Amarc Resources Ltd 6-K, filed Aug 30, 2021
Amarc Resources Ltd (AXREF)
6-K
2021-08-30
For: 2021-08-27
View Original
Added on
April 07, 2026
About this 6-K
Amarc Resources Ltd filed this 6-K on August 30, 2021.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
As at
August 27,
2021
Commission
File Number: 000-49869
AMARC RESOURCES LTD.
(Translation
of registrant's name into English)
14th Floor
– 1040 W. Georgia Street
Vancouver, British Columbia
Canada V6E 4H1
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
[X]
Form 20-F [ ] Form 40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7):
[ ]
SUBMITTED HEREWITH
Exhibits
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Condensed Consolidated Interim Financial
Statements for the three months ended June 30, 2021 and
2021
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Management's Discussion and Analysis for the
three months ended June 30, 2021
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Form
52-109FV2 Certification of interim filings - venture issuer basic
certificate - CEO
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Form
52-109FV2 Certification of interim filings - venture issuer basic
certificate - CFO
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Amarc
Resources Ltd.
(Registrant)
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Date: August 27,
2021
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By:
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/s/ Sebastian
Tang
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Sebastian
Tang
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Chief Financial
Officer
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Exhibit
99.1
AMARC RESOURCES LTD.
CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE
THREE MONTHS ENDED JUNE 30, 2021 and 2020
(Expressed in Canadian Dollars) (Unaudited)
Notice to
Reader
In
accordance with subsection 4.3(3) of National Instrument 51-102,
management of the Company advises that the Company's auditors have
not performed a review of these interim financial
statements.
2
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Amarc Resources Ltd.
Condensed
Interim Consolidated Statements of Financial Position
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|
(Unaudited –
Expressed in Canadian Dollars)
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Note
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June
30,
2021
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March
31,
2021
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ASSETS
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|
|
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Current
assets
Cash
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3
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$682,976
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$308,085
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Amounts receivable
and other assets
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6
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192,762
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47,380
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Marketable
securities
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4
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958,255
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1,026,418
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|
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1,833,993
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1,381,883
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Non-current
assets
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|
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Restricted
cash
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5
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178,530
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178,487
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Right-of-use
asset
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13
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97,514
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–
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Total
assets
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$2,110,037
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$1,560,370
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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Current
liabilities
Accounts payable
and accrued liabilities
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8
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$569,726
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$168,195
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Balance due to
related parties
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11
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873,013
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795,239
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Lease
liability
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13
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14,714
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–
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|
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1,457,453
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963,434
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Non-current
liabilities
Director's
loan
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9
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587,197
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570,000
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Lease
liability
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13
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86,020
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–
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Total
liabilities
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2,130,670
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1,533,434
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Shareholders'
equity
Share
capital
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10
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64,744,721
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64,744,721
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Reserves
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10
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4,801,919
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4,870,082
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Accumulated
deficit
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(69,567,273)
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(69,587,867)
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|
|
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(20,633)
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26,936
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Total
liabilities and shareholders' equity
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$2,110,037
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$1,560,370
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Nature of
operations and going concern (note 1)
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|
|
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The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
/s/ Robert A.
Dickinson
/s/ Scott D. Cousens
Robert A.
Dickinson
Scott D.
Cousens
Director
Director
3
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Amarc Resources Ltd.
Condensed
Consolidated Interim Statements of Loss
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(Unaudited -
Expressed in Canadian Dollars, except for weighted average number
of common shares)
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Note
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2021
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ended
June 30,
2020
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Expenses
Exploration and
evaluation
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7(b)
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$793,568
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$344,091
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Assays and
analysis
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76,967
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67,766
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Drilling
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35,772
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–
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Equipment
rental
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–
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–
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Geological,
including geophysical
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160,825
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226,673
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Helicopter and
fuel
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47,534
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–
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Property
acquisition and assessments costs
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198
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198
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Site
activities
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264,815
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29,591
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Socioeconomic
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184,537
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19,863
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Technical
data
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11,322
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–
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Travel and
accommodation
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11,598
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–
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Administration
|
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126,495
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119,571
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Legal, accounting
and audit
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30,693
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3,767
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Office and
administration
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12(b)
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76,945
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101,554
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Rent
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3,720
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–
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Shareholder
communication
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14,673
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8,113
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Travel and
accommodation
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–
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5,008
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Trust and
regulatory
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461
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1,129
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Equity-settled
share-based compensation
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–
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6,476
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Cost
recoveries
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7(b)
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(923,730)
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–
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(3,667)
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470,138
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Other
items
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Finance
income
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(11,722)
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(674)
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Interest expense
– director's loans
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9
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24,932
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32,411
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Accretion expense -
office lease
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1,985
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–
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Other fee
income
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7(b)
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(52,672)
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–
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Amortization of
Right-of-use asset
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3,363
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–
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Transaction cost
– director's loans
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9
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17,197
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12,920
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Foreign exchange
loss
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(10)
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1
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Net
(income) loss
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$(20,594)
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$514,796
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Basic
and diluted (earnings) loss per common share
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$(0.00)
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$0.00
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Weighted
average number of common shares outstanding
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180,602,894
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175,602,894
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The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
4
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Amarc Resources Ltd.
Condensed
Consolidated Interim Statements of Comprehensive Loss
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(Unaudited -
Expressed in Canadian Dollars)
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Three
months ended on June 30,
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||
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2021
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2020
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Net
(income) loss
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$(20,594)
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$514,796
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Other
comprehensive loss:
Items that will not
be reclassified subsequently to profit and loss: Revaluation of
marketable securities
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68,163
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1,465
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Total
other comprehensive loss
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68,163
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1,465
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Comprehensive
loss
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$47,569
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$516,261
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The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
5
Amarc Resources Ltd.
Condensed
Consolidated Interim Statements of Changes in (Deficiency)
Equity
(Unaudited -
Expressed in Canadian Dollars, except for share
information)
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Share
Capital
|
Reserves
|
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|||
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Number
of shares
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Amount
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Share-based
payments
reserve
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Investment
revaluation
reserve
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Share
warrants
reserve
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Deficit
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Total
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Balance at April 1,
2020
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175,602,894
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$64,341,556
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$2,244,764
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$13,761
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$3,373,372
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$(70,948,566)
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$(975,113)
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Net loss for the
period
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–
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–
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–
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–
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–
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(514,796)
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(514,796)
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Other comprehensive
loss for the period
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–
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–
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–
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(1,465)
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–
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–
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Total comprehensive
loss
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–
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–
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–
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(1,465)
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–
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(514,796)
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(516,261)
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Equity-settled
share-based compensation
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–
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–
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6,476
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–
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–
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6,476
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Balance
at June 30, 2020
|
175,602,894
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$64,341,556
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$2,251,240
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$12,296
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$3,373,372
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$(71,463,362)
|
$(1,484,898)
|
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Balance at April 1,
2021
|
180,602,894
|
$64,744,721
|
$2,262,652
|
$(612,677)
|
$3,220,107
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$(69,587,867)
|
$26,936
|
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Net income for the
period
|
–
|
–
|
–
|
–
|
–
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20,594
|
20,594
|
|
Other
comprehensive loss for the period
|
–
|
–
|
–
|
(68,163)
|
–
|
–
|
(68,163)
|
|
Total
comprehensive loss
|
–
|
–
|
–
|
(68,163)
|
–
|
20,594
|
(47,569)
|
|
Equity-settled
share-based compensation
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|
Balance
at June 30, 2021
|
180,602,894
|
$64,744,721
|
2,262,652
|
(680,840)
|
3,220,107
|
(69,567,273)
|
(20,633)
|
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
6
Amarc Resources Ltd.
Condensed
Consolidated Interim Statements of Cash Flows
(Unaudited -
Expressed in Canadian Dollars)
|
|
Three months ended June 30,
|
||
|
Note
|
2021
|
2020
|
|
|
Operating
activities
|
|
|
|
|
Net income (loss)
for the period
|
|
$20,594
|
$(514,796)
|
|
Adjustments
for:
|
|
|
|
|
Amortization of
right-of-use asset
|
13
|
3,363
|
–
|
|
Equity-settled
share-based compensation
|
|
–
|
6,476
|
|
Office lease
accretion per IFRS 16
|
13
|
1,985
|
–
|
|
Office base rent
recorded as lease reduction per IFRS 16
|
13
|
(2,128)
|
–
|
|
Interest expense
– director's loans
|
9
|
24,932
|
32,411
|
|
Transaction cost
– director's loans
|
9
|
17,197
|
12,920
|
|
Changes in working
capital items Amounts receivable and other assets
|
|
(145,382)
|
22,980
|
|
Restricted
cash
|
|
(43)
|
(258)
|
|
Accounts payable
and accrued liabilities
|
|
401,531
|
(2,749)
|
|
Balance due to
related parties
|
|
52,842
|
216,478
|
|
Net cash (used in)
provided by operating activities
|
|
374,891
|
(226,538)
|
|
Net
(decrease) increase in cash
|
|
374,891
|
(226,538)
|
|
Cash,
beginning balance
|
|
308,085
|
249,183
|
|
Cash,
ending balance
|
3
|
$682,976
|
$22,645
|
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
7
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AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
1.
NATURE OF OPERATIONS AND GOING CONCERN
Amarc
Resources Ltd. (“Amarc” or the “Company”)
is a company incorporated under the laws of the Province of British
Columbia (“BC”). Its principal business activity is the
acquisition and exploration of mineral properties. The
Company’s mineral property interests are located in BC. The
address of the Company’s corporate office is 14th Floor, 1040
West Georgia Street, Vancouver, BC, Canada V6E 4H1.
The
Company is in the process of exploring its mineral property
interests and has not yet determined whether its mineral property
interests contain economically recoverable mineral reserves. The
Company’s continuing operations are entirely dependent upon
the existence of economically recoverable mineral reserves, the
ability of the Company to obtain the necessary financing to
continue the exploration and development of its mineral property
interests and to obtain the permits necessary to mine, and the
future profitable production from its mineral property interest or
proceeds from the disposition of its mineral property
interests.
These
condensed consolidated interim financial statements as at and for
the three months ended June 30, 2021 (the “Financial
Statements”) have been prepared on a going concern basis,
which contemplates the realization of assets and the discharge of
liabilities in the normal course of business for the foreseeable
future. As at June 30, 2021, the Company had cash of $682,976, a
working capital of $376,540, and an accumulated deficit of
$69,567,273.
The
Company will need to seek additional financing to meet its
exploration and development objectives. The Company has a
reasonable expectation that additional funds will be available when
necessary to meet ongoing exploration and development costs.
However, there can be no assurance that the Company will continue
to be able to obtain additional financial resources or will achieve
profitability or positive cash flows. If the Company is unable to
obtain adequate additional financing, the Company will be required
to re-evaluate its planned expenditures until additional funding
can be raised through financing activities. These factors indicate
the existence of a material uncertainty that casts significant
doubt about the Company’s ability to continue as a going
concern.
These
Financial Statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and
classification of liabilities that may be necessary should the
Company be unable to continue as a going concern.
The
current outbreak of COVID-19, and any future emergence and spread
of similar pathogens, could have a material adverse effect on
global and local economic and business conditions, which may
adversely impact Amarc’s business and results of operations
and the operations of contractors and service providers. The extent
to which the COVID-19 impacts our operations will depend on future
developments, which are highly uncertain and cannot be predicted
with confidence, including the duration of the outbreak, new
information that may emerge concerning its severity and the actions
takento contain the virus or treat its impact, among others. The
adverse effects on the economy, the stock market and Amarc’s
share price could adversely impact its ability to raise capital,
with the result that ourability to pursue development of the JOY,
IKE and DUKE Districts could be adversely impacted,
both
8
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AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
through
delays and through increased costs. Any of these developments, and
others, could have a material adverse effect on the Company’s
business and results of operations and could delay its plans for
development of its districts.
2.
SIGNIFICANT ACCOUNTING POLICIES
The
principal accounting policies applied in the preparation of these
Financial Statements are described below. These policies have been
consistently applied for all years presented, unless otherwise
stated.
(a)
Statement of compliance
These
Financial Statements have been prepared in accordance with IAS 34,
Interim Financial Reporting (“IAS 34”), as issued by
the International Accounting Standards Board (“IASB”)
and the interpretations by the IFRS Interpretation Committee
(“IFRIC”). These Financial Statements do not include
all of the information and footnotes required by International
Financial Reporting Standards (“IFRS”) for complete
financial statements for year-end reporting purposes. These
Financial Statements should be read in conjunction with the
Company’s consolidated financial statements as at and for the
year ended March 31, 2021. Results for the reporting period ended
June 30, 2021 are not necessarily indicative of future results. The
accounting policies and methods of computation applied by the
Company in these Financial Statements are the same as those applied
by the Company in its more recent annual financial statements,
which are filed under the Company’s provide on SEDAR at
www.sedar.com.
The
Audit Committee of the Company’s Board of Directors
authorized these Financial Statements for
issuance on August
27, 2021.
(b)
Basis of presentation and consolidation
These
Financial Statements have been prepared on a historical cost basis,
except for certain financial instruments classified as fair value
through other comprehensive income, which are reported at fair
value. In addition, these Financial Statements have been prepared
using the accrual basis of accounting, except for cash flow
information.
These
Financial Statements include the financial statements of the
Company and its wholly-owned subsidiary, 1130346 B.C. Ltd. (the
“Subco”), incorporated under the laws of BC. The Subco
was incorporated for the purposes of entering into an option
agreement related to the JOY District. As at June 30, 2020, the
Subco did not have any assets, liabilities, income or expenses.
Intercompany balances and transactions are eliminated in full on
consolidation. On March 30, 2021, the Subco was
dissolved.
Certain
comparative amounts have been reclassified to conform to the
presentation adopted in the current period.
9
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
(c)
Adoption of IFRS 16, Leases (“IFRS 16”)
In
January 2016, the IASB issued IFRS 16, replacing IAS 17 - Leases.
IFRS 16 provides a single lessee accounting model and requires the
lessee to recognize assets and liabilities for all leases on its
statement of financial position, providing the reader with greater
transparency of an entity’s lease obligations.
The
Company elected to use the modified retrospective transition
approach, which provides lessees a method for recording existing
leases at adoption with no restatement of prior period financial
information. Under this approach, a lease liability was recognized
at January 1, 2019 in respect of leases previously classified as
operating leases, measured at the present value of the remaining
lease payments, discounted using the lessee’s incremental
borrowing rate at transition. The associated right-of-use assets
were measured at amounts equal to the respective lease liabilities,
subject to certain adjustments allowed under IFRS 16.
All
leases are accounted for by recognizing a right-of-use asset and a
lease liability except for:
●
Leases of low value
assets; and
●
Leases with a
duration of twelve months or less.
Lease
liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount
rate determined by the interest rate implicit in the lease, or if
that rate cannot be readily determined, the Company’s
incremental borrowing rate on commencement of the leaseis used.
Variable lease payments are only included in the measurement of the
lease liability if they dependon an index or rate. In such cases,
the initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other
variable lease payments are expensed in the period to which they
relate.
On
initial recognition, the carrying value of the lease liability also
includes:
●
Amounts expected to
be payable under any residual value guarantee;
●
The exercise price
of any purchase option granted if it is reasonable certain to
assess that option;
●
Any penalties
payable for terminating the lease, if the term of the lease has
been estimated on the basis of termination option being
exercised.
