Unaudited Condensed Interim Consolidated Financial
Statements
For the Six Months Ended June 30, 2013

These unaudited cond...
FORSYS METALS Corp.
(An exploration stage company)

Consolidated Balance Sheet
As at June 30, 2013

June 30
(Expressed in ...
FORSYS METALS Corp.
(An exploration stage company)

Consolidated Income (Loss) Statement
For the six months ended June 30,...
FORSYS METALS Corp.
(An exploration stage company)

Consolidated Statement of Changes in Equity
For the six months ended J...
FORSYS METALS Corp.
(An exploration stage company)

Consolidated Statement of Changes in Equity (continued)
For the six mo...
FORSYS METALS Corp.
(An exploration stage company)

Consolidated Statement of Cash Flows
For the six months ended June 30,...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements
For the six months ended June 30, 20...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
FORSYS METALS Corp.
(An exploration stage company)

Notes to the Financial Statements (continued)
For the six months ended...
Upcoming SlideShare
Loading in...5
×

Forsys Metals Corp HY 2013 results

237

Published on

Forsys Metals Corp HY 2013 results

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
237
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Forsys Metals Corp HY 2013 results

  1. 1. Unaudited Condensed Interim Consolidated Financial Statements For the Six Months Ended June 30, 2013 These unaudited condensed interim consolidated financial statements of Forsys Metals Corp. for the six months ended June 30, 2013 have been prepared by management and approved by the Board of Directors of the Company. In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its external auditors have not reviewed these unaudited interim consolidated financial statements. !
  2. 2. FORSYS METALS Corp. (An exploration stage company) Consolidated Balance Sheet As at June 30, 2013 June 30 (Expressed in Canadian dollars) 2012 $ $ 4,041,131 5,666,318 114,445 1,405,815 11,520 30,959 4,167,096 Note December 31 2013 7,103,092 ASSETS Current assets Cash and cash equivalents Trade and other receivables 3 Prepaid expenses and other assets Total current assets Non-current assets Investments 4 256,000 320,000 Mineral properties, exploration and evaluation costs 5 77,499,409 78,447,691 Property, plant and equipment 6 13,033,287 14,390,573 Total non-current assets 90,788,696 93,158,264 Total assets 94,955,792 100,261,356 310,817 376,188 310,817 376,188 Share capital 203,786,076 203,716,953 Accumulated loss (96,022,464) (95,127,684) Accumulated other comprehensive income (loss) (12,976,689) (8,611,765) 94,786,923 99,977,504 (141,948) (92,336) Total equity 94,644,975 99,885,168 Total liabilities and equity 94,955,792 100,261,356 LIABILIITIES AND SHAREHOLDERS’ EQUITY Current liabilities Trade and other payables Total liabilities Equity Total equity attributable to shareholders of the Company Non-controlling interests Commitments and contingencies 11 The accompanying notes are an integral part of these consolidated financial statements. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1! !
  3. 3. FORSYS METALS Corp. (An exploration stage company) Consolidated Income (Loss) Statement For the six months ended June 30, 2013 Three months ended June 30 (Expressed in Canadian dollars except per share amounts) General and administrative expenses Six months ended June 30 2013 9 Interest income 2013 2012 $ $ $ $ (446,775) (963,409) (937,013) (2,304,941) 18,297 Note 2012 42,757 41,086 96,668 Net change in fair value of derivative financial instruments 4 - - - (9,000) Write-down of investments 4 - - - (45,000) (428,478) (920,652) (895,927) (2,262,273) - - - - (428,478) (920,652) (895,927) (2,262,273) 42 619 (1,147) 619 (428,520) (921,271) (894,780) (2,262,892) (0.01) (0.01) (0.01) (0.02) 109,875,422 109,875,422 109,875,422 103,732,565 Loss before income tax Income tax expense Net loss for the period Net income (loss) for the period attributable to: Non-controlling interests Shareholders of the Company Net loss per share attributable to shareholders of the Company (basic and diluted) Weighted average number of common shares outstanding Consolidated Statement of Comprehensive Income (Loss) For the six months ended June 30, 2013 Three months ended June 30 Six months ended June 30 2013 2012 2013 2012 $ $ $ $ (428,478) (920,652) (895,927) (2,262,273) (1,732,154) (2,134,928) (4,349,389) (507,991) 16,000 (16,000) (64,000) (8,000) Other comprehensive loss, net of taxes (1,716,154) (2,150,928) (4,413,389) (515,991) Comprehensive loss for the period (2,144,632) (3,071,580) (5,309,316) (2,778,264) (19,375) (25,054) (49,612) (25,054) (2,125,257) (3,046,526) (5,259,704) (2,753,210) (2,144,632) (3,071,580) (5,309,316) (2,778,264) (Expressed in Canadian dollars) Note Net loss for the period Other comprehensive income (loss), net of taxes Items that may be reclassified subsequently to net income Foreign currency translation Unrealized profit (loss) on availablefor- sale investments 4 Comprehensive loss for the period attributable to: Non-controlling interests Shareholders of the Company The accompanying notes are an integral part of these consolidated financial statements. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2! !
