Perpetua Resources Corp 10-Q for FY2022 Q1
Perpetua Resources Corp. (PPTA)
About this 10-Q
Perpetua Resources Corp filed this 10-Q on May 13, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).
Headline figures
Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $6.24M
- compared with a net loss of $4.72M a year earlier
- Diluted EPS
- $0.10
- unchanged from $0.10 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
British Columbia, (State or other jurisdiction |
| (I.R.S. Employer |
| | |
(Address of principal executive offices) | | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, an emerging growth company, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | | | Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 6, 2022, the registrant had
PERPETUA RESOURCES CORP.
TABLE OF CONTENTS
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1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” “outlook,” “may,” “will,” “should,” “would,” “could,” “can,” the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on certain estimates, beliefs, expectations and assumptions made in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate.
Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed or implied in such statements. Due to the risks, uncertainties and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects can be found in Item 1A, Risk Factors, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report and in Item 1A, Risk Factors and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021. These factors include, but are not limited to, the following:
| ● | analyses and other information based on expectations of future performance and planned work programs; |
| ● | possible events, conditions or financial performance that are based on assumptions about future economic conditions and courses of action; |
| ● | assumptions and analysis underlying our mineral reserve estimates and plans for mineral resource exploration and development; |
| ● | timing, costs and potential success of future activities on the Company’s properties, including but not limited to development and operating costs in the event that a production decision is made; |
| ● | potential results of exploration, development and environmental protection and remediation activities; |
| ● | future outlook and goals; |
| ● | permitting timelines and requirements, regulatory and legal changes, requirements for additional capital, requirements for additional water rights and the potential effect of proposed notices of environmental conditions relating to mineral claims; |
| ● | current or future litigation or environmental liability; |
| ● | planned expenditures and budgets and the execution thereof, including the ability of the Company to discharge its liabilities as they become due; |
| ● | access to capital for future exploration and development plans; |
| ● | global economic, political and social conditions and financial markets; |
| ● | changes in gold and antimony commodity prices; |
| ● | our ability to implement our strategic plan and to maintain and manage growth effectively; |
| ● | loss of our key executives; |
| ● | labor shortages and disruptions; |
| ● | cyber-attacks and other security breaches of our information and technology systems; and |
| ● | other factors and risks described under the heading “Risk Factors” in Item 1A of this Quarterly Report. |
Statements concerning mineral resource and mineral reserve estimates may also be deemed to constitute forward-looking information to the extent that such statements involve estimates of the mineralization that may be encountered if a property is developed.
With respect to forward-looking information contained herein, the Company has applied several material factors or assumptions including, but not limited to, certain assumptions as to production rates, operating cost, recovery and metal costs; that any additional financing needed will be available on reasonable terms; the exchange rates for the U.S. and Canadian currencies will be consistent with the Company’s expectations; that the current exploration, development, environmental other objectives concerning the Company’s Stibnite Gold Project (the “Project” or “Stibnite Gold Project”) can be achieved and that the Company’s other corporate activities will proceed as expected; that the formal review process under the National Environmental Policy Act (“NEPA”) (including a joint review
2
process involving the United States Forest Service (“USFS” or “Forest Service”), the State of Idaho and other agencies and regulatory bodies) as well as the public comment period and environmental impact statements will proceed in a timely manner and as expected; that the progression of the litigation involving the Nez Perce Tribe will proceed in a timely manner and as expected; that the current price and demand for gold and other metals will be sustained or will improve; that general business and economic conditions will not change in a materially adverse manner and that all necessary governmental approvals for the planned exploration, development and environmental protection activities on the Project will be obtained in a timely manner and on acceptable terms; and that the continuity of economic and political conditions and operations of the Company will be sustained.
These risks are not exhaustive. Because of these risks and other uncertainties, our actual results, performance or achievement, or industry results, may be materially different from the anticipated or estimated results discussed in the forward-looking statements in this Quarterly Report. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the effects of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements. Our past results of operations are not necessarily indicative of our future results. You should not rely on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Perpetua Resources Corp.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
| | March 31, | | December 31, | ||
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| 2022 |
| 2021 | ||
ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents | | $ | | | $ | |
Receivables | |
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Prepaid expenses | |
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NON-CURRENT ASSETS | |
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Buildings and equipment, net | |
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Right-of-use assets | |
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Environmental reclamation bond (Note 9) | | | | | | |
Mineral properties and interest (Note 3) | |
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TOTAL ASSETS | | $ | | | $ | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | |
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CURRENT LIABILITIES | |
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Trade and other payables | | $ | | | $ | |
Lease liabilities | |
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Environmental reclamation liabilities (Note 9) | | | | | | |
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NON-CURRENT LIABILITIES | |
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Warrant derivative (Note 4) | |
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Lease liabilities | |
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| — |
Environmental reclamation liabilities (Note 9) | |
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TOTAL LIABILITIES | |
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COMMITMENT AND CONTINGENCIES (Note 10) | |
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SHAREHOLDERS’ EQUITY (Note 7) | |
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Common stock, | |
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Additional paid-in capital | | | | | | |
Accumulated deficit | |
| ( | |
| ( |
TOTAL SHAREHOLDERS’ EQUITY | |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | | | $ | |
See accompanying notes to the unaudited condensed consolidated financial statements
4
Perpetua Resources Corp.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| | Three months ended March 31, | ||||
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| 2022 |
| 2021 | ||
EXPENSES |
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Consulting | | $ | | | $ | |
Corporate salaries and benefits | |
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Depreciation | |
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Directors’ fees | |
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Exploration | | | | | | |
Environmental liability expense | | | — | | | |
Office and administrative | |
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Professional fees | |
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Shareholder and regulatory | |
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Travel and related costs | |
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OPERATING LOSS | |
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OTHER EXPENSES (INCOME) | |
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Change in fair value of warrant derivative (Note 4) | |
| ( | |
| ( |
Change in fair value of convertible note derivative (Note 6) | |
| — | |
| ( |
Finance costs | |
| — | |
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Foreign exchange loss | |
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Interest income | |
| ( | |
| ( |
Total other loss (income) | |
| ( | |
| ( |
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NET LOSS | | $ | | | $ | |
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NET LOSS PER SHARE, BASIC AND DILUTED | | | | | ||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | |
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See accompanying notes to the unaudited condensed consolidated financial statements
5
Perpetua Resources Corp.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
Three months ended March 31, 2022 and 2021
| | Common Stock | | Additional Paid | | Accumulated | | | | |||||
|
| Shares |
| Amount |
| in Capital |
| Deficit |
| Total | ||||
BALANCE, December 31, 2020 |
| | | $ | | | $ | | | | ( | | | |
Share based compensation |
| — | |
| — | | | | |
| — | |
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Shares issued through stock appreciation rights |
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| | | | ( | |
| — | |
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Exercise of share purchase options |
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| — | |
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Net loss for the period |
| — | |
| — | | | — | |
| ( | |
| ( |
BALANCE, March 31, 2021 |
| | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | |
BALANCE, December 31, 2021 | | | | $ | | | $ | | | $ | ( | | $ | |
Share based compensation |
| — | |
| — | | | | |
| — | |
| |
Restricted shares units distributed | | | | | | | | ( | | | — | | | — |
Net loss for the period |
| — | |
| — | | | — | |
| ( | |
| ( |
BALANCE, March 31, 2022 |
| | | $ | | | $ | | | $ | ( | | $ | |
See accompanying notes to the unaudited condensed consolidated financial statements
6
Perpetua Resources Corp.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
| | Three months ended March 31, | ||||
| | 2022 | | 2021 | ||
OPERATING ACTIVITIES: |
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Net loss | | $ | ( | | $ | ( |
Noncash items included in net loss: | |
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Share based compensation (Note 7) | |
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Depreciation | |
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Accretion of convertible debt discount (Note 6) | |
| — | |
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Change in fair value of warrant derivative (Note 4) | |
| ( | |
| ( |
Change in fair value of convertible note derivative (Note 6) | |
| — | |
| ( |
Environmental liability expense | | | — | | | |
Unrealized foreign exchange loss | |
| ( | |
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Changes in: | |
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Receivables | |
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| |
Prepaid expenses | |
| ( | |
| ( |
Trade and other payables | |
| ( | |
| ( |
Environmental reclamation liabilities | | | ( | | | ( |
Net cash used in operating activities | |
| ( | |
| ( |
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INVESTING ACTIVITIES: | |
|
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|
Purchase of surety bond | | | — | | | ( |
Net cash used in investing activities | |
| — | |
| ( |
| | | | | | |
FINANCING ACTIVITIES: | |
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Proceeds from exercise of share purchase options (Note 7) | |
| — | |
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Net cash provided by financing activities | |
| — | |
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Effect of foreign exchange on cash and cash equivalents | |
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Net change in cash and cash equivalents | |
| ( | | | ( |
Cash and cash equivalents, beginning of quarter | |
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Cash and cash equivalents, end of quarter | | $ | | | $ | |
| | | | | | |
NONCASH INVESTING AND FINANCING ACTIVITIES | |
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Recognition of operating lease liability and right-of-use asset | | $ | | | $ | — |
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CASH AND CASH EQUIVALENTS | |
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Cash | | $ | | | $ | |
Investment savings accounts | |
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GIC and term deposits | |
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Total cash and cash equivalents | | $ | | | $ | |
See accompanying notes to the unaudited condensed consolidated financial statements
7
Perpetua Resources Corp.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.Nature of Operations and Basis of Presentation
Perpetua Resources Corp. (the “Corporation”, the “Company”, “Perpetua Resources” or “Perpetua”) was incorporated on February 22, 2011 under the Business Corporation Act (British Columbia) (the “BCBCA”). The Company was organized to hold shares in wholly owned subsidiaries that locate, acquire, develop and restore mineral properties located principally in the Stibnite – Yellow Pine mining district in Valley County, Idaho, USA. The Company’s principal asset is
The unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of Perpetua Resources Corp. and its wholly owned subsidiaries, Perpetua Resources Idaho, Inc. and Idaho Gold Resource Company, LLC. Intercompany transactions and balances have been eliminated.