Right-of-use assets
are initially measured at the amount of the lease liability,
reduced for any lease incentives received, and increased
for:
●
Lease payments made
at or before commencement of the lease;
●
Initial direct
costs incurred; and
●
The amount of any
provision recognized where the Company is contractually required to
dismantle, remove or restore the leased asset.
Lease
liabilities, on initial measurement, increase as a result of
interest charged at a constant rate on the balance outstanding and
are reduced for lease payments made.
Right-of-use assets
are amortized on a straight-line basis over the remaining term of
the lease or over the remaining economic life of the asset if this
is judged to be shorter than the lease term.
10
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
When
the Company revises its estimate of the term of any lease, it
adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted at the
same discount rate that applied on lease commencement. The carrying
value of lease liabilities is similarly revised when the variable
element of future lease payments dependent on a rate or index is
revised. In both cases, an equivalent adjustment is made to the
carrying value.
As of
the initial adoption date of January 1, 2019, the Company does not
have any leases that are required to be recognized as assets and
liabilities. The Company entered into an office lease with an
effective date on May 1, 2021.
(d)
Significant accounting estimates and judgements
The
critical estimates and judgements applied in the preparation of
these Financial Statements are consistent with those applied in the
Company’s audited consolidated financial statements as at and
for the year ended March 31, 2021.
(e)
Operating segments
The
Company operates as a single reportable segment—the acquisition,
exploration and development of mineral properties. All assets are
held in Canada.
3.
CASH
The
Company’s cash is invested in business and savings accounts,
which are available on demand by the
Company.
4.
MARKETABLE SECURITIES
As at
June 30, 2021, the fair value of its current holdings was $958,255
(June 30, 2020 - $18,356) and the negative change of fair value
adjustment of $68,163 for the three months ended June 30, 2021
(June 30, 2020 – negative change of fair value adjustment of
$1,465). The marketable securities include 5.5 million units
(shares and warrants) of Carlyle Commodities Corp., a Canadian
public company listed on TSX-V exchange.
Continuity
table:
|
|
June 30,
2021
|
June 30,
2020
|
|
Balance
– beginning of year
|
$1,026,418
|
$18,356
|
|
Revaluation of
marketable securities
|
(68,163)
|
(1,465)
|
|
Balance
– end of year
|
$958,255
|
$16,892
|
11
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
As at
June 30, 2021, the Company held the following marketable
securities:
|
|
|
|
|
Fair
Value Increase
|
|
Company
|
Shares/Warrants
Held
|
Cost
|
Fair
Value
|
(Decrease)
|
|
Carlyle Commodities
Corp - Shares
|
5,500,000
|
907,500
|
522,500
|
(385,000)
|
|
Carlyle Commodities
Corp - Warrants
|
5,500,000
|
727,000
|
415,000
|
(312,000)
|
|
Other
|
2,275,002
|
18,356
|
20,755
|
2,399
|
|
|
|
1,652,856
|
958,255
|
(694,601)
|
5.
RESTRICTED CASH
Restricted cash
represents amounts held in support of exploration permits. The
amounts are refundable subject to the consent of regulatory
authorities upon completion of any required reclamation work on the
related projects.
6.
AMOUNTS RECEIVABLE AND OTHER ASSETS
|
|
June 30,
2020
|
March 31,
2021
|
|
Sales tax
refundable
|
$31,443
|
$17,011
|
|
Contribution
receivable (Note 7(b))
|
149,120
|
9,851
|
|
Prepaid last
month’s rent (Note 13)
|
3,524
|
-
|
|
Prepaid
insurance
|
8,675
|
20,518
|
|
Total
|
$192,762
|
$47,380
|
7.
EXPLORATION AND EVALUATION EXPENSES AND COST
RECOVERIES
Below
is a summary of the Company’s major exploration projects and
their associated royalties, where the Company is currently
incurring the majority of its exploration work.
(a)
IKE District
Refer
to the discussion of IKE District under note 7(a) in the audited
financial statements of the Company for the year ended March 31,
2021.
12
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
(b)
JOY District
Historical information
Refer
to the discussion of JOY District under note 7(b) in the audited
financial statements of the Company for the year ended March 31,
2021.
JOY District Agreement with Freeport
On May
11, 2021, the Company and Freeport-McMoRan Mineral Properties
Canada Inc. (“Freeport”), a wholly owned subsidiary of
Freeport-McMoRan Inc. (NYSE:FCX) entered into a Mineral Property
Earn-in Agreement (the “EIA”) whereby Freeport may
acquire up to a 70% ownership interest of the Company’s Joy
porphyry Cu-Au District Property.
Under
the terms of the EIA, Freeport has a two-stage option to earn up to
a 70% ownership interest in the mineral claims comprising the JOY
District, plus other rights and interests, over a 10 year
period.
To earn
an initial 60% interest, Freeport is required to fund $35 million
of work expenditures over a 5- year term. During the first year of
the earn-in, a $4 million work program is planned in the JOY
District.
These
optional earn-in expenditures can be accelerated by Freeport at its
discretion. Amarc will be operator during the initial earn-in
period. Once Freeport has acquired such 60% interest, Amarc and
Freeport will proceed to operate the JOY District through a jointly
owned corporation with Freeport assuming project
operatorship.
Upon
Freeport earning such 60% interest, it can elect, in its sole
discretion, to earn an additional 10% interest, for a total 70%
interest by sole funding a further $75 million within the following
five years.
Once
Freeport has finalized its earned ownership interest at either the
60% or 70% level, each party will be responsible for funding its
own pro-rata share of project costs on a 60:40 or 70:30
basis.
On
August 4, 2021, Amarc announced that Freeport had increased its first year contribution to
the
Company’s
ongoing exploration program at the JOY District from $4 million to
$5.5 million.
During
the three months ended June 30, 2021, the Company incurred eligible
and recoverable project costs of $758,903. These were included in
the expenses in the Condensed Consolidated Statement of Loss for
the three months ended June 30, 2021. The cost recoveries recorded
in the three months ended June 30, 2021 are: (i) $758,903 related
to this project, (ii) $148,227 related to the refunds received by
the Company for its portion of BC Mineral Exploration Tax Credit
(“BCMETC”) as a result of the re-assessment of the
Company’s refund claims for fiscal 2018 and 2019, and (iii)
$1,151 cost recoveries related to other property costs incurred in
fiscal 2021.
During
the three months ended June 30, 2021, the Company earned a fee of
$52,672 as the operator of the project of the JOY
District.
(c)
DUKE District
The
DUKE District is located in central BC. In November 2016, the
Company entered into a purchase agreement with a private company
wholly-owned by one of its directors (note 11(c)) to purchase a
100% interest in the DUKE property for the reimbursement of the
vendor’s direct acquisition costs of $168,996.
13
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
8.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|
|
June 30,
2021
|
March 31,
2021
|
|
Accounts
payable
|
$345,658
|
$51,889
|
|
Accrued
liabilities
|
224,068
|
116,306
|
|
Total
|
$569,726
|
$168,195
|
9.
DIRECTORS LOANS
|
|
Three months ended
June 30, 2021
|
Year ended March 31, 2021
|
|
Opening
balance
|
$570,000
|
$812,119
|
|
Principal
repayments
|
–
|
(300,000)
|
|
Amortization of
transaction costs
|
17,197
|
57,881
|
|
Closing
balance
|
$587,197
|
$570,000
|
|
|
Three months ended
June 30, 2021
|
Year ended March 31, 2021
|
|
Non-current
portion
|
$587,197
|
$570,000
|
|
Total
|
$587,197
|
$570,000
|
|
Finance
expenses
|
Three months ended June 30,
|
|
|
|
2021
|
2020
|
|
Interest on
director’s loan
|
$24,932
|
$32,411
|
|
Amortization of
transaction costs
|
17,197
|
12,920
|
|
Total
|
$42,129
|
$45,331
|
(a)
2019 loan
In
December 2019, the Company entered into a loan extension and
amendment agreement (the “Loan”) with a director and
significant shareholder of the Company (the “Lender”),
pursuant to which a previous loan agreement with a maturity date of
November 26, 2019 was extended for five years or earlier pending
the achievement of certain financing milestones. The Loan has a
principal sum of $1,000,000, is unsecured and bears interest at a
rate of 10% per annum.
Pursuant to the
Loan, the Company issued to the Lender a loan bonus comprising of
16,000,000 common share purchase warrants (the
“Warrants”) with an expiry of five years and an
exercise price of $0.05 per share.
14
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
(b)
2019 bridge loans
In July
and August 2019, the Company entered into certain loan agreements
(collective the “Bridge Loans”) with a director of the
Company and a private company wholly-owned by a director of the
Company (collectively the “Bridge Lenders”), pursuant
to which the Bridge Lenders advanced to the Company an aggregate
principal sum of $375,000 with a 1-year term and bearing interest
at 10% per annum. The Bridge Loans were fully repaid in September
2019.
In
December 2019, the Company entered into a loan agreement (the
“Second Bridge Loan”) with a director of the Company
(the “Second Bridge Lender”), pursuant to which the
Second Bridge Lender advanced to the Company a principal sum of
$300,000 with a 9-month term and bearing interest at a rate of 10%
per annum.
Advances have been
measured as financial liabilities at their (cash) transaction
values, with the unamortized balance of directly applicable
transaction costs, comprised of the fair values of the loan bonus
warrants granted, representing a partially offsetting asset
balance. Such transaction costs are being expensed pro-rata over
the term of the debt, with the effect on the balance sheet
presentation being that the aggregate debt is accreted towards its
face value.
In
August 2020, the principal and interest balances of the Second
Bridge Loan were fully repaid.
10.
SHARE CAPITAL AND RESERVES
(a)
Authorized and outstanding share capital
The
Company’s authorized share capital consists of an unlimited
number of common shares without par value (“Common
Shares”) and an unlimited number of preferred shares. All
issued Common Shares are fully paid. No preferred shares have been
issued.
On
August 20, 2020, 3,000,000 flow-through shares were issued pursuant
to the exercise of warrants for gross proceeds of
$150,000.
On
October 2, 2020, 2,000,000 flow-through shares were issued pursuant
to the exercise of warrants for gross proceeds of $100,000. $100
related to flow-through tax filing has been deducted from the gross
proceeds as issuance costs.
Approximately
$167,000 of the flow-through proceeds received were renounced to
the shareholder as at December 31, 2020. The Company recognized no
flow-through premium in excess of the fair value of these common
shares at their dates of issuance.
As at
June 30, 2021, the amount of flow-through proceeds remaining to be
expended is approximately
$83,000, which must
be incurred on or before December 31, 2023.
As at
June 30, 2021, there were 180,602,894 Common Shares issued and
outstanding (June 30, 2020 –
175,602,894).
15
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
(b)
Share purchase options
The
following summarizes changes in the Company’s share purchase
options (the “Options”):
|
|
June 30, 2021
|
June 30, 2020
|
||
|
|
Weighted Average Exercise
Price
|
Number of Options
|
Weighted Average Exercise
Price
|
Number of Options
|
|
Outstanding –
beginning balance
|
$0.05
|
2,000,000
|
$0.05
|
2,000,000
|
|
Grant
|
-
|
-
|
-
|
-
|
|
Outstanding –
ending balance
|
$0.05
|
2,000,000
|
$0.05
|
2,000,000
|
Award
vesting in several tranches ranging from 6 months to 18 months from
the date of grant.
The
following summarizes information on the options outstanding and
exercisable as at June 30, 2021:
|
|
|
Options
Outstanding
|
|
Options
Exercisable
|
|
Exercise
price
|
Weighted Average
Remaining Contractual
Life
(years)
|
Number of
Options
|
Weighted Average
Remaining Contractual
Life
(years)
|
Number of
Options
|
|
$0.05
|
3.26
|
2,000,000
|
3.26
|
2,000,000
|
|
Total
|
3.26
|
2,000,000
|
3.26
|
2,000,000
|
(c)
Share purchase warrants
The
following common share purchase warrants were outstanding at June
30, 2020 and March 31, 2019:
|
|
Exercise price
|
June 30,
2021
|
March 31,
2021
|
|
Issued pursuant to
the Loan (note 9(a))
|
$0.05
|
16,000,000
|
16,000,000
|
|
Exercised
|
|
(5,000,000)
|
(5,000,000)
|
|
Total
|
|
11,000,000
|
11,000,000
|
(i)
2019 loan bonus warrants
In
December 2019, 16,000,000 share purchase warrants were issued
pursuant to the Loan (note 9(a)). The fair value of these warrants
at issue was determined to be $490,449 at $0.03 per warrant using
the Black-Scholes pricing model and based on the following
assumptions: risk-free rate of 1.57%; expected volatility of 144%;
underlying market price of $0.035; strike price of $0.05; expiry
term of 5 years; and, dividend yield of nil.
16
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
11.
RELATED PARTY TRANSACTIONS
|
Balances
due to related parties
|
June 30,
2021
|
March 31,
2021
|
|
Bookskipper
Accounting & Tax Services
|
$1,575
|
$1,050
|
|
Hunter Dickinson
Services Inc.
|
667,821
|
614,352
|
|
Robert Dickinson
(interest payable)
|
199,747
|
174,816
|
|
United Mineral
Services Ltd.
|
3,870
|
5,021
|
|
Total
|
$873,013
|
$795,239
|
(a)
Transactions with key management personnel
Key
management personnel (“KMP”) are those persons that
have the authority and responsibility for planning, directing, and
controlling the activities of the Company, directly and indirectly,
and by definition include all the directors of the
Company.
Note 9
includes the details of a director’s loan. Note 7(b) and 7(c)
includes the details of the acquisition of mineral property
interests from a private entity wholly-owned by one of the
directors of the Company.
During
the three months ended June 30, 2021 and 2020, the Company’s
President, Chief Executive Officer and Director; and Corporate
Secretary provided services to the Company under a service
agreement with Hunter Dickinson Services Inc. (note
11(b)).
During
the three months ended June 30, 2021, the Company incurred a $4,000
fee for the services provided by the Chief Financial Officer
($1,000 for the three months ended June 30, 2020).
There
were no other transactions with KMP during the three months ended
June 30, 2021 and 2020.
(b)
Hunter Dickinson Services Inc.
Hunter
Dickinson Inc. (“HDI”) and its wholly-owned subsidiary
Hunter Dickinson Services Inc. (“HDSI”) are private
companies established by a group of mining professionals. HDSI
provides contract services for a number of mineral exploration and
development companies, and also to companies that are outsideof the
mining and mineral development space. Amarc acquires services from
a number of related and arms- length contractors, and it is at
Amarc’s discretion that HDSI provides certain contract
services.
The
Company has one director in common with HDSI, namely Robert
Dickinson. Also, the Company’s President, Chief Executive
Officer and Director, Chief Financial Officer (until March 31,
2020) and Corporate Secretary are employees of HDSI and are
contracted to work for the Company under an employee secondment
agreement between the Company and HDSI.
17
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
Pursuant to an
agreement dated July 2, 2010, HDSI provides certain cost effective
technical, geological, corporate communications, regulatory
compliance, and administrative and management services to
the Company, on a non-exclusive basis as needed and as
requested by the Company. As a result of this relationship, the
Company has ready access to a range of diverse and specialized
expertise on a regular basis, without having to engage or hire
full-time employees or experts. The Company benefits from the
economies of scale created by HDSI which itself serves several
clients both within and external to the exploration and mining
sector.
The
Company is not obligated to acquire any minimum amount of services
from HDSI. The monetary amount of the services received from HDSI
in a given period of time is a function of annually set and agreed
charge-out rates for and the time spent by each HDSI employee
engaged by the Company.