  4. 4. FORSYS METALS Corp. (An exploration stage company) Consolidated Statement of Changes in Equity For the six months ended June 30, 2013 Six months ended June 30 2013 (Expressed in Canadian dollars) 2012 $ $ 159,342,775 147,275,041 - 12,067,734 159,342,775 Note 159,342,775 Share capital Common shares Balance as at beginning of period Share issuance net of costs 7 Balance as at end of period Share purchase warrants Balance as at beginning of period Issue of warrants 751,056 751,056 751,056 43,589,758 Balance as at end of period - 751,056 5 42,682,532 69,123 853,933 43,658,881 43,536,465 33,364 - - 33,364 33,364 33,364 203,786,076 203,663,660 (95,127,684) (91,786,848) (894,780) (2,262,892) (96,022,464) (94,049,740) Contributed surplus Balance as at beginning of period Share-based compensation 8 Balance as at end of period Equity reserve Balance as at beginning of period Transaction with non-controlling interest Balance as at end of period Total share capital Accumulated loss Balance as at beginning of period Loss for the year attributable to shareholders of the Company Balance as at end of period The accompanying notes are an integral part of these consolidated financial statements. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3! !
  5. 5. FORSYS METALS Corp. (An exploration stage company) Consolidated Statement of Changes in Equity (continued) For the six months ended June 30, 2013 Six months ended June 30 2013 2012 $ $ Balance as at beginning of period (8,699,765) (5,375,554) Currency translation differences on foreign operations (4,300,924) (482,318) (13,000,689) (5,857,872) 88,000 - (64,000) (8,000) 24,000 (8,000) (12,976,689) (5,865,872) Balance as at beginning of period (92,336) - Loss attributable to non-controlling interests (49,612) (25,054) (141,948) (25,054) (Expressed in Canadian dollars) Note Accumulated other comprehensive income (Ioss) Foreign currency translation Balance as at end of period AFS reserve Balance as at beginning of period Available-for-sale investment 4 Balance as at end of period Total accumulated comprehensive loss Non-controlling interests Balance as at end of period The accompanying notes are an integral part of these consolidated financial statements. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4! !
  6. 6. FORSYS METALS Corp. (An exploration stage company) Consolidated Statement of Cash Flows For the six months ended June 30, 2013 Three months ended June 30 Six months ended June 30 2013 (Expressed in Canadian dollars) 2012 2013 2012 $ $ $ $ (428,478) (920,652) (895,927) (2,262,273) (18,297) Note (42,757) (41,086) (96,668) Cash flows from operating activities Net loss for the period Interest income Items not involving cash: Share-based compensation 8 13,147 10,214 34,629 736,837 Depreciation 9 18,569 27,119 38,181 55,248 - - - 401 Gain on sale of property, plant and equipment Net change in value of derivative financial instruments 4 - - - 9,000 Write-down of available-for-sale investments 4 - - - 45,000 247,899 41,540 1,204,456 (101,314) 8,328 7,830 19,010 16,657 (89,530) (305,492) (48,964) (175,591) (248,362) (1,182,198) 310,299 (1,772,703) - - - - 18,297 42,757 41,086 96,668 Changes in non-cash operating working capital: Trade and other receivables Prepaid expenses and other assets Trade and other payables Cash provided from (used in) operating activities Cash flows from financing activities Cash provided from financing activities Cash flows from investing activities Interest income Additions to mineral properties, exploration and evaluation costs 5 (1,105,871) (1,482,195) (1,954,594) (2,446,376) Purchase of property, plant and equipment 6 (393) (37,252) (5,012) (38,324) - - - 7,283 Cash used in investing activities (1,087,967) (1,476,690) (1,918,520) (2,380,749) Decrease in cash and cash equivalents (1,336,329) (2,658,888) (1,608,221) (4,153,452) 5,382,608 12,657,316 5,666,318 14,119,604 (5,148) (33,426) (16,966) (1,150) 4,041,131 9,965,002 4,041,131 9,965,002 Proceeds on sale of property, plant and equipment Cash and cash equivalents at beginning of period Exchange loss on cash held in foreign currency Cash and cash equivalents at end of period Non-cash investing activities 5 The accompanying notes are an integral part of these consolidated financial statements. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!5! !