The unaudited condensed consolidated financial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be read in conjunction with our annual financial statements for the year ended December 31, 2021. Operating results for the three months ended March 31, 2022 may not be indicative of results expected for the full year ending December 31, 2022.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2022 and statements of operations, of cash flows and of changes in shareholders’ equity for the three months ended March 31, 2022 and 2021, respectively.
Loss per share
Basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic loss per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of share purchase options and warrants, if dilutive. The Company’s potential dilutive shares of common stock include outstanding share purchase options, restricted share units, performance share units, deferred share units, warrants and, in 2021, convertible notes. Potentially diluted shares as of March 31, 2022 and March 31, 2021:
| | March 31, | ||
|
| 2022 |
| 2021 |
Share purchase options | | | | |
Share units | | | | — |
Warrants |
| | | |
Convertible notes | | — | | |
Balance |
| | | |
All potentially dilutive shares were excluded from the calculation of diluted loss per share as their exercise and conversion would be anti-dilutive.
2.Recently Issued Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40),” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception, permitting more contracts to qualify for the exception. In addition, the guidance eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting periods within those
8
annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2021. The adoption of this update on January 1, 2022 did not have a material impact on our unaudited condensed consolidated financial statements.
From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.
3.Mineral Properties and Interest
The Company’s mineral properties and interest at the Stibnite Gold Project totaled $
The Company’s subsidiaries acquired mineral rights to the Stibnite Gold Project through several transactions. All mineral rights held by the Company’s subsidiaries are held through patented and unpatented mineral and mill site claims, except the Cinnabar option claims which are held under an Option to Purchase (“OTP”), and all of the Stibnite Gold Project is subject to a
Included in mineral properties and interest are annual payments made under option agreements, where the Company is entitled to continue to make annual option payments or, ultimately, purchase certain properties. Annual payments due under option agreements during 2022 are $
As of March 31, 2022, it has not yet been determined that the Project’s mining deposits can be economically and legally extracted or produced because the Project’s estimated reserves do not yet meet the definition of proven reserves under the United States Securities and Exchange Commission (“SEC”) Regulation S-K 1300.
Accordingly, development costs related to such reserves will not be considered capitalized unless they are incurred after such determination. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure.
Although the Company has taken steps to review and verify mineral rights to the properties in which it has an interest, in accordance with industry standards for properties in the exploration stage, these procedures do not guarantee the Company’s title and interests. Mineral title may be subject to unregistered prior agreements and noncompliance with regulatory requirements.
4.Warrant Derivative
In May 2013, the Company issued to Franco Nevada Company (“Franco”)
The exercise price of the Franco Warrants is denominated in Canadian dollars; however, the functional currency of the Company is the U.S. dollar. As a result of this difference in currencies, the proceeds that will be received by the Company are not fixed and will vary based on foreign exchange rates and the warrants are a derivative and are required to be recognized and measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as a gain or loss in the unaudited condensed consolidated statements of operations. There are no circumstances in which the Company would be required to pay any cash upon exercise or expiry of the warrants.
9
A reconciliation of the change in fair values of the derivative is below:
|
| Fair Value of Warrant | |
| | Derivative | |
Balance, December 31, 2020 | | $ | |
Change in fair value of warrant derivative | | | ( |
Balance, March 31, 2021 | | $ | |
| | | |
Balance, December 31, 2021 | | $ | |
Change in fair value of warrant derivative |
| | ( |
Balance, March 31, 2022 | | $ | |
The fair value of the warrants was calculated using the Black-Scholes valuation model. As of March 31, 2022 and 2021, the inputs used in the Black-Scholes valuation model are:
| | Three months ended | ||
| | March 31, | | March 31, |
|
| 2022 |
| 2021 |
Share price | | C$ | | C$ |
Exercise price |
| C$ |
| C$ |
Expected term (in years) |
|
| ||
Expected share price volatility |
| | ||
Annual rate of quarterly dividends |
| | ||
Risk-free interest rate |
| | ||
5.Convertible Notes
On March 17, 2016, the Company issued unsecured convertible notes (the “2016 Notes”) for gross proceeds of $
Each set of convertible notes are deemed to contain an embedded derivative (collectively, the “Convertible Note Derivatives”) relating to the conversion option. The Convertible Note Derivatives were valued upon initial recognition at fair value using partial differential equation methods. At inception, for each set of notes, the face value of the notes was reduced by the estimated fair value of the related convertible note derivative and the transaction costs.
During the years ended December 31, 2021 and 2020, convertible notes in the aggregate principal amount of C$
6.Convertible Note Derivative
Convertible Note Derivatives related to each set of convertible notes (see Note 5) were valued upon initial recognition at fair value using partial differential equation methods and are subsequently re-measured at fair value at each period end through the unaudited condensed consolidated statements of operations. During the three month period ended March 31, 2021, a change in fair value of $
In 2021, the Convertible Note Derivatives expired upon conversion of all convertible notes (see Note 5). The balance of the derivative at December 31, 2021 and March 31, 2022 is
10
7.Equity
| a. | Authorized |
| ● |
| ● |
| ● |
On January 27, 2021, the Corporation completed a-for-ten (1:10) reverse share split of all of its issued and outstanding common shares (“Share Consolidation”), resulting in a reduction of the and common shares from
| b. | Share based compensation |
Share based compensation was recognized in the unaudited condensed consolidated statements of operations for the three month periods ended March 31, 2022 and 2021 as follows:
| Three month period ended March 31, | |||||
|
| 2022 |
| 2021 | ||
Exploration | | $ | | | $ | |
Consulting | |
| — | |
| |
Corporate salaries and benefits | |
| | |
| |
Directors’ fees | |
| | |
| |
Total | | $ | | | $ | |
Share purchase options
A summary of share purchase option activity within the Company’s share-based compensation plan (the “Plan”) for the year ended December 31, 2021 and three month period ended March 31, 2022 is as follows:
| | | | Weighted Average | |
|
| Number of Options |
| Exercise Price (C$) | |
Balance December 31, 2020 |
| | | $ | |
Options granted |
| | |
| |
Options expired |
| ( | |
| |
Options terminated via SAR |
| ( | |
| |
Options exercised |
| ( | |
| |
Balance, December 31, 2021 |
| | | $ | |
Options cancelled or forfeited |
| ( | |
| |
Options expired | | ( | | | |
Balance, March 31, 2022 |
| | | $ | |
During the three month periods ended March 31, 2022 and 2021, the Company’s total share based compensation from options was $
11
average inputs used in the Black-Scholes option pricing model for options granted during the three month period ended March 31, 2021 are:
| | Three month period ended | |
|
| March 31, 2021 | |
Fair value options granted | | $ | |
Risk-free interest rate | |
| |
Expected term (in years) | |
| |
Expected share price volatility | |
| |
Expected dividend yield | |
| — |
An analysis of outstanding share purchase options as of March 31, 2022 is as follows:
| | Options Outstanding |
| Options Exercisable | ||||||||||
Range of Exercise | | | | | | | | | | | | | | |
Prices (C$) |
| Number |
| Price (C$) 1 |
| Remaining Life2 |
| Number |
| Price (C$) 1 |
| Remaining Life2 | ||
$ |
| | | | |
| | | | | |
| ||
$ |
| | | | |
| | | | | |
| ||
$ |
| | | | |
| | | | | |
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$ |
| | | | |
| | | | | |
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$ |
| | | | |
| | | | | |
| ||
1 Weighted Average Exercise Price (C$)
2 Weighted Average Remaining Contractual Life (Years)
As of March 31, 2022, all unvested options are expected to vest and unvested compensation of approximately $
Restricted Share Units
The following table summarizes activity for restricted share units (“RSUs”) awarded under the Plan that vest over the required service period of the participant.
