The following discussion of the operating results, corporate activities and
financial condition of
This discussion and analysis contain forward-looking statements that involve
risks, uncertainties and assumptions. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including, but not limited to, those set forth under the heading "Risk
Factors and Uncertainties" in our Annual Report on Form 10-K for the year ended
The interim statements have been prepared in accordance with US Generally
Accepted Accounting Principles, as required under
The information contained within this report is current as of
Technical information in this Form 10Q, including the MD&A, has been reviewed
and approved by
Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates
The Company uses
14
Cautionary Note Regarding Forward-Looking Statements
Certain statements made in this Quarterly Report on Form 10-Q may constitute
forward-looking statements about the Company and its business. Forward-looking
statements are statements that are not historical facts and include, but are not
limited to, reserve and resource estimates, estimated value of the project,
projected investment returns, anticipated mining and processing methods for the
project, the estimated economics of the project, anticipated scandium
recoveries, production rates, scandium grades, estimated capital costs,
operating cash costs and total production costs, planned additional processing
work and environmental permitting. The forward-looking statements in this report
are subject to various risks, uncertainties and other factors that could cause
the Company's actual results or achievements to differ materially from those
expressed in or implied by forward-looking statements. These risks,
uncertainties and other factors include, without limitation, risks related to
uncertainty in the demand for scandium and pricing assumptions; uncertainties
related to raising sufficient financing to fund the
Scandium International Corporate Overview
During the first quarter of 2022, SCY completed an internal review of its
portfolio of assets and projects. The purpose of this review was to determine
the appropriate allocation of capital between the Company's scandium activities
and the recently announced initiatives on Critical Metals Recovery (CMR) and
High Purity Alumina (HPA). The board decided and announced on
During the second and third quarters, SCY was successful in reducing corporate
SG&A costs on an absolute and ongoing basis including reversing over
During the third quarter, we filed a new mine lease application to re-establish
the original Mining License and give access to the full scandium resource at
Nyngan. The application is pending with governmental authorities. We also
developed two drill programs, one for Nyngan and one for Honeybugle, which will
further delineate both resources. Because of the wet weather currently in
15
The Company was formed in 2006, under the name
Our focus of operations is the exploration and development of the Nyngan
scandium deposit located in
We acquired a 100% interest in the
During the third quarter of 2015, the Company converted a
In June of 2017, the Company entered into a share exchange agreement with SIL
for the purchase of SIL's 20% interest in
Corporate activity during the second quarter of 2022 focused on increasing our
financial strength through a non-brokered equity private placement and reducing
costs. SCY raised aggregate gross proceeds of
During the third quarter, we commenced a review of SCY's patent portfolio. We expect to conclude this review in the fourth quarter and plan to explore licensing opportunities in 2023.
16 Principal Properties Review
Nyngan Property Description and Location
Figure 1: Location of
[[Image Removed: scy_10qimg21.jpg]]
Note: None of the Existing Mines identified in Figure 1 produce scandium.
17
Figure 2: Location of the Exploration Licenses and
Scandium Project [[Image Removed: scy_10qimg2.jpg]]
Note: All Exploration Licenses and Leases described in Figure 2 are held 100% by EMC-A.
Nyngan Feasibility Study
On
The Feasibility Study concluded that the
18
The financial results of the Feasibility Study are based on a conventional flow sheet, employing continuous high pressure acid leach (HPAL) and solvent extraction (SX) techniques. The flow sheet was modeled and validated from METSIM modeling and considerable bench scale/pilot scale metallurgical test work utilizing Nyngan resource material. A number of the key elements of this flowsheet work have been protected by the Company under US patent applications, four of which have been granted, with two of those four directly applicable in the flowsheet applied to the current Feasibility Study.
The Feasibility Study has been developed and compiled to an accuracy level of
+15%/-5% by a globally recognized engineering firm that has considerable
expertise in laterite deposits and process facilities, as well as in smaller
mining and processing projects, and has excellent familiarity with the
Nyngan Scandium Project Highlights
· Capital cost estimate for the Project isUS$87.1 million , · Annual scandium oxide product volume averages 37,690 kg per year over 20 years, · Annual revenue ofUS$75.4 million (oxide price assumption ofUS$2,000 /kg), · Operating cost estimate for the Project isUS$557 /kg scandium oxide, · ProjectConstant Dollar NPV10% isUS$177 million , NPV8% isUS$225 million , · Project Constant Dollar IRR is 33.1%, · Oxide product grades of 98-99.8% based on customer requirements, · Project resource increases by 40% to 16.9 million tonnes, grading 235ppm Sc, at a 100ppm cut-off in the measured and indicated categories, and · Project Reserve totaling 1.43 million tonnes, grading 409ppm Sc was established on part of the resource.