  7. 7. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements For the six months ended June 30, 2013 (Expressed in Canadian dollars) 1. Nature of operations Forsys Metals Corp. (“Forsys”) and its subsidiary companies (collectively the “Company”) are engaged in the acquisition, exploration and development of mineral properties located in Namibia, Africa. The Company’s principal focus is on bringing its wholly owned Norasa Uranium Project (“Norasa”) into production and increasing total uranium resources through an advanced exploration program. Norasa is the consolidation of the Valencia and Namibplaas Uranium Projects. As an exploration stage company, the Company’s income is limited to interest income and other incidental income. The recoverability of the amounts shown for mineral properties, exploration and evaluation costs and property, plant and equipment is dependent upon, but not limited to: the existence and economic recovery of mineral reserves in the future; the ability to obtain necessary permits and financing to complete the exploration and development of these properties; government policies and regulations; and attaining profitable production or proceeds from the disposition of properties. The Company may be adversely affected by governmental amendments or changes to mining laws, regulations and requirements in Namibia. The Company’s continued operations are dependent on its ability to secure additional equity capital, divest assets or generate cash flow from operations in the future, none of which is assured. Seasonality does not have a significant impact on the Company’s operations. Forsys is incorporated under the Business Corporations Act (Ontario) and the primary listing of its common shares is on the Toronto Stock Exchange, with secondary listings on the Namibian Stock Exchange and Frankfurt Stock Exchange. The Forsys registered office is at 66 Wellington Street West, Toronto Bank Tower, Suite 5300, Toronto, Ontario, Canada, M5K 1E6. 2. Significant accounting policies a) Statement of compliance These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). These condensed interim consolidated financial statements should be read in conjunction with the Company’s consolidated annual financial statements for the year ended December 31, 2012. The accounting policies applied in these condensed interim consolidated financial statements are consistent with those applied in the preparation of, and disclosed in, the consolidated annual financial statements for the year ended December 31, 2012. The policies applied in these condensed interim consolidated financial statements are based on IFRS issued and current as of August 07, 2013. These condensed interim financial statements for the six months ended June 30, 2013 (including comparatives) were approved and authorized for issue by the Company’s Board of Directors on August 07, 2013. b) Changes in accounting policies The Company has adopted the following new and revised standards, along with any consequential amendments, effective January 1, 2013. These changes were made in accordance with the applicable transitional provisions. IFRS 10, Consolidated Financial Statements IFRS 10, Consolidated Financial Statements replaces the guidance on control and consolidation in IAS 27, Consolidated and Separate Financial Statements and SIC-12, Consolidation—Special Purpose Entities. The new consolidation standard changes the definition of control so that the same criteria apply to all entities, both operating and special purpose entities, to determine control. The revised definition focuses on the need to have both power and variable returns before control is present. The Company assessed its consolidation conclusions on January 1, 2013 and determined that the adoption of IFRS 10 did not result in any change in the consolidation status or any of its subsidiaries. IFRS 11, Joint Arrangements IFRS 11, Joint Arrangements, supersedes IAS 31, Interests in Joint Ventures. The new standard requires joint arrangements to be classified either as joint operations or joint ventures depending on the contractual rights and obligations of each investor that jointly controls the arrangement. For joint operations the Company recognizes its share of assets, liabilities, revenue