|
|
|
|
| Weighted Average | |
| | | Share | | Grant Date | |
| |
| Units |
| Fair Value | |
Unvested, January 1, 2021 | |
| |
| $ | — |
Granted | |
| | |
| |
Distributed (vested) | |
| ( | |
| |
Unvested, December 31, 2021 | |
| | |
| |
Granted | | | | | | |
Distributed (vested) | | | ( | | | |
Cancelled | | | ( | | | |
Unvested, March 31, 2022 | | | | | | |
During the three month period ended March 31, 2022, the Company awarded
During the three months ended March 31, 2022, the Company has recognized $
12
compensation expense for RSUs recorded during the three month period ended March 31, 2021. The unvested units at March 31, 2022 are scheduled to vest as follows:
Remainder of 2022 |
| |
2023 | | |
2024 |
| |
2025 | | |
Total |
| |
Unvested units will be forfeited by participants upon termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met.
Performance Share Units
The following table summarizes activity for performance share units (“PSUs”) and market-based performance share units (“MPSUs”) awarded under the Plan:
|
|
|
| Weighted Average | |
| | Share | | Grant Date | |
| | Units | | Fair Value | |
Unvested, January 1, 2021 |
| |
| $ | — |
Granted |
| |
|
| |
Unvested, December 31, 2021 |
| |
|
| |
Granted | | | | | |
Cancelled | | ( | | | |
Unvested, March 31, 2022 | | | | | |
During the three months ended March 31, 2022, the Company has recognized $
PSUs: These PSUs vest upon completion of the performance period (through September 2022 and 2023) and specific performance conditions set forth for each individual grant for individually defined reporting and operating measurement objectives. The Company determines the factor to be applied to that target number of PSUs, with such percentage based on level of achievement of the performance conditions. Upon the achievement of the conditions, any unvested PSUs become fully vested. During the three month period ended March 31, 2022, the Company awarded
Market-based PSUs: On March 5, 2022, the Company granted MPSUs where vesting is based on the Company’s cumulative total shareholder return (“TSR”) as compared to the constituents that the comprise the VanEck Junior Gold Miners ETF (“GDXJ Index”) a group of similar junior gold mining companies, over the period from March 5, 2022 to March 5, 2025 (the “Performance Period”). The ultimate number of MPSUs that vest may range from
During the three month period ended March 31, 2022, the Company awarded
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|
| Three month period ended |
|
| March 31, 2022 |
Risk-free interest rate |
| |
Expected term (in years) |
| |
Expected share price volatility |
| |
Expected dividend yield |
| — |
The expected volatility utilized is based on the historical volatilities of the Corporation’s common stock and the GDXJ Index in order to model the stock price movements. The volatility used was calculated over the most recent three year period. The risk-free interest rates used are based on the implied yield available on a U.S. Treasury zero-coupon bill with a term equivalent to the Performance Period. The expected dividend yield of zero was used since it is the mathematical equivalent to reinvesting dividends in each issuing entity over the Performance Period.
Deferred Share Units
The following table summarizes activity for deferred share units (“DSUs”) awarded under the Plan:
| | | | Weighted Average | |
| | Share | | Grant Date | |
|
| Units |
| Fair Value | |
Outstanding, January 1, 2021 | | | | $ | — |
Granted | | | | | |
Outstanding, December 31, 2021 |
| | |
| |
Granted |
| | |
| |
Outstanding, March 31, 2022 |
| | |
| |
Under the Plan, the Company may issue DSUs to non-employee directors. During the three month period ended March 31 2022,
| c. | Warrants |
There was a total of
8.Financial Instruments and Fair Value Measurements
At March 31, 2022, the Company’s financial instruments consist of cash and cash equivalents and environmental reclamation bond which approximate their fair value due to their short-term nature.
The Company’s financial instruments also consist of the warrant derivative at March 31, 2022 and December 31, 2021. The derivative is valued at fair value at the end of each reporting period. At March 31, 2022 and December 31, 2021, the levels in the fair value hierarchy into which the Company’s financial assets and liabilities are measured and recognized on the balance sheet at fair value are categorized as follows:
|
| Level 1 |
| Level 2 |
| Level 3 | |||
| | March 31, 2022 | |||||||
Warrant Derivative (Note 4) | | $ | — | | $ | — | | $ | |
Total | | $ | — | | $ | — | | $ | |
|
| December 31, 2021 | |||||||
Warrant Derivative (Note 4) | |
| — |
|
| — |
|
| |
Total | | $ | — | | $ | — | | $ | |
The Company uses the Black-Scholes option pricing model or other valuation models for valuation of its warrant derivative. Valuation models require the input of subjective assumptions including expected share price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company's net loss.
14
9.Environmental Reclamation Liability
On January 15, 2021, the Company agreed to an Administrative Settlement and Order on Consent (“ASAOC”). The Company has accounted for its obligation under the ASAOC as an environmental reclamation liability. The aggregate cost of the obligation was estimated to be approximately $
|
| Three month period ended | |
| | March 31, 2022 | |
Balance at beginning of period |
| $ | |
Additions |
|
| — |
Work performed on early action items |
|
| ( |
Balance at end of period |
| $ | |
Current portion |
|
| |
Long-term portion | | $ | |
The Company provided $
10.Commitments and Contingencies
The Company currently holds mining claims on which it has an annual assessment obligation to the Bureau of Land Management of $
| b. | Stibnite Foundation |
Upon formation of the Stibnite Foundation on February 26, 2019, the Company became contractually liable for certain future payments to the Stibnite Foundation based on several triggering events, including receipt of a final Record of Decision issued by the USFS, receipt of all permits and approvals necessary for commencement of construction, commercial production, and of the final reclamation phase. These payments could begin as early as late 2023 based on the current permitting schedule and range from $
The Stibnite Foundation will support projects that benefit the communities surrounding the Stibnite Gold Project and was created through the establishment of the Community Agreement between Perpetua Resources Idaho, Inc. and
| c. | Option Payments on Other Properties |
The Company is obligated to make option payments on mineral properties in order to maintain an option to purchase these properties. As of March 31, 2022, the option payments due on these properties in 2022 are $
| d. | Off balance sheet arrangements |
The Company has
15
e.Legal Update
The Company is a party to ongoing legal proceedings with the Nez Perce Tribe for alleged violations of the Clean Water Act related to historical mining activities. In August 2019, the Nez Perce Tribe filed suit in the United States District Court for the District of Idaho. The Company promptly filed a motion to dismiss and, in the alternative, a motion to stay the litigation. Both motions were denied. Later, the court allowed the Company to amend its answer and file a third-party complaint and the Company also filed a separate citizen suit against the USFS alleging the point source discharges, referred to by the Nez Perce Tribe in its complaint, were alleged to be occurring on lands owned and controlled by the United States. Pursuant to the terms of the Comprehensive Environmental Response, Compensation, and Liability Act (the “CERCLA”) ASAOC executed with the U.S. EPA and the United States Department of Agriculture, the Company dismissed its pending actions against USFS. The remaining parties to the ongoing legal proceeding agreed to stay the litigation and explore Alternative Dispute Resolution (“ADR”) options. The stay has been extended on subsequent occasions, and a request to extend the stay through July 31, 2022 was filed jointly by the parties on April 28, 2022 and subsequently ordered by the court on April 29, 2022.
