6-K
Silver North Resources Ltd. (TARSF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of August 2020
File No. 000-55193
Alianza Minerals Ltd.
(Name of Registrant)
410 – 325 Howe Street Vancouver, British Columbia, Canada V6C 1Z7
(Address of principal executive offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F. FORM 20-F x FORM 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Alianza Minerals Ltd.
(Registrant)
| Dated: September 11, 2020 | By: /s/ “Winnie Wong”<br><br><br>Winnie Wong,<br><br><br>Chief Financial Officer |
|---|
Exhibits:
99.1
News Release dated August 31, 2020
99.2
Interim Financial Statements for the period ended June 30, 2020
99.3
Management Discussion and Analysis
99.4
CEO Certification
99.5
CFO Certification
Alianza News Release
| Trading Symbol (TSX-V: ANZ)<br><br><br>410-325 Howe Street<br><br><br>Vancouver, British Columbia<br><br><br>Canada V6C 1Z7<br><br><br>Tel: (604) 687 3520<br><br><br>Fax: 1-888-889-4874<br><br><br>www.alianzaminerals.com |
|---|
| NR 20-13 |
| --- |
Alianza Minerals Expands Twin Canyon Project & Defines Large Gold in Soils Anomaly
Vancouver, B.C., August 31, 2020 - Alianza Minerals Ltd. (TSX-V: ANZ, OTC: TARSF) **** (“Alianza” or the “Company”) reports that it has expanded the size of the Twin Canyon project in southwestern Colorado by staking and has completed an initial soil geochemical sampling and prospecting program with positive results. Twin Canyon hosts disseminated gold mineralization in sandstone and was the site of a small mining operation dating back to the 1950s.
Alianza expanded the size of the property to over 450 hectares (over 1,100 acres) through staking. Staking targeted extensions of the prospective host Junction Creek sandstone unit where gold mineralization can occur. In the areas where gold mineralization is present, the host sandstone unit is bleached and spotted with bitumen, with small amounts of limonite after pyrite. Optical and microprobe work carried out on mineralized samples indicate a direct gold – bitumen association raising the novel possibility that the mineralizing process at Twin Canyon is driven by those associated with petroleum basin development. A small underground gold mine (the Charlene Mine) operated at Twin Canyon dating back to the mid-1950s. Historic sampling of the underground workings has returned grab samples ranging from 0.1 to 15.77 g/t gold. Twenty-eight historic channel samples 1.5 to 10 metres in length were anomalous in gold, eight of which exceeded 2 g/t gold (including a highlight of 8.1 g/t gold over 3 metres).
“We are very encouraged by our initial foray in the field at Twin Canyon,” stated Jason Weber, P.Geo., President and CEO of Alianza. “Demonstrated gold anomalies in both rocks and soils over a combined area that now covers in excess of 3.2 square km provides evidence of the potential for a large gold mineralizing system across the structural antiform that hosts the past-producing Charlene Mine. We look forward to getting back in the field to expand our soils coverage and continue prospecting to determine the ultimate size of the system.”
An initial BLEG soil sampling campaign targeted the upper portions of the Junction Creek Sandstone outboard from the Charlene mine and returned a coherent anomaly ranging from 20 – 460 ppb gold measuring over 1,900 m long by 100 m wide. This expands the area of anomalous soil results four-fold and provides proof of concept that Twin Canyon may be host to a much larger gold mineralizing system than observed at the Charlene Mine.
Reconnaissance prospecting of targeted areas of the project successfully discovered bitumen-spotted sandstone that returned 0.148 g/t gold in a grab sample within the soil anomaly approximately 350 m southeast from the Charlene Mine. A second prospecting discovery located approximately 1.3 kilometers northeast of the Charlene Mine returned 0.208 g/t gold in a grab sample of bitumen-spotted altered Junction Creek Sandstone in an area that is not covered by soil sampling. This important result opens up a significantly larger area of the Junction Creek sandstone to being prospective for gold mineralization and will be a top priority for follow up exploration.
About Alianza Minerals Ltd.
Alianza employs a hybrid business model of joint venture funding and self-funded projects to maximize opportunity for exploration success. The Company currently has gold, silver and base metal projects in Yukon Territory, British Columbia, Nevada and Peru. Alianza currently has two projects optioned out in Nevada and Yukon Territory, and is actively exploring on two others. Alianza’s current partners include Hochschild Mining PLC and Coeur Mining, Inc.
The Company has 109.0 million shares issued and outstanding and is listed on the TSX Venture Exchange under the symbol “ANZ” and trades on the OTC market in the US under the symbol TARSF.