and expenses of the joint operation. An investment in a joint venture is accounted for using the equity method as set out in IAS 28, Investments in Associates and Joint Ventures (amended in 2011). The other amendments to IAS 28 did not affect the Company. The Company has no joint arrangements and concluded that the adoption of IFRS 11 did not result in any changes in the accounting for joint arrangements. IFRS 12, Disclosure of Interests in Other Entities IFRS 12, Disclosure of interests in other entities establishes a comprehensive disclosure standard to address the requirements for subsidiaries, joint arrangements and associates including the reporting entity’s involvement with other entities. It also includes the requirements for unconsolidated structured entities (i.e. special purpose entities) The Company has adopted IFRS 12 effective January 1, 2013 and this adoption will currently not result in any changes in the disclosure in the annual consolidated financial statements. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!6! !
  8. 8. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 2. Significant accounting policies (continued) b) Changes in accounting policies (continued) IFRS 13, Fair Value Measurement IFRS 13, Fair Value Measurement provides a single framework for measuring fair value. The measurement of the fair value of an asset or liability is based on assumptions that market participants would use when pricing the asset or liability under current market conditions, including assumptions about risk. The Company adopted IFRS 13 on January 1, 2013 on a prospective basis. The adoption of IFRS 13 did not require any adjustment to the valuation techniques used by the Company to measure fair value and did not result in any measurement adjustments as at January 1, 2013. Additional disclosure on fair value measurement has been included in note 10. IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine IFRIC 20, Stripping costs in the production phase of a surface mine provides guidance on the accounting for costs of stripping activities associated with waste removal in the production phase of surface mining. Stripping activity may create two types of benefit: i) useable ore which can be used to produce inventory and ii) improved access to further quantities of material that can be mined in future periods. The Company has adopted IFRIC 20 as at January 1, 2013. The Company is currently not in production phase so these changes did not result in any adjustments to the financial statements. IAS 1, Amendment, Presentation of Items of Other Comprehensive Income The Company has adopted the amendments to IAS 1 effective January 1, 2013. These amendments require the Company to group other comprehensive income items by those that will be reclassified subsequently to profit or loss and those that will not be reclassified. The Company has classified comprehensive income items of the comparative period. These changes did not result in any adjustments to other comprehensive income or comprehensive income. 3. Trade and other receivables At June 30, 2013 trade and other receivables were $114,445 ($1,405,815 at December 31, 2012) including refundable VAT of $99,261 receivable from the Namibian Revenue Authority. An amount of $1,077,648 VAT paid in 2012 on the importation of the crusher plant into Namibia, which was previously stored in South Africa, was subsequently received in the first quarter of 2013. 4. Investments June 30 2013 $ 1 Shares of Angus Mining Inc. December 31 2012 $ 256,000 320,000 As at June 30, 2013, the Company held 1,600,000 shares of Angus Mining Inc. (“Angus”) which had a fair value of $256,000 (December 31, 2012- $320,000). As at December 31, 2011, the Company held 4,600,000 shares of Angus, which were designated as available for sale assets and had a fair value of $667,000. In addition, the Company held 3,000,000 common share purchase warrants with a fair value on December 31, 2011 of $11,000 which were classified as derivative instruments, entitling the Company to acquire 3,000,000 common shares of Angus exercisable at $0.50 per common share up to September 23, 2012. On March 26, 2012, Angus relinquished its rights, title and interest under the Option Agreement with respect to the Ondundu Gold Project, which is described in note 5. As consideration for this relinquishment, Angus received a 20% carried ownership interest in Omatjete Mining Company (Proprietary) Limited and Forsys returned to Angus for cancellation 3,000,000 common shares and 3,000,000 common share purchase warrants of Angus, which Forsys received when the Option Agreement was initially executed in September 2010. This relinquishment resulted in a $45,000 write-down in investments and a $9,000 write-down of derivative financial instruments which were expensed through the consolidated income (loss) statement in the 2012 financial year. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!7! !