DFS Conclusions and Recommendations
The production assumptions in the Feasibility Study are backed by solid
independent flow sheet test work on the planned process for scandium recovery
and consolidate a significant amount of metallurgical test work and prior study
on the
The level of accuracy established in the Feasibility Study substantially reduces the uncertainty levels inherent in earlier studies. The greater confidence intervals around the Feasibility Study were achieved by reliance on significant project engineering work, a capital and operating cost estimate supported by detailed requirements and vendor pricing, plus one conditional offtake agreement and an independent marketing assessment, both supportive of the marketing assumptions on the business.
The Feasibility Study delivered a positive result on the
19
Confirmatory Metallurgical Test Results
On
The project DFS recommended that a number of process flowsheet test work programs be investigated prior to commencing detailed engineering and construction. Those study areas included pressure leach ("HPAL"), counter-current decant circuits, solvent extraction ("SX"), and oxalate precipitation, with specific work steps suggested in each area. This latest test work program addressed all of these recommended areas, and the results confirmed recoveries and efficiencies that either meet or exceed the parameters used in the DFS. Highlights of the testing were:
· Pressure leach test work achieved 88% recoveries, from larger volume tests, · Settling characteristics of leach discharge slurry show substantial improvement, · Residue neutralization work meets or exceeds all environmental requirements as presented in the DFS and the environmental impact statement, · Solvent extraction circuit optimization tests generated improved performance, exceeding 99% recovery in single pass systems, and · Product finish circuits produced 99.8% scandium oxide, completing the recovery process from Nyngan ore to finished scandia product.
Engineering, Procurement and Construction Management Contract
On
The EPCM contract appoints Lycopodium (
On
Environmental Permitting/Development Consent/
On
EIS Highlights: · The EIS finds residual environmental impacts represent negligible risk. · The proposed development design achieves sustainable environmental outcomes. · The EIS finds net-positive social and economic outcomes for the community. 20 · Nine independent environmental consulting groups conducted analysis over five years, and contributed report findings to the EIS. ·The Nyngan Project development is estimated to contributeA$12.4M to the local and regional economies, andA$39M to the State and Federal economies, annually. · The EIS is fully aligned with the DFS and with a NSW Mining License Application for theNyngan Project .
The conclusion statement in the EIS reads as follows: "In light of the conclusions included throughout this Environmental Impact Statement, it is assessed that the Proposal could be constructed and operated in a manner that would satisfy all relevant statutory goals and criteria, environmental objectives and reasonable community expectations."
Development Consent:
The Development Consent is considered the key approval required to build a mine
facility in
On
Mining Lease :
During
In addition to these two key governmental approvals, other required licenses and
permits must be acquired but are considered routine and require only compliance
with fixed standards and objective measurements. These remaining approvals
include submittal of numerous plans and reports supporting compliance with the
Development Consent and
· Water Supply Works and Use Approval and Water Access License, · State and local approval for construction of the intersection of the SiteAccess Road andGilgai Road , · An approval from theNSW Dams Safety Committee for the design and construction of the Residue Storage Facility, and · A high voltage connection agreement withEssential Energy .
The 2019 ML 1792 grant covers 810 acres (370 hectares) of surface area fully owned by the Company, an area adequate to construct and operate a scandium mine of a scale outlined in the definitive Feasibility Study. The Company had originally filed a mining lease application (MLA 531) covering an area of 874 hectares, which was granted in 2017 as a mining lease (ML 1763), and later ruled invalid. At that time, it was unknown, to both the Department and the Company, that a local landowner had filed a prior, timely and valid objection to the granting of that mining lease. The reduction in area between the initial 2017 ML 1763 and the replacement 2019 ML 1792 represented acreage protested in an "Agricultural Land" objection lodged by a local landowner. The landowner holds freehold surface ownership over a portion of the original grant that was previously covered by the 2017 ML 1763.
