CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION   (Unaudited - Expressed in thousands of Canadian dollars (“CAD”) except for share amounts)
		At September 30 2018		At December 31 2017		At January 1 2017
ASSETS				Restated (note 3,4)		Restated (note 3,4)
Current
Cash and cash equivalents (note 5)	$	21,470	$	3,636	$	15,894
Investments (note 8)		-		37,807		-
Trade and other receivables (note 6)		4,169		4,791		3,226
Inventories (note 7)		3,738		3,454		3,196
Prepaid expenses and other		523		664		660
		29,900		50,352		22,976
Non-Current
Inventories-ore in stockpiles (note 7)		2,098		2,098		2,098
Investments (note 8)		5,145		7,359		5,049
Investments in associates (note 9)		5,734		5,305		6,011
Restricted cash and investments (note 10)		12,389		12,184		3,107
Property, plant and equipment (note 11)		247,003		249,002		252,392
Total assets	$	302,269	$	326,300	$	291,633
LIABILITIES
Current
Accounts payable and accrued liabilities	$	5,166	$	5,756	$	5,561
Current portion of long-term liabilities:
Deferred revenue (note 12)		1,333		1,627		-
Post-employment benefits (note 13)		200		250		250
Reclamation obligations (note 14)		856		819		1,088
Other liabilities (note 15)		-		3,835		2,850
		7,555		12,287		9,749
Non-Current
Deferred revenue (note 12)		36,805		37,025		-
Post-employment benefits (note 13)		2,104		2,115		2,209
Reclamation obligations (note 14)		28,067		27,690		27,060
Other liabilities (note 15)		-		-		845
Deferred income tax liability		13,079		17,422		20,168
Total liabilities		87,610		96,539		60,031
EQUITY
Share capital (note 16)		1,310,473		1,310,473		1,295,235
Share purchase warrants (note 17)		435		435		-
Contributed surplus (note 18)		63,137		61,799		60,612
Deficit		(1,160,521)		(1,144,086)		(1,124,523)
Accumulated other comprehensive income (note 19)		1,135		1,140		278
Total equity		214,659		229,761		231,602
Total liabilities and equity	$	302,269	$	326,300	$	291,633
Issued and outstanding common shares (note 16)		559,183,209		559,183,209		540,722,365
Commitments and contingencies (note 25)
Subsequent events (note 26)
The accompanying notes are integral to the condensed interim consolidated financial statements

 

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Unaudited - Expressed in thousands of CAD dollars except for share and per share amounts)
		Three Months Ended September 30				Nine Months Ended September 30
		2018		2017		2018		2017
				Restated (note 3)				Restated (note 3, 4)
REVENUES (note 21)	$	3,729	$	3,753	$	11,406	$	11,531
EXPENSES
Operating expenses (note 20, 21)		(4,231)		(3,294)		(11,739)		(9,862)
Exploration and evaluation (note 21)		(3,894)		(5,447)		(14,018)		(14,432)
General and administrative (note 21)		(1,657)		(1,489)		(5,378)		(6,185)
Impairment reversal (note 21)		-		-		11		331
Other income (expense) (note 20)		664		(1,137)		(2,654)		112
		(9,118)		(11,367)		(33,778)		(30,036)
Loss before finance charges, equity accounting		(5,389)		(7,614)		(22,372)		(18,505)
Finance expense (note 20)		(981)		(1,136)		(2,670)		(3,077)
Equity share of income (loss) of associate (note 9)		639		217		429		(1,361)
Loss before taxes		(5,731)		(8,533)		(24,613)		(22,943)
Income tax recovery (note 23)
Deferred		1,847		906		8,178		5,322
Loss from continuing operations		(3,884)		(7,627)		(16,435)		(17,621)
Net loss from discontinued operations		-		-		-		(109)
Net loss for the period	$	(3,884)	$	(7,627)	$	(16,435)	$	(17,730)
Other comprehensive income (loss) (note 19):
Items that may be reclassified to income (loss):
Foreign currency translation change		2		451		(5)		921
Comprehensive loss for the period	$	(3,882)	$	(7,176)	$	(16,440)	$	(16,809)
Basic and diluted net loss per share:
All operations	$	(0.01)	$	(0.01)	$	(0.03)	$	(0.03)
Weighted-average number of shares outstanding (in thousands):
Basic and diluted		559,183		559,084		559,183		553,983
The accompanying notes are integral to the condensed interim consolidated financial statements