The CERCLA ASAOC entered into by the Company, the U.S. EPA, and the United States Department of Agriculture requires numerous voluntary early cleanup actions to occur over the next several years. Perpetua Resources Idaho, Inc. is presently executing the development of the Phase 1 early cleanup actions (known as “time critical removal actions”) that, upon final work plan approval by the federal agencies, will be designed and constructed to efficiently improve water quality in a number of areas on the Site while other, longer-term proposed actions relating to Project operations are being evaluated through the NEPA process.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations for the three months ended March 31, 2022 and 2021 with our consolidated financial statements and related notes and other financial information appearing in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, operations, and product candidates, includes forward-looking statements that involve risks and uncertainties. You should review the sections of this Quarterly Report captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Perpetua Resources (formerly Midas Gold Corp.) was incorporated on February 22, 2011 under the Business Corporations Act (British Columbia) (the “BCBCA”). The Corporation was organized to hold shares in wholly owned subsidiaries that locate, acquire, develop and restore mineral properties located principally in the Stibnite – Yellow Pine mining district in Valley County, Idaho, USA. The Corporation’s principal asset is 100% ownership in subsidiaries that control the Stibnite Gold Project. The Corporation currently operates in one segment, mineral exploration in the United States. The registered office of the Perpetua Resources is 400-725 Granville St, Vancouver, BC, V7Y 1G5, Canada and the corporate head office is located at 201-405 S 8th St, Boise, ID 83702, USA.
COVID-19 Response
The Company has implemented policies at its offices in Boise and Donnelly designed to ensure the safety and well-being of all employees and the people associated with them. In that regard, to reduce risk, our employees have been encouraged to get fully vaccinated against COVID-19, have been asked to work remotely, avoid non-essential business travel, when possible, adhere to good hygiene practices, and engage in social distancing. Continuation of COVID-19 in 2022 and beyond could impact employee health, workforce productivity, insurance premiums, ability to travel, the availability of industry experts, personnel and equipment, restrictions or delays to field work, studies, and assay results, and other factors that will depend on future developments that may be beyond our control.
Recent Key Developments
2022 Outlook and Goals
Perpetua Resources’ vision is to provide the United States with a domestic source of the critical mineral antimony, develop one of the largest and highest-grade open pit gold mines in the country and restore an abandoned brownfield site. In 2022, Perpetua Resources
16
continues to focus on advancing the permitting for the Stibnite Gold Project through the National Environmental Policy Act (“NEPA”) process. The NEPA process is intended to ensure that federal agencies and the public are informed of a proposed action’s potential environmental impacts before a final decision is made by the agency regarding the action.
In response to public comments received on the Draft Environmental Impact Statement (“DEIS”), Perpetua Resources submitted a refined proposed action to the USFS in December 2020. To ensure a full analysis of the improved Project, the USFS will issue a Supplemental Draft Environmental Impact Statement (“SDEIS”) followed by an opportunity for public comment. The preliminary SDEIS was circulated for cooperating agency review in April 2022. The publication of the SDEIS for public review and comment is expected in early third quarter 2022. The USFS is expected to provide a formal schedule later this year regarding the remaining steps in the NEPA review process.
First Quarter 2022 Highlights
| ● | Zero lost time incidents or reportable environmental spills |
| ● | Announced USFS expected to publish the SDEIS for public review and comment in the third quarter of 2022 |
| ● | Promoted Jessica Largent to CFO and further strengthened team with hiring of Chris Fogg as Manager of Investor Relations |
| ● | Strengthened Board with appointment of Laura Dove who brings three decades of external affairs and stakeholder management experience to Perpetua |
| ● | Launched a Sustainability Roadmap which outlines 13 goals to guide the Company as it advances the Stibnite Gold Project towards development |
The forward‐looking information contained in this section is subject to the risk factors and assumptions contained in the “Cautionary Note Regarding Forward-Looking Statements” and “Risks Factor” sections.
Results of Operations
Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021
| | Three months ended March 31, | ||||
|
| 2022 |
| 2021 | ||
EXPENSES |
| |
|
| |
|
Consulting | | $ | 10,880 | | $ | 104,917 |
Corporate salaries and benefits | |
| 303,411 | |
| 889,889 |
Depreciation | |
| 11,466 | |
| 19,122 |
Directors’ fees | |
| 262,948 | |
| 304,211 |
Exploration | |
| 4,560,053 | |
| 6,580,863 |
Environmental liability expense | |
| — | |
| 7,473,805 |
Office and administrative | |
| 213,483 | |
| 472,268 |
Professional fees | |
| 734,529 | |
| 167,336 |
Shareholder and regulatory | |
| 158,973 | |
| 251,625 |
Travel and related costs | |
| 5,090 | |
| 126 |
OPERATING LOSS | | | 6,260,833 | | | 16,264,162 |
| | | | | | |
OTHER EXPENSES (INCOME) | |
|
| |
|
|
Change in fair value of warrant derivative | |
| (15,248) | |
| (486,399) |
Change in fair value of convertible note derivative | |
| — | |
| (11,596,790) |
Finance costs | |
| — | |
| 256,998 |
Foreign exchange loss | |
| 30,751 | |
| 302,477 |
Interest income | |
| (31,442) | |
| (23,871) |
Total other loss (income) | | | (15,939) | | | (11,547,585) |
| | | | | | |
NET LOSS | | $ | 6,244,894 | | $ | 4,716,577 |
Net Loss
Net loss for the three months ended March 31, 2022 was $6.2 million compared with a net loss of $4.7 million for the three months ended March 31, 2021. This $1.5 million increase compared to the prior year period was primarily attributable to a $11.6 million
17
decrease in the gain related to the change in fair value of the convertible note derivative, a $0.5 million decrease in the gain related to the change in fair value of the warrant derivative and a $0.6 million increase in professional fees. These changes were partially offset by a $7.5 million decrease in environmental liability expense, a $2.0 million decrease in exploration expenses, and a $0.6 million decrease in corporate salaries and benefits. As noted above, for the three months ended March 31, 2022, the Company’s main focus was the continued evaluation and advancement of the Stibnite Gold Project.
Consulting
This expense relates to consulting services provided to the Corporation that do not relate to the exploration and evaluation of the Stibnite Gold Project. Consulting fees for the three months ended March 31, 2022 are 90% lower than the previous year due to consulting work to support various corporate activities in the first quarter of 2021, including the share consolidation and listing on the NASDAQ.
Corporate Salaries and Benefits
This expense results from salaries and benefits of the employees that are not directly related to the exploration and evaluation of the Stibnite Gold Project, primarily corporate employees. Salaries and benefits for the three months ended March 31, 2022 were $0.6 million, or 66%, lower than the previous year primarily due to severance payments made to corporate employees in the first quarter of 2021 and lower stock-based compensation.
Directors’ Fees
Each of the Corporation’s non-executive directors is entitled to annual base fees paid in quarterly installments, with the independent Lead Director, Chairs of Board Committees and Members of Board Committees receiving additional fees commensurate with each role. Directors’ fees are inclusive of cash fees and share-based compensation (deferred share units and stock options). This expense for the three months ended March 31, 2022, is $41,263, or 14%, lower than the previous year primarily due to the number of stock options vesting in the first quarter of 2021.