  9. 9. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 5. Mineral properties, exploration and evaluation costs a) The continuity of the Company’s investment in Mineral properties, exploration and evaluation costs is as follows. ! Valencia Namibplaas Uranium Uranium Gold Project Project Project $ $ $ $ 42,928,539 16,756,895 3,280,620 62,966,054 Acquisition of mineral properties - 12,841,056 676,549 13,517,605 Recovery of mineral properties - - (428,804) (428,804) 1,652,814 2,807,209 125,499 4,485,522 Balance at January 1, 2012 Additions to exploration and evaluation costs Ondundu Total Foreign exchange (1,494,915) (511,073) (186,698) (2,192,686) Balance at December 31, 2012 43,086,438 31,894,087 3,467,166 78,447,691 1,756,337 177,636 74,118 2,008,091 Additions to exploration and evaluation costs Foreign currency translation (1,959,889) (751,029) (245,455) (2,956,373) Balance at June 30, 2013 42,882,886 31,320,694 3,295,829 77,499,409 b) The Company holds the following licences in relation to mineral properties in Namibia, Africa which have mineral property, exploration and evaluation costs capitalized on the balance sheet as at June 30, 2013. Valencia Uranium Project Through its wholly owned subsidiary Valencia Uranium (Proprietary) Limited, the Company holds Mining Licence ML149 for the Valencia Uranium Project which is a component of the Norasa Uranium Project. This Mining Licence was granted effective June 23, 2008 for a period of 25 years until June 22, 2033. Namibplaas Uranium Project The exploration licence for Namibplaas expires November 6, 2013. A renewal application for a further two year period was lodged on August 6, 2013. This project is also a component of the Norasa Uranium Project. Effective March 26, 2012 the Company acquired the remaining 30% of the Namibplaas Uranium Project from Etherlin Management Corp. Consideration for the transaction is summarized below. This transaction was recorded as an asset acquisition. Accordingly, the Company recorded an increase in mineral properties, exploration and evaluation costs in 2012 for the fair value of the shares and warrants issued. 13,000,000 Class A Common Shares 12,090,000 2,000,000 Class A Common Share Purchase Warrants exercisable until March 26, 2014 at $1.10 to acquire 2,000,000 Class A Common Shares 751,056 Total consideration recorded as an increase to Mineral Properties, Exploration and Evaluation Costs $ 12,841,056 Ondundu Gold Project Following completion of the Angus transaction described in note 4 and implementation of a participation agreement with Minden Investments (Proprietary) Limited (“Minden”) on March 26, 2012, the Company holds a 70% interest in Omatjete Mining Company (Proprietary) Limited (“Omatjete”), which owns 100% of Exclusive Prospecting Licence 3195 (“EPL 3195”) for the Ondundu Gold Project (“Ondundu”). Angus holds a 20% carried interest and Minden has earned the right to a 10% stake in Ondundu. This minority shareholding is recorded as a 30% non-controlling interest in Omatjete. This partnership was established to facilitate the direct participation of the Namibian community in Ondundu. Application for renewal of EPL 3195 was lodged on February 28, 2013 to extend the licence from May 30, 2013 for a further two years. The licence remains in good standing while the application is being assessed. In July 2011, Angus provided notice to the Company to exercise their option to acquire a 50.1% beneficial interest in the Ondundu project pursuant to the terms of an option agreement the Company entered into with Angus in September 2010. Subsequently and prior to the issue of any shares, Angus advised the Company they wished to terminate the Option Agreement. On January 31, 2012, the Company and Angus entered into an Option Termination and Settlement Agreement which was completed on March 26, 2012. Pursuant to this agreement, Angus agreed to relinquish all of its rights, title and interests under the option agreement with respect to Ondundu. As consideration for this relinquishment, Angus has received a 20% carried interest in Omatjete and Forsys has returned for cancellation the 3,000,000 common shares and 3,000,000 common share purchase warrants of Angus which it received in September 2010 and assumed net liabilities of $304,298 in 2012. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!8! !