 

 

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited - Expressed in thousands of CAD dollars)
						Nine Months Ended September 30
						2018		2017
						Restated (note 3, 4)		Restated (note 3, 4)
Share capital
Balance-beginning of period					$	1,310,473	$	1,295,235
Shares issued-net of issue costs						-		18,871
Flow-through share premium						-		(3,835)
Share options exercised-cash						-		20
Share options exercised-non cash						-		18
Balance-end of period						1,310,473		1,310,309
Share purchase warrants
Balance-beginning of period						435		-
Warrants issued in connection with APG Arrangement						-		435
Balance-end of period						435		435
Contributed surplus
Balance-beginning of period						61,799		60,612
Share-based compensation expense						1,338		941
Share options exercised-non cash						-		(18)
Balance-end of period						63,137		61,535
Deficit
Balance-beginning of period						(1,144,086)		(1,124,523)
Net loss						(16,435)		(17,730)
Balance-end of period						(1,160,521)		(1,142,253)
Accumulated other comprehensive income
Balance-beginning of period						1,140		278
Foreign currency translation						(5)		921
Balance-end of period						1,135		1,199
Total Equity
Balance-beginning of period						229,761		231,602
Balance-end of period					$	214,659	$	231,225
The accompanying notes are integral to the condensed interim consolidated financial statements

 

 

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited - Expressed in thousands of CAD dollars)
						Nine Months Ended September 30
CASH PROVIDED BY (USED IN):						2018		2017
								Restated (note 3, 4)
OPERATING ACTIVITIES
Net loss for the period					$	(16,435)	$	(17,730)
Items not affecting cash and cash equivalents:
Depletion, depreciation, amortization and accretion						6,393		6,762
Impairment reversal						(11)		(331)
Share-based compensation (note 18)						1,338		941
Recognition of deferred revenue (note 12)						(3,000)		(3,070)
Gain on extinguishment of toll milling liability (note 15, 20)						-		(899)
Loss on divestiture of Africa Mining Division						-		109
Gains on property, plant and equipment disposals (note 20)						(117)		(27)
Losses (gains) on investments						2,521		(524)
Equity loss of associate (note 9)						247		822
Dilution loss (gain) of associate (note 9)						(676)		539
Deferred income tax recovery						(8,178)		(5,322)
Foreign exchange losses						-		912
Other						-		21
Deferred revenue cash receipts (note 12)						-		39,980
Post-employment benefits (note 13)						(115)		(124)
Reclamation obligations (note 14)						(573)		(767)
Change in non-cash working capital items (note 20)						(142)		6
Net cash provided by (used in) operating activities						(18,748)		21,298
INVESTING ACTIVITIES
Divestiture of asset group, net of cash and cash equivalents divested:
Africa Mining Division						-		(109)
Sale of investments (note 8)						37,500		-
Purchase of investments (note 8)						-		(40,200)
Expenditures on property, plant and equipment (note 11)						(1,060)		(969)
Proceeds on sale of property, plant and equipment						347		248
Increase in restricted cash and investments						(205)		(9,200)
Net cash provided by (used in) investing activities						36,582		(50,230)
FINANCING ACTIVITIES
Repayment of debt obligations						-		(370)
Issuance of common shares for:
New share issues-net of issue costs (note 16)						-		18,871
Share options exercised (note 16)						-		20
Net cash provided by financing activities						-		18,521
Increase (decrease) in cash and cash equivalents						17,834		(10,411)
Cash and cash equivalents, beginning of period						3,636		15,894
Cash and cash equivalents, end of period					$	21,470	$	5,483
The accompanying notes are integral to the condensed interim consolidated financial statements

 

 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018
(Unaudited - Expressed in CAD dollars except for shares and per share amounts)

 

 

Denison Mines Corp. (“DMC”) and its subsidiary companies and joint arrangements (collectively, “Denison” or the “Company”) are engaged in uranium mining related activities, which can include acquisition, exploration and development of uranium bearing properties, extraction, processing and selling of uranium.