Exploration
This expense relates to all exploration and evaluation expenditures related to the Stibnite Gold Project, including labor, drilling, field operations costs, engineering, permitting, environmental, legal and sustainability costs. The Company’s exploration expenses of $4.6 million during the three months ended March 31, 2022 are $2.0 million, or 31%, lower than the three months ended March 31, 2021 primarily due to a $1.4 million decrease in consulting and labor cost including lower stock based compensation expense, a $0.5 million decrease in permitting, and a $0.2 million decrease in engineering partially offset by a $0.3 million increase in legal and sustainability. Additional details of expenditures incurred are as follows:
|
| Quarters Ended | ||||
| | March 31, 2022 |
| March 31, 2021 | ||
Consulting and labor cost | | $ | 1,335,170 | | $ | 2,763,625 |
Engineering | |
| 155,930 | |
| 348,784 |
Environmental and reclamation | |
| 64,367 | |
| 229,061 |
Field operations and drilling support | |
| 469,529 | |
| 461,315 |
Legal and sustainability | |
| 456,365 | |
| 189,124 |
Permitting | |
| 2,078,692 | |
| 2,588,954 |
Exploration | | $ | 4,560,053 | | $ | 6,580,863 |
Environmental Liability Expense
This expense relates to the ASAOC signed in January 2021 to voluntarily address environmental conditions at the abandoned mine site. Upon signing of the ASAOC, the Company recorded an immediate expense of $7,473,805 and a corresponding environmental reclamation liability. Cost estimates were developed with the use of engineering consultants, independent contractor quotes and the Company’s internal development team, and the timing of cash flows is based on the current schedule for early action items. In the three months ended March 31, 2022, the total cost estimate to complete Phase 1 early cleanup actions did not change. As of March 31, 2022, the estimate for the environmental liability was $9.4 million.
18
Office and Administrative
This expense is predominantly insurance policies for the U.S. offices and is $258,785, or 55%, lower for the three months ended March 31, 2022, than the three months ended March 31, 2021 primarily due to lower insurance premiums.
Professional Fees
This expense relates to the legal and accounting costs of the Corporation. The costs for the three months ended March 31, 2022 were $567,193, or 339%, higher than the three months ended March 31, 2021 primarily due to legal fees to support the Company’s transition to a U.S. Domestic Issuer and increased accounting fees related to the change in the basis of accounting for the Company’s consolidated financial statements from international standards to U.S. GAAP.
Shareholder and Regulatory
This expense relates to marketing, licenses and fees, and shareholder communications. The expense for the three months ended March 31, 2022 is $92,562, or 37%, lower than the three months ended March 31, 2021 primarily due to fees related to the NASDAQ listing which commenced in February 2021.
Change in Fair Value of Warrant Derivative
The Corporation issued 200,000 warrants in a financing transaction in May 2013, with an exercise price denominated in Canadian dollars. The Company determined that warrants with an exercise price denominated in a currency that is different from the entity’s functional currency should be classified as a derivative and carried at their fair value. Any changes in their fair value from period to period have been recorded as a gain or loss. There are no circumstances under which Perpetua Resources will be required to pay cash upon exercise or expiry of the warrants or finder’s options (see Note 4 in the Condensed Consolidated Financial Statements - unaudited).
Change in Fair Value of Convertible Note Derivative
The Corporation issued unsecured convertible notes with an interest rate of 0.05% per annum in March 2016 and March 2020 (together, the “Convertible Notes”) with an exercise price denominated in Canadian dollars. The Company determined that the Convertible Notes with an exercise price denominated in a currency that is different from the entity’s functional currency should be classified as a derivative and carried at their fair value. Any changes in their fair value from inception to balance sheet date have been recorded as a gain or loss in the Consolidated Statements of Operations. The convertible note derivative is valued at fair value. The decrease in fair value is due to the conversion of Convertible Notes during the year. During 2021, the remaining Convertible Notes in the aggregate principal amount of C$15,409,901 were converted for 4,351,850 common shares of Perpetua Resources at a conversion rate of C$3.541 per common share (see Note 4 in the Condensed Consolidated Financial Statements - unaudited).
Finance Costs
Finance costs for the Corporation include accretion of note discount and interest expense related to the Convertible Notes described above. No such expense was recognized for the three months ended March 31, 2022 given the remainder of the Convertible Notes were converted in 2021.
Foreign Exchange Loss
Changes in foreign exchange are driven by the change in value of the Canadian Dollar compared to the U.S. Dollar and the impact the change has on translating the Corporation’s Canadian dollar denominated balances. The impact was larger in the first quarter of 2021 compared to the first quarter of 2022 primarily due to the translation on the Convertible Notes and convertible note derivatives which were fully converted in 2021.
Interest Income
This income results from interest received on the Company’s cash balances. Interest income increased $7,572 in the three months ended March 31, 2022, compared to the three months ended March 31, 2021 as a result of higher average cash balances in the first quarter of 2022.
19
Liquidity and Capital Resources
Capital resources of Perpetua Resources consist primarily of cash and liquid short-term investments. As of March 31, 2022, Perpetua Resources had cash and cash equivalents totaling approximately $41.2 million, approximately $1.0 million in other current assets and $2.0 million in trade and other payables.
In August 2021, the Corporation completed a public offering for total gross proceeds of $57.5 million to be used to continue permitting, early restoration and field operations, engineering and design and general corporate purposes.
With its current capital resources, Perpetua Resources believes that it has sufficient funds to continue to advance the regulatory process related to permitting for mine development beyond 2022. Perpetua Resources plans to:
| ● | Continue engaging with Project stakeholders to provide those stakeholders with the opportunity for a better understanding of the Project concepts and to provide a forum for such stakeholders to provide further input into the Project; |
| ● | Continue to collect environmental baseline data in support of the ongoing regulatory processes related to permitting for site restoration and redevelopment of the Project; |
| ● | Continue to advance the regulatory process for the restoration and redevelopment of the Project; and |
| ● | Continue to advance the voluntary early cleanup actions under the ASAOC. |
It is management’s opinion, based on the Corporation’s current capital resources and liquidity that the Corporation will have sufficient assets to discharge its liabilities as they become due, to continue to advance the Stibnite Gold Project for at least 12 months from the date these first quarter 2022 financial statements are issued, and to meet its administrative and overhead requirements for more than a year. Future financings to fund construction are anticipated through debt, equity, project specific debt, and/or other means. Our continued operations are dependent on our ability to obtain additional financing or to generate future cash flows. However, there can be no assurance that we will be successful in our efforts to raise additional capital on terms favorable to us, or at all.
Our anticipated expenditures in fiscal year 2022 are approximately $27.5 million, which are expected to be funded from cash on hand. These expenditures include an estimated $12.2 million to fund permitting of the Stibnite Gold Project, $10.5 million for general corporate purposes and administrative costs, $0.7 million for engineering and design work and $4.1 million to advance early restoration and continue field operations. These costs are subject to change due to cost over-runs, delays or other unbudgeted events.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2022 (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the Evaluation Date.
Changes in Internal Control Over Financial Reporting.
As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
20
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is a party to an ongoing legal proceeding with the Nez Perce Tribe for alleged violations of the Clean Water Act related to historical mining activities. In August 2019, the Nez Perce Tribe filed suit in the United States District Court for the District of Idaho. The Company promptly filed a motion to dismiss and, in the alternative, a motion to stay the litigation. Both motions were denied. Later, the court allowed the Company to amend its answer and file a third-party complaint and the Company also filed a separate citizen suit against the USFS alleging the point source discharges, referred to by the Nez Perce Tribe in its complaint, were alleged to be occurring on lands owned and controlled by the United States. Pursuant to the terms of the CERCLA ASAOC executed with the U.S. EPA, and the United States Department of Agriculture, the Company dismissed its pending actions against USFS. The remaining parties to the ongoing legal proceedings agreed to stay the litigation and explore Alternative Dispute Resolution (“ADR”) options. The stay has been extended on subsequent occasions, and a request to extend the stay through July 31, 2022 was filed jointly by the parties on April 28, 2022 and subsequently ordered by the court on April 29, 2022.
Item 1A. Risk Factors.
In addition to other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our businesses, financial condition, or future results. Additional risks and uncertainties currently unknown to us, or that we currently deem to be immaterial, also may materially adversely affect our business, financial condition, or future results. There have been no material changes in our risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Recent Sales of Unregistered Securities; Issuer’s Purchases of Equity Securities
None.
Use of Proceeds from Registered Securities
On August 16, 2021, we completed an underwritten public offering pursuant to a prospectus supplement to our short form base shelf prospectus dated April 1, 2021, filed pursuant to General Instruction II.L. of Form F-10, and declared effective by the SEC on April 2, 2021 (File No. 333-254517, the “Prospectus Supplement”). The Corporation issued 10,952,382 common shares, which included 1,428,572 common shares issued pursuant to the overallotment option granted to the underwriters, at a public offering price of $5.25 per common share for gross proceeds of approximately $57.5 million before deducting underwriting discounts and commissions and offering expenses. The net proceeds from the issuance were $54.3 million, after deduction of underwriting discounts and commissions and offering expenses of $3.2 million. B. Riley Securities, Inc. and Cantor Fitzgerald Canada Corporation acted as joint-bookrunning managers for the offering.