  10. 10. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 5. Mineral properties, exploration and evaluation costs (continued) Ondundu Gold Project (continued) In 2012 the Company recorded an increase to mineral properties, exploration and evaluation costs for the fair value of the shares and warrants forfeited and the net liabilities assumed on the date of acquisition less a subsequent reduction of $19,749 to accounts payable, as set out in the following summary. Shares of Angus Mining Inc. relinquished 390,000 Warrants of Angus Mining Inc. relinquished 2,000 Accounts payable 284,549 Additions to Mineral Properties, Exploration and Evaluation Costs $ 676,549 6. Property, plant and equipment At June 30, 2013, included in property, plant and equipment of $13,033,287 (December 31, 2012 - $14,390,572) is capital workin-progress of $12,899,435 (December 31, 2012 $14,207,787). In order to achieve production at the Valencia Uranium Project the Company identified certain critical long-lead items required to bring the mine into production. At June 30, 2013 capital work-in-progress includes $2,573,084 incurred to date for an access road to the Valencia mine site which is now complete, $6,809,231 to fabricate a crusher (currently in storage in Namibia), $3,092,092 incurred for costs to commence fabrication of three rod mills and deposits of $425,028 for construction of hydro infrastructure. Installation of the crusher at the Valencia mine site and remaining fabrication of the rod mills has been put on hold pending completion of financing arrangements and a formal decision by the Company’s Board of Directors for the development of the Norasa Uranium Project. 7. Share capital Authorized The Company is authorized to issue: An unlimited number of Class A common shares without par value An unlimited number of redeemable, voting non-participating Class B shares (2) An unlimited number of Class C shares with rights and privileges to be determined by the Forsys Board of Directors (2) Issued A continuity summary of the issued and outstanding Class A common shares and the associated dollar amounts is presented below: Number of Common Shares Balance as at January 1, 2012 Amount $ 96,875,422 147,275,041 Issued for cash: Share issuance (1) Balance as at March 31, June 30 and December 31, 2012 Share issuance Balance as at March 31 and June 30, 2013 13,000,000 12,067,734 109,875,422 159,342,775 - - 109,875,422 159,342,775 (1) On March 26, 2012, Forsys issued 13,000,000 common shares as consideration for purchasing the remaining 30% interest in the Namibplaas Uranium project described in note 5. The closing price of the Company’s shares on the date of this transaction was $0.93 per share resulting in total share consideration of $12,067,734 after deducting issuance costs of $22,266. (2) The Company has not issued any Class B or Class C shares. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!9! ! Num
  11. 11. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 8. Stock options Forsys has established a stock option plan to provide additional incentive to its officers, directors, employees and consultants in their efforts on behalf of the Company in the conduct of its affairs. Under this stock option plan, as amended in 2008, the Company is authorized to grant a maximum of 12,000,000 stock options to its directors, employees, consultants and management to acquire Class A common shares. At June 30, 2013 an aggregate of 3,000,000 options have been granted and are outstanding (net of forfeitures and cancellations) under this plan and 3,941,666 stock options had been exercised since inception in 1998. As a result, as at June 30, 2013, 5,058,334 (December 31, 2012 – 5,058,334) options were available for issuance. The term of the stock options is five years from the date of issue and the exercise price of any stock option granted shall not be lower than the market price of the Company’s Class A common shares on the date on which the grant of the option is approved by the Board of Directors. The Board of Directors determines the number of stock options, the date or dates on which the options should be granted and the terms and conditions attached to each option within the limits prescribed by applicable law. A summary of the activity in the Company’s stock option plan is presented below. Three Months Ended June 30, 2013 Weighted Average Number of Exercise Options Price Per Share $ 3,000,000 1.16 Stock options outstanding, beginning of the period Six Months Ended June 30, 2013 Weighted Average Number of