 

As at September 30, 2018, the Company has a 63.30% interest in the Wheeler River Joint Venture (“WRJV”) (see note 11 and 26), a 22.50% interest in the McClean Lake Joint Venture (“MLJV”) (which includes the McClean Lake mill) and a 25.17% interest in the Midwest Joint Venture (“MWJV”), each of which are located in the eastern portion of the Athabasca Basin region in northern Saskatchewan, Canada. The McClean Lake mill provides toll milling services to the Cigar Lake Joint Venture (“CLJV”) under the terms of a toll milling agreement between the parties (see note 12). In addition, the Company has varying ownership interests in a number of other development and exploration projects located in Canada.

 

The Company provides mine decommissioning and decommissioned site monitoring services to third parties through its Denison Environmental Services (“DES”) division and is also the manager of Uranium Participation Corporation (“UPC”), a publicly-listed investment holding company formed to invest substantially all of its assets in uranium oxide concentrates (“U3O8”) and uranium hexafluoride (“UF6”). The Company has no ownership interest in UPC but receives fees for management services and commissions from the purchase and sale of U3O8 and UF6 by UPC.

 

DMC is incorporated under the Business Corporations Act (Ontario) and domiciled in Canada. The address of its registered head office is 40 University Avenue, Suite 1100, Toronto, Ontario, Canada, M5J 1T1.

 

 

 

These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The condensed interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2017. The Company’s presentation currency is Canadian dollars.

 

These financial statements were approved by the board of directors for issue on November 9, 2018.

 

 

 

Significant Accounting Policies

 

The significant accounting policies followed in these condensed interim consolidated financial statements are consistent with those applied in the Company’s audited annual consolidated financial statements for the year ended December 31, 2017, except as described in the “Accounting Policy Changes – Adoption Impacts” and “New Accounting Policies” sections below.

 

Accounting Policy Changes – Adoption Impacts

 

The Company has made the following changes to its accounting policies and has adopted the following new accounting pronouncements:

 

 

Foreign Currency Translation – Presentation Currency

 

The Company has changed its presentation currency from U.S. dollars (“USD”) to Canadian dollars (“CAD”) effective for reporting periods after January 1, 2018. The comparative periods have been restated to reflect the change in presentation currency. Refer to note 4 for more information.

 

International Financial Reporting Standard 9, Financial Instruments (“IFRS 9”)

 

In July 2014, the IASB published the final version of IFRS 9 Financial Instruments (“IFRS 9”) which is effective for periods beginning on or after January 1, 2018.

 

Denison reviewed its accounting policies for financial instruments and on adoption of IFRS 9 has elected not to measure any of its equity instruments using the fair value through other comprehensive income (“FVTOCI”) approach and will instead use the fair value through profit and loss (“FVTPL”) measurement method. Previously, under IAS 39, the Company had classified a subset of its equity instruments as “available for sale” and had recognized gains or losses on these investments in other comprehensive income (loss), similar to the FVTOCI approach under IFRS 9.

 

The Company adopted the provisions of IFRS 9 on January 1, 2018 and has applied the amendment retrospectively, through an adjustment to its opening equity as at January 1, 2017, reflecting a reclassification of the FVTOCI amount previously included in accumulated other comprehensive income (“AOCI”) to Deficit. Any subsequent changes in AOCI for changes in FVTOCI during fiscal 2017 have been reversed and reflected as a component of net income (loss) for the period. See note 4 for details.

 

International Financial Reporting Standard 15, Revenue from Contracts with Customers (“IFRS 15”)

 

IFRS 15 replaces IAS 18 “Revenue” and IAS 11 ”Construction Contracts” and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2018.

 

The Company reviewed its revenue recognition policies related to its UPC management services and its DES care and maintenance services and concluded that no retrospective change in timing or measurement is required for adoption of IFRS 15.