The Prospectus Supplement included a proposed use of proceeds that would be compared to expenditures from October 1, 2021 onwards. A reconciliation of the use of proceeds is provided below. There has been no material change in the planned use of proceeds as described in our Prospectus Supplement.
|
| Proposed Use of |
| Actual Use of |
| Remaining to be | |||
Expense Category (in Millions) | | Proceeds | | Proceeds | | Spent/Difference | |||
Permitting | | $ | 21.0 | | $ | 4.1 | | $ | 16.9 |
General Corporate Purposes(i) | |
| 20.1 | |
| 7.1 | |
| 13.0 |
Early Restoration & Field Operations | |
| 7.9 | |
| 1.8 | |
| 6.1 |
Engineering & Design | |
| 5.3 | |
| 0.4 | |
| 4.9 |
| | $ | 54.3 | | $ | 13.4 | | $ | 40.9 |
(i) Funds for general corporate purposes may be allocated for corporate expenses, business development and legal expenses.
None of the offering proceeds were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10.0% or more of any class of our equity securities, to any other affiliates or to others.
21
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by MSHA. During the three months ended March 31, 2022, the Company and its subsidiaries were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.
Item 5. Other Information.
None.
22
Item 6. Exhibits.
Exhibit Number |
| Description |
| | |
3.1 | | |
3.2 | | |
3.3 | | |
4.1 | | |
10.1+* | | Amendment to Employment Agreement between Jessica Largent and Perpetua Resources Idaho, Inc. |
31.1 | | |
31.2 | | |
32.1 | | |
32.2 | | |
101.INS | | Inline XBRL Instance Document |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
+ Compensatory plan or agreement.
* Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).
23
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, there unto duly authorized.
Date: May 13, 2022 | PERPETUA RESOURCES CORP. | |
| ||
By: | /s/ Laurel Sayer | |
Name: | Laurel Sayer | |
Title: | President, Chief Executive Officer and | |
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Exhibit 4.1
DESCRIPTION OF COMMON SHARES
The common shares of Perpetua Resources Corp. (the “Company” and such shares, the “Common Shares”) are its only class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The following description of our Common Shares is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Notice of Articles and Articles (the “Articles”) which are filed as exhibits to the Annual Report on Form 10-K. We are incorporated in the Province of British Columbia, Canada and are subject to the Business Corporations Act (British Columbia) (the “BCBCA”).
General
There are no special rights or restrictions attached to any of the Common Shares, which all rank equally as to all benefits which might accrue to the holders of Common Shares.
Authorized Share Capital
We are authorized to issue an unlimited number of Common Shares without par value.
Voting Rights
Holders of Common Shares are entitled to receive notice of and to attend any meetings of shareholders of the Company. At any general meeting, subject to the restrictions on joint registered owners of Common Shares, on a vote by show of hands every shareholder who is present in person or by proxy and entitled to vote has one vote and on a poll, every shareholder entitled to vote has one vote for each Common Share of which he, she or it is the registered owner and may exercise such vote either in person or by proxy. On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way. The majority of votes required for the Company to pass a special resolution at a general meeting of shareholders is two-thirds of the votes cast on the resolution.
Economic Rights
Dividends and Distributions.
Subject to the BCBCA, holders of Common Shares are entitled to receive dividends if, as and when declared by the board of directors of the Company (the “Board”) at its discretion from funds legally available therefor, in each case subject to the rights, privileges, restrictions and conditions attached to any other series or class of shares ranking senior in priority to or on a pro-rata basis with the holders of Common Shares with respect to dividends.
Liquidation Rights.
Subject to the BCBCA, in the event of our liquidation, dissolution, or winding-up, holders of Common Shares are entitled to receive a pro rata share of our assets available for distribution to the shareholders after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attached to any other series or class of shares ranking senior in priority to or on a pro-rata basis with the holders of Common Shares with respect to liquidation.
Conversion.
Holders of Common Shares have no conversion rights.
Pre-emptive Rights.
Paulson & Co. Inc. (“Paulson”) is entitled to the right of first opportunity to provide any equity financing required by us pursuant to the Amended and Restated Investor Rights Agreement between Midas Gold Corp., Idaho Gold Resources Company, LLC and Paulson & Co. Inc., dated March 17, 2020 (the “Paulson Investor Rights Agreement”) so long as Paulson owns in the aggregate 10% or more of the issued and outstanding Common Shares.
Participation Rights.
So long as Paulson owns at least 10% or more of the issued and outstanding Common Shares, Paulson has the right to participate in any future issuances of debt or equity securities of the Company to maintain its pro rata interest in the Company.
Subscription Rights.
Holders of Common Shares have no subscription rights.
Redemption Provisions.
There are no redemption provisions applicable to our Common Shares.
Sinking Fund Provisions.
There are no sinking fund provisions applicable to our Common Shares.
Preferred Stock
We currently have no outstanding preferred shares. We are authorized to issue an unlimited number of first preferred shares without par value, and an unlimited number of second preferred shares without par value. If we were to register and issue preferred shares, such preferred shares would rank senior to the Common Shares with respect to the payment of dividends and the distribution of assets on a liquidation, dissolution or winding up of the Company.
Shareholder Approval; Vote on Extraordinary Corporate Transactions
Under the BCBCA, certain extraordinary corporate actions, such as amalgamations (other than with certain affiliated companies), continuances to another jurisdiction and sales, leases or exchanges of all, or substantially all, of the property of a company (other than in the ordinary course of business), and other extraordinary corporate actions such as liquidations, dissolutions and arrangements (if ordered by a court), are required to be approved by a “special resolution” of shareholders.
A “special resolution” is a resolution (i) passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in respect of the resolution, or (ii) signed by all shareholders entitled to vote on the resolution. In specified cases, a special resolution to approve an extraordinary corporate action is required to be approved separately by the holders of a class or series of shares, including in certain cases a class or series of shares not otherwise carrying voting rights.
Approval Rights
Under the Paulson Investor Rights Agreement, so long as Paulson owns 20% or more of the outstanding Common Shares, without the prior written approval of Paulson and subject to certain exceptions, the Company shall not, and shall not permit any subsidiary to: (a) voluntarily delist from any stock exchange where its securities are listed; (b) incur any indebtedness or guarantee any indebtedness; or (c) incur any lien, claim or security interest on assets of the Company or any subsidiary including royalty agreements, streaming agreements or long-term offtake agreements.
Amendments to the Governing Documents
Under the BCBCA, the type of resolution required to be passed in order to authorize amendments to the notice of articles and/or articles of a company is determined as follows:
· | the type of resolution specified by the BCBCA; or |
· | if not specified by the BCBCA, the type of resolution specified by the company’s articles; or |
· | if neither (i) nor (ii) apply, a special resolution. |
If the proposed amendment would affect a particular class of shares in certain specified ways, the holders of shares of that class are entitled to vote separately as a class on the proposed amendment, whether or not the shares otherwise carry the right to vote.
A company may alter its articles to specify or change the majority of votes that is required to pass a special resolution, which majority must be at least 2/3 and not more than 3/4 of the votes cast on the resolution, if the shareholders resolve, by a special resolution, to make the alteration. A company may also alter its articles to specify or change the majority of votes that is required for shareholders holding shares of a class or series of shares to pass a special separate resolution, which majority must be at least 2/3 and not more than 3/4 of the votes cast on the resolution, if (a) the shareholders resolve, by a special resolution, to make the alteration, and (b) shareholders holding shares of that class or series of shares consent by a special separate resolution of those shareholders.
There are no restrictions in the BCBCA on when the Company’s Articles can be altered. There is a general rule at common law that an alteration to the articles must be bona fide and in the best interests of the company as a whole. Where a shareholder alleges there has been, or is proposed to be, an alteration to the articles that is unfairly prejudicial to one or more of the shareholders, including the applicant, the applicant may be able to claim unfair prejudice. If the articles are being altered by the directors, the directors have similar duties to act honestly and in good faith with a view to the best interests of the company. Where the directors propose to alter or have altered the articles in a manner that a shareholder claims to be oppressive to one or more of the shareholders, the oppression/unfair prejudice remedies in the BCBCA may apply.
