Galantas Reports Results for the Three and Six Months Ended June 30, 2018
Galantas Reports Results for the Three and Six Months Ended June 30, 2018
TORONTO, Aug. 28, 2018 -- Galantas Gold Corporation (the ‘Company’) is pleased to announce its financial results for the
Three and Six Months ended June 30, 2018.
Financial Highlights
Highlights of the 2018 second quarter’s and first six month’s results, which are expressed in Canadian Dollars, are
summarized below:
All figures denominated in Canadian Dollars (CDN$) Second Quarter Ended
June 30
Six Months Ended
June 30
2018 2017 2018 2017
Revenue $ 57,040 $ 16,607 $ 57,040 $ 19,341
Cost of Sales $ (34,150) $ (111,605) $ (58,216) $ (175,021)
Income (loss) before the undernoted $ 22,890 $ (94,998) $ (1,176) $ (155,680)
Depreciation $ (77,980) $ (50,887) $ (142,229) $ (90,942)
General administrative expenses $ (616,153) $ (497,235) $ (1,025,043) $ (999,351)
Unrealized gain on fair value of derivative financial liability $ 0 $ 28,000 $ 10,000 $ 6,000
Foreign exchange gain / (loss) $ (29,267) $ 103,244 $ (66,560) $ 43,863)
Net Loss for the period $ (700,510) $ (511,876) $
(1,225,008) $(1,196,110)
Working Capital Deficit $(5,252,685) $(2,328,303) $ (5,252,685) $(2,328,303)
Cash loss from operating activities before changes in non-cash
working capital $ (429,920) $ (404,783) $ (762,340) $ (799,382)
Cash at June 30, 2018 $ 732,603 $ 1,681,739 $ 732,603 $ 1,681,739
The Net Loss for the three months ended June 30, 2018 amounted to CDN$ 700,510 (2017: CDN$ 511,876) and the cash loss
from operating activities before changes in non-cash working capital for the second quarter of 2018 amounted to CDN$ 429,920
(2017 Q2: CDN$ 404,783). The Net Loss for the six months ended June 30, 2018 amounted to CDN$ 1,225,008 (2017:CDN$
1,196,110) and the cash loss from operating activities before changes in non-cash working capital for the first six months of
2018 amounted to CDN$ 762,340 (2017: CDN$ 799,382).
The Company had cash balances of $ 732,603 at June 30, 2018 compared to $ 1,681,739 at June 30, 2017. The working
capital deficit at June 30, 2018 amounted to $ 2,328,303 compared to a working capital deficit of $ 2,328,303 at June 30, 2017.
There were no financing activities during the first half of 2018. Additional loan advances from G&F Phelps Ltd, a related party,
during the six months totaled $ 549,193 (UK£ 316,410). During the second quarter Galantas announced that its operating
subsidiary, Flintridge Resources Ltd. had signed a concentrate pre-payment agreement and a loan facility agreement for US$
1.6 million (CDN$ 2.012 million) with Ocean Partners UK Ltd., together with an increased, on-demand loan facility of £600,000
with G&F Phelps Ltd. (See press release dated April 12, 2018 for further details).
Permitting
In November 2017, Galantas reported that it had received notice of an application, by a third party, to the Court of Appeal, in
relation to a positive judicial review judgment regarding the grant of planning permission. This was subsequently heard in
February 2018. The Court will deliver its judgement at a later date, currently unknown but indicated for September 2018.
Production/Mine Development
Production of flotation concentrate at the Omagh mine from development ore restarted in the third quarter of 2018. The granting
of planning consent in 2015 for an underground operation at the Omagh site, now subject to the result of a judicial review
appeal, permits the continuation and expansion of gold mining, following the exhaustion of accessible resources available to
the previous open pit operation. The underground mine, which is in active development, will utilize the same processing
methods and the processing plant has received a partial upgrade. The strategy is to establish the underground mine and look
for further expansion of gold resources on the property, which has many undrilled targets.
The phased development arrangement, in terms of mine access dimensions, is expected to allow for rapid expansion of
production as additional capital becomes available.