Mr. Jason Weber, P.Geo., President and CEO of Alianza Minerals Ltd. is a Qualified Person as defined by National Instrument 43-101. Mr. Weber supervised the preparation of the technical information contained in this release.
For further information, contact:
Jason Weber, President and CEO
Sandrine Lam, Shareholder Communications
Tel: (604) 807-7217
Fax: (888) 889-4874
Renmark Financial Communications Inc.
Melanie Barbeau
Tel: (416) 644-2020 or (514) 939-3989
www.renmarkfinancial.com
To learn more visit: www.alianzaminerals.com
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. STATEMENTS IN THIS NEWS RELEASE, OTHER THAN PURELY HISTORICAL INFORMATION, INCLUDING STATEMENTS RELATING TO THE COMPANY'S FUTURE PLANS AND OBJECTIVES OR EXPECTED RESULTS, MAY INCLUDE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS AND ARE SUBJECT TO ALL OF THE RISKS AND UNCERTAINTIES INHERENT IN RESOURCE EXPLORATION AND DEVELOPMENT. AS A RESULT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS.
Alianza Interim Financial Statements
![[anzjune2020interim_fs001.jpg]](anzjune2020interim_fs001.jpg)
ALIANZA MINERALS LTD.
Condensed Consolidated Interim Financial Statements
For the nine months ended June 30, 2020 and 2019
325 Howe Street, Suite 410, Vancouver B.C. V6C 1Z7, Canada, TSXV: ANZ; Tel: 604-687-3520
CONTENTS
| Page | |
|---|---|
| Notice of No Auditor Review of Interim Financial Statements | 3 |
| Condensed Consolidated Interim Financial Statements: | |
| Statements of Financial Position | 4 |
| Statements of Comprehensive Loss | 5 |
| Statements of Changes in Shareholders’ Equity | 6 |
| Statements of Cash Flows | 7 |
| Notes to the Financial Statements | 8 - 28 |
NOTICE OF NO AUDITOR REVIEW OF
INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.
The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.
ALIANZA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Presented in Canadian Dollars)
| Note | June 30,<br><br><br>2020<br><br><br>(Unaudited) | September 30,<br><br><br>2019<br><br><br>(Audited) | |||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash | $ | 525,362 | $ | 322,984 | |
| Restricted cash | 5 | 20,975 | 29,546 | ||
| Receivables | 8,406 | 54,141 | |||
| Prepaid expenses | 60,586 | 315,938 | |||
| 615,329 | 722,609 | ||||
| Non-current assets | |||||
| Equipment | 4 | 198 | 338 | ||
| Exploration and evaluation assets | 5 | 4,017,227 | 3,728,231 | ||
| VAT receivables | 43,726 | 43,503 | |||
| 4,061,151 | 3,772,072 | ||||
| Total assets | $ | 4,676,480 | $ | 4,494,681 | |
| Current liabilities | |||||
| Accounts payable and accrued liabilities | $ | 287,060 | $ | 316,049 | |
| Due to related parties | 9 | 278,931 | 326,437 | ||
| Funds held for optionee | 5 | 20,975 | 29,546 | ||
| Flow-through share premium liability | 7 | - | 21,459 | ||
| 586,966 | 693,491 | ||||
| Shareholders’ equity | |||||
| Share capital | 7 | 19,554,096 | 18,487,106 | ||
| Reserves | 7, 8 | 2,908,737 | 2,903,068 | ||
| Accumulated other comprehensive loss | (34,806) | (26,619) | |||
| Deficit | (18,338,513) | (17,562,365) | |||
| 4,089,514 | 3,801,190 | ||||
| Total shareholders’ equity and liabilities | $ | 4,676,480 | $ | 4,494,681 |
Nature of operations and going concern (Note 1)
Events after the reporting period (Note 15)
These consolidated financial statements are authorized for issue by the Board of Directors on August 18, 2020.