 

In its review of toll milling revenue recognition and its arrangement with Anglo Pacific Group PLC and its subsidiaries (the “APG Arrangement” and “APG”, respectively – see note 12), the Company concluded that the adoption of IFRS 15 will require a change to the Company’s accounting policy for deferred revenue associated with the APG Arrangement. Previously, the Company amortized the net proceeds of the APG Arrangement into revenue, on a pro-rata basis, based on the actual cash receipts from toll milling received in the period as a percentage of the total remaining undiscounted cash receipts expected to be received over the life of the arrangement. IFRS 15 requires that the APG deferred revenue be separated into a revenue component and a financing component. The transaction price associated with the revenue component is considered “variable” consideration under the standard. The transaction price has initially been measured at the transaction date as the aggregate of the net proceeds from the APG Arrangement and the expected financing charges to be incurred over the contract life, and is subsequently remeasured as changes to the timing or volume of the toll milling production profile occur. Revenue is recognized into net income (loss) based on the average toll milling drawdown rate multipled by toll milling production during the period. The average toll milling drawdown rate is computed based on estimates of the transaction price over the life of the contract divided by the estimated toll milling production to be delivered over the life of the contract. Changes in the estimated average toll milling drawdown rate are required to be retroactively adjusted each period with a cumulative adjustment to revenue. The financing component, computed annually, is based upon the discount rate applicable to the APG Arrangement up-front fee received multiplied by the outstanding deferred revenue liability amount.

 

The Company adopted the provisions of IFRS 15 on January 1, 2018 and has applied the provisions of IFRS 15 on a full retrospective basis. This retrospective adoption has resulted in adjustments to increase revenues and finance expenses associated with the APG Arrangement, starting at the point in time of the APG Arrangement’s inception in February 2017, with the resulting net income (loss) impact being partly offset by changes in the deferred tax recoveries being recognized. See note 4 and 12 for details.

 

 

New Accounting Policies

 

The Company has changed its accounting policies in its audited annual consolidated financial statements for the year ended December 31, 2017 for “Foreign currency translation”, “Financial instruments”, “Impairment of financial assets”, “Deferred revenue – toll milling” and “Revenue recognition” in light of the changes to its presentation currency and the adoption of IFRS 9 and 15. In addition, the Company has expanded its accounting policy for “Employee benefits – stock-based compensation” as a result of the new share unit plan approved by shareholders in May 2018. The new accounting policies are as follows:

 

 

 

Items included in the financial statements of each entity in the DMC group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). Primary and secondary indicators are used to determine the functional currency. Primary indicators include the currency that mainly influences sales prices, labour, material and other costs. Secondary indicators include the currency in which funds from financing activities are generated and in which receipts from operating activities are usually retained. Typically, the local currency has been determined to be the functional currency of Denison’s entities.

 

The consolidated financial statements are presented in Canadian dollars, unless otherwise stated.

 

The financial statements of entities that have a functional currency different from the presentation currency of DMC (“foreign operations”) are translated into Canadian dollars as follows: assets and liabilities-at the closing rate at the date of the statement of financial position, and income and expenses-at the average rate of the period (as this is considered a reasonable approximation to actual rates). All resulting changes are recognized in other comprehensive income or loss as cumulative foreign currency translation adjustments.

 

When the Company disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income or loss related to the foreign operation are recognized in the statement of income or loss as translational foreign exchange gains or losses.

 

 

Foreign currency transactions are translated into an entity’s functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than an operation’s functional currency are recognized in the statement of income or loss as transactional foreign exchange gains or losses.

 

 

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled or expires.

 

At initial recognition, the Company classifies its financial instruments in the following categories:

 

 

A financial asset is classified in this category if it is a derivative instrument, an equity instrument for which the Company has not made the irrevocable election to classify as fair value through other comprehensive income (“FVTOCI”), or a debt instrument that is not held within a business model whose objective includes holding the financial assets in order to collect contractual cash flows that are solely payments of principal and interest. Derivative financial liabilities and contingent consideration liabilities related to business combinations are also classified in this category. Financial instruments in this category are recognized initially and subsequently at fair value. Transaction costs are expensed in the statement of income or loss. Gains and losses arising from changes in fair value are presented in the statement of income or loss – within other income (expense) - in the period in which they arise.

 

 

 

A financial asset is classified in this category if it is a debt instrument and / or other similar asset that is held within a business model whose objective is to hold the asset in order to collect the contractual cash flows (i.e. principal and interest). Financial assets in this category are initially recognized at fair value plus transaction costs and subsequently measured at amortized cost using the effective interest method less a provision for impairment. Interest income is recorded in net income through finance income.