HDSI
also incurs third-party costs on behalf of the Company. Such third
party costs include, for example, capital market advisory services,
communication services and office supplies. Third-party costs are
billed at cost, without markup.
There
are no ongoing contractual or other commitments resulting from the
Company's transactions with HDSI, other than the payment for
services already rendered and billed. The agreement may be
terminated upon 60 days' notice by either the Company or
HDSI.
The
following is a summary of transactions with HDSI that occurred
during the reporting period:
|
Transactions
with HDSI
|
Three months ended June 30,
|
|
|
(rounded to the nearest thousand CAD)
|
2021
|
2020
|
|
Services received
from HDSI and as requested by the Company
|
$192,000
|
$299,000
|
|
Information
technology – infrastructure and support services
|
22,000
|
15,000
|
|
Office
rent
|
2,000
|
-
|
|
Reimbursement, at
cost, of third-party expenses incurred by HDSI on behalf of the
Company
|
24,000
|
46,000
|
|
Total
|
$240,000
|
$360,000
|
(c)
United Mineral Services Ltd.
United
Mineral Services Ltd. (“UMS”) is a private company
wholly-owned by one of the directors of the Company. UMS is engaged
in the acquisition and exploration of mineral property interests.
There were no transactions with UMS that occurred during the three
months ended June 30, 2021 and 2020.
18
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
12.
SUPPLEMENTARY INFORMATION TO THE CONSOLIDATED STATEMENTS OF
LOSS
(a)
Employees’ salaries and benefits
The
employees’ salaries and benefits included in exploration and
evaluation expenses and administration expenses are as
follows:
|
Employees’
salaries and benefits
|
Three months ended June 30,
|
|
|
(rounded to the nearest thousand CAD)
|
2021
|
2020
|
|
Salaries and
benefits included in the following:
|
|
|
|
Exploration and
evaluation expenses
|
$247,000
|
$203,000
|
|
Administration
expenses 1
|
63,000
|
111,000
|
|
Total
|
$310,000
|
$379,000
|
1
This amount
includes salaries and benefits included in office and
administration expenses (note 12(b)) as well as other salaries and
benefits expenses classified as administration
expenses.
(b)
Office and administration expenses
Office
and administration expenses include the following:
|
Office
and administration expenses
|
Three months ended June 30,
|
|
|
(rounded to the nearest thousand CAD)
|
2021
|
2020
|
|
Salaries and
benefits
|
$56,000
|
$61,000
|
|
Insurance
|
12,000
|
21,000
|
|
Data processing and
retention
|
6,000
|
15,000
|
|
Other office
expenses
|
3,000
|
4,000
|
|
Total
|
$77,000
|
$101,000
|
13.
OFFICE LEASE – RIGHT OF USE ASSET AND LEASE
LIABILITY
The
Company subleases corporate offices in Vancouver, BC from HDSI
under a lease agreement dated May 1,2021 and the lease expires on
April 29, 2026. Refer to Note 2 (c) for details regarding the 2019
adoption of IFRS 16.
Right-of-use asset
A
summary of the changes in the right-of-use asset for the three
months period ended June 30, 2021 and 2020 is as
follow:
19
|
AMARC
RESOURCES LTD.
Notes
to the Condensed Consolidated Interim Financial
Statements
For the
three months ended June 30, 2021 and 2020
(Unaudited – Expressed in Canadian Dollars, unless otherwise
stated)
|
|
Right-of-use-asset
|
2021
|
2020
|
|
Balance at March
31
|
$-
|
$-
|
|
Addition
|
100,877
|
-
|
|
Amortization
|
(3,363)
|
5,021
|
|
Balance at June
30
|
$97,514
|
$795,239
|
Lease liability
On May
1, 2021, the Company entered into lease agreement which resulted in
the lease liability of
$100,877
(undiscounted value of $134,766, discount rate used is 12.00%).
This liability represents the monthly lease payment from May 1,
2021 to April 29, 2026, the end of the lease term less abatement
granted by HDSI.
A
summary of changes in the lease liability during the three-months
ended June 30, 2021 and 2020 are as follows:
|
Lease
liability
|
2021
|
2020
|
|
Balance at March
31
|
$-
|
$-
|
|
Addition
|
100,877
|
-
|
|
Lease payment
– base rent portion
|
(2,128)
|
-
|
|
Lease liability
– accretion expense
|
1,985
|
-
|
|
Balance as at June
30
|
$100,734
|
$-
|
|
Current
portion
|
$14,714
|
$-
|
|
Long-term
portion
|
$86,020
|
$-
|
The
following is a schedule of the Company’s future lease
payments (base rent portion) under lease obligations:
|
Future
lease payments (base rent portion only)
|
|
|
Fiscal 2022 (July
1, 2021 to March 31, 2022)
|
$19,159
|
|
Fiscal 2023 (April
1, 2022 to March 31, 2023)
|
26,746
|
|
Fiscal 2024 (April
1, 2023 to March 31, 2024)
|
28,056
|
|
Fiscal 2025 (April
1, 2024 to March 31, 2025)
|
28,165
|
|
Fiscal 2026 (April
1, 2025 to March 31, 2026)
|
28,165
|
|
Fiscal 2027 (April
1, 2026 to April 29, 2027) (Note 6)
|
2,347
|
|
Total undiscounted
lease payments
|
$132,638
|
|
Less: imputed
interest
|
(31,904)
|
|
Lease liability as
at June 30, 2021
|
$100,734
|
20
Exhibit 99.2
AMARC RESOURCES LTD.
MANAGEMENT'S
DISCUSSION AND ANALYSIS
FOR
THE THREE MONTHS ENDED JUNE 30, 2021
|
AMARC RESOURCES LTD.
MANAGEMENT’S
DISCUSSION AND ANALYSIS FOR THE THREE MONTHS ENDED JUNE 30,
2021
|
|
1.1
|
DATE
|
1
|
|
|
1.2
|
OVERVIEW
|
1
|
|
|
1.3
|
SELECTED
ANNUAL INFORMATION
|
18
|
|
|
1.4
|
SUMMARY
OF QUARTERLY RESULTS
|
18
|
|
|
1.5
|
RESULTS
OF OPERATIONS
|
19
|
|
|
1.6
|
LIQUIDITY
|
20
|
|
|
1.7
|
CAPITAL
RESOURCES
|
21
|
|
|
1.8
|
OFF-BALANCE
SHEET ARRANGEMENTS
|
21
|
|
|
1.9
|
TRANSACTIONS
WITH RELATED PARTIES
|
21
|
|
|
1.10
|
FOURTH
QUARTER
|
22
|
|
|
1.11
|
PROPOSED
TRANSACTIONS
|
22
|
|
|
1.12
|
CRITICAL
ACCOUNTING ESTIMATES
|
22
|
|
|
1.13
|
CHANGES
IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION
|
22
|
|
|
1.14
|
FINANCIAL
INSTRUMENTS AND OTHER INSTRUMENTS
|
23
|
|
|
1.15
|
OTHER
MD&A REQUIREMENTS
|
23
|
|
|
1.15.1
|
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT
SIGNIFICANT REVENUE
|
23
|
|
|
1.15.2
|
DISCLOSURE OF
OUTSTANDING SHARE DATA
|
23
|
|
|
1.15.3
|
DISCLOSURE
CONTROLS AND PROCEDURES
|
23
|
|
|
1.15.4
|
INTERNAL
CONTROLS OVER FINANCIAL REPORTING PROCEDURES
|
24
|
|
|
1.15.5
|
LIMITATIONS
OF CONTROLS AND PROCEDURES
|
24
|
|
|
1.16
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RISK
FACTORS
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25
|
|
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AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
This
Management's Discussion and Analysis ("MD&A") should be read in
conjunction with the audited consolidated financial statements (the
“Annual Financial Statements”) of Amarc Resources Ltd.
(“Amarc”, or the “Company”) for the year
ended March 31, 2021, and the unaudited condensed consolidated
interim financial statements (the “Financial
Statements”) of the Company for the three months ended June
30, 2021, both of which are publicly available on SEDAR at
www.sedar.com.
All monetary amounts herein are expressed in Canadian Dollars
("CAD") unless otherwise stated. which are publicly available on
SEDAR at www.sedar.com.
All monetary amounts herein are expressed in Canadian Dollars
("CAD") unless otherwise stated.
The
Company reports in accordance with International Financial
Reporting Standards as issued by the International Accounting
Standards Board ("IASB") and interpretations of the IFRS
Interpretations Committee (together known as "IFRS"). The following
disclosure and associated Financial Statements are presented in
accordance with IFRS.
This
MD&A is prepared as of August 27, 2021.
|
Cautionary Note to Investors Concerning Forward-looking
Statements
This discussion and analysis includes
certain statements that may be deemed “forward-looking
statements”. All such statements, other than statements of
historical fact that address exploration drilling, exploitation
activities and other related events or developments are
forward-looking statements. Although Amarc Resources Ltd.
(“Amarc”) believes the expectations expressed in such
forward- looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the
forward-looking statements. Assumptions used by Amarc to develop
forward- looking statements include the following: Amarc’s
projects will obtain all required environmental and other permits
and all land use and other licenses, studies and exploration of
Amarc’s projects will continue to be positive and no
geological or technical problems will occur. Factors that could
cause actual results to differ materially from those in
forward-looking statements include market prices, potential
environmental issues or liabilities associated with exploration,
development and mining activities, exploitation and exploration
successes, continuity of mineralization, uncertainties related to
the ability to obtain necessary permits, licenses and tenure and
delays due to third party opposition, changes in and the effect of
government policies regarding mining and natural resource
exploration and exploitation, and exploration and development of
properties located within Aboriginal groups asserted territories
may affect or be perceived to affect asserted aboriginal rights and
title, which may cause permitting delays or opposition by
Aboriginal groups, continued availability of capital and financing
and general economic, market or business conditions, as well as
risks relating to the uncertainties with respect to the effects of
COVID-19. Investors are cautioned that any such statements are not
guarantees of future performance and actual results or developments
may differ materially from those projected in the forward-looking
statements. For more information on Amarc investors should review
the Company’s annual Form 20-F filing with the United States
Securities and Exchange Commission (the “SEC”)
at www.sec.gov
and its home jurisdiction filings that
are available at www.sedar.com.
|
Amarc
is a mineral exploration and development company with an
experienced and successful management team focused on developing a
new generation of long life, high value British Columbia
(“BC”) porphyry copper-gold (“Cu-Au”)
mines. By combining high demand projects with successful
management, Amarc has created a solid platform to create value from
its exploration and development-stage assets.
Amarc
is advancing the 100%-owned JOY, IKE and DUKE porphyry Cu±Au
deposit districts located in northern, southern and central BC,
respectively. Importantly, each of the three districts is located
in proximity to industrial infrastructure – including power,
highways and rail. The JOY, IKE and DUKE Districts represent
significant potential for the development of multiple and
important-scale, porphyry Cu±Au deposits.
1
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
LOCATION
OF THE COMPANY'S JOY, IKE and DUKE PROJECTS
Amarc’s
100%-owned 482 km2 JOY
District covers the northern extension of the prolific Kemess
porphyry Cu-Au district (the “Kemess District”) in the
Toodoggone region of north-central BC. A geological region with
high potential for important porphyry and epithermal deposits, the
Toodoggone is part of BC's Golden Horseshoe, which includes the
Golden Triangle to the west and northwest.
The JOY
claims are located approximately 20 km north of the former Kemess
South Mine and the government-approved Kemess underground project.
In mid-2017, Centerra Gold Inc. (“Centerra”) purchased
the Kemess District from AuRico Metals Inc. for $310
million1. JOY is host to the
open-ended PINE porphyry Cu-Au deposit (the “PINE
Deposit”) and the promising MEX porphyry Cu-Au deposit
target. Work by Amarc has identified significant expansion
potential that requires drill testing at both the PINE Deposit and
at MEX. In addition, Amarc’s extensive exploration surveys
have identified a pipeline of other large (approximately 1 to 8
km2) and high potential,
porphyry Cu-Au targets, which cluster on the property. Each of
these target areas in themselves host multiple targets that are
either drill-ready, or can rapidly be brought up to a drill ready
status by the completion of focused surface surveys.
Amarc
has entered into an alliance with Freeport-McMoran Minerals
Properties Canada Inc. (“Freeport”), a wholly owned
subsidiary of Freeport-McMoRan Inc., to efficiently advance the JOY
District. Under the terms
1
Centerra Gold Inc.
news release January 8, 2018.
2
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
of the agreement Freeport may acquire up to a 70%
ownership interest by making staged investments totalling $110
million. As project operator, Amarc has mobilized work crews to JOY
to undertake a comprehensive 2021 exploration program, inclusive of
drilling, which is designed to advance deposit delineation and
assess several important-scale mineral systems. Drill and IP
permits are in hand for the work programs being
undertaken.
The 462
km2 IKE District is located 33
km northwest of the historical mining community of Gold Bridge near
the heartland of BC’s producing porphyry Cu mines. The
greater IKE District includes porphyry Cu-Mo-Ag deposit discovery
(the “IKE Deposit”), the high potential Greater Empress
Cu-Au Project (the “Greater Empress” area) that hosts
the Empress Cu-Au-Ag deposit (the “Empress Deposit”)
and other significant porphyry Cu-Au-Mo-Ag and Cu-Au-Ag replacement
deposit targets, and also the number of promising porphyry Cu and
epithermal Au-Ag targets. The District shares many characteristics
with porphyry districts around the globe that host major, and
commonly multiple, Cu±Au±Mo±Ag deposits and has the
potential to possess the grades and resources necessary to develop
into an important mining camp.
Subject
to funding Amarc is planning:
●
An expanded drill
program at the IKE Deposit with the goal of establishing a mineral
resource;
●
A well-planned core
drilling program at the Empress Deposit to expand the
mineralization which remains open; and
●
An integrated
program in the Greater Empress area to drill test high potential
drill-ready targets and survey work on other promising targets to
bring them also to a drill ready status.
The
Company has the required drill and IP permits in hand for the
proposed work programs.
Amarc’s DUKE
District is located 80 km northeast of Smithers within the broader
Babine District (the “District”), one of BC’s
most prolific porphyry Cu-Au belts. The Babine District, a 40 by
100 km north- northwesterly striking mineralized belt is host to
Noranda Mines’ past producing Bell and Granisle Cu-Au mines
that produced a total of 1.1 billion pounds of Cu, 634,000 ounces
of Au and 3.5 million ounces of Ag2, and the advanced stage Morrison Cu-Au
deposit. The DUKE District includes both the DUKE porphyry Cu
deposit target discovery and a series of high potential porphyry
Cu-Au deposit targets generated form the Company’s
comprehensive district-scale targeting programs.
The
Company is currently planning:
●
To undertake the
drilling required to delineate the geometry and grade distribution
of its DUKE discovery in order to inform a mineral resource
estimate and related studies; and
●
Initial ground
surveys on its regional targets taking advantage of extensive
logging road networks across the property. These focused surveys
would be followed by RC drilling to test prioritized targets for
the presence of potential porphyry Cu- Au mineralized systems below
cover and, where a deposit target is confirmed, core drilling to
determine the extent, grade and geometry of the mineralized
system.
The
Company has permits in hand to commence these works.
2
MINFILE Number 093L
146 and 093M 001 MINFILE Production Detail Report, BC Geological
Survey, Ministry of Energy and Mines, BC.