Underground development of a decline tunnel, located at the base of the existing open pit, commenced in the first quarter
2017. After over-coming initial difficulties, tunneling continued through 2017 and to date in 2018. A detailed plan is being
implemented to accelerate progress in line with the planning consent. The main decline tunnel descends at a slope of 1 in 7,
from near the base of the former Kearney open pit. A horizontal west to east access tunnel driven from the decline tunnel
intersected the north / south Kearney vein during June at approximately a right angle and has exposed the vein to be
approximately 2.8 metres wide at that point. The vein intersection is located some 15 metres below the base of the Kearney
open-pit. A horizontal development tunnel is planned to be driven on vein, at this level, in both directions, beneath a safety
(Crown) pillar which will initially provide limited feed to the mill in the third quarter. The decline tunnel is planned to be extended
in depth, along with construction of a second means of egress. The decline is planned to provide access to lower levels and
permit stoping between the first two horizontal levels in late 2018 or early 2019. Stoping operations are expected to provide an
enhanced supply of mill feed. The underground development, using drill and blast techniques, is being carried out by an in-
house crew which is fully trained in safety and operating procedures. An in-house, mines rescue team has also been trained
and equipped.
Whilst the present drilling and loading equipment, which was purchased for training and early tunnel development purposes, is
performing above expectations it has lower productivity when compared with current technology. New drilling equipment has
been acquired on a rental basis, with options to purchase, and is expected to improve advance rates significantly. A substitute
tunneling drill rig has been available on rental to cover delays in manufacture. The interim rig has led to a significant
improvement in advance rate. In addition a new 4t capacity load-haul-dump unit, has been ordered on a rental purchase basis.
This is expected to improve productivity in loading operations from the smaller cross-section vein drives. It is equipped with
radio remote control which enhances safety in stope mucking operations. Delivery is expected in September 2018. Further
equipment purchases are under negotiation.
Environmental monitoring continues to demonstrate compliance with the standards imposed by the regulatory authorities.
Safety is a high priority and the zero lost time accident rate, since the start of underground operations, continues.
The detailed results and Management Discussion and Analysis (MD&A) are available on www.sedar.com and
www.galantas.com and the highlights in this release should be read in conjunction with the detailed results and MD&A. The
MD&A provides an analysis of comparisons with previous periods, trends affecting the business and risk factors.
The Annual General and Special Meeting of the Company was held at Thursday, June 28, 2018 at 11:00 a.m. (Toronto time) at
the registered office of the Company, DSA Corporate Services Inc. 82 Richmond Street East, Toronto, Ontario, M5C 1P1.
Qualified Person
The financial components of this disclosure has been reviewed by Leo O’Shaughnessy (Chief Financial Officer) and the
production, exploration and permitting components by Roland Phelps (President & CEO), qualified persons under the meaning
of NI. 43-101. The information is based upon local production and financial data prepared under their supervision.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements
within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities
laws, including anticipated production and development projections, for the Omagh Gold project. Forward-looking statements
are based on estimates and assumptions made by Galantas in light of its experience and perception of historical trends,
current conditions and expected future developments, as well as other factors that Galantas believes are appropriate in the
circumstances. Many factors could cause Galantas’ actual results, the performance or achievements to differ materially from
those expressed or implied by the forward looking statements or strategy, including: gold price volatility; discrepancies
between actual and estimated production, actual and estimated metallurgical recoveries and throughputs; mining operational
risk, geological uncertainties; regulatory restrictions, including environmental regulatory restrictions and liability; risks of
sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of or availability of key employees;
additional funding requirements; uncertainties regarding planning and other permitting issues; and defective title to mineral
claims or property. These factors and others that could affect Galantas’s forward-looking statements are discussed in greater
detail in the section entitled “Risk Factors” in Galantas’ Management Discussion & Analysis of the financial statements of
Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other
regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place
undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any
forward-looking statements in this press release, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
Enquiries
Galantas Gold Corporation
Jack Gunter P.Eng – Chairman
Roland Phelps C.Eng – President & CEO
Email: [email protected]
Website: www.galantas.com
Telephone: +44 (0) 2882 241100
Grant Thornton UK LLP (Nomad)
Philip Secrett, Richard Tonthat.