21
On
Written advice from the Department to the Company makes clear that all required
independent investigative processes, and all affected party comment periods,
were completed, and the Department's decision in this dispute matter is final.
There are further state courts of appeal available to the landowner, but the
facts supporting this final decision are confirmed by the
This Final Determination from the NSW Government will again allow all measured and indicated resource included in the Nyngan Scandium Project DFS to be reinstated in a new mining lease grant, which will require the filing of a new mine lease application which was filed in Q3 2022.
Honeybugle Scandium Property (NSW,
On
Exploration rights for the Honeybugle Scandium Property include certain minimum expenditure requirements. The Company intends to fulfill those minimum expenditure requirements and has planned a new drilling program to commence in the first quarter of 2023.
Honeybugle Drill Results
On
Highlights of initial drilling program results include the following:
· The highest 3-meter intercept graded 572 ppm scandium (hole EHAC 11). · EHAC 11 also generated two additional high grade scandium intercepts, grading 510 ppm and 415 ppm, each over 3 meters. · The program identified a 13-hole cluster which was of particular interest; intercepts on these 13 holes averaged 270 ppm scandium over a total 273 meters, at an average continuous thickness of 21 meters per hole, representing a total of 57% (354 meters) of total initial program drilling. · The 13 holes produced 29 individual (3-meter) intercepts over 300 ppm, representing 31% of the mineralized intercepts in the 273 meters of interest. · This initial 30-hole AC exploratory drill program generated a total of 620 meters of scandium drill/assay results, over approximately 1 square kilometer on the property.
Kiviniemi Scandium Property (
On
22
Highlights · Kiviniemi property previously identified for scandium and explored by GTK. · Property is a high iron content, medium grade scandium target, located on surface, with on-site upgrade potential. · Early resource upgrade work done for GTK promising, confirmed by SCY. · Property is all-weather accessible, close to infrastructure. ·Finland location is mining-friendly and ideally suited to EU customer markets. Kiviniemi Summary
The Kiviniemi property represents a medium grade scandium resource target that
has remained unrecognized and overlooked by exploration work, largely due to the
absence of the more commonly sought-after minerals in the region, specifically
copper, nickel and cobalt. We believe that Kiviniemi is
The target has benefited significantly from valuable early exploration work by
the GTK, which has advanced the property to a stage where successful
metallurgical investigations may prove value that offsets grade concerns. SCY
estimates roughly
Downstream Scandium Products
In
During the 2015-2017 timeframe, we continued our own internal laboratory-scale investigations into the production of aluminum-scandium master alloys, furthering our understanding of commercial processes, and achievable recoveries. We also advanced our abilities to make a commercial-grade 2% scandium master alloy product.
On
The MOU outlines steps to jointly establish the manufacturing parameters,
metallurgical processes, and capital requirements to convert
23
On
The 2018 pilot program consisted of 5 separate trials on two MA product types, production of MA in various forms, and dross analysis to ascertain scandium recoveries to product. The mass of master alloy and product variants produced in the program totaled approximately 20kg and was completed in December of 2018. The results of the program included the successful production of 2% grade MA, with recoveries of scandium to product of 85%.
A second phase of the small-scale pilot program was initiated in the first half of 2019, again at 4kg scale, building on the work done in phase I. The results of this second program included successful production of 2% grade MA, with improvements in form of rapid kinetics, and recoveries of scandium to product of +90%.
On
Master Alloy Capability Demonstrated
On
This master alloy capability will allow the Company to offer scandium product
from the
Research Highlights: · Program achieved full 2% target product quality requirement, · Sc recoveries from oxide exceeded target, demonstrated in final tests, · The microstructure and metal quality meet major alloy producers' specifications, · Rapid kinetics achieved, important for commercial viability, · Individual testing batches done at 4kg scale, and · Successful program testing forms a basis for a larger scale demonstration facility, supporting large scale samples required for industrial aluminum alloy trials.
Focus on Aluminum Alloy Applications for Scandium Products
Our focus is on the use of scandium as an alloying ingredient in aluminum-based products. The specific scandium product forms we intend to sell from the Nyngan project include both scandium oxide (Sc2O3) and aluminum-scandium master alloys (Al-Sc 2%).
24
Scandium as an alloying agent in aluminum allows for aluminum metal products that are much stronger, more easily weldable and exhibit improved performance at higher temperatures than current aluminum-based materials. This means lighter structures, lower manufacturing costs and improved performance in areas that aluminum alloys do not currently compete.