3
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Amarc
works closely with local governments, indigenous groups and other
stakeholders in order to advance its mineral projects responsibly,
and to do so in a manner that contributes to sustainable community
and economic development. We pursue early and meaningful engagement
to ensure our mineral exploration and development activities are
well coordinated and broadly supported, address local priorities
and concerns, and optimize opportunities for collaboration. In
particular, we seek to establish mutually beneficial partnerships
with indigenous groups within whose traditional territories its
projects are located, through the provision of jobs, training
programs, contract opportunities, capacity funding agreements and
sponsorship of community events. All Amarc’s work programs
are carefully planned to achieve high levels of environmental and
social performance.
The JOY Cu-Au District
Amarc’s
100%-owned 482 km2 JOY
District covers the northern extension of the prolific Kemess
porphyry Cu-Au district (the “Kemess District”) in the
Toodoggone region of north-central BC (see May 15, 2020 news
release and the Company’s website at www.amarcresources.com/projects/joy-project).
A geological region with high potential for important porphyry and
epithermal deposits, the Toodoggone is part of BC's Golden
Horseshoe, which includes the Golden Triangle to the west and
northwest.
Through
its association with HDI, Amarc's technical team was first to
recognize the Kemess District's true porphyry potential, acquiring
both Kemess North and Kemess South as early-stage prospects and
advancing both to significant porphyry Cu-Au deposits. Kemess South
was sold on beneficial terms to a predecessor of Northgate
Minerals, which brought the deposit into production. Northgate
Minerals produced 3 million ounces of Au, and 750 million pounds of
Cu over a 13-year period to 20113 from Kemess South (BC’s third
largest Au producer). The southern area of the Kemess District, now
owned by Centerra, includes the government-approved Kemess
Underground Project (the deeper higher-grade extension of the
Kemess North deposit), the advanced stage Kemess East deposit as
well as the mined-out Kemess South deposit. The resource road that
services Centerra’s deposits and the historical Lawyers and
Shasta Au-Ag mines, also provides access to Amarc’s JOY
District.
JOY District Highlights
The
PINE Deposit within the JOY District has seen several phases of
historical drilling. Work by Amarc has identified significant
expansion potential at both the PINE Deposit and the MEX deposit
target that requires drill testing. In addition, Amarc has defined
seven large (approximately 1 to 8 km2), high potential porphyry Cu-Au
exploration target areas, each of which hosts multiple targets that
are either drill-ready, or can rapidly be brought up to a drill
ready status by the completion of focused surface surveys. A highly
effective targeting strategy was achieved by combining and
interpreting information from the Company’s exploration
surveys and extensive historical datasets. These datasets include
results from soil geochemical sample grids, airborne magnetics and
Induced Polarization (“IP”) geophysical surveys,
geological and alteration mapping and historical drilling. The
large historical soils geochemical database (6,390 samples) was of
particular use.
The JOY
technical information in this section is summarized from the
Company’s National Instrument 43-101
Technical Report
(“JOY Technical Report”) filed under Amarc’s
profile at www.sedar.com and on
the
3
SRK Consulting
(Canada) Inc. 2013 NI-43-101 Technical Report on the Kemess
Underground Project, British Columbia, Canada, AuRico Metals Ltd.
Sedar
4
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AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Company’s
website at www.amarcresources.com/projects/joy-project/technical-report.
Amarc
has mobilized work crews to JOY to undertake a comprehensive 2021
exploration program, inclusive of drilling, which is designed to
advance deposit delineation and assess several important-scale
mineral systems. Required drill and IP permits are in hand for the
work programs being undertaken.
New Porphyry Cu-Au Potential at the PINE Deposit and MEX Deposit
Target
The
PINE Deposit is a northeast-trending, 2.5 km-long porphyry Cu-Au
mineralized system located within an underexplored 6 km2 area of strong hydrothermal alteration,
as defined by IP chargeability, alteration mapping and limited
historical drilling. At the PINE Deposit, shallow historical
drilling (most holes record less than 175 m vertical penetration)
indicates that mineralization is open both laterally and to depth,
with many of the holes ending in mineralization and some showing a
downhole increase in Cu and Au grades. Examples of the historical
results are provided in Table 1.
Table
1: PINE DEPOSIT
Selected
Drill Intervals from Historical Drilling
|
Drill
Hole
|
From (m)
|
To (m)
|
Int.(m)1,2,3
|
Cu(%)
|
Au(g/t)
|
Ag(g/t)
|
Mo(%)
|
CuEQ(%)4,5
|
|
79-2
|
1.8
|
51.0
|
49.2
|
0.28
|
0.669
|
-
|
-
|
0.64
|
|
79-2
|
99.0
|
127.5
|
28.5
|
0.32
|
0.647
|
-
|
-
|
0.67
|
|
80-07
|
10.8
|
48.2
|
37.4
|
0.22
|
1.353*
|
1.4
|
0.001
|
0.97*
|
|
Incl.
|
13.0
|
15.9
|
2.9
|
0.30
|
3.12
|
1.3
|
0.001
|
1.94*
|
|
|
57.0
|
90.5
|
33.5
|
0.11
|
0.531
|
1.4
|
0.003
|
0.41
|
|
92-38
|
14.0
|
44.1
|
30.1
|
0.21
|
1.116
|
0.7
|
0.001
|
0.82
|
|
92-38
|
53.5
|
192.2
|
138.7
|
0.09
|
0.381
|
0.6
|
0.003
|
0.31
|
|
92-40
|
14.0
|
49.2
|
35.2
|
0.21
|
1.506*
|
1.3
|
0.001
|
1.04*
|
|
Incl.
|
20.0
|
22.0
|
2.0
|
0.28
|
3.34
|
1.2
|
0.001
|
1.93*
|
|
|
54.5
|
140.0
|
85.5
|
0.14
|
0.725
|
0.6
|
0.002
|
0.55
|
|
|
164.5
|
182.7
|
18.2
|
0.08
|
0.367
|
0.6
|
0.001
|
0.29
|
|
93-41
|
69.5
|
113.0
|
43.5
|
0.13
|
0.741*
|
0.8
|
0.002
|
0.55*
|
|
Incl.
|
75.0
|
77.0
|
2.0
|
0.28
|
3.10
|
3.6
|
0.001
|
1.94*
|
|
|
129.0
|
137.0
|
8.0
|
0.36
|
0.210
|
0.1
|
0.002
|
0.48
|
|
|
189.0
|
197.0
|
8.0
|
0.10
|
0.375
|
0.6
|
0.003
|
0.32
|
|
|
265.0
|
273.0
|
8.0
|
0.08
|
0.438
|
0.1
|
0.004
|
0.33
|
|
P97-04
|
55.1
|
75.3
|
20.2
|
0.15
|
0.510*
|
4.5
|
0.002
|
0.46*
|
|
Incl.
|
74.0
|
75.3
|
1.3
|
0.32
|
205.20
|
43.4
|
0.004
|
2.25*
|
|
|
90.7
|
127.4
|
36.7
|
0.15
|
0.522
|
2.8
|
0.002
|
0.46*
|
|
|
127.4
|
192.4
|
65.0
|
0.16
|
0.658*
|
2.3
|
0.002
|
0.54*
|
|
Incl.
|
150.0
|
153.0
|
3.0
|
0.28
|
39.80
|
16.1
|
0.003
|
2.02*
|
|
Incl.
|
166.8
|
168.4
|
1.6
|
0.17
|
4.36
|
4.4
|
0.001
|
1.84*
|
|
P97-08
|
127.7
|
268.6
|
140.9
|
0.17
|
0.492
|
2.0
|
0.002
|
0.46
|
|
CuEQ%
|
>=0.30 &
<0.50
|
|
|
>=0.50
|
|
|
5
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AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Notes
to Table 1:
1
Widths reported are
drill widths, such that the thicknesses are unknown.
2
All assay intervals
represent length-weighted averages.
3
Some figures may
not sum exactly due to rounding.
4
Copper equivalent
(CuEQ) calculations use metal prices of: Cu US$3.00/lb, Mo
US$12.00/lb, Ag US$18.00/oz and Au US$1,400.00/oz and conceptual
recoveries of: Cu 90%, Au 72%, 67% Ag and 82% Mo. Conversion of
metals to an equivalent Cu grade based on these metal prices is
relative to the Cu price per unit mass factored by predicted
recoveries for those metals normalized to the copper recovery. The
metal equivalencies for each metal are added to the Cu grade. The
general formula for this is: CuEQ % = Cu% + (Au g/t * (Au recovery
/ Cu recovery) * (Au $ per oz/ 31.1034768) / (Cu $ per lb*
22.04623)) + (Ag g/t * (Ag recovery / Cu recovery) * (Ag $ per oz/
31.1034768) / (Cu $ per lb* 22.04623)) + (Mo % * (Mo recovery / Cu
recovery) * (Mo $ per lb / Cu $ per lb)).
5
The estimated
metallurgical recoveries are conceptual in nature. There is no
guarantee that the metallurgical testing required to determine
metal recoveries will be done or, if done, the metallurgical
recoveries could be at the level of the conceptual recoveries used
to determine the CuEQ.
6
Details of
analysis, QA/QC and data verification for the PINE Deposit drilling
is provided in the 2020 IKE National Instrument 43-101 Technical
Report, which is posted on the Amarc website and the
Company’s profile on SEDAR.
In
addition:
●
(-)
means not assayed for.
●
Au and CuEQ values
marked with an asterisk signify capping of very high Au assay
results at 3.0 g/t for the composite calculation (3.0 g/t is the
98th percentile for Au in the JOY drill data). The included (Incl.)
interval that follows presents the sample interval with the
uncapped Au result.
In
addition to the delineated drill-ready targets at the PINE Deposit,
untested areas of high IP chargeability and/or soil geochemistry
lie between the widely-spaced historical holes and extend outward
laterally, with the majority of the surrounding 6 km2 area of strong hydrothermal alteration
remaining to be fully explored.
Similarly, at the
MEX deposit target widely-spaced historical drilling indicates that
the system remains open both laterally and to depth.
Newly Identified Porphyry Cu-Au Targets
The MEX
Cluster, located between the PINE Deposit and MEX mineralized
systems, includes a series of new targets, that are characterized
by coincident anomalies defined by geochemical, geophysical and
mapping surveys. These new, well-defined targets are a priority for
early drill testing.
Additional surface
surveys are planned to prepare emerging drill targets at the Canyon
South, Twins, SW Takla, Central Takla and the North Finley target
areas for drilling. For example at Canyon South, a 1 km wide
high-contrast >28 mV/V core of a 2 km-wide >18 mV/V IP
chargeability anomaly closely coincides with a 500 m diameter
magnetic high that is possibly related to an unidentified, and
potentially mineralized, porphyry stock. Notably, two historical
drill holes: PIN09-15, which encountered 11.43 g/t Au over 3 m, and
MEX12- 013, which recorded 0.05% Cu and 0.18 g/t Au over 62.3 m are
located on the periphery of the Canyon South target and on the
opposite sides of the open 2 km-wide IP chargeability anomaly. Such
an occurrence of Au ± Cu could be related to the outer regions
of a porphyry system. A new IP survey is proposed to expand the
coverage of the historical IP to define the full extent of the
chargeability anomaly in preparation for drill
testing.
6
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AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
JOY District Agreement with Freeport
On May
12, 2021 Amarc announced it entered into an agreement (the
"Agreement") with Freeport pursuant to which Freeport may acquire,
through a staged two-stage option up to a 70% ownership interest in
the mineral claims comprising the JOY District, plus other rights
and interests, over up to a 10 year period.
To earn
an initial 60% interest, Freeport is required to fund $35 million
of work expenditures over a 5-year term. During the first year of
the earn-in, a $4 million work program is required in the JOY
District. Annual optional earn-in expenditures can be accelerated
by Freeport at its discretion. Amarc will be operator during the
initial earn-in period. Once Freeport has acquired such 60%
interest, Amarc and Freeport will proceed to explore and develop
the JOY District through a jointly owned corporation with Freeport
assuming project operatorship.
Upon
Freeport earning such 60% interest, it can elect, in its sole
discretion, to earn an additional 10% in the mineral claims
comprising the JOY District, plus other rights and interests (for a
total 70% interest) by sole funding a further $75 million within
the following five years.
Once
Freeport has finalized its earned ownership interest at either the
60% or 70% level, each party will be responsible for funding its
own pro-rata share of project costs on a 60:40 or 70:30
basis.
On
August 4, 2021 Amarc announced that Freeport had increased its
first year contribution to the
Company’s
ongoing exploration program at the JOY District from $4 million to
$5.5 million.
JOY District Royalties
The
100% Amarc owned JOY District comprises the JOY, PINE and Paula
properties, and also the STAKED Claims. The mineral claims
comprising the STAKED Claims were staked and are owned 100% by the
Company.
On
November 21, 2017, Amarc acquired 100% interest in the 7,200 Ha JOY
property from United Minerals Services Ltd., a private vendor. The
JOY property is subject to an underlying 3% NSR royalty from
production to a former owner, which is capped at $3.5
million.
On
August 29, 2017, Amarc announced that it had concluded option
agreements with each of Gold Fields Toodoggone Exploration
Corporation (“Gold Fields”) and Cascadero Copper
Corporation ("Cascadero"), which at that time held the PINE
property in a 51%:49% joint venture, that enabled Amarc to purchase
100% of the property. On December 31, 2018, Amarc completed the
purchase of Cascadero’s 49% interest in the PINE property
(Amarc MD&A December 31, 2018). Further on December 9, 2019,
Amarc announced that it had reached an agreement with Gold Fields
to amend the option agreement between the parties and purchased
outright the remaining 51% of the PINE property from Gold Fields
(Amarc news release, December 9, 2019).
Gold
Fields retains a 2.5% NPI royalty on mineral claims comprising
about 96% of the PINE property and a 1% NSR royalty on the balance
of the claims. The NPI royalty can be reduced to 1.25% at any time
through the payment to Gold Fields of $2.5 million in cash or
shares. The NSR royalty can be reduced to 0.50% through the payment
to Gold Fields of $2.5 million in cash orshares.
7
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AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The
PINE property is subject to a 3% underlying NSR royalty payable
from production to a former owner and capped at $5 million payable
from production (Amarc November 21, 2017 news
release).
In
November 2019 Amarc entered into a purchase agreement with two
prospectors to acquire 100% of a single mineral claim, called the
Paula property, located internal to the wider JOY District tenure
(Amarc MD&A December 31, 2019). The claim is subject to a 1%
NSR royalty payable from commercial production that is capped at
$0.5 million.
The IKE Cu-Au District
Amarc’s 100%
owned IKE District is located 35 km northwest of the town of Gold
Bridge in southwestern BC near the heartland of the provinces
producing porphyry Cu mines. It is proximal to industrial
infrastructure including power, and also highways and rail that
connect the District to Vancouver and its port
facilities.
Hydrothermal
alteration and mineralization, which is prospective for the
discovery of porphyry Cu±Au±Mo±Ag and related
deposit types occurs throughout the 462 km2 IKE District. The District occupies a
highly fertile block of crust where
magmatic‐hydrothermal‐structural characteristics are
favorable for the formation of intrusion-related
Cu±Au±Mo±Ag deposits with good grade (see below).
These characteristics are common to most porphyry districts around
the globe that host major, and commonly multiple,
Cu±Au±Mo±Ag deposits.
The
greater IKE District includes the IKE porphyry Cu-Mo-Ag deposit
discovery, the high potential Greater Empress area that hosts the
Empress Cu-Au-Ag deposit and significant porphyry Cu-Au-Mo-Ag and
Cu-Au- Ag replacement deposit targets, and also a number of
promising porphyry Cu and Au-Ag epithermal targets. The District
has the potential to possess the grades and resources necessary to
develop into an important mining camp.