Telephone: +44(0)20 7383 5100
Whitman Howard Ltd (Broker & Corporate Adviser)
Ranald McGregor-Smith, Nick Lovering
Telephone: +44(0)20 7659 1234
NOTICE TO READER
The accompanying unaudited condensed interim consolidated financial statements of Galantas Gold Corporation (the
"Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated
financial statements have not been reviewed by the Company's auditors.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
(Unaudited)
As at As at
June 30, December 31,
2018 2017
ASSETS
Current assets
Cash $ 732,603 $ 779,758
Accounts receivable and prepaid expenses (note 4) 267,699 316,410
Inventories (note 5) 11,282 15,095
Total current assets 1,011,584 1,111,263
Non-current assets
Property, plant and equipment (note 6) 8,818,885 8,166,752
Long-term deposit (note 8) 520,710 508,830
Exploration and evaluation assets (note 7) 5,949,095 3,948,452
Total non-current assets 15,288,690 12,624,034
Total assets $ 16,300,274 $ 13,735,297
EQUITY AND LIABILITIES
Current liabilities
Accounts payable and other liabilities (note 9) $ 1,705,261 $ 1,216,332
Current portion of financing facilities (note 10) 285,667 6,182
Due to related parties (note 13) 4,273,341 3,381,357
Total current liabilities 6,264,269 4,603,871
Non-current liabilities
Non-current portion of financing facilities (note 10) 1,006,105 19,689
Decommissioning liability (note 8) 570,042 551,680
Derivative financial liability - 10,000
Total non-current liabilities 1,576,147 581,369
Total liabilities 7,840,416 5,185,240
Capital and reserves
Share capital (note 11(a)(b)) 39,759,172 39,759,172
Reserves 8,792,996 7,658,187
Deficit (40,092,310) (38,867,302)
Total equity 8,459,858 8,550,057
Total equity and liabilities $ 16,300,274 $ 13,735,297
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Going concern (note 1)
Contingency (note 15)
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Loss
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenues
Gold sales $ 57,040 $ 16,607 $ 57,040 $ 19,341
Cost and expenses of operations
Cost of sales 34,150 111,605 58,216 175,021
Depreciation (note 6) 77,980 50,887 142,229 90,942
112,130 162,492 200,445 265,963
Loss before general administrative and other (incomes)
expenses (55,090) (145,885) (143,405) (246,622)
General administrative expenses
Management and administration wages (note 13) 216,565 158,014 373,417 304,742
Other operating expenses 57,081 98,247 104,177 121,261
Accounting and corporate 17,107 16,191 30,360 30,090
Legal and audit 17,452 47,451 64,203 80,737
Stock-based compensation (note 11(d)(i)(ii)) 69,772 80,506 145,855 301,087
Shareholder communication and investor relations 66,312 61,991 105,630 100,172
Transfer agent 5,477 5,605 6,127 7,580
Director fees (note 13) 8,250 8,500 13,250 13,500
General office 2,041 1,949 4,422 3,910
Accretion expenses (notes 8 and 10) 77,618 2,717 80,397 5,307
Loan interest and bank charges (note 13) 78,478 16,064 97,205 30,965
616,153 497,235 1,025,043 999,351
Other (incomes) expenses
Unrealized gain on fair value of derivative financial liability - (28,000) (10,000) (6,000)
Foreign exchange loss (gain) 29,267 (103,244) 66,560 (43,863)
29,267 (131,244) 56,560 (49,863)
Net loss for the period $ (700,510)$ (511,876)$ (1,225,008)$ (1,196,110)
Basic and diluted net loss per share (note 12) $ (0.00)$ (0.00)$ (0.01)$ (0.01)
Weighted average number of common shares outstanding
- basic and diluted 187,549,186 170,894,087 187,549,186 160,616,924
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Other Comprehensive (Loss) Income
(Expressed in Canadian Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net loss for the period $ (700,510)$ (511,876) $ (1,225,008) $ (1,196,110)
Other comprehensive (loss) income