Exercise Options Price Per Share $ 3,000,000 1.16 Transactions during the period: Granted - - - - Exercised - - - - Forfeited - - - - - - - Expired Stock options outstanding at end of period 3,000,000 1.16 3,000,000 1.16 Stock options exercisable at end of period 2,700,000 1.20 2,700,000 1.20 A summary of the Company’s options outstanding and exercisable as at June 30, 2013 is presented below: Market Price / Exercise Price Options Outstanding Options Exercisable Expiry Date August 1, 2008 $3.80 100,000 100,000 August 1, 2013 June 27, 2011 $1.41 875,000 875,000 June 26, 2016 March 16, 2012 $0.95 1,625,000 1,625,000 March 16, 2017 June 12, 2012 $0.88 200,000 100,000 June 12, 2017 November 30, 2012 $0.69 200,000 - November 30, 2017 3,000,000 2,700,000 Grant Date Share-based compensation is included as a component of general and administrative expense in the consolidated statement of income (loss). During the three months ended June 30, 2013 share-based compensation of $13,147 (three months ended June 30, 2012 - $10,214) was expensed and $12,667 (three months ended June 30, 2012 - $34,168) was included in mineral properties, exploration and evaluation costs. During the six months ended June 30, 2013 share-based compensation of $34,629 (six months ended June 30, 2012 - $736,837) was expensed within general and administrative expenses and $34,494 (six months ended June 30, 2012 - $117,096) was included in mineral properties, exploration and evaluation costs. The fair values of stock options with vesting provisions are amortized following a graded vesting method as share-based compensation expense over the applicable vesting periods. At June 30, 2013, the Company has a maximum value of unvested share-based compensation expense of $58,114 to be recognized in future years up to August 31, 2015. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!10! !
  12. 12. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 9. Expenses by nature The elements of general and administrative expense in the consolidated income (loss) statement are as follows: Three Months Ended June 30 Six Months Ended June 30 2013 $ Consulting fees 2012 $ 2013 $ 2012 $ 224,024 210,730 448,417 393,035 Salaries, directors’ fees and benefits 80,290 547,440 174,606 694,517 Share-based compensation 13,147 10,214 34,629 736,837 Professional fees 39,126 43,602 77,575 123,035 Public company costs 31,316 30,137 77,118 78,628 Other corporate costs 5,034 43,999 43,275 127,019 Travel 35,269 50,168 43,212 96,221 Depreciation 55,248 18,569 27,119 38,181 Gain on sale of property, plant and equipment - - - 401 General and administrative expense for period 446,775 963,409 937,013 2,304,941 Salaries, directors’ fees and benefits for the three months ended June 30, 2012 included a severance payment of $400,000. 10. Fair value measurement The Company’s principal financial instruments are cash and cash equivalents, investments and trade payables. Financial instruments are classified into one of five categories: assets and liabilities held at fair value through profit and loss, held-to maturity investments, loans and receivables, available-for-sale assets and other financial liabilities. The carrying values of the Company’s financial instruments are classified into the following categories: June 30 2013 $ December 31 2012 $ 4,041,131 5,666,318 256,000 320,000 - - 237,659 278,068 Recurring measurements Financial Assets Loans and receivables (1) Available-for-sale financial assets (2) Assets held at fair value through profit and loss (3) Financial Liabilities Other financial liabilities (1) (2) (3) (4) (4) Comprises cash and cash equivalents. Comprises investment in shares of Angus Mining Inc. Comprises investment in warrants of Angus Mining Inc. Comprises trade payables. Each level is based on the transparency of the inputs used to measure the fair values of assets and liabilities: Level 1 - Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities, Level 2 – Values based on quoted prices in markets that are not active or model inputs which are observable either directly or indirectly for substantially the full term of the asset or liability, Level 3 – Values based on prices or valuation techniques that require inputs which are both unobservable and significant to the overall fair value measurement. The Company applies a fair value measurement hierarchy to assets and liabilities in the consolidated balance sheet carried at fair value. This only applies to available-for-sale financial assets and derivative instruments consisting of the Company’s investment in shares and warrants of Angus Mining Inc. respectively. The derivative financial instruments are considered level 2 inputs. The available-for-sale financial assets are a level 1 input as fair value is determined by reference to quoted marked prices in active markets. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11! !