The IKE
technical information in this section is summarized from the
Company’s National Instrument 43-101 Technical Report
(“IKE Technical Report”) filed under Amarc’s
profile at www.sedar.com and
on the Company’s website at www.amarcresources.com/projects/ike-project/technical-report.
IKE Porphyry Cu-Mo-Ag Deposit
The
potential of the IKE porphyry deposit was recognized by Amarc
during a review of porphyry occurrences located in underexplored
mineral belts in BC. Limited historical drilling indicated the
presence of a mineral system with characteristics favorable for an
economically viable porphyry Cu-Mo-Ag deposit, underlying a
significant area of gossanous material. Three historical drill
holes, located over approximately 220 m, had intersected long
continuous intercepts of chalcopyrite and molybdenite
mineralization with encouraging grades, for example: Hole 11-1
returned 186 m of 0.41% CuEQ4
(see Table 1 above for note 4) at 0.31% Cu, 0.022% Mo, 1.9 g/t Ag
and 0.01 g/t Au, including 58 m of 0.52% CuEQ at 0.39% Cu, 0.031%
Mo, 1.9 g/t Ag
and
0.02 g/t Au; and Hole 11-2: 120 m of 0.41% CuEQ at 0.31% Cu, 0.020%
Mo, 3.3 g/t Ag and 0.01 g/t Au
including 32 m of
0.58% CuEQ at 0.42 % Cu, 0.028% Mo, 6.3 g/t Ag and 0.02 g/t
Au.
8
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
There
was no follow up exploration until Amarc initiated exploration.
Largely co-incident magnetic, IP chargeability geophysics and
geochemical talus fines anomalies, together with geological
alteration mapping have defined an extensive 9 km2 hydrothermal system, into which Amarc
has completed approximately 15,455 m of core drilling in 26
widely-spaced holes. This drilling has confirmed the presence of a
substantial body of porphyry Cu-Mo-Ag mineralization with
encouraging grades, over an area 1,200 m east-west by 1,000 m
north- south, and over a vertical extent of 875 m depth, that
remains open to expansion. Table 1 provides selected drill
intercepts for the IKE Deposit.
Table
2: IKE DEPOSIT
Selected
Drill Intervals from Amarc’s Drilling
|
Drill Hole
|
From (m)
|
To (m)
|
Int. (m)1,2,3
|
Cu (%)
|
Au (g/t)
|
Ag (g/t)
|
Mo (%)
|
CuEQ(%)4,5
|
|
IK14005
|
269.4
|
325.4
|
56.0
|
0.31
|
-
|
1.6
|
0.064
|
0.55
|
|
|
339.1
|
426.2
|
87.1
|
0.36
|
-
|
0.7
|
0.054
|
0.56
|
|
Incl.
|
347.7
|
378.6
|
30.9
|
0.47
|
-
|
1.2
|
0.052
|
0.67
|
|
|
437.6
|
554.6
|
117.0
|
0.27
|
-
|
0.3
|
0.021
|
0.35
|
|
|
602.9
|
616.1
|
13.2
|
0.29
|
-
|
0.6
|
0.009
|
0.32
|
|
IK15010
|
204.0
|
268.0
|
64.0
|
0.30
|
-
|
2.9
|
0.015
|
0.38
|
|
|
293.0
|
421.0
|
128.0
|
0.33
|
-
|
3.1
|
0.022
|
0.43
|
|
Incl.
|
298.5
|
330.0
|
31.5
|
0.43
|
-
|
4.3
|
0.032
|
0.58
|
|
|
444.0
|
506.0
|
62.0
|
0.24
|
-
|
2.3
|
0.020
|
0.32
|
|
IK15013
|
48.0
|
60.0
|
12.0
|
0.23
|
-
|
1.7
|
0.017
|
0.31
|
|
|
75.0
|
99.0
|
24.0
|
0.24
|
-
|
1.9
|
0.044
|
0.41
|
|
|
129.0
|
307.7
|
178.7
|
0.32
|
-
|
2.2
|
0.025
|
0.42
|
|
|
339.5
|
366.5
|
27.0
|
0.18
|
-
|
1.2
|
0.030
|
0.30
|
|
|
372.5
|
693.3
|
320.8
|
0.32
|
-
|
2.3
|
0.038
|
0.47
|
|
Incl.
|
527.4
|
651.5
|
124.1
|
0.43
|
-
|
3.3
|
0.063
|
0.68
|
|
IK16020
|
111.0
|
156.0
|
45.0
|
0.25
|
-
|
1.7
|
0.015
|
0.31
|
|
|
314.5
|
381.9
|
67.4
|
0.35
|
-
|
2.8
|
0.023
|
0.45
|
|
Incl.
|
366.0
|
381.9
|
15.9
|
0.45
|
-
|
3.5
|
0.044
|
0.64
|
|
|
395.8
|
456.0
|
60.2
|
0.53
|
-
|
3.7
|
0.045
|
0.72
|
|
|
528.0
|
543.0
|
15.0
|
0.16
|
-
|
1.3
|
0.035
|
0.30
|
|
|
549.0
|
582.0
|
33.0
|
0.23
|
-
|
1.6
|
0.110
|
0.64
|
|
IK18025
|
257.0
|
351.7
|
94.7
|
0.37
|
0.020
|
2.5
|
0.020
|
0.47
|
|
Incl.
|
308.0
|
345.4
|
37.4
|
0.48
|
0.025
|
3.4
|
0.030
|
0.62
|
|
|
359.0
|
437.0
|
78.0
|
0.44
|
0.019
|
3.0
|
0.037
|
0.61
|
|
|
461.0
|
482.0
|
21.0
|
0.14
|
0.005
|
1.0
|
0.054
|
0.35
|
|
CuEQ%
|
>=0.30 &
<0.50
|
|
|
>=0.50
|
For
notes refer to Table 1.
●
Details of
analysis, QA/QC and data verification for the IKE Deposit drilling
is provided in the 2020 IKE National Instrument 43-
101
Technical Report, which is posted on the Amarc website and the
Company’s profile on SEDAR at www.sedar.com.
9
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Like
many major porphyry deposits, the IKE deposit formed in a very
active, multi-stage hydrothermal system that was extensive and
robust. Geological mapping and logging of diamond drill core at IKE
indicate the deposit is hosted entirely by multi-phase intrusive
rocks. Its overall geological setting is similar to that of many
important porphyry belts along the Cordillera in North and South
America.
Core
observations and initial petrographic studies at IKE indicate that
the chalcopyrite and molybdenite mineralization occurs as fine to
relatively coarse, mostly discrete grains, mainly as disseminations
and less commonly in fractures and veins. Multi-element analyses
have returned consistently and unusually low concentrations of
metallurgically or environmentally deleterious elements. These
characteristics, and the generally low concentrations of pyrite at
IKE, suggest excellent potential to produce clean, good-grade Cu
and Mo concentrates by standard flotation processing.
Subject
to funding, the Company is planning an expanded phased drill
program at the IKE deposit with the goal of establishing a mineral
resource, which will provide the basis for initial future economic
studies. The Company has the required permit in-hand for the
proposed drill programs.
Empress Deposit and Greater Empress Area Au-Rich Porphyry Cu and
Replacement-Style Deposit Potential
Having
recognized the potential of the IKE Deposit, Amarc consolidated the
IKE District tenure. This included an important 35 km2 sub-area of the District located 6 km
north of the IKE Deposit, that straddles the Coastal Plutonic
Complex (“CPC”) contact for approximately 15 km. This
area known as the Greater Empress area is centred on the high grade
Empress Cu-Au-Ag Deposit. The Greater Empress area has seen
exploration completed by several operators since the 1920’s.
Recent compilation and integration of useful historical information
from geochemical and geophysical surveys and also drilling,
permitted a rapid advancement in the understanding of the potential
both to expand the Empress Deposit, and throughout the area with
the recognition of significant porphyry Cu±Au±Mo-Ag and
Cu-Au-Ag replacement deposit targets. Potential also exits for
auriferous, polymetallic/mesothermal-epithermal deposits. The
Company has the required permits in-hand for the proposed drill
programs and IP geophysical surveys.
Empress Cu-Au-Ag Replacement Deposit
Historical drilling
at Empress has indicated a significant body of good grade Cu-Au
mineralization, which remains open to expansion with a modern core
drilling program. Table 3 provides selected drill historical
intercepts for the Empress Deposit. Mineralization at Empress is
considered to have formed by the replacement of previously altered
volcanics by a quartz-magnetite-sulphide assemblage, with higher
Cu-Au- Ag grades commonly occurring within 100 m in vertical
distance above the CPC’s contact, within the overlying
volcanics. An initial examination of historical drill core by the
Amarc team recognized the nearby, Granite porphyry Cu-Au-Ag-Mo
deposit target, which is shallowly concealed by overburden. The
Granite porphyry deposit target is considered a probable source of
the Empress Deposit replacement fluids. Historical core drill
intercepts at Granite include Hole 91-49 which returned 92 m of
0.38% CuEQ4 (see Table 1 for
note 4) @ 0.22% Cu, 0.23 g/t Au, 0.008% Mo and 0.4 g/t Ag. This
target has not been delineated and mineralization remains open to
expansion. Step-out drilling from the known mineralization is
required.
10
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Table
3: EMPRESS DEPOSIT
Selected
Drill Intervals from Historical Drilling
|
Drill Hole
|
From (m)
|
To (m)
|
Int. (m)1,2,3
|
Cu (%)
|
Au (g/t)
|
Ag (g/t)
|
Mo (%)
|
CuEQ (%)4,5
|
|
76-2
|
51.2
|
114.9
|
63.7
|
0.37
|
0.492
|
0.1
|
-
|
0.64
|
|
Incl.
|
60.4
|
72.4
|
12.0
|
0.51
|
0.442
|
-
|
-
|
0.76
|
|
Incl.
|
103.0
|
114.9
|
11.9
|
0.75
|
0.721
|
0.4
|
-
|
1.15
|
|
|
139.6
|
185.3
|
45.7
|
0.42
|
0.350
|
0.6
|
-
|
0.61
|
|
Incl.
|
139.6
|
157.9
|
18.3
|
0.39
|
0.941
|
1.1
|
-
|
0.91
|
|
Incl.
|
173.1
|
185.3
|
12.2
|
0.73
|
0.010
|
-
|
-
|
0.74
|
|
|
209.4
|
215.8
|
6.4
|
0.74
|
0.758
|
-
|
-
|
1.15
|
|
76-3
|
5.2
|
17.7
|
12.5
|
0.23
|
0.162
|
1.6
|
-
|
0.33
|
|
|
26.8
|
102.9
|
76.1
|
0.92
|
1.418
|
4.7
|
-
|
1.72
|
|
Incl.
|
26.8
|
37.6
|
10.8
|
0.49
|
4.244
|
2.3
|
-
|
2.81
|
|
Incl.
|
42.7
|
74.4
|
31.7
|
1.11
|
1.388
|
4.5
|
-
|
1.89
|
|
88-2
|
7.3
|
50.3
|
43.0
|
0.36
|
0.326
|
1.3
|
0.005
|
0.57
|
|
Incl.
|
13.4
|
29.9
|
16.5
|
0.62
|
0.579
|
2.3
|
0.002
|
0.95
|
|
88-7
|
17.7
|
69.5
|
51.8
|
0.47
|
0.457
|
2.4
|
0.002
|
0.74
|
|
Incl.
|
48.4
|
64.6
|
16.2
|
0.98
|
0.741
|
5.7
|
0.001
|
1.43
|
|
89-2
|
21.6
|
123.7
|
102.1
|
0.36
|
0.361
|
2.7
|
0.001
|
0.58
|
|
Incl.
|
26.5
|
37.0
|
10.5
|
0.31
|
0.754
|
3.2
|
0.003
|
0.75
|
|
Incl.
|
60.6
|
78.9
|
18.3
|
0.72
|
0.573
|
3.8
|
0.001
|
1.06
|
|
Incl.
|
99.1
|
118.0
|
18.9
|
0.49
|
0.470
|
4.2
|
0.001
|
0.78
|
|
89-8
|
9.1
|
115.5
|
106.4
|
0.35
|
0.359
|
1.5
|
0.003
|
0.56
|
|
Incl.
|
78.0
|
99.6
|
21.6
|
0.69
|
0.913
|
2.8
|
0.003
|
1.21
|
|
90-17
|
107.6
|
113.4
|
5.8
|
0.55
|
0.446
|
1.6
|
0.010
|
0.84
|
|
|
143.9
|
200.3
|
56.4
|
1.38
|
1.666
|
4.1
|
0.009
|
2.35
|
|
90-18
|
22.6
|
29.3
|
6.7
|
0.15
|
0.300
|
0.7
|
0.008
|
0.35
|
|
|
35.0
|
40.5
|
5.5
|
0.15
|
0.523
|
0.3
|
0.006
|
0.46
|
|
|
47.9
|
74.4
|
26.5
|
0.47
|
0.683
|
3.2
|
0.010
|
0.90
|
|
|
79.9
|
92.7
|
12.8
|
0.15
|
0.254
|
0.4
|
0.003
|
0.31
|
|
|
107.0
|
161.9
|
54.9
|
0.78
|
0.746
|
1.0
|
0.004
|
1.20
|
|
90-21
|
10.4
|
19.5
|
9.1
|
0.31
|
0.336
|
0.5
|
0.011
|
0.53
|
|
|
140.5
|
192.9
|
52.4
|
1.10
|
1.209
|
2.5
|
0.004
|
1.79
|
|
Incl.
|
153.3
|
175.3
|
22.0
|
1.58
|
1.671
|
2.6
|
0.006
|
2.52
|
|
Incl.
|
182.6
|
191.1
|
8.5
|
1.92
|
2.735
|
7.8
|
0.006
|
3.48
|
|
|
198.4
|
218.8
|
20.4
|
0.30
|
0.542
|
1.3
|
0.002
|
0.61
|
|
90-22
|
143.9
|
190.2
|
46.3
|
1.15
|
1.415
|
4.2
|
0.009
|
1.98
|
|
90-29
|
94.2
|
110.6
|
16.4
|
0.43
|
0.171
|
1.3
|
0.003
|
0.55
|
|
|
141.7
|
214.6
|
72.9
|
0.37
|
0.433
|
0.6
|
0.003
|
0.62
|
|
Incl.
|
178.3
|
194.8
|
16.5
|
0.86
|
1.069
|
1.5
|
0.003
|
1.46
|
|
CuEQ%
|
>=0.30 &
<0.50
|
|
|
>=0.50
|
11
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Greater Empress Area
Cu±Au±Mo-Ag Porphyry and Replacement Targets: In
addition to the Empress deposit, the 35 km2 Greater Empress area includes seven
identified compelling porphyry and replacement- style
Cu-Au±Mo±Ag deposit and exploration targets. The deposit
targets include, Empress East, Empress Gap, Granite (as discussed
above) and Buzzer, and the earlier-stage exploration targets
include Empress West. Each are discussed below with selected
historical drill results provided in Tables 4 and 5. These targets
are either: not fully drill delineated or have been tested only by
shallow, widely-spaced historical reconnaissance percussion
drilling: and can with focused exploration be brought to a drill
ready status.