Items that will be reclassified subsequently to profit or loss
Foreign currency translation differences (391,688) 56,765 202,954 113,470
Total comprehensive loss $ (1,092,198)$ (455,111) $ (1,022,054) $ (1,082,640)
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
Six Months Ended
June 30,
2018 2017
Operating activities
Net loss for the period $ (1,225,008) $ (1,196,110)
Adjustment for:
Depreciation (note 6) 142,229 90,942
Stock-based compensation (note 11(d)(i)(ii)) 145,855 301,087
Interest expense 93,063 28,968
Foreign exchange gain 11,034 (23,576)
Accretion expenses (notes 8 and 10) 80,397 5,307
Unrealized gain on fair value of derivative financial liability (10,000) (6,000)
Non-cash working capital items:
Accounts receivable and prepaid expenses 54,505 (38,856)
Inventories 4,070 9,110
Accounts payable and other liabilities 453,412 124,308
Due to related parties 173,908 174,284
Net cash used in operating activities (76,535) (530,536)
Investing activities
Purchase of property, plant and equipment (602,009) (371,546)
Exploration and evaluation assets (1,909,858) (305,963)
Net cash used in investing activities (2,511,867) (677,509)
Financing activities
Proceeds of private placement - 2,446,299
Share issue costs - (134,854)
Advances from related parties 549,193 -
Proceeds from financing facilities (note 10) 2,021,280 -
Financing charges related to financing liabilities (41,806) -
Repayment of financing facilities (note 10) (3,022) (1,842)
Net cash provided by financing activities 2,525,645 2,309,603
Net change in cash (62,757) 1,101,558
Effect of exchange rate changes on cash held in foreign currencies 15,602 23,176
Cash, beginning of period 779,758 557,005
Cash, end of period $ 732,603 $ 1,681,739
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Galantas Gold Corporation
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars)
(Unaudited)
Reserves
Equity
settled Foreign
share-
based currency
Share Warrants payments translation
capital reserve reserve reserve Deficit Total
Balance, December 31, 2016 $ 36,331,577 $ - $ 6,575,109 $ 450,948 $(36,789,163) $ 6,568,471
Shares issued in private placement
(note 11(b)(i)) 2,446,299 - - - - 2,446,299
Share issue costs (134,854) - - - - (134,854)
Stock-based compensation (note
11(d)(i)) - - 301,087 - - 301,087
Net loss and other comprehensive
income for the period - - - 113,470 (1,196,110) (1,082,640)
Balance, June 30, 2017 $ 38,643,022 $ - $ 6,876,196 $ 564,418 $(37,985,273) $ 8,098,363
Balance, December 31, 2017 $ 39,759,172 $ - $ 7,038,978 $ 619,209 $(38,867,302) $ 8,550,057
Warrants issued (note 10(ii)) - 786,000 - - - 786,000
Stock-based compensation (note
11(d)(i)(ii)) - - 145,855 - - 145,855
Net loss and other comprehensive
income for the period - - - 202,954 (1,225,008) (1,022,054)
Balance, June 30, 2018 $ 39,759,172 $ 786,000 $ 7,184,833 $ 822,163 $(40,092,310) $ 8,459,858
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Galantas Gold Corporation
Notes to Condensed Interim Consolidated Financial Statements
Three and Six Months Ended June 30, 2018
(Expressed in Canadian Dollars)
(Unaudited)
1. Going Concern
These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which
contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the
normal course of business. In assessing whether the going concern assumption is appropriate, management takes into
account all available information about the future, which is at least, but is not limited to, twelve months from the end of the
reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions
that may cast significant doubt on the Company's ability to continue as a going concern. The Company's future viability
depends on the consolidated results of the Company's wholly-owned subsidiary Cavanacaw Corporation ("Cavanacaw").