 

 

All financial liabilities that are not recorded as FVTPL are classified in this category and are initially recognized less a discount (when material) to reduce the financial liabilities to fair value and less any directly attributable transaction costs. Subsequently, financial liabilities are measured at amortized cost using the effective interest method. Interest expense is recorded in net income through finance expense.

 

The Company has designated its financial assets and liabilities as follows:

 

 

 

At each reporting date, the Company assesses the expected credit losses associated with its financial assets that are not carried at FVTPL. Expected credit losses are calculated based on the difference between the contractual cash flows and the cash flows that the Company expects to receive, discounted, where applicable, based on the assets original effective interest rate.

 

For “Trade and other receivables”, the Company calculates expected credit losses based on historical credit loss experience, adjusted for forward-looking factors specific to debtors and the economic environment. In recording an impairment loss, the carrying amount of the asset is reduced by this computed amount either directly or indirectly through the use of an allowance account.

 

 

IFRS 15 supersedes IAS 18 Revenue and IAS 11 Construction Contracts, and applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards.

 

 

Revenue from the pre-sale of toll milling arrangement cash flows will be recognized as the toll milling services are provided. At contract inception, the Company will estimate the expected transaction price of the toll milling services being sold based on available information and calculate an average per unit transaction price that applies over the life of the contract. This unit price will be used to draw-down the deferred revenue balance as the toll milling services occur. When changes occur to the timing, or volume of toll milling services, the per unit transaction price will adjusted to reflect the change (such review to be done annually, at a minimum), and a cumulative catch up adjustment will be made to reflect the updated rate. The upfront nature of the payments from toll milling pre-sale arrangements represents a significant financing component. As such, the Company will also recognize an accretion expense on the deferred revenue balance which will be recorded in net income through finance expense.

 

 

 

Environmental service contracts represent a series of distinct performance obligations that are substantially the same and have the same pattern of transfer of control to the customer. The transaction price is estimated at contract inception and, is recognized over the life of the contract as control is transferred to the customer. Variable consideration, where applicable, is estimated at contract inception using either the expected value method or the most likely amount method. If it is highly probable that a subsequent reversal of revenue will not occur when the uncertainty has been resolved, the Company will recognize as revenue the estimated transaction price, including the estimate of the variable portion, upon transfer of control to the customer. Where it is determined that it is highly probable that a subsequent reversal of revenue will occur upon the resolution of the uncertainty, the variable portion of the transaction price will be constrained, and will not be recognized as revenue until the uncertainty has been resolved.

 

 

The management services arrangement with UPC represents a series of distinct performance obligations that are substantially the same and have the same pattern of transfer of control to the customer. The transaction price for the contract is estimated at contract inception and is recognized over the life of the contract as control is transferred to the customer as the services are provided. The variable consideration related to the net asset value (“NAV”)-based management fee was estimated at contract inception using the expected value method. It was determined that it is highly probable that a subsequent reversal of revenue would occur if the variable consideration was included in the transaction price, and as such, the variable portion of the transaction price will be measured and recognized when the uncertainty has been resolved (i.e. when the actual NAV has been calculated).

 

Commission revenue earned on acquisition or sale of U3O8 and UF6 on behalf of UPC (or other parties where Denison acts as an agent) is recognized when control of the related U3O8 or UF6 passes to the customer, which is the date when title of the U3O8 and UF6 passes.

 

 

 

The Company uses a fair value-based method of accounting for share options to employees and to non-employees. The fair value is determined using the Black-Scholes option pricing model on the date of the grant. The cost is recognized on a graded method basis, adjusted for expected forfeitures, over the applicable vesting period as an increase in share-based compensation expense and the contributed surplus account. When such share options are exercised, the proceeds received by the Company, together with the respective amount from contributed surplus, are credited to share capital.

 

The Company also has a share unit plan pursuant to which it may grant share units to employees – the share units are equity-settled awards. The Company determines the fair value of the awards on the date of grant. The cost is recognized on a graded method basis, adjusted for expected forfeitures, over the applicable vesting period as an increase in share-based compensation expense and the contributed surplus account. When such share units are settled for common shares, the applicable amounts of contributed surplus are credited to share capital.