Cerium-Scandium Aluminum Alloy Program Agreement
On
The companies intend to pursue alloy refinements in both wrought and cast alloy applications, specifically targeting property improvements related to strength, corrosion resistance, and heat-working tolerance, principally in A5000 series alloys.
Program Highlights: · Joint economic and technical support to alloy design, · Joint sharing of previous data, and new data produced from this program, · Samples production for customer trials, either as cast products, or wrought sample shapes for various potential customers and alloy manufacturers, · Initial high value application expected to be in marine applications, and · Program work is protected by existing patent applications filed by ECK.
Use Of Scandium In Lithium-Ion Batteries
On
Patent Application Highlights:
· US Patent Application filed for use of scandium in lithium-ion battery applications. · Scandium doping applications are explained for anodes, cathodes and electrolytes. · Scandium offers conductivity advantages as a dopant, over other options, and · Scandium in other aluminum components offers numerous property improvements, including conductivity, strength and corrosion resistance.
Patent Application Discussion:
Rechargeable lithium-ion batteries (LIBs) are a staple of everyday life. The search for improved performance through design and materials advances is intense today. Considerable effort is being expended in developing next-generation materials for LIBs that will make batteries safer, lighter, more durable, faster to charge, more powerful, and more cost-effective. A sampling of some these efforts follows:
· Minimizing or removing cobalt from cathode materials, based on cost, supply and geographic sourcing issues. · Improving the durability of liquid electrolytes with dopants, or substitution with safer and higher performing liquid or solid electrolyte systems. · Designing for higher voltage potential by utilizing different anode or cathode materials. · Determining combinations of metals that can better withstand harsh internal conditions. 25
Scandium, along with other specialty metals, has a clear role to play in each of these areas.
One particularly promising area for scandium contributions is in a lithium nickel manganese oxide (LNMO) battery. The cathode in this design substitutes manganese for cobalt and supports a higher nickel content as well. The substitution then delivers higher working potentials (voltage), higher energy densities, and faster charge/discharge rates, all of which offer the promise of improved battery performance.
Delivering on that promise requires a number of improvements, including employing a dopant for stabilization of the manganese in the LNMO cathode, potential stabilization of lithium titanate (LTO) anode materials as well, and use of dopants to improve the conductivity of both these anode and cathode materials. Conventional liquid electrolytes may see improved function and longevity with the improved cathode and anode conductivity. Scandium represents a suitable and effective dopant in each of these applications.
Solid state electrolytes (SSEs) represent another potential break-through improvement in LIBs. They will handle higher voltages, higher temperatures, greater power densities, are potentially easier to package, and are considered safer in use. Scandium represents a suitable and effective dopant in these applications, analogous to the use of scandium to stabilize solid zirconia electrolytes in solid oxide fuel cells. Recently technical papers (available upon request) covering the use of Lithium Super Ion Conductors (LiSICON) for SSEs have indicated that primary compounds containing scandium, such as Li3Sc2(PO4)3, LiScP2O7 and Li3Sc(BO3)2, LiScO2 as well as certain doped compounds such as Li1.33ScSi0.33P1.67O7, Li3.375Mg0.375Sc0.625(BO3)2, Li1.5Al0.33Sc0.17Ge1.5(PO4)3, etc. can provide desirable crystal structural frameworks for solid state electrolytes. Non-oxide LiSICON fast conductors have also been identified recently, such as some lithium cryolite types: Li3ScCl6, as well as its fluoride counterpart Li3ScF6.
Lithium-ion batteries employ aluminum in a number of areas, specifically in cathode structure, current connectors, and in general battery structure. Aluminum-scandium alloys represent an enhanced aluminum alloy option, based on their combination of conductivity and strength.
The intent of this SCY patent filing was to advise the battery industry that scandium is a prospective dopant choice for enhanced performance of LIBs, both under existing design parameters and in particular for next-generation LNMO batteries. We want to ensure that battery research and design groups consider scandium additions, amongst their various materials choices, as they race to build a better lithium-ion battery.
Operating results - Revenues and Expenses
The Company's results on a year-to-date basis reflect lower operating costs.
Cash expenditures were
The Company's results when comparing Q3 2022 to Q3 2021 reflect a decrease of
26 Summary of quarterly results
A summary of the Company's quarterly results is shown below at Table 1.