Cavanacaw has a 100% shareholding in both Omagh Minerals Limited (“Omagh”) and Flintridge Resources Limited
("Flintridge") who are engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern
Ireland. The Omagh mine has an open pit mine, which was in production and is reported as property, plant and equipment and
an underground mine which is in the development stage and reported as exploration and evaluation assets. The production at
the open pit mine was suspended in 2013.
The going concern assumption is dependent upon the ability of the Company to obtain the following:
a. Securing sufficient financing to fund ongoing operational activity and the development of the underground mine.
b. Obtaining consent for an underground mine which is currently subject to a judicial review process.
Should the Company be unsuccessful in securing the above, there would be significant uncertainty over the Company’s ability
to continue as a going concern. The Company is currently in discussions with a number of potential financiers.
As at June 30, 2018, the Company had a deficit of $40,092,310 (December 31, 2017 - $38,867,302). Management is confident
that it will be able to secure the required financing to enable the Company to continue as a going concern. However, this is
subject to a number of factors including market conditions.
These unaudited condensed interim consolidated financial statements do not reflect adjustments to the carrying values of
assets and liabilities, the reported expenses and financial position classifications used that would be necessary if the going
concern assumption was not appropriate. These adjustments could be material.
2. Incorporation and Nature of Operations
The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479
Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by
articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources
Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties,
principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern Ireland,
including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to bring its property
into production.
The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw,
a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold
deposit near Omagh. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the
name Galántas Irish Gold Limited ("Galántas"). As at July 1, 2007, the Company's Omagh mine began production and in 2013
production was suspended. On April 1, 2014, Galántas amalgamated its jewelry business with Omagh.
On April 8, 2014, Cavanacaw acquired Flintridge. Following a strategic review of its business by the Company during 2014
certain assets owned by Omagh were acquired by Flintridge.
The Company's operations include the consolidated results of Cavanacaw, and its wholly-owned subsidiaries Omagh,
Galántas and Flintridge.
The Company’s common shares are listed on the TSX Venture Exchange ("TSXV") and London Stock Exchange AIM under
the symbol GAL. The primary office is located at The Canadian Venture Building, 82 Richmond Street East, Toronto, Ontario,
Canada, M5C 1P1.
3. Significant Accounting Policies
Statement of compliance
The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting
Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee
("IFRIC"). These unaudited condensed interim consolidated financial statements have been prepared in accordance with
International Accounting Standard 34 - Interim Financial Reporting. Accordingly, they do not include all of the information
required for full annual financial statements.
The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRSs issued and
outstanding as of August 22, 2018 the date the Board of Directors approved the statements. The same accounting policies
and methods of computation are followed in these unaudited condensed interim consolidated financial statements as
compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2017,
except as noted below. Any subsequent changes to IFRS that are given effect in the Company’s annual consolidated financial
statements for the year ending December 31, 2018 could result in restatement of these unaudited condensed interim
consolidated financial statements.
New accounting standard adopted
Effective January 1, 2018, the Company adopted IFRS 9 - Financial Instruments ("IFRS 9"). In July 2014, the IASB issued the
final publication of the IFRS 9 standard, which supersedes lAS 39 - Financial Instruments: Recognition and Measurement
("lAS 39"). IFRS 9 includes revised guidance on the classification and measurement of financial instruments, new guidance for
measuring impairment on financial assets, and new hedge accounting guidance. The Company has adopted IFRS 9 on a
retrospective basis, however, this guidance had no impact to the Company's unaudited condensed interim consolidated
financial statements.
Under IFRS 9, financial assets are classified and measured based on the business model in which they are held and the
characteristics of their contractual cash flows. IFRS 9 contains the primary measurement categories for financial assets:
measured at amortized cost, fair value through other comprehensive income ("FVTOCI") and fair value through profit and loss
("FVTPL").
