WESCAN GOLDFIELDS INC. Management's Discussion and Analysis
December 31, 2021
April 28, 2022
MANAGEMENT'S DISCUSSION & ANALYSIS ("MD&A")
The following discussion and analysis is prepared by Management as of April 28, 2022 and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021 ("financial statements for the year ended December 31, 2021") available on SEDAR atwww.sedar.com.Wescan Goldfields Inc. ("Wescan" or "the Company") prepared its financial statements for the year ended December 31, 2021 in accordance with International Financial Reporting Standards ("IFRS"). All currency amounts are quoted in Canadian Dollars, unless otherwise stated.
Overview
Wescan is a growth oriented mineral exploration company based in Saskatchewan. Wescan is focused on the exploration of its current portfolio of gold properties and the acquisition of new exploration targets. The Company has previously focused exploration efforts on its northern Saskatchewan properties with known gold mineralization located in the La Ronge Gold Belt. No exploration programs were carried out during the year ended December 31, 2021. The Company will also continue to evaluate the potential for the acquisition of other mineral properties that fit the Company's strategic direction.
Due to the global COVID-19 pandemic, the Government of Saskatchewan waived expenditure requirements for active mineral claims and leases. As a result, the Company was not required to incur expenditures on certain of the Company's mineral properties during 2021 to keep these claims in good standing.
Projects
Jojay Gold Project
Background
The Company holds a 100% interest in the Jojay gold property, consisting of five claim blocks covering 1,496 hectares located approximately 150 kilometers northeast of La Ronge, Saskatchewan. The Company's initial 25% interest in the property was acquired from Star Diamond Corporation (formerly Shore Gold Inc.) in 2004 in exchange for shares of the Company. The remaining 75% was acquired from SSR Mining Inc. (formerly Claude Resources Inc.) in 2006 in exchange for shares. The Company has an Indicated Mineral Resource and Inferred Mineral Resource, as defined under National Instrument ("NI") 43-101, on the Jojay gold deposit which was completed on February 4, 2010. The NI 43-101 compliant Mineral Resource Estimate completed by ACA Howe International Limited ("ACA Howe") includes 21 Wescan diamond drill holes completed in 2005 and 2007-2008 and 79 historic drill holes. At a block cut-off grade of 2.0 grams per tonne Au, non-diluted Indicated Mineral Resources, located entirely in the Red Zone, amount to 420,000 tonnes with an average grade of 3.7 grams per tonne Au, for 50,000 ounces gold. Non-diluted Inferred Mineral Resources, approximately half of which were located in the Red Zone, amount to 630,000 tonnes with an average grade of 4.3 grams per tonne Au, for 87,000 ounces gold. No Measured Mineral Resources or Mineral Reserves of any category were identified. Mineral resources are not mineral reserves and by NI 43-101 definition do notdemonstrate economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into a Mineral Reserve.
Based on recommendations from a review of historical drilling data that was completed in February 2011 and the recommendations contained in the Technical Report that accompanied the NI 43-101 compliant Resource Estimate, Wescan commenced a 2,678.5 metre drill program (10 holes) in June 2011. The program successfully identified significant mineralized zones outside the existing drill-defined area of mineralization and successfully confirmed, as well as infilled, historical drilling results.
Current year and future activities
No activity occurred on the Jojay property during the year ended December 31, 2021. Management is currently assessing options for future work on this property.
Munro Lake Gold Project
Background
The Company holds a 100% interest in the Munro Lake gold property. The Munro Lake property consists of mineral dispositions covering 2,489 hectares located approximately 128 kilometers northeast of La Ronge, Saskatchewan. The Company's initial 51% interest in the property was acquired from Star Diamond Corporation in 2004 in exchange for shares of the Company and has increased to 100% based on non-participation of the former joint venture partner in past exploration programs. Munro Lake is located approximately seven kilometers from a producing gold mine and is on trend with other known gold mineralized zones in the area. Limited historical exploration work has been performed on Munro Lake.
During 2011 the Company conducted a magnetic and electromagnetic airborne geophysical survey on the Munro Lake property. The intent of the airborne geophysical survey was to assist in the interpretation of historic soil sampling and prospecting programs that had identified anomalous gold targets throughout the property. During 2013, the Company announced the results of a winter drill program on the Munro Lake property which consisted of 1,052.34 metres of diamond drilling over 4 holes. Drilling results included an interval of 67.1 g/t Au over 1.00 metres in a vein with associated visible gold as well as 7.1 g/t Au over 1.00 metres.
Current year and future activities
No activity occurred on the Munro property during the year ended December 31, 2021. Management is currently assessing options for future work on this property.