Table 1. Quarterly Results Summary (US$) 2022 2021 2020 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Net Sales - - - - - - - Net Income 70,701 28,578 522,946 (215,111) (278,704) (761,080) (312,137) (706,306) (Loss) attributable to Scandium Mining
Corp.
Basic and (0.00) (0.00) (0.0) (0.00) (0.00) (0.00) (0.00) (0.00)
diluted Net Income (Loss) per share attributable to Scandium Mining Corp.
Results of Operations for the three months ended
The net profit for the quarter was
Table 2. Variance Analysis for Net Loss Q3 2022 vs. Q3 2021 - Variance Analysis Item Variance Favourable / Explanation (Unfavourable) Gain on derivative$214,794 Warrants issued in Q2 2022 are in Canadian liability funds. As the exchange rate with the Canadian dollar fluctuates, a gain or loss on this is recorded in the financial statements. Also the value of the warrants are recalculated based on Black-Scholes calculation at the end of the quarter. In Q3 2022 a gain was calculated. This is a non-cash item. Salaries and$73,983 This favorable variance is due to the benefits resignation of senior staff that have not been replaced in Q1 2022. General and$60,861 With the closing of the Sparks, Nevada office administrative and reduced staffing, a favorable variance was realized when compared to Q3 2021 when there was much more activity and staffing. Consulting$44,137 The resignation of a consultant in Q1 2022 led to this favorable variance.
Foreign exchange
because of the large derivative liability being in Canadian dollars there was a favorable foreign exchange gain compared to a small loss in the comparable quarter one year ago. Exploration$10,543 The decrease when compared to Q3 2021 is due to lower overall expenditures related as the Company focuses on its properties in Australia. Insurance$1,926 Lower fees were negotiated in Q4 2021 resulting in lower costs in the current quarter when compared to Q3 2021. Amortization$419 All fixed assets were fully depreciated in Q2 2022. In Q3 2021 the Company recognized$419 in amortization expense.
Professional fees
unfavorable variance when compared to Q3 2021. Stock-based$(61,222) Stock options granted in Q2 2022 will vest and compensation be expensed over an 18-month period while stock options granted in Q2 2021 vested and were expensed immediately resulting in no expenses being charged in periods subsequent to their issue.
Results of Operations for the nine months ended
The net profit for the nine-month period was
27 Table 2. Variance Analysis for Net Loss
Nine months ended
Variance Analysis Item Variance Favourable / Explanation (Unfavourable) Accrual reversal$1,032,044 In the current nine-month period, the Company reversed accrued liabilities for certain staff who are no longer with the Company. No such item was incurred in the comparable nine-month period in 2021. Stock-based$460,716 Stock options granted in Q2 2022 will vest and compensation be expensed over an 18-month period while stock options granted in Q2 2021 vested and were expensed immediately. Also, the options granted in Q2 2021 were at a higher price resulting in higher amounts expensed. These are non-cash costs. Salaries and$170,031 This favorable variance is due to the benefits resignation in Q1 2022 of senior staff that have not been replaced. Gain on derivative$161,053 Warrants issued in Q2 2022 are in Canadian liability funds. As the exchange rate with the Canadian dollar fluctuates, a gain or loss on this is recorded in the financial statements. Also, the value of the warrants is recalculated based on Black-Scholes calculation at the end of the quarter. Since the warrants were issued, a gain has been calculated. This is a non-cash item. Consulting$86,759 The resignation of a consultant in Q1 2022 led to this favorable variance. Exploration$64,328 In Q2 2022, the Company received a refund for the cost of a new mine lease after the original mine lease was objected to. The cost of the second mine lease was refunded as it was determined that the original mine lease was valid. General and$20,807 With the closing of the Sparks, Nevada office administrative and reduced staffing, a favorable variance was realized when compared to 2021 when there was much more activity and staffing. Foreign exchange$9,372 The US dollar strengthened in the nine-month period ending September 30, 2022, and because of the large derivative liability being in Canadian dollars, there was a favorable foreign exchange gain. However, excluding the impact of the derivative liability there was a loss on assets carried in foreign currencies. Insurance$4,726 Lower fees were negotiated in Q4 2021 resulting in lower costs in the current nine-month period when compared to the comparable period in 2021. Amortization$(1,623) In the nine-month period in 2022, all depreciable assets were disposed of resulting in this negative variance. Professional fees$(34,067) Audit fees have increased resulting in this unfavorable variance when compared to the nine-month period in 2021. 28
Cash flow discussion for the nine-month period ended
The cash outflow for operating activities was
Cash inflows from financing activities of
Financial Position Cash
The Company's cash position increased during the nine-month period by
Prepaid expenses and receivables
Prepaid expenses and accounts receivable decreased by
Property and equipment
Property and equipment consisted of computer equipment at the
The decrease of
29 Mineral interests
Mineral interests remained the same at
Accounts payable, accrued liabilities and accounts payable with related parties
Accounts payable have increased by
Capital Stock
Capital stock increased by
Additional paid-in capital increased by
Liquidity and Capital Resources
At
At
Outstanding share data
At the date of this report, the Company has 355,860,813 issued and outstanding
common shares, 37,803,218 purchase warrants currently outstanding at an exercise
price of
Off-balance sheet arrangements
At
Transactions with related parties
During the nine-month period ended
30
During the nine-month period ended
During the nine-month period ended
As at
Proposed Transactions
There are no proposed transactions outstanding other than as disclosed.