The new hedge accounting guidance aligns hedge accounting more closely with an entity's risk management objectives and
strategies. IFRS 9 does not fundamentally change the types of hedging relationships or the requirement to measure and
recognize ineffectiveness; however, it allows more hedging strategies used for risk management to qualify for hedge
accounting and introduces more judgement to assess the effectiveness of a hedging relationship, primarily from a qualitative
standpoint. The Company has elected to continue with lAS 39 for hedging. This does not have an effect on our reported
results.
Below is a summary showing the classification and measurement bases of our financial instruments as at January 1, 2018 as
a result of adopting IFRS 9 (along with comparison to lAS 39).
Classification IAS 39 IFRS 9
Cash FVTPL FVTPL
Accounts receivable Loans and receivables (amortized cost) Amortized cost
Long-term deposit Loans and receivables (amortized cost) Amortized cost
Accounts payable and other liabilities Other financial liabilities (amortized cost) Amortized cost
Financing facilities Other financial liabilities (amortized cost) Amortized cost
Due to related parties Other financial liabilities (amortized cost) Amortized cost
As a result of the adoption of IFRS 9, the accounting policy for financial instruments as disclosed in the Company’s December
31, 2017 consolidated financial statements has been updated as follows:
Financial assets
Financial assets are classified as either financial assets at FVTPL, amortized cost, or FVTOCI. The Company determines the
classification of its financial assets at initial recognition.
i. Financial assets recorded at FVTPL
Financial assets are classified as FVTPL if they do not meet the criteria of amortized cost or FVTOCI. Gains or losses on
these items are recognized in profit or loss.
The Company’s cash is classified as financial assets measured at FVTPL.
ii. Amortized cost
Financial assets are classified as measured at amortized cost if both of the following criteria are met and the financial assets
are not designated as at FVTPL: 1) the object of the Company’s business model for these financial assets is to collect their
contractual cash flows; and 2) the asset’s contractual cash flows represent "solely payments of principal and interest".
The Company’s accounts receivable and long-term deposit are classified as financial assets measured at amortized cost.
Financial liabilities
Financial liabilities are classified as either financial liabilities at FVTPL or at amortized cost. The Company determines the
classification of its financial liabilities at initial recognition.
i. Amortized cost
Financial liabilities are classified as measured at amortized cost unless they fall into one of the following categories: financial
liabilities at FVTPL, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition, financial
guarantee contracts, commitments to provide a loan at a below-market interest rate, or contingent consideration recognized by
an acquirer in a business combination.
The Company’s accounts payable and other liabilities, financing facilities and due to related parties do not fall into any of the
exemptions and are therefore classified as measured at amortized cost.
ii. Financial liabilities recorded FVTPL
Financial liabilities are classified as FVTPL if they fall into one of the five exemptions detailed above.
Transaction costs
Transaction costs associated with financial instruments, carried at FVTPL, are expensed as incurred, while transaction costs
associated with all other financial instruments are included in the initial carrying amount of the asset or the liability.
Subsequent measurement
Instruments classified as FVTPL are measured at fair value with unrealized gains and losses recognized in profit or loss.
Instruments classified as amortized cost are measured at amortized cost using the effective interest rate method. Instruments
classified as FVTOCI are measured at fair value with unrealized gains and losses recognized in other comprehensive income.
Derecognition
The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged,
cancelled, or expired. The difference between the carrying amount of the financial liability derecognized and the consideration
paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
Expected credit loss impairment model
IFRS 9 introduced a single expected credit loss impairment model, which is based on changes in credit quality since initial
application. The adoption of the expected credit loss impairment model had no impact on the Company’s unaudited
condensed interim consolidated financial statements.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the
Company in full or when the financial asset is more than 90 days past due.
The carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect
of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of
income that could generate sufficient cash flows to repay the amounts subject to the write-off.
New accounting standards not yet effective
(i) On June 7, 2017, the IASB issued IFRIC 23 - Uncertainty Over Income Tax Treatments. The interpretation provides guidance
on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income
tax treatments. The interpretation is applicable for annual periods beginning on or after January 1, 2019. Earlier application is
permitted. The Company intends to adopt the Interpretation in its consolidated financial statements for the annual period