  13. 13. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 10. Fair value measurement (continued) A number of the Company’s accounting policies and disclosures require the determination of fair values for both financial assets and non-financial assets and liabilities. The fair value has been determined for measurement and/or disclosure purposes based on the methods described below. Where applicable additional information on the assumptions used to determine fair value is included in the notes related to the specific asset or liability. Investments in Equity and Debt Securities The fair value of the share component of the Company’s investment in Angus Mining Inc. is determined by reference to the share’s quoted market price in active markets on the reporting date. The fair value of the warrant component of the Company’s investment is determined using the binomial option pricing model which requires estimates for the useful life of the instrument and stock volatility. 11. Commitments and contingencies The Company has lease obligations of $6,310. There are currently no tenement obligations on Exclusive Prospecting Licences (“EPL”s) to the Ministry of Mines and Energy of the Republic of Namibia. The Company is awaiting renewal of the Ondundu EPL which expired on May 30, 2013 (refer note 5) with the application including a proposed exploration programme totalling $1,436,400. The Company has also lodged a licence renewal for the Namibplaas EPL which expires November 6, 2013 (refer note 5) and includes a proposed exploration programme of $536,256. Proposed exploration programmes become a tenement obligation upon licence renewal. The Company is involved from time to time in various legal actions and claims in the ordinary course of business. In the opinion of management, the aggregate amount of any potential liability is not expected to have a material adverse effect on the Company’s financial position or results. 12. Key management compensation and related party transactions Compensation of key management personnel Key management personnel as defined under IFRS are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s Chief Executive Officer, Chief Financial Officer, Vice-President Legal Affairs and members of the Company’s Board of Directors. Compensation awarded to key management personnel is as follows: Three Months Ended June 30 Six Months Ended June 30 2013 $ Consulting fees Salaries and short-term employee benefits Termination payments Share-based compensation 2012 $ 2013 $ 2012 $ 180,000 161,769 360,000 296,769 79,740 146,846 172,740 289,846 - 400,000 - 400,000 13,147 5,634 30,050 713,939 272,887 714,249 562,790 1,700,554 Related party transactions General and administrative expenses include $nil (2012 - $28,111) for the six months ended June 30, 2013 for legal fees paid to a firm, a partner of which is also a Director of the Company and $4,865 (2012 - $nil) for the three months ended June 30, 2013 and $21,405 (2012 - $nil) for the six months ended June 30, 2013 for serviced office expenses paid to a business, the principal of which is also a Director of the Company. Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!12! !
  14. 14. FORSYS METALS Corp. (An exploration stage company) Notes to the Financial Statements (continued) For the six months ended June 30, 2013 (Expressed in Canadian dollars) 13. Segmented information An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are reviewed regularly by the Company’s chief operating decision maker, the Chief Executive Officer and for which discrete financial information is available. The Company has determined that it has one operating segment, the acquisition, exploration and development of uranium and gold mineral properties, all of which are currently located in Namibia. The Company’s corporate head office earns nominal interest income which is considered incidental to the activities of the Company and therefore does not meet the definition of an operating segment. Non-current assets excluding financial assets and deferred taxes by geographic area are as follows: June 30 2013 $ Other 90,523,591 92,827,901 9,105 10,363 90,532,696 Namibia December 31 2012 $ 92,838,264 ! Forsys!Metals!Corp.!Interim!Consolidated!Financial!Statements!for!the!Six!Months!Ending!June!30,!2013!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!13! !

×