 

Accounting Standards Issued But Not Yet Effective

 

IFRS 16 Leases requires lessees to recognize assets and liabilities for most leases. Under current standards, the Company expenses most of its lease payments. Application of IFRS 16 is mandatory for reporting periods beginning on or after January 1, 2019. The Company expects the adoption of IFRS 16 to result in the following: a) increased reported assets and liabilities; b) increased depreciation and accretion expense and decreased lease expense within the statement of income (loss); and c) decreased cash outflows from operations and increased cash outflows from financing as lease payments will be recorded as financing outflows in the cash flow statement. Assessments of the magnitude of the above impacts of adopting the standard are ongoing.

 

Critical Accounting Estimates and Judgements

 

The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates and judgements that affect the amounts reported. It also requires management to exercise judgement in applying the Company’s accounting policies. These judgements and estimates are based on management’s best knowledge of the relevant facts and circumstances taking into account previous experience. Although the Company regularly reviews the estimates and judgements made that affect these financial statements, actual results may be materially different.

 

Management has made significant estimates and judgements in the current period related to the following items that are in addition to those included in the financial statements for the year ended December 31, 2017:

 

 

 

In February 2017, Denison closed the APG Arrangement and effectively monetized its right to receive specified future toll milling cash receipts from the MLJV related to the current toll milling agreement with the CLJV. In exchange, Denison received a net up-front payment of $39,980,000 which has been accounted for as a deferred revenue liability as at the transaction close date (see note 12).

 

Under IFRS 15, the Company is required to recognize a revenue component and a financing component as it draws down the deferred revenue associated with the APG Arrangement over the life of the specified toll milling production included in the APG Arrangement. In estimating both of these components, the Company is required to make assumptions relating to the future toll milling production volume associated with Cigar Lake Phase 1 and 2 ore reserves and resources (to end of mine life) and estimates of the annual timing of that production. Changes in these estimates affect the underlying production profile which in turn affects the average toll milling drawdown rate used to recognize revenue.

 

When the average toll milling drawdown rate is changed, the impact is reflected on a life-to-date production basis with a retroactive adjustment to revenue recorded in the current period. Going forward, each time the Company updates its estimates of the underlying production profile for the APG Arrangement (typically, in the first quarter of each year, in the absence of material publicly disclosed news relating to Cigar Lake uranium production), retroactive adjustments to revenue will be recorded in the period that the revised estimate is determined – such adjustments could, and most likely will, be material.

 

Comparative Numbers

 

Certain classifications of the comparative figures have been changed to conform to those used in the current period.

 

 

 

Effective January 1, 2018, the Company changed its presentation currency to CAD from USD. This change in presentation currency was made to better reflect the Company’s current business activities, which are now predominantly focused in Canada following the disposal of the Company’s African and Asia mining segments in fiscal 2016 and 2015, respectively.

 

The consolidated financial statements for all periods presented in the interim financial statements are in CAD. The majority of the Company’s current entities, including all of its operating entities, have CAD as their functional currency so their functional currency financial statement amounts have been carried forward into the consolidated results. The financial statements of entities with a functional currency of USD have been translated into CAD in accordance with IAS 21, “The Effects of Changes in Foreign Exchange Rates”, as follows:

 

 

The impact of the changes in presentation currency and the adoption of new accounting pronouncements (see note 3) on the consolidated financial statements is as follows:

 

 

Consolidated Statement of Financial Position – As at January 1, 2017

 

		Reported		Reported		IFRS		Restated
(in thousands)		USD		in CAD		Adoption		CAD
Assets
Current	$	17,113	$	22,976	$	-	$	22,976
Non-Current		200,310		268,657		-		268,657
Total assets		217,423		291,633		-		291,633
Liabilities
Current	$	7,260	$	9,749	$	-	$	9,749
Non-Current		37,452		50,282		-		50,282
Total liabilities		44,712		60,031		-		60,031
Equity
Share capital	$	1,140,631	$	1,295,235	$	-	$	1,295,235
Share purchase warrants		-		-		-		-
Contributed surplus		54,306		60,612		-		60,612
Deficit
Opening		(961,440)		(1,124,532)		9 (1)		(1,124,523)
Accumulated other comprehensive income (loss)
Cumulative foreign currency translation		(61,371)		(446)		-		(446)
Unamortized experience gain		578		724		-		724
Unrealized gain on investments		7		9		(9) (1)		-
Total equity		172,711		231,602		-		231,602
Total liabilities and equity	$	217,423	$	291,633	$	-	$	291,633