Quorum of Shareholders
The BCBCA provides that the quorum for the transaction of business at a meeting of shareholders of a company is the quorum established by the articles, or, if no quorum is established by the articles, two shareholders entitled to vote at the meeting whether present personally or by proxy.
Although our current Articles provide that the presence, in person or by proxy, of two or more shareholders representing at least 10% of the outstanding Common Shares entitled to be voted shall constitute a quorum, we have submitted for shareholder approval at our annual meeting of shareholders to be held on May 25, 2022, an amendment to our current Articles to raise the quorum threshold from 10% to at least 33 1/3% of the voting power of outstanding Common Shares.
Calling Meetings
The BCBCA requires that a company must hold its first annual general meeting not more than 18 months after the date on which it was recognized and subsequent annual general meetings must be held at least once in each calendar year and not more than 15 months after the annual reference date (which generally means that date of the last preceding annual general meeting).
General meetings of shareholders held between annual general meetings to consider matters other than those specifically required by the BCBCA or the Articles to be dealt with at an annual general meeting are commonly referred to as extraordinary general meetings. An extraordinary general meeting of shareholders may be called at any time for the transaction of any business the general nature of which is specified in the notice calling the meeting.
The shareholders (as defined in the BCBCA) of not less than 5% of the issued shares of a company that carry the right to vote at a meeting sought to be held may requisition the directors to call a general meeting of shareholders for the purposes stated in the requisition. In order to have standing to requisition a general meeting, a requisitionist must be entered on the securities register of the company as the registered owner of voting shares. If a general meeting is properly requisitioned, the directors must call a general meeting to transact the business specified in the requisition, to be held within four months after the date the requisition is received by the company.
General meetings must be held in British Columbia unless (a) a location outside British Columbia is provided for in the articles; (b) the articles do not restrict the company from approving a location outside British Columbia for holding a general meeting and a location outside British Columbia is (i) approved by the resolution required by the articles for that purpose; or (ii) if no resolution is required by the articles for that purpose, approved by an ordinary resolution; or (iii) the location for the meeting is approved in writing by the registrar before the meeting is held.
Our Articles provide that general meetings may be held outside British Columbia if that location is approved either by a resolution of the directors or in writing by the registrar before the meeting is held.
If the general meeting is a partially electronic meeting, as contemplated by the BCBCA, these requirements apply to the location where persons attend the meeting in person. If the general meeting is a fully electronic meeting, these requirements do not apply.
Shareholder Consent in Lieu of Meeting
Under the BCBCA, consent resolutions of shareholders are deemed to be proceedings at meetings of those shareholders and to be as valid and effective as if passed at a meeting that complies with all the requirements of the BCBCA and the articles relating to meetings of shareholders. A company must keep a copy of any shareholders’ consent resolutions, and minutes of shareholders’ meetings, at the records office of the company.
A “consent resolution” of shareholders in respect of the Company means:
· | in the case of a resolution of shareholders that may be passed as an ordinary resolution, a resolution consented to in writing by shareholders holding shares that carry the right to vote at general meetings who, in the aggregate, hold shares carrying at least 66 2/3% of the votes entitled to be cast on the resolution; and |
· | in the case of any other resolution of shareholders, a unanimous resolution. |
Director Qualification, Election and Number
Only an individual who is properly qualified may become or act as a director of a company. Those who are not qualified to become or act as directors (or officers) include people under the age of 18 (not 19, the age of majority), people found to be incapable of managing their own affairs, undischarged bankrupts, and people who have been convicted of an offence concerning the promotion, formation, or management of a corporation or an unincorporated business or an offence involving fraud, subject to certain exceptions.
Under the BCBCA, a company must have at least one director and a public company must have at least three directors. Our Articles provide that the number of directors is set at the most recently set of:
· | the number of directors elected by ordinary resolution; and |
· | if at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office until further new directors are elected. If any such election/continuance of directors does not result in the number of directors set for the time being, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office. |
The Board has adopted a majority voting policy (the “Majority Voting Policy”) which requires, in an election of directors, other than at a Contested Meeting (as defined below), any director who receives a greater number of shares withheld than shares voted in favor of his or her election must immediately tender his or her resignation (the “Resignation”) to the Board. The Corporate Governance and Nominating Committee of the Company will then review the matter and make a recommendation to the Board. In considering the Resignation, the Corporate Governance and Nominating Committee and the Board shall consider all factors they deem relevant. The Board shall determine whether or not to accept the Resignation within 90 days after the date of the relevant shareholders’ meeting. The Board shall
accept the Resignation absent exceptional circumstances. The Resignation will be effective when accepted by the Board. The Director tendering the Resignation will not participate in any Board or Corporate Governance and Nominating Committee meeting at which the Resignation is considered. The Company shall promptly issue a news release with the Board’s decision and send a copy of the news release to the Toronto Stock Exchange (“TSX”). If the Resignation is not accepted, the news release shall fully state the reasons for that decision.
Under the Majority Voting Policy, a “Contested Meeting” is a meeting at which the number of directors nominated for election is greater than the number of seats available on the Board.
Under the Paulson Investor Rights Agreement, Paulson is entitled to designate nominees to the Board (each, a “Board Designee”) as follows: (a) so long as Paulson owns 10% or more of the outstanding Common Shares, Paulson shall be entitled to designate one Board Designee; and (b) so long as Paulson owns 20% or more of the outstanding Common Shares, Paulson shall be entitled to designate two Board Designees. Pursuant to the Paulson Investor Rights Agreement, the Company shall, in respect of every shareholders’ meeting at which the election of directors to the Board is considered, nominate for election to the Board the Board Designee(s), and shall use its commercially reasonable efforts to obtain shareholder approval for the election of the Board Designee(s). In the event that a Board Designee is not elected to the Board at such meeting or a Board Designee resigns or is unable to serve as a director for any reason, Paulson shall be entitled to designate a replacement director and the Company agrees to appoint, subject to applicable laws and TSX requirements, such person to the Board.
Vacancies on the Board of Directors
Under our Articles, any casual vacancy occurring in the Board may be filled by the directors.
Removal of Directors
Under our Articles, directors may be removed by shareholders or the Board as described below.
The shareholders may remove any director by special resolution, in which case the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.
The directors may remove any director before the expiration of their term of office if the director is convicted of an indictable offense, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.
Fiduciary Duty of Directors
Directors of a company existing under the BCBCA have fiduciary obligations to the company. The BCBCA requires directors and officers of a British Columbia company, in exercising their powers and performing the functions of a director or officer of the company must:
· | act honestly and in good faith with a view to the best interests of the company; |
· | exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; |
· | act in accordance with the BCBCA and the regulations; and |
· | subject to paragraphs i to iii above, act in accordance with the articles of the company. |
Dissent Rights
The BCBCA provides that shareholders of a company are entitled to exercise dissent rights and be paid by the company the fair value of their shares in connection with specified matters, including, among others:
· | resolution altering any restrictions on the business the company is permitted to carry on or on its powers; |
· | a continuance under the laws of another jurisdiction; |
· | the disposition (other than in the ordinary course of business) of all or substantially all of the undertaking of a company; and |
· | an amalgamation with another company (other than with certain affiliated companies). |
Oppression Remedy
The BCBCA provides an oppression remedy that enables a court to make any interim or final order it considers appropriate with a view to remedying or bringing to an end to the matters complained of by a “complainant” (including a registered shareholder, beneficial owner of Common Shares and any other person whom the court considers appropriate), may apply for an order on the ground:
· | that the affairs of the company are being or have been conducted, or that the powers of the directors are being or have been exercised, in a manner oppressive to one or more of the shareholders, including the applicant, or |
· | that some act of the company has been done or is threatened, or that some resolution of the shareholders or of the shareholders holding shares of a class or series of shares has been passed or is proposed, that is unfairly prejudicial to one or more of the shareholders, including the applicant. |
The oppression remedy provides the court with very broad and flexible powers to intervene in corporate affairs to protect shareholders and other complainants. Common remedies include (a) orders that remedy the specific conduct complained of, for example by ordering repayment of management fees (where the conduct complained of was the discriminatory payment of those fees) or ordering the payment of dividends (where the conduct complained of was the failure to pay them); (b) orders requiring the company or other shareholders to purchase the wronged shareholder’s shares; (c) orders appointing a receiver or receiver-manager; and (d) orders for liquidation and dissolution.