Empress East Cu-Au-Ag
Replacement Deposit Target: Located 1 km east of the Empress
Deposit, limited historical core holes drilled at the Empress East
deposit target intercepted mineralization similar to that at the
Empress deposit in both style and grade. This drilling together
with moderate to locally strong IP chargeability responses,
magnetic geophysical features, and results from historical Cu and
Au soil geochemistry where (>250 ppm Cu and ≥50 ppb Au
values closely reflect the first three historical drill samples
results at the base of overburden, see IKE Technical Report),
indicate there is significant potential with further core drilling
to enlarge this body of mineralization. Notably there is a complete
absence of drill holes in the southern part of this target, which
is at a position that is analogous to shallower, high grade Cu-
Au-Ag replacement-style mineralization at the Empress deposit to
the west.
Table
4: EMPRESS EAST DEPOSIT TARGET
Selected
Drill Intervals from Historical Drill
|
Drill
Hole
|
From
(m)
|
To
(m)
|
Int.
(m)1,2,3
|
Cu(%)
|
Au
(g/t)
|
Ag
(g/t)
|
Mo
(%)
|
CuEQ
(%)4,5
|
|
91-39
|
9.8
|
37.8
|
28.0
|
0.34
|
0.543
|
1.2
|
0.002
|
0.66
|
|
|
107.6
|
147.5
|
39.9
|
0.40
|
0.332
|
0.8
|
0.004
|
0.60
|
|
Incl.
|
141.4
|
147.5
|
6.1
|
1.23
|
0.928
|
2.2
|
0.009
|
1.78
|
|
91-54
|
73.1108.2
|
85.0158.2
|
11.950.0
|
0.310.46
|
0.2210.304
|
0.71.0
|
0.0010.002
|
0.44
|
|
91-54
|
73.1108.2
|
85.0158.2
|
11.950.0
|
0.310.46
|
0.2210.304
|
0.71.0
|
0.0010.002
|
0.64
|
|
CuEQ%
|
>=0.30 &
<0.50
|
|
|
>=0.50
|
For notes refer to Table 1.
Empress Gap Cu-Au-Ag Replacement Deposit
Target: Results from limited historical drilling, comprising
11 shallow percussion drill holes and three deeper core holes in
the >1 km long Empress Gap zone located between the Empress
Deposit and Empress East, suggest a clear opportunity to discover
additional Cu-Au- Ag mineralization in proximity to the
volcanic-CPC contact. Many of the short percussion holes returned
anomalous Cu‐Mo (Au and Ag were not analyzed for),
potentially indicative of higher-grade underlying mineralization as
at the Empress Deposit. Of the deeper core holes, Cu‐Au
mineralization associated with alteration similar to that at
Empress is also reported, however only two of these holes reached
the volcanic- CPC contact.
Empress
Gap is a significantly underexplored target and drill testing of
areas close to the CPC-volcanic contact is required.
12
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Buzzer Cu-Au-Ag±Mo
Porphyry Deposit Target: The Buzzer deposit target is
located in the eastern side of the Greater Empress area inboard of
the CPC. Historical drilling at Buzzer has intercepted high-grade
Cu-Au- Ag-Mo porphyry mineralization hosted in biotite altered
intrusions (Table 5). Whether these mineralized intrusions, are
part of a small high-level cupola or a large mineralized intrusive
mineralized body below, as indicated by magnetic surveys, cannot be
determined from the limited drilling.
The
Granite and Buzzer porphyry systems demonstrate that significant
porphyry-style mineralization is present in the Greater Empress
area, and that further exploration surveys and drilling have the
potential to make new porphyry discoveries, both inboard and
outboard from the CPC contact.
Table
5: BUZZER DEPOSIT TARGET
Selected
Drill Intervals from Historical Drilling
|
Drill
Hole
|
From
(m)
|
To
(m)
|
Int.
(m)1,2,3
|
Cu
(%)
|
Au
(g/t)4
|
Ag
(g/t)
|
Mo
(%)
|
CuEQ
(%)4,5
|
|
DDH-3†
|
21.3
|
120.4
|
99.1
|
0.43
|
-
|
-
|
0.042
|
0.58
|
|
DDH-4†
|
14.6
|
113.4
|
98.8
|
0.37
|
-
|
-
|
0.037
|
0.50
|
|
X-1
|
0.0
|
5.9
|
5.9
|
0.15
|
0.237
|
5.8
|
0.013
|
0.36
|
|
|
9.5
|
42.5
|
33.0
|
0.26
|
0.175
|
3.4
|
0.042
|
0.53
|
|
Incl.
|
24.7
|
40.8
|
16.1
|
0.40
|
0.268
|
5.0
|
0.064
|
0.81
|
|
X-3
|
0.0
|
44.2
|
44.2
|
0.67
|
0.496
|
5.3
|
0.046
|
1.14
|
|
Incl.
|
10.7
|
38.1
|
27.4
|
0.86
|
0.724
|
6.6
|
0.059
|
1.51
|
|
GC11-74
|
11.4
|
52.2
|
40.8
|
0.28
|
0.210
|
1.8
|
0.012
|
0.44
|
|
Incl.
|
15.0
|
27.0
|
12.0
|
0.41
|
0.281
|
2.6
|
0.021
|
0.66
|
|
CuEQ%
|
>=0.30 &
<0.50
|
|
|
>=0.50
|
For
notes refer to Table 1.
†
Assay interval from historically reported composite. Individual
assay results are unknown.
Empress West Cu-Au-Ag
Exploration Target: This large target, which extends more
than 2 km to the west of the Empress deposit along the favorable
CPC-volcanic contact, has only been tested by widely-spaced and
shallow percussion holes and a few core. It exhibits the same
geological setting as the Empress Deposit, and the potential to
discover additional Cu-Au-Ag mineralization is indicated by the
results of the historical drilling when combined with magnetic and
IP survey data, and known Cu-Au-Mo anomalies in soils. Modern IP
and drilling are required to test a series of defined
targets.
IKE District Porphyry and
Epithermal Targets: The IKE District hosts several known
centres of porphyry Cu mineralization (Rowbottom, Mad Major- OMG)
and Au-Ag epithermal mineralization (Battlement, Mewtwo) that exist
outside of, but in proximity to and between, the IKE Deposit and
Greater Empress areas. Limited exploration by historical operators
and/or Amarc indicates that further survey work followed by
drilling is warranted at these targets. The Company has the permits
in-hand for the potential work program.
13
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Rowbottom Cu-Mo-Au Porphyry
Deposit Target: At Rowbottom, porphyry-style mineralization
and alteration is intermittently exposed along 550 m of Rowbottom
creek, and spatially associated with an extensive 1.3 km by 1.0 km
IP chargeability anomaly that remains open for further surveying.
Limited historical shallow percussion drilling returned good Cu and
Mo grades (Au and Ag were not analysed for), and a single core hole
completed by Amarc confirmed the presence of Au and
Ag.
Historical drill
intercepts include for example: Hole S-64: 49 m of 0.51%
CuEQ4 (see
Table 1 for note 4) 0.49% Cu and 0.007% Mo and Hole S-24: 43 m of
0.40% CuEQ at 0.28% Cu and 0.032% Mo.
The
Amarc core hole intersected significant intervals of porphyry Cu-Mo
mineralization hosting elevated Ag and Au values, which are cut by
a number of post mineral dykes and returned, for example: RB17001:
66 m
of
0.38% CuEQ4 at 0.29% Cu, 0.006%
Mo, 0.08 g/t Au and 4.1 g/t Ag and 21 m of 0.43% CuEQ at 0.38%
Cu,
0.007%
Mo and 4.3 g/t Ag.
An
historical soils grid along with both the historical and Amarc IP
chargeability anomalies suggest that a larger system could be
present, warranting further drilling both laterally and to depth in
order to determine the geometry and grade distribution of the
Rowbottom deposit target.
Mad Major Cu-Mo Porphyry
Target: The Mad Major-OMG target area extends over
approximately 23 km2 area of highly
anomalous stream sediment geochemistry and gossanous ridges (see
IKE Technical Report). Amarc’s exploration, and that of
historical operators, has defined several large IP chargeability
and magnetic geophysical, talus fines and soils geochemical and
geological alteration mapping anomalies that remain to be
adequately drill tested. Amarc has completed only eight very
wide-spaced core holes into the target, and the source of the IP
and geochemical anomalies is yet to be determined. Additional
survey work and drilling are warranted.
Battlement and Mewtwo Au-Ag
Epithermal Targets: Although not the focus of Amarc’s
exploration, epithermal potential exits on the IKE District. For
example, at both Battlement and Mewtwo reconnaissance stage
exploration suggests a geological environment that is permissive
for either, or both, a porphyry or epithermal-type deposits.
Further exploration is warranted at both targets.
In
summary collectively the IKE Deposit, Empress Deposit, Greater
Empress area and IKE District target areas as described warrant
substantial exploration programs.
IKE District Capped Royalties
Amarc
has a 100% interest in the IKE, Granite, Juno and Galore
Properties, which make up the IKE District. The mineral claims
comprising the Juno Property were staked and are owned 100% by the
Company.
In July
2014, Amarc acquired a 100% interest in the IKE property from
Oxford Resources Inc. (“Oxford”, formerly Highpoint
Exploration Inc.). At that time Oxford’s ownership interest
was converted to a 1% Net Smelter Returns (“NSR”)
royalty, which can be purchased at any time for $2 million (payable
in cash or common shares of Amarc at the company’s sole
election).
14
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The IKE
property is also subject to a 2% underlying NSR royalty to two
underlying owners, whereby Amarc has the right to purchase: (1) one
half of the royalty (1%) for $2 million ($1 million of which is
payable in cash, Amarc common shares, or any such combination of
cash and shares, at Amarc's discretion) at any time prior to
commercial production; and (2) the second half of the royalty (1%)
also for $2 million ($1 million of which is payable in cash, and
the balance in Amarc common shares, or any such combination of cash
and shares, at Amarc's discretion) at any time on or before a
commercial mine production decision has been made in respect of the
IKE property. Amarc has agreed that upon completion of a positive
feasibility study it will issue 500,000 common shares to the
underlying owners.
In
November 2014, Amarc acquired a 100% interest in the adjoining
Granite property from Great Quest Fertilizers Ltd. ("Great Quest",
previously known as Great Quest Metals Ltd., which is also referred
to as “Great Quest” herein). Great Quest holds a 2% NSR
royalty on that property which can be purchased for $2 million, on
or before commercial production (payable in cash, Amarc common
shares, or any such combination of cash and shares, at
Amarc’s discretion). In addition, there is an underlying 2.5%
NSR royalty on certain mineral claims within the Granite property,
which can be purchased at any time for $1.5 million less any amount
of royalty already paid.
In
January 2017, Amarc acquired a 100% interest in the adjoining
Galore property from Galore Resources Inc. ("Galore Resources"),
clear of any royalties to Galore Resources. In January 2018, Amarc
concluded an agreement with the underlying owners of the Galore
property, whereby Amarc acquired all of the underlying
owners’ residual interest in and to the Galore property,
including five NSR and five NPI royalties.
On
September 3, 2015, Amarc entered into an agreement (the
"Agreement") with Thompson Creek (now a wholly owned subsidiary of
Centerra) pursuant to which Thompson Creek could acquire, through a
staged investment process within five years, a 30% ownership
interest in mineral claims and crown grants covering the IKE
District. Under the terms of the Agreement, Thompson Creek also
received an option, after acquiring its 30% interest, to acquire an
additional 20% interest in the IKE District, subject to certain
conditions, including the completion of a Feasibility Study. On
January 11, 2017, Amarc announced that Thompson Creek, having been
acquired by Au-focused Centerra, relinquished its option to earn up
to a 50% interest in the IKE District. Thompson Creek had a 10%
participating interest in the IKE District by investing $6 million
in exploration programs undertaken in 2015 and 2016, and elected to
exchange its participating interest for a 1% Conversion NSR royalty
from mine production, which is capped at a total of $5 million. As
a result, Amarc re-acquired 100% interest in the IKE
District.
The DUKE District
Amarc’s 100%
owned DUKE District is located 80 km northeast of Smithers within
the broader Babine District (the “District”), one of
BC’s most prolific porphyry Cu-Au belts. The Babine District,
a 40 by 100 km north- northwesterly striking mineralized belt is
host to Noranda Mines’ past producing Bell and Granisle Cu-Au
mines that produced a total of 1.1 billion pounds of Cu, 634,000
ounces of Au and 3.5 million ounces of Ag2, and the advanced stage Morrison Cu-Au
deposit. Amarc’s DUKE porphyry Cu discovery is located 30 km
north of the Bell Mine. Extensive infrastructure exists in the
District, which primarily relates to the forestry industry but also
dates back to mining activity.
15
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The 704
km2 DUKE
District includes both the DUKE porphyry Cu deposit target
discovery (“DUKE”) and a series of high potential
porphyry Cu-Au deposit targets generated form the Company’s
district- scale targeting program.
The
DUKE technical information in this section is summarized from the
Company’s National Instrument 43-101 Technical Report (DUKE
Technical Report) filed under Amarc’s profile at www.sedar.com and
on the Company’s website at www.amarcresources.com/projects/duke-project/technical-report.
Porphyry Cu Expansion
Potential at the Duke Deposit Target: The porphyry Cu system
at DUKE has seen only limited drilling. Many of the 30 historical
shallow and closely-spaced core holes intersected and ended in
significant Cu-Mo-Ag-Au mineralization. In the main area of known
mineralization, these holes extended to only 124 m vertical depth
from surface. Examples of the intercepts from the historical drill
holes are provided in Table 6.
Table
6: DUKE DEPOSIT TARGET
Selected
Drill Intervals from Historical and Amarc’s
Drilling
|
Drill
Hole
|
From
(m)
|
To
(m)
|
Int.(m)1,2,3
|
Cu%
|
Au(g/t)
|
Ag(g/t)
|
Mo(%)
|
CuEQ(%)4,5
|
|
70-027
|
30.5
|
143.3
|
112.8
|
0.29
|
0.060
|
1.1
|
0.012
|
0.38
|
|
70-027
|
73.1
|
85.3
|
12.2
|
0.41
|
0.091
|
1.6
|
0.010
|
0.50
|
|
70-107
|
21.3
|
164.6
|
143.3
|
0.26
|
0.068
|
1.7
|
0.016
|
0.37
|
|
Incl.
|
115.8
|
131.0
|
15.2
|
0.47
|
0.110
|
2.9
|
0.027
|
0.64
|
|
71-147
|
28.6
|
115.2
|
86.6
|
0.40
|
0.053
|
2.2
|
0.021
|
0.52
|
|
Incl.
|
34.8
|
74.4
|
39.6
|
0.48
|
0.067
|
2.6
|
0.023
|
0.61
|
|
DK17002
|
17.0
|
32.0
|
15.0
|
0.44
|
0.126
|
2.1
|
0.019
|
0.59
|
|
|
40.3
|
142.0
|
101.7
|
0.22
|
0.064
|
1.3
|
0.014
|
0.31
|
|
|
238.0
|
268.0
|
30.0
|
0.33
|
0.069
|
1.9
|
0.019
|
0.45
|
|
|
308.5
|
399.0
|
90.5
|
0.21
|
0.043
|
1.1
|
0.025
|
0.34
|
|
|
450.5
|
523.0
|
72.5
|
0.23
|
0.030
|
1.2
|
0.022
|
0.33
|
|
Incl.
|
486.0
|
495.0
|
9.0
|
0.41
|
0.062
|
2.0
|
0.040
|
0.61
|
|
DK18005
|
13.5
|
89.9
|
76.4
|
0.23
|
0.042
|
1.1
|
0.012
|
0.30
|
|
|
98.9
|
246.0
|
147.1
|
0.27
|
0.046
|
1.1
|
0.028
|
0.40
|
|
Incl.
|
125.0
|
137.0
|
12.0
|
0.32
|
0.072
|
1.1
|
0.037
|
0.51
|
|
Incl.
|
212.1
|
231.9
|
19.8
|
0.45
|
0.062
|
2.0
|
0.033
|
0.62
|
|
|
302.0
|
344.0
|
42.0
|
0.28
|
0.059
|
1.2
|
0.019
|
0.38
|
|
DK18006
|
98.0
|
416.0
|
318.0
|
0.24
|
0.052
|
1.1
|
0.012
|
0.32
|
|
Incl.
|
206.0
|
296.0
|
90.0
|
0.27
|
0.067
|
1.2
|
0.015
|
0.37
|
|
Incl.
|
338.0
|
416.0
|
78.0
|
0.30
|
0.055
|
1.4
|
0.016
|
0.39
|
|
and
|
347.0
|
405.2
|
58.2
|
0.34
|
0.059
|
1.5
|
0.015
|
0.45
|
|
CuEQ%
|
>=0.30 &
<0.50
|
|
|
>=0.50
|
For
notes refer to Table 1.