Jasper Gold Project
Background
The Company holds a 100% interest in the Fork Lake/Jasper/Tamar ("Jasper") gold property, consisting of certain mineral dispositions covering 6,513 hectares located approximately 150 kilometers northeast of La Ronge, Saskatchewan. The property contains the high grade Jasper Gold Mine which mined and milled 140,127 tonnes at an average grade of 18.9 grams per tonne in the early 1990s. The Company's initial interest in the property was acquired from Star Diamond Corporation in 2004 in exchange for shares ofthe Company. The Company performed drilling in 2005, 2006, and 2007 of certain deeper zones and during 2011 the Company completed a 2,313.5 metre drill program (9 holes) to further assess the future potential of this past producing gold mine. During 2013 the Company performed a drill program to further evaluate the Jasper property. This program was carried out following examination of Wescan's 2005, 2006 & 2011 diamond drill programs on the Jasper property and recommendations of the Technical Report for the Jasper Gold Project, completed by A.C.A. Howe International dated November 30, 2005.
The Company intends to continue exploration efforts on the Jasper Gold deposit before an NI 43-101 Resource Estimate is completed to maximize any potential mineral resources.
Current year and future activities
No activity occurred on the Jasper property during the year ended December 31, 2021. Management is currently assessing options for future work on this property.
Financial Highlights
Selected Annual Information
Selected financial information of the Company by year is summarized as follows:
2021 $ | 2020 $ | 2019 $ | |
Interest and other income | 0 | 11 | 323 |
Net loss | 132,901 | 58,556 | 101,995 |
Net loss per share | 0.00 | 0.00 | 0.00 |
Total assets | 6,421 | 63,651 | 120,509 |
Total non-current liabilities (1) | 75,520 | 75,520 | 75,520 |
Working capital (deficit) | (17,465) | 44,333 | 102,398 |
(1) Non-current liabilities are comprised of an environmental rehabilitation provision.
Year Ended December 31, 2021
Results of Operations
For the year ended December 31, 2021 the Company recorded a net loss of $132,901 ($0.00 per share) compared to a net loss of $58,556 ($0.00 per share) for 2020. The net losses during 2021 and 2020 were due to ongoing operating costs incurred by the Company.
Expenses
Total expenses for the year ended December 31, 2021 were $132,901 compared to $58,567 for 2020.
Administration expenses incurred during 2021 increased to $132,901, compared to $57,831 in 2020. This increase of $75,070 was primarily due to $70,710 of non-cash share-based compensation expenses in 2021 (nil in 2020) as well as higher regulatory and professional fees incurred. Costs in the administration category also includes depreciation, interest and other office related expenses. During 2021, the Company did not incur exploration and evaluation expenditures (2020 - $200). Corporate development costs decreased to $0 in 2021 compared to $536 for the same period in 2020.
Financing
No financing activities occurred in 2021 or 2020. During the first quarter of 2022, the Company completed a private placement whereby 5,000,000 Units were issued for gross proceeds of $350,000 (see Wescan News Release dated March 8, 2022). Each Unit was comprised of one common share and one warrant. Each whole warrant entitles the holder thereof to purchase one common share at a price of $0.10, for a period of twelve months from closing of the private placement.
Summary of Quarterly Results
2021 | 2020 | |||||||
Qtr 4 $ | Qtr 3 $ | Qtr 2 $ | Qtr 1 $ | Qtr 4 $ | Qtr 3 $ | Qtr 2 $ | Qtr 1 $ | |
Net loss (1) | 14,471 | 10,237 | 91,185 | 17,008 | 14,262 | 7,268 | 20,161 | 16,865 |
Net loss/share (2) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Shares outstanding | 45,084,320 | 45,084,320 | 45,084,320 | 45,084,320 | 45,084,320 | 45,084,320 | 45,084,320 | 45,084,320 |
(1) Net losses for the quarters reflects normal operations of the Company. The net loss for second quarter of 2021 has been adjusted to reflect share-based compensation of $70,710 as disclosed in note 14 to the annual audited consolidated financial statements.
(2) Basic and diluted.
Fourth Quarter Results
For the quarter ended December 31, 2021, the Company recorded a net loss of $14,471 ($0.00 per share) compared to a net loss of $14,262 ($0.00 per share) during the same period in 2020.
Related Party Transactions
During 2021 and 2020, Mr. Kenneth E. MacNeill (Chief Executive Officer) through his consulting company, waived his management fees.
Total compensation paid to key management personnel, including amounts paid or payable to related parties owned by key management personnel, executive officers and directors, was $62,160 (2020 - $0). These amounts relate to the share-based payments and have been included in administration expense on the statement of loss and comprehensive loss. The fair value of share-based payments was determined using the Black-Scholes model.
Liquidity
As at December 31, 2021, the Company had a working capital deficit of $17,465 compared to working capital of $44,333 at December 31, 2020. Included in the working capital deficit at December 31, 2021 are payables and accrued liabilities of $22,321 (2020 - $17,360).
The Company currently has no ongoing source of revenue and, as such, is dependent upon the issuance of new equity to finance its ongoing obligations and to advance its exploration properties, such as the $350,000 equity financing completed by the Company during the first quarter of 2022. Although the Company has been successful in the past in obtaining financing, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favorable to the Company. Failure to obtain additional financing could result in delay or indefinite postponement of
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Wescan Goldfields Inc. published this content on 28 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2022 22:10:47 UTC.