Critical Accounting Estimates
The preparation of financial statements in conformity with generally accepted accounting policies requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on past experience, industry trends and known commitments and events. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Actual results will likely differ from those estimates.
Stock-based compensation
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options and compensatory warrants granted. This model is subject to various assumptions. The assumptions the Company makes will likely change from time to time. At the time the fair value is determined, the methodology the Company uses is based on historical information, as well as anticipated future events. The assumptions with the greatest impact on fair value are those for estimated stock volatility and for the expected life of the instrument.
Future income taxes
The Company accounts for tax consequences of the differences in the carrying amounts of assets and liabilities and their tax bases using tax rates expected to apply when these temporary differences are expected to be settled. When the future realization of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance in the amount of the potential future benefit is taken and no future income tax asset is recognized. The Company has taken a valuation allowance against all such potential tax assets.
Mineral properties and exploration and development costs
The Company capitalizes the costs of acquiring mineral rights at the date of
acquisition. After acquisition, various factors can affect the recoverability of
the capitalized costs. The Company's recoverability evaluation of our mineral
properties and equipment is based on market conditions for minerals, underlying
mineral resources associated with the assets and future costs that may be
required for ultimate realization through mining operations or by sale. The
Company is in an industry that is exposed to a number of risks and
uncertainties, including exploration risk, development risk, commodity price
risk, operating risk, ownership and political risk, funding and currency risk,
as well as environmental risk. Bearing these risks in mind, the Company has
assumed recent world commodity prices will be achievable. The Company has
considered the mineral resource reports by independent engineers on the
31
Recent Accounting Pronouncements
Accounting Standards Update 2021-04 - Earnings Per Share (Topic 260), Debt
Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock
Compensation (Topic 718), and Derivatives and Hedging Contracts in Entity's Own
Equity (Subtopic 815-40). This update is to provide clarity around earnings per
share calculations and is effective for fiscal years beginning after
Financial instruments and other risks
The Company's financial instruments consist of cash, receivables, accounts
payable, accounts payable with related parties, accrued liabilities and
promissory notes payable. It is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from its
financial instruments. The fair values of these financial instruments
approximate their carrying values unless otherwise noted. The Company has its
cash primarily in three commercial banks: (i) one in
Information Regarding Forward-Looking Statements
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contain certain forward-looking statements. Forward-looking
statements include but are not limited to those with respect to the prices of
metals, the estimation of mineral resources and reserves, the realization of
mineral reserve estimates, the timing and amount of estimated future production,
costs of production, capital expenditures, costs and timing of the development
of new deposits, success of exploration activities, permitting time lines,
currency fluctuations, requirements for additional capital, government
regulation of mining operations, environmental risks, unanticipated reclamation
expenses, title disputes or claims and limitations on insurance coverage and the
timing and possible outcome of pending litigation. In certain cases,
forward-looking statements can be identified by the use of words such as
"plans", "expects" or "does not expect", "is expected", "estimates", "intends",
"anticipates" or "does not anticipate" or "believes" or variations of such words
and phrases, or statements that certain actions, events or results "may",
"could", "would", or "will" be taken, occur or be achieved. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of
32
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