7 Results of these
historical Ducanex JV drill holes are from the 1991 Corona
resampling and analyses by Acme.
16
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The
historical drilling was centered within a restricted part of a
robust, 3 km north-south by 1 km east-west historical IP
chargeability anomaly, which is thought to have been offset by
faulting. When reconstructed, this IP chargeability anomaly has a
classic donut shape that was the target of Amarc’s eight core
holes completed in 2017 through 2018 (see December 19, 2017 and
June 12, 2018 news releases).
Seven
of the eight core holes drilledover an area measuring approximately
400 m north-south by 600 m east-west successfully intersected
porphyry Cu-style mineralization to a vertical depth of 360 m. This
mineralization remains open to expansion. Select intercept examples
are provided in Table 6.
Notably, a single
step-out hole (DK18004) completed by Amarc more than 1 km to the
north of the seven other Amarc holes, and within the displaced
portion of the IP chargeability anomaly, intersected substantial
lengths of moderate to low grade Cu and Mo mineralization,
confirming a very extensive lateral dimension to the DUKE porphyry
Cu system.
Subject
to financing Amarc is currently planning how best to undertake the
drilling required to delineate the geometry and grade distribution
of its DUKE discovery in order to inform a mineral resource
estimate and related studies. The Company has the permit in hand to
commence potential works.
New Duke District Porphyry
Cu-Au Targets: Appreciating the Cu-Au prospectivity of the
Babine District and its relatively unexplored nature due to
widespread glacial cover (4 m to 18 m thick in the Amarc DUKE
discovery drill holes), Amarc has completed a comprehensive
compilation of government and historical data over the entire 704
km2 DUKE District. This
integrated study provided a new interpretation of the geological,
geochemical and geophysical characteristics of the Babine District,
identifying 12 previously unrecognized high potential porphyry
Cu-Au deposit targets. These target areas were defined, for
example, by anomalous Cu-Au-Mo-Ag (and other porphyry indicator
elements) till geochemistry, till samples with identified grains of
bornite, chalcopyrite and/or favorable biotite feldspar porphyry,
compelling up- ice magnetic geophysics features, and indications of
structural control along faults emanating from large deep-seated
regional structures that likely controlled the emplacement of the
prospective intrusions, along with numerous other scientific
vectors.
Regionally, Amarc
is planning for initial, focused ground surveys taking advantage of
extensive logging road networks across the property. These surveys
would be followed by RC drilling that would test prioritized
targets for the presence of potential porphyry Cu mineralized
systems below cover and, where a deposit target is confirmed core
drilling to determine the extent, grade and geometry of the
mineralized system. The Company has an IP permit in hand to
commence these works.
DUKE District Royalties
Amarc
holds 100% interest in the DUKE District free of any
royalty.
The
Newton Au Property
Amarc
reported the sale of the Newton Au property located in
south-central BC in December, 2020 to a wholly-owned subsidiary of
Carlyle Commodities Corp. (“Carlyle”). Under the terms
of the agreement, Amarc has received consideration comprising total
cash of $300,000 and 5.5 million equity units (share
plus
17
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
warrant) in Carlyle
valued at $0.25 per unit. In addition, Amarc retains a 2% NSR
Royalty in the property.
The
Newton technical information is summarized from the Company’s
National Instrument 43-101 Technical Report (Newton Technical
Report) on the Company’s website at www.amarcresources.com/projects/newton-gold-property/overview.
The
divestment of the Newton property allows Amarc to retain exposure
to the upside Au potential at Newton through its equity position in
Carlyle and the retained NSR Royalty, whilst maintaining strategic
focus on the development of its three high-value and expansive,
100%-owned Cu±Au districts – JOY, IKE and
DUKE.
Market Trends
Average
annual prices for Cu, Mo, Au and Ag during last 5 years are shown
in the following table:
|
|
Average metal price
(US$)
|
|||
|
calendar
year
|
Copper
|
Molybdenum
|
Gold
|
Silver
|
|
2015
|
2.50/lb
|
6.73/lb
|
1,160/oz
|
15.69/oz
|
|
2016
|
2.21/lb
|
6.56/lb
|
1,251/oz
|
17.14/oz
|
|
2017
|
2.88/lb
|
7.26/lb
|
1,275/oz
|
17.01/oz
|
|
2018
|
2.96/lb
|
11.94/lb
|
1.269/oz
|
15.71/oz
|
|
2019
|
2.72/lb
|
11.36/lb
|
1,393/oz
|
16.21/oz
|
|
2020
|
2.80/lb
|
8.68/lb
|
1,769/oz
|
20.54/oz
|
|
2021
(to the date of this document)
|
4.16/lb
|
14.20/lb
|
1,803/oz
|
26.14/oz
|
Not
required for the current period.
These
amounts are expressed in thousands of Canadian Dollars, except per
share amounts. Minor differences are due to rounding.
|
|
Jun
30,
|
Mar
31,
|
Dec
31,
|
Sep
30,
|
Jun
30,
|
Mar
31,
|
Dec
31,
|
Sep
30,
|
|
|
2021
|
2021
|
2020
|
2020
|
2020
|
2020
|
2019
|
2019
|
|
Net (income)
loss
|
$(21)
|
$52
|
$(1,665)
|
$(262)
|
$515
|
$599
|
$581
|
$(479)
|
|
Basic and diluted
(earnings) loss per share
|
$(0.00)
|
$0.00
|
$-0.01
|
$0.00
|
$0.00
|
$0.00
|
$0.00
|
$0.00
|
18
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The
Company recorded a net income of $21,000 in the three months ended
June 30, 2021 compared to a net loss of $515,000 in the three
months ended June 30, 2020.
The
following table summarizes the operating results by major
categories between the three months ended June 30, 2021 and
2020:
Three months ended June 30, 2021 and 2020
|
|
2021
|
2020
|
|
Exploration and
evaluation expenditures
|
$794,000
|
$344,000
|
|
Administrative
expenditures
|
119,000
|
120,000
|
|
Cost
recoveries
|
(924,000)
|
-
|
Exploration and
evaluation expenditures during the three months ended June 30, 2021
(the “2022 Q1”) increased against those for the three
months ended June 30, 2020 (the “2021 Q1”). This
increase in expenditures is due to the increase in expenditures
related to the JOY District in 2022 Q1 versus those for the 2021
Q1.
Administrative
expenditures incurred during 2022 Q1 decreased against the 2021 Q1.
The reduction results from management’s efforts to maximize
of cost effectiveness.
The
cost recoveries recorded in the three months ended June 30, 2021
are: (i) $774,000 related to this project, (ii) $149,000 related to
the refunds received by the Company for its portion of BC Mineral
Exploration Tax Credit (“BCMETC”) as a result of the
re-assessment of the Company’s refund claims for fiscal 2018
and 2019, and (iii) $1,000 cost recoveries related to other
property costs incurred in fiscal 2021.
A
breakdown by districts and projects of the Company’s
exploration and evaluation expenses for the three months June 30,
2021 and 2020 is as follows:
|
Three
months ended June 30, 2021
|
IKE
|
JOY
|
DUKE
|
Other
|
Total
|
|
Assays and
analysis
|
$–
|
$67,394
|
$338
|
$9,235
|
$76,967
|
|
Drilling
|
–
|
35,772
|
–
|
–
|
35,772
|
|
Equipment
rental
|
–
|
–
|
–
|
–
|
–
|
|
Geological
|
1,300
|
146,745
|
1,300
|
11,480
|
160,825
|
|
Helicopter and
fuel
|
–
|
47,534
|
–
|
–
|
47,534
|
|
Property costs and
assessments
|
198
|
–
|
–
|
–
|
198
|
|
Site
activities
|
80
|
262,782
|
80
|
1,873
|
264,815
|
|
Socioeconomic
|
2,599
|
179,922
|
2,016
|
–
|
184,357
|
|
Technical data
retention and management
|
2,083
|
7,156
|
2,083
|
–
|
11,322
|
|
Travel and
accommodation
|
–
|
11,598
|
–
|
–
|
11,598
|
|
Total
|
$6,260
|
$758,903
|
$5,817
|
$22,588
|
$793,568
|
19
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
|
Three
months ended June 30, 2020
|
IKE
|
JOY
|
DUKE
|
Other
|
Total
|
|
Assays and
analysis
|
$53,962
|
$6,528
|
$7,276
|
$–
|
$67,766
|
|
Drilling
|
–
|
–
|
–
|
–
|
–
|
|
Equipment
rental
|
–
|
–
|
–
|
–
|
–
|
|
Geological
|
111,271
|
54,792
|
44,410
|
16,200
|
226,673
|
|
Helicopter and
fuel
|
–
|
–
|
–
|
–
|
–
|
|
Property costs and
assessments
|
198
|
–
|
–
|
–
|
198
|
|
Site
activities
|
17,064
|
6,123
|
5,864
|
–
|
29,591
|
|
Socioeconomic
|
2,144
|
9,667
|
2,583
|
5,469
|
19,863
|
|
Travel and
accommodation
|
–
|
–
|
–
|
–
|
–
|
|
Total
|
$185,179
|
$77,110
|
$60,133
|
$21,669
|
$344,091
|
The
significant increase in the Company’s exploration and
evaluation expenses during the three months ended June 30, 2021
compared against the expenses during the same period in fiscal 2020
was primarily due to the initiation of the exploration program for
the JOY District during the three months ended June 30,
2021.
General
and administration expenses for the three months ended June 30,
2021 of $126,000 were slightly higher than the same period of last
fiscal year of $119,000. This was due to the legal professional
fees incurred in relation to the Freeport Earn-in Agreement
completed in May 2021. A breakdown of general and administration
expenses for the three months ended June 30, 2021 and 2020 is as
follows:
|
Three
months ended June 30,
|
||
|
General
and Administration Expenses
|
2021
|
2020
|
|
Legal, accounting
and audit
|
$30,696
|
$3,767
|
|
Office and
administration
|
76,945
|
101,554
|
|
Rent
|
3,720
|
-
|
|
Shareholder
communication
|
14,673
|
8,113
|
|
Travel and
accommodation
|
-
|
5,008
|
|
Trust and
regulatory
|
461
|
1,129
|
|
Total
|
$126,495
|
$119,571
|
Historically, the
Company's sole source of funding has been provided from the
issuance of equity securities for cash, primarily through private
placements to sophisticated investors and institutions, and from
director loans. The Company's access to financing is always
uncertain. There can be no assurance of continued access to
significant equity funding to finance the Company's ongoing
operations.
At June
30, 2021, the Company had a cash balance of $682,976 and a working
capital of approximately
$377,000 and the
increase in the related party balances from $795,000 at March 31,
2021 to $873,000 at June 30, 2021.
20
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Further
advancement and development of the Company’s mineral property
interests in the long run will require additional funding from a
combination of the Company’s shareholders, existing or
potential new partners, and debt financing. As the Company is
currently in the exploration stage, it does not have any revenues
from operations. Therefore, the Company relies on funding from its
partners for its continuing financial liquidity and the Company
relies on the equity market and debt financing as sources of
funding. The Company continues to focus on preserving its cash
resources while maintaining its operational
activities.
The
Company does not have any material capital lease obligations,
purchase obligations or any other long- term obligations other than
the office lease disclosed in note 13 of the unaudited financial
statements for the three months ended June 30, 2021.
The
Company has no lines of credit or other sources of financing which
have been arranged or utilized. The Company has no "Purchase
Obligations" defined as any agreement to purchase goods or services
that is enforceable and legally binding on the Company that
specifies all significant terms, including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price
provisions; and the approximate timing of the
transaction.
None.
The
required quantitative disclosure is provided in the Financial
Statements, which are publicly available on SEDAR at www.sedar.com.
Hunter Dickinson Inc.
Hunter
Dickinson Inc. (“HDI”) and its wholly-owned subsidiary
Hunter Dickinson Services Inc. (“HDSI”) are private
companies established by a group of mining professionals. HDSI
provides contract services for a number of mineral exploration and
development companies, and also to companies that are outside of
the
mining
and mineral development space. Amarc is one of the publicly-listed
companies for which HDSI provides a variety of contract
services.
The
Company has one director in common with HDSI, namely Robert
Dickinson. The Company’s President, Chief Executive Officer
and Director, and Corporate Secretary are employees of HDSI and
work for the Company under an employee secondment arrangement
between the Company and HDSI.
Pursuant to an
agreement dated July 2, 2010, HDSI provides cost effective
technical, geological, corporate communications, regulatory
compliance, and administrative and management services to the
Company, on a non-exclusive basis as needed and as requested by the
Company. As a result of this relationship, the Company has ready
access to a range of diverse and specialized expertise on a regular
basis, without having
21
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
to
engage or hire full-time employees or experts. The Company benefits
from the economies of scale created by HDSI which itself serves
several clients.
The
Company is not obligated to acquire any minimum amount of services
from HDSI. The monetary amount of the services received from HDSI
in a given period of time is a function of annually set and agreed
charge- out rates for and the time spent by each HDSI employee
engaged by the Company.
HDSI
also incurs third-party costs on behalf of the Company. Such third
party costs include, for example, capital market advisory services,
communication services and office supplies. Third-party costs are
billed at cost, without markup.
There
are no ongoing contractual or other commitments resulting from the
Company's transactions with HDSI, other than the payment for
services already rendered and billed. The agreement may be
terminated upon 60 days' notice by either the Company or
HDSI.
The
details of transactions with HDSI and the balance due to HDSI as a
result of such transactions are provided in the Financial
Statements, along with the details of borrowings by the Company
from Mr. Dickinson.
United Mineral Services Ltd.
United
Mineral Services Ltd. (“UMS”) is a privately held
company wholly-owned by one of the Company’s directors. UMS
is engaged in the acquisition and exploration of mineral property
interests. UMS does incur third party expenses on behalf of the
Company from time to time.
Details
of transactions with UMS and the balance due to UMS as a result of
such transactions are provided in the Financial
Statements.
Not
required for the current period.
Except
as discussed in this MD&A, there are no proposed transactions
requiring disclosure under this section.
Not
required. The Company is a venture issuer.
The
required disclosure is provided in the Financial Statements, which
are publicly available on SEDAR at www.sedar.com.