Derivative Actions
Under the BCBCA, a shareholder or director of a company may apply to the court for leave to:
· | prosecute a legal proceeding in the name and behalf of the company to: |
o | enforce a right, duty or obligation owed to the company that could be enforced by the company itself; |
o | or to obtain damages for any breach of a right, duty or obligation referred to in paragraph a above; or |
· | defend, in the name and on behalf of a company, a legal proceeding brought against the company. |
Under the BCBCA, the court may grant leave on terms it considers appropriate, if:
· | the complainant has made reasonable efforts to cause the directors of the company to prosecute or defend the legal proceeding; |
· | notice of application for leave has been given to the company and to any other person the court may order; |
· | the complainant is acting in good faith; and |
· | it appears to the court that it is in the best interests of the company for the legal proceeding to be prosecuted or defended. |
Under the BCBCA, the court in a derivative action may (a) make an order that the complainant give security for costs; (b) authorize any person to control the conduct of the legal proceeding or give any other directions; (c) order interim costs to be paid to the person controlling the conduct of the legal proceed; and (d) on final disposition of a legal proceeding, make various other orders including orders for repayment of interim costs advanced and for indemnities as to costs and expenses.
Examination of Corporate Records
Under the BCBCA, upon payment of a prescribed fee, a person is entitled, during usual business hours, to examine certain corporate records and to make copies of or extracts from such documents.
Advance Notice for Shareholder Proposals and Director Nominations
The BCBCA permits certain eligible shareholders and beneficial owners of shares to submit shareholder proposals to a company, which proposals may be included in the company’s management information circular and proxy statement. To be considered for inclusion in the management information circular and proxy statement for an annual meeting of shareholders of the Company, any such shareholder proposal under the BCBCA must be:
· | signed by the submitter and qualified shareholders who, together with the submitter, are, at the time of signing registered owners or beneficial owners of shares that, in the aggregate, constitute at least 1/100 of the issued Common Shares that carry the right of vote at general meetings or having a market value in excess of $2,000; |
· | received by the Company at least three months before the anniversary date of the last annual meeting of shareholders; and |
· | accompanied by declarations of those making the proposal and their supporters declaring the number of Common Shares carrying the right to vote at general meetings that are owned by the signatories and the names of the registered holders of the Common Shares, for inclusion in the management information circular and proxy statement distributed to shareholders prior to the annual meeting of shareholders of the Company. |
On April 4, 2013, the Board adopted an advance notice policy (which was ratified by the Company’s shareholders at the annual general meeting held on May 14, 2013) (the “Advance Notice Policy”), which fixes the deadlines by which shareholders of the Company must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the information that a shareholder must include in a written notice to the Company for any director nominee to be eligible for election at such annual or special meeting of shareholders.
The following is a brief summary of certain provisions of the Advance Notice Policy and is qualified in its entirety by the full text of the Advance Notice Policy:
· | Other than pursuant to (a) a proposal made in accordance with the BCBCA (as described above) or (b) a requisition of the shareholders made in accordance with the provisions of the BCBCA, shareholders of the Company must give advance written notice to the Company of any nominees for election to the Board. |
· | The Advance Notice Policy fixes a deadline by which shareholders of the Company must submit, in writing, nominations for directors to the Corporate Secretary of the Company prior to any annual or special meeting of shareholders, and sets forth the specific information that such shareholders must include with their nominations in order to be effective. Only persons who are nominated in accordance with the Advance Notice Policy are eligible for election as directors of the Company. |
· | For an annual meeting of shareholders, notice to the Company must be not less than 30 days and not more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date less than 50 days after the date on which the first public announcement of |
the date of such annual meeting was made, notice may be given not later than the close of business on the 10th day following such public announcement.
· | For a special meeting of shareholders (that is not also an annual meeting), notice to the Company must be given not later than the close of business on the 15th day following the day on which the first public announcement of the date of such special meeting was made. |
· | The time periods for giving notice set forth above shall in all cases be determined based on the original date of the applicable annual meeting and/or special meeting of shareholders, and in no event shall any adjournment or postponement of a meeting of shareholders, or the reconvening of any adjourned or postponed meeting of shareholders, or the announcement thereof, commence a new time period for the giving of notice as described above. |
For the purposes of the Advance Notice Policy, “public announcement” means disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on SEDAR at www.sedar.com or on the SEC’s Website at www.sec.gov.
Registration Rights
Barrick Gold Corporation (“Barrick”) and Paulson are entitled to certain registration rights with respect to Common Shares held by them pursuant to the Investor Rights Agreement between Midas Gold Corp. and Barrick Gold Corporation, dated May 16, 2018 (as amended by those certain amending agreements dated as of March 24, 2019, May 15, 2019, May 24, 2019, and August 20, 2021, the “Barrick Investor Rights Agreement”) and the Paulson Investor Rights Agreement (together, the “Investor Rights Agreements”), respectively. Pursuant to the terms of the respective Investor Rights Agreements, Barrick and Paulson have the right to demand that we file a prospectus and take such other steps as may be necessary to facilitate a distribution in Canada of all or any portion of the registrable securities held by them, respectively, subject to certain exceptions set forth in the respective Investor Rights Agreement. In addition, in the event that we effect a registered distribution of securities, either for our account or for the account of our other security holders, Barrick and Paulson will be entitled to certain piggyback registration rights with respect to such distribution, subject to certain limitations set forth in the respective Investor Rights Agreement.
The Investor Rights Agreements provide that we must pay registration expenses in connection with effecting any demand registration or piggyback registration, with the exception of commissions payable to any underwriter attributable to the holders’ registrable securities, the holders’ pro rata share of the registration expenses attributable to a demand registration offering and any and all fees, disbursements and expenses of legal counsel or other advisors retained by the holders in connection with a piggyback registration.
Such registration rights are subject to the exceptions and conditions set forth in the respective Investor Rights Agreements, each of which is filed as an exhibit to our Annual Report on Form 10-K. The registration rights will expire upon the terms of the respective Investor Rights Agreement.
Listing
Our Common Shares are listed on the TSX under the symbol “PPTA” and on the Nasdaq under the symbol “PPTA”.
Transfer Agent and Registrar
The transfer agent and registrar for our Common Shares is Computershare Investor Services. The transfer agent’s address is Proxy Department, 3rd Floor, 510 Burrard Street, Vancouver, BC V6C 3B9.
Exhibit 10.1
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| PO Box 429, 13181 Hwy 55 |
| Donnelly, ID 83615 |
| (208) 901-3060 |
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| PerpetuaResources.com |
March 25, 2022
Jessica Largent | |
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Subject: Amendment to Employment Agreement
Dear Jessica,
The items below relate to amendments to your Employment Agreement (“Agreement”) dated February 8, 2011. Schedule “A” of your Agreement will be amended as follows:
1. | Employment Position |
Chief Financial Officer, Perpetua Resources Corp. effective April 1, 2022
Chief Financial Officer, Perpetua Resources Idaho, Inc. effective March 25, 2022
2. | Salary |
The Employee’s current gross annual salary will be $245,000 (USD) on a full-time basis (“Full-time Salary”), effective April 1, 2022.
If you are in agreement with the above changes, please sign and return in the below space.
Yours truly,
/s/ Laurel Sayer
Laurel Sayer
President & CEO
I accept the above-mentioned changes.
/s/ Jessica Largent | |
Jessica Largent | |
VP, Investor Relations & Finance, PRC | |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Laurel Sayer, President and Chief Executive Officer of Perpetua Resources Corp. certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of Perpetua Resources Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2022 | |
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/s/ Laurel Sayer | |
Laurel Sayer | |
President and Chief Executive Officer | |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jessica Largent, Chief Financial Officer of Perpetua Resources Corp. certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of Perpetua Resources Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2022 | |
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/s/ Jessica Largent | |
Jessica Largent | |
Chief Financial Officer | |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Perpetua Resources Corp., (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurel Sayer, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 13, 2022 | |
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| /s/ Laurel Sayer |
| Laurel Sayer |
| President and Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jessica Largent, Chief Financial Officer of Perpetua Resources Corp. certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of Perpetua Resources Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2022 | |
/s/ Jessica Largent | |
Jessica Largent | |
Chief Financial Officer | |