 

 

 

 

Consolidated Statement of Financial Position – As at December 31, 2017

 

		Reported		Reported		IFRS		Restated
(in thousands)		USD		in CAD		Adoption		CAD
Assets
Current	$	40,135	$	50,352	$	-	$	50,352
Non-Current		219,933		275,948		-		275,948
Total assets		260,068		326,300		-		326,300
Liabilities
Current
Deferred revenue	$	2,498	$	3,134	$	(1,507) (2)	$	1,627
All other current liabilities		8,497		10,660		-		10,660
		10,995		13,794		(1,507)		12,287
Non-Current
Deferred revenue		27,181		34,100		2,925 (2)		37,025
Deferred income tax liability		14,182		17,792		(370) (3)		17,422
All other non-current liabilies		23,758		29,805		-		29,805
		65,121		81,697		2,555		84,252
Total liabilities		76,116		95,491		1,048		96,539
Equity
Share capital	$	1,151,927	$	1,310,473	$	-	$	1,310,473
Share purchase warrants		333		435		-		435
Contributed surplus		55,165		61,799		-		61,799
Deficit
Opening		(961,440)		(1,124,532)		9 (1)		(1,124,523)
Net income (loss)		(14,168)		(18,520)		5 (1)
						(1,418) (2)
						370 (3)		(19,563)
Accumulated other comprehensive income (loss)
Cumulative foreign currency translation		(48,454)		416		-		416
Unamortized experience gain		578		724		-		724
Unrealized gain on investments		11		14		(14) (1)		-
Total equity		183,952		230,809		(1,048)		229,761
Total liabilities and equity	$	260,068	$	326,300	$	-	$	326,300

 

 

 

 

Consolidated Statement of Income (Loss) and Comprehensive Income (Loss) – nine months ended September 30, 2017

 

		Reported		Reported		IFRS		Restated
(in thousands)		USD		in CAD		Adoption		CAD
Revenues	$	7,929	$	10,359	$	1,172 (2)	$	11,531
Other income (expense) (3)		121		112		- (1)		112
Finance income (expense)		(622)		(812)		(2,265) (2)		(3,077)
Deferred income tax recovery (expense)		3,828		5,037		285 (2)		5,322
Net loss for the period	$	(12,927)	$	(16,922)	$	(808)	$	(17,730)
Other comprehensive income (loss)
Unrealized gain (loss) on investments		-		-		- (1)		-
Foreign currency translation change		13,938		921		-		921
Comprehensive income (loss) for the period	$	1,011	$	(16,001)	$	(808)	$	(16,809)

 

 

Consolidated Statement of Cash Flow – nine months ended September 30, 2017

 

		Reported		Reported		IFRS		Restated
(in thousands)		USD		in CAD		Adoption		CAD
Net cash provided by operating activities	$	15,857		21,298		-		21,298
Net cash used in investing activities		(37,472)		(50,230)		-		(50,230)
Net cash provided by financing activities		13,689		18,521		-		18,521
Increase (decrease) in cash and equivalents		(7,926)		(10,411)		-		(10,411)
Foreign exchange effect on cash and equivalents		481		-		-		-
Cash and equivalents, beginning of period		11,838		15,894		-		15,894
Cash and equivalents, end of period	$	4,393	$	5,483	$	-	$	5,483

 

 

 

The cash and cash equivalent balance consists of:

 

		At September 30		At December 31		At January 1
(in thousands of CAD dollars)		2018		2017		2017
Cash	$	547	$	2,717	$	6,927
Cash in MLJV and MWJV		581		913		1,557
Cash equivalents		20,342		6		7,410
	$	21,470	$	3,636	$	15,894

 

 

 

 

The trade and other receivables balance consists of:

 

			At September 30		At December 31		At January 1
(in thousands of CAD dollars)			2018		2017		2017
Trade receivables		$	3,570	$	3,999	$	2,406
Receivables in MLJV and MWJV			335		640		783
Sales tax receivables			165		84		23
Sundry receivables			99		68		14
	$		4,169	$	4,791	$	3,226