22
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The
carrying amounts of cash, amounts receivable, marketable
securities, accounts payable and accrued liabilities, balance due
to a related party, and director’s loan approximate their
fair values due to their short- term nature.
Additional
information relating to the Company is available on SEDAR at
www.sedar.com.
|
(a)
|
capitalized or
expensed exploration and development costs
|
See
1.5 Results of
Operations above.
|
|
(b)
|
expensed research
and development costs
|
Not
applicable.
|
|
(c)
|
deferred
development costs
|
Not
applicable.
|
|
(d)
|
general
and administration expenses
|
See
1.5 Results of
Operations above.
|
|
(e)
|
any
material costs, whether capitalized,
deferred or
expensed, not referred to in (a) through (d)
|
None.
|
The
following table details the share capital structure as of the date
of this MD&A:
|
|
Number
|
|
Common
shares
|
180,602,894
|
|
Share
purchase options
|
2,000,000
|
|
Share
purchase warrants
|
11,000,000
|
The
Company has disclosure controls and procedures in place to provide
reasonable assurance that any information required to be disclosed
by the Company under securities legislation is recorded, processed,
summarized and reported within the appropriate time periods and
that required information is accumulated and communicated to the
Company’s management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate, so that decisions can
be made about the timely disclosure of that
information.
23
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The Company's management,
including the Chief Executive Officer and the Chief Financial
Officer, is responsible for establishing and maintaining adequate
internal control over financial reporting. Under the supervision of
the Chief Executive Officer and Chief Financial Officer, the
Company's internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements
for external purposes in accordance with IFRS. The Company's
internal control over financial reporting includes those policies
and procedures that:
●
pertain to the
maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of
the Company;
●
provide reasonable
assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with IFRS, and
that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of
the company; and
●
provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could
have a material effect on the financial statements.
There
has been no change in the design of the Company's internal control
over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company's internal
control over financial reporting during the period covered by this
Management's Discussion and Analysis.
The
Company's management, including its Chief Executive Officer and
Chief Financial Officer, believe that any system of disclosure
controls and procedures or internal control over financial
reporting, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the
control system are met. Furthermore, the design of a control system
must reflect the fact that there are resource constraints and the
benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, they
cannot provide absolute assurance that all control issues and
instances of fraud, if any, within the Company have been prevented
or detected.
These
inherent limitations include the realities that judgments in
decision- making can be faulty and breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented
by the individual acts of some persons, by collusion of two or more
people, or by unauthorized override of controls. The design of any
system of controls is also based in part upon certain assumptions
about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Accordingly,
because of the inherent limitations in a cost effective control
system, misstatements due to error or fraud may occur and not be
detected.
24
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The
risk factors associated with the principal business of the Company
are discussed below. Briefly, these include the highly speculative
nature of the mining industry characterized by the requirement for
large capital investment from an early stage and a very small
probability of finding economic mineral deposits.
In
addition to the general risks of mining, there are country-specific
risks associated with operations, including political, social, and
legal risk.
Due to
the nature of the Company's business and the present stage of
exploration and development of its projects, the Company may be
subject to significant risks. Readers should carefully consider all
such risks set out in the discussion below. The Company's actual
exploration and operating results may be very different from those
expected as at the date of this MD&A.
Exploration and Mining Risks
Resource
exploration, development, and operations are highly speculative,
characterized by a number of significant risks, which even a
combination of careful evaluation, experience and knowledge may not
eliminate, including, among other things, unprofitable efforts
resulting not only from the failure to discover mineral deposits
but from finding mineral deposits which, though present, are
insufficient in quantity and quality to return a profit from
production. Few properties that are explored are ultimately
developed into producing mines. Unusual or unexpected formations,
formation pressures, fires, power outages, labour disruptions,
flooding, explosions, cave-ins, landslides and the inability to
obtain suitable or adequate machinery, equipment or labour are
other risks involved in the operation of mines and the conduct of
exploration programs. The Company will rely on consultants and
others for exploration, development, construction and operating
expertise. Substantial expenditures are required to establish
mineral resources and mineral reserves through drilling, to develop
metallurgical processes to extract the metal from mineral
resources, and in the case of new properties, to develop the mining
and processing facilities and infrastructure at any site chosen for
mining.
No
assurance can be given that minerals will be discovered in
sufficient quantities to justify commercial operations or that
funds required for development can be obtained on a timely basis.
Whether a mineral deposit will be commercially viable depends on a
number of factors, some of which are:
●
the particular
attributes of the deposit, such as size, grade and proximity to
infrastructure;
●
metal prices, which
may be volatile, and are highly cyclical; and
●
government
regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of
minerals, and environmental protection.
The
exact effect of these factors cannot accurately be predicted, but
the combination of these factors may result in the Company not
receiving an adequate return on invested capital.
25
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
The
Company will carefully evaluate the political and economic
environment in considering any properties for acquisition. There
can be no assurance that additional significant restrictions will
not be placed on the Company's projects and any other properties
the Company may acquire, or its operations. Such restrictions may
have a material adverse effect on the Company's business and
results of operation.
First Nations
Our
properties are located within First Nations asserted traditional
territories, and the exploration and development of these
properties may affect, or be perceived to affect, asserted
aboriginal rights and title, which has the potential to manifest
permitting delays or opposition by First Nations
communities.
The
Company is working to establish positive relationships with First
Nations. As part of this process the Company may enter into
agreements commensurate with the stage of activity, with First
Nations in relation to current and future exploration and any
potential future production. This could reduce expected
earnings.
Future Profits/Losses and Production Revenues/Expenses
The
Company has no history of operations and expects that its losses
will continue for the foreseeable future. No deposit that has been
shown to be economic has yet been found on the Company's projects.
There can be no assurance that the Company will be able to acquire
any additional properties. There can be no assurance that the
Company will be profitable in the future. The Company's operating
expenses and capital expenditures may increase in subsequent years
as needed consultants, personnel and equipment associated with
advancing exploration, development and commercial production of the
Company's projects and any other properties the Company may
acquire, are added. The amounts and timing of expenditures will
depend on:
●
the progress of
ongoing exploration and development;
●
the results of
consultants' analyses and recommendations;
●
the rate at which
operating losses are incurred;
●
the execution of
any joint venture agreements with strategic partners;
and
●
the acquisition of
additional properties and other factors, many of which are beyond
the Company's control.
The
Company does not expect to receive revenues from operations in the
foreseeable future, if at all. The Company expects to incur losses
unless and until such time as the projects the Company advances, or
any other properties the Company may acquire, enter into commercial
production and generate sufficient revenues to fund its continuing
operations.
The
development of mineral properties will require the commitment of
substantial resources to conduct the time-consuming exploration and
development of the properties. There can be no assurance that the
Company will generate any revenues or achieve profitability. There
can be no assurance that the underlying assumed levels of expenses
will prove to be accurate.
26
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Additional Funding Requirements
The
Company has limited working capital as at the current reporting
date.
Further
exploration on, and development of, the Company's projects will
require additional resources and funding. The Company currently
does not have sufficient funds to fully develop these projects. In
addition, a positive production decision, if achieved, would
require significant funding for project engineering and
construction. Accordingly, the continuing development of the
Company's properties will depend upon the Company's ability to
obtain financing through debt financing, equity financing, the
joint venturing of projects, or other means.
There
is no assurance that the Company will be successful in obtaining
the required financing for these or other purposes, including for
general working capital.
Competitors in the Mining Industry
The
mining industry is competitive in all of its phases, including
financing, technical resources, personnel and property acquisition.
It requires significant capital, technical resources, personnel and
operational experience to effectively compete in the mining
industry. Because of the high costs associated with exploration,
the expertise required to analyze a project's potential and the
capital required to develop a mine, larger companies with
significant resources may have a competitive advantage over Amarc.
Amarc faces strong competition from other mining companies, some
with greater financial resources, operational experience and
technical capabilities than those that Amarc possesses. As a result
of this competition, Amarc may be unable to maintain or acquire
financing, personnel, technical resources or attractive mining
properties on terms Amarc considers acceptable or at
all.
Risks That Are Not Insurable
Hazards
such as unusual or unexpected geological formations and other
conditions are involved in mineral exploration and development.
Amarc may become subject to liability for pollution, cave-ins or
hazards against which it cannot insure. The payment of such
liabilities could result in increases in Amarc's operating expenses
which could, in turn, have a material adverse effect on Amarc's
financial position and its results of operations. Although Amarc
maintains liability insurance in an amount which it considers
adequate, the nature of these risks is such that the liabilities
might exceed policy limits, the liabilities and hazards might not
be insurable against, or Amarc might elect not to insure itself
against such liabilities due to high premium costs or other
reasons. In these events, Amarc could incur significant liabilities
and costs that couldmaterially increase Amarc's operating
expenses.
Environmental Matters
All of
the Company's operations will be subject to environmental
regulations, which can make operations more expensive or
potentially prohibit them altogether.
The
Company may be subject to the risks and liabilities associated with
potential pollution of the environment and the disposal of waste
products that could occur as a result of its
activities.
27
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
To the
extent the Company is subject to environmental liabilities, the
payment of such liabilities or the costs that it may incur to
remedy environmental pollution would reduce funds otherwise
available to it and could have a material adverse effect on the
Company. If the Company is unable to fully remedy an environmental
problem, it might be required to suspend operations or enter into
interim compliance measures pending completion of the required
remedy. The potential exposure may be significant and could have a
material adverse effect on the Company.
All of
the Company's activities are or will be subject to regulation under
one or more environmental laws and regulations. Many of the
regulations require the Company to obtain permits for its
activities. The Company must update and review its permits from
time to time, and is subject to environmental impact analyses and
public review processes prior to approval of the additional
activities. It is possible that future changes in applicable laws,
regulations and permits or changes in their enforcement or
regulatory interpretation could have a significant impact on some
portion of the Company's business, causing those activities to
become economically unattractive at that time.
Market for Securities and Volatility of Share Price
There
can be no assurance that an active trading market in the Company's
securities will be established or sustained. The market price for
the Company's securities is subject to wide fluctuations. Factors
such as announcements of exploration results, as well as market
conditions in the industry, may have a significant adverse impact
on the market price of the securities of the Company. Shares of the
Company are suitable only for those who can afford to lose their
entire investment. The stock market has from time to time
experienced extreme price and volume fluctuations, which have often
been unrelated to the operating performance of particular
companies.
Conflicts of Interest
Certain
of the Company's directors and officers may serve as directors or
officers of other companies or companies providing services to the
Company or they may have significant shareholdings in other
companies. Situations may arise where these directors and/or
officers of the Company may be in competition with the Company. Any
conflicts of interest will be subject to and governed by the law
applicable to directors' and officers' conflicts of interest. In
the event that such a conflict of interest arises at a meeting of
the Company's directors, a director who has such a conflict will
abstain from voting for or against the approval of such
participation or such terms. In accordance with applicable laws,
the directors of the Company are required to act honestly, in good
faith and in the best interests of the Company.
Payment of Dividends Unlikely
There
is no assurance that the Company will pay dividends on its shares
in the near future. The Company will likely require all its funds
to further the development of its business.
28
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Lack of Revenues; History of Operating Losses
The
Company does not have any operational history or earnings and has
incurred net losses and negative cash flow from its operations
since incorporation. Although the Company will hope to eventually
generate revenues, significant operating losses are to be
anticipated for at least the next several years and possibly
longer. To the extent that such expenses do not result in the
creation of appropriate revenues, the Company's business may be
materially adversely affected. It is not possible to forecast how
the business of the Company will develop.
General Economic Conditions
Market
conditions and unexpected volatility or illiquidity in financial
markets may adversely affect the prospects of the Company and the
value of its shares.
Risk Related to COVID-19
The
current outbreak of COVID-19, and any future emergence and spread
of similar pathogens, could have a material adverse effect on
global and local economic and business conditions, which may
adversely impact Amarc’s business and results of operations
and the operations of contractors and service providers. The extent
to which the COVID-19 impacts our operations will depend on future
developments, which are highly uncertain and cannot be predicted
with confidence, including the duration of the outbreak, new
information that may emerge concerning its severity and the actions
taken to contain the virus or treat its impact, among others. The
adverse effects on the economy, the stock market and Amarc’s
share price could adversely impact its ability to raise capital,
with the result that our ability to pursue development of the JOY,
IKE and DUKE Districts could be adversely impacted, both through
delays and through increased costs. Any of these developments, and
others, could have a material adverse effect on the Company’s
business and results of operations and could delay its plans for
development of its districts.
Reliance on Key Personnel
The
Company will be dependent on the continued services of its senior
management team, and its ability to retain other key personnel. The
loss of such key personnel could have a material adverse effect on
the Company. There can be no assurance that any of the Company's
employees will remain with the Company or that, in the future, the
employees will not organize competitive businesses or accept
employment with companies competitive with the
Company.
Furthermore, as
part of the Company's growth strategy, it must continue to hire
highly qualified individuals. There can be no assurance that the
Company will be able to attract, assimilate or retain qualified
personnel in the future, which would adversely affect its
business.
29
|
AMARC RESOURCES LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
Changes in Federal and Provincial Government Rules, Regulations or
Agreements, or Their Application, May Negatively Affect the
Company’s Ownership Rights, Its Access to or Its Ability to
Advance the Exploration and Development of its Mineral
Properties
The
federal and provincial governments currently have in place or may
in the future implement laws, regulations, policies or agreements
that may negatively affect the Company’s ownership rights
with respect to its mineral properties or its access to the
properties. These may restrain or block the Company’s ability
to advance the exploration and development of its mineral
properties or significantly increase the costs and timeframe to
advance the properties.
30
Exhibit 99.3
Form
52-109FV2
Certification
of interim filings - venture issuer basic certificate
I,
Diane S.
Nicolson, ChiefExecutive Officer ofAmarc Resources
Ltd., certify the following:
1.
Review: I have reviewed the interim
financial report and interim MD&A, (together, the "interim
filings") ofAmarc Resources Ltd.
(the "issuer") for the interim period ended June 30,
2021.
2.
No misrepresentations: Based on my
knowledg e, having exercised reasonable dilig ence, the interim
filings do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or that is
necessary to make a statement not misleading in light of the
circumstances under which it was made, with respect to the period
covered by the interim filings.
3.
Fair presentation: Based on my
knowledge, having exercised reasonable diligence, the interim
financial report together with the other financial information
included in the interim filings fairly present in all material
respects the financial condition, financial performance and cash
flows of the issuer, as of the date of and for the periods
presented in the interim filings.
Date:
August 27, 2021
Diane
S. Nicolson Chief Executive Officer
Exhibit 99.4
Form
52-109FV2
Certification
of interim filings - venture issuer basic certificate
I,
Sebastian Tang,
Chief Financial Officer of Amarc Resources
Ltd., certify the following:
1.
Review: I have reviewed the interim
financial report and interim MD&A, (together, the "interim
filings") of Amarc Resources Ltd.
(the "issuer") for the interim period ended June 30,
2021.
2.
No misrepresentations: Based on my
knowledg e, having exercised reasonable dilig ence, the interim
filings do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or that is
necessary to make a statement not misleading in light of the
circumstances under which it was made, with respect to the period
covered by the interim filings.
3.
Fair presentation: Based on my
knowledge, having exercised reasonable diligence, the interim
financial report together with the other financial information
included in the interim filings fairly present in all material
respects the financial condition, financial performance and cash
flows of the issuer, as of the date of and for the periods
presented in the interim filings.
Date:
August 27, 2021
Sebastian
Tang
Chief
Financial Officer