On behalf of the Board of Directors:
| Director “Jason Weber” | Director “Mark T. Brown” |
|---|
See accompanying notes to the condensed consolidated interim financial statements
ALIANZA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited, presented in Canadian Dollars)
| Three months ended June 30 | Nine months ended June 30 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Note | 2020 | 2019 | 2020 | 2019 | |||||
| Expenses | |||||||||
| Accounting and legal fees | 9 | $ | 64,002 | $ | 34,475 | $ | 181,788 | $ | 120,473 |
| Depreciation | 4 | 47 | 103 | 140 | 309 | ||||
| Investor relations and shareholder information | 9 | 57,235 | 3,869 | 470,128 | 25,462 | ||||
| Office facilities and administrative services | 9 | 4,500 | 4,500 | 13,500 | 13,500 | ||||
| Office expenses | 1,928 | 6,171 | 16,258 | 14,964 | |||||
| Property investigation expenses | 1,000 | - | 7,689 | - | |||||
| Transfer agent, listing and filing fees | 8,720 | 5,663 | 37,917 | 17,930 | |||||
| Travel | 212 | 1,951 | 18,786 | 5,990 | |||||
| Wages, benefits and consulting fees | 9 | 29,753 | 25,485 | 122,070 | 96,517 | ||||
| (167,397) | (82,217) | (868,276) | (295,145) | ||||||
| Interest income and other income | 250 | 2,069 | 1,527 | 4,439 | |||||
| Flow-through share premium recovery | - | - | 21,459 | - | |||||
| Foreign exchange (loss) | (11,107) | (5,816) | (10,037) | (7,371) | |||||
| Management Fee | 79,179 | - | 79,179 | - | |||||
| Net loss for the period | $ | (99,075) | $ | (85,964) | $ | (776,148) | $ | (298,077) | |
| Other comprehensive income (loss) | |||||||||
| Exchange difference arising on the translation of foreign subsidiary | 3,487 | 4,694 | (8,187) | (1,724) | |||||
| Total comprehensive loss for the period | $ | (95,588) | $ | (81,270) | $ | (784,335) | $ | (299,801) | |
| Basic and diluted loss per common share | $ | (0.00) | $ | (0.00) | $ | (0.01) | $ | (0.01) | |
| Weighted average number of common shares outstanding – basic and diluted | 104,682,354 | 60,442,528 | 92,633,736 | 55,643,872 |
See accompanying notes to the condensed consolidated interim financial statements
ALIANZA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited, presented in Canadian Dollars)
| Share Capital | Reserves | Accumulated Other Comprehensive<br><br><br>Income (Loss) | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Note | Number of shares | Amount | Equity settled<br><br><br>employee<br><br><br>benefits | Warrants | Finders’<br><br><br>warrants | Foreign<br><br><br>exchange<br><br><br>reserve | Deficit | Total equity | |
| Balance, September 30, 2018 (Audited) | 45,141,668 | $ 16,863,904 | $ 1,788,405 | $ 641,848 | $ 246,791 | $ (20,100) | $ (16,564,996) | $ 2,955,852 | |
| Private placement | 7(b)(i) | 15,203,333 | 862,200 | - | - | - | - | - | 862,200 |
| Acquisition of exploration and evaluation assets | 7(b)(ii) | 125,000 | 8,125 | - | - | - | - | - | 8,125 |
| Share issue costs | - | (116,899) | - | - | 30,078 | - | - | (86,821) | |
| Net loss | - | - | - | - | - | (1,724) | (298,077) | (299,801) | |
| Balance, June 30, 2019 (Unaudited) | 60,470,001 | 17,617,330 | 1,788,405 | 641,848 | 276,869 | (21,824) | (16,863,073) | 3,439,555 | |
| Private placements | 7(b)(iii) | 20,728,333 | 934,383 | - | - | - | 934,383 | ||
| Acquisition of exploration and evaluation assets | 7(b)(iv)(v) | 1,236,363 | 81,500 | - | - | - | - | - | 81,500 |
| Share issue costs | - | (146,107) | - | - | 33,738 | - | - | (112,369) | |
| Share-based payments | - | - | 162,208 | - | - | - | - | 162,208 | |
| Net loss | - | - | - | - | - | (4,795) | (699,292) | (704,087) | |
| Balance, September 30, 2019 (Audited) | 82,434,697 | $ 18,487,106 | $ 1,950,613 | $ 641,848 | $ 310,607 | $ (26,619) | $ (17,562,365) | $ 3,801,190 | |
| Private placements | 7(b)(vi) | 22,000,000 | 1,100,000 | - | - | - | - | - | 1,100,000 |
| Acquisition of exploration and evaluation assets | 7(b)(vii) | 125,000 | 11,250 | - | - | - | - | - | 11,250 |
| Share issue costs | - | (111,550) | - | - | 32,665 | - | - | (78,885) | |
| Exercise of finder’s warrants | 7(b)(viii) | 805,875 | 67,290 | - | - | (26,996) | - | - | 40,294 |
| Net loss | - | - | - | - | - | (8,187) | (776,148) | (784,335) | |
| Balance, June 30, 2020 (Unaudited) | 105,365,572 | $ 19,554,096 | $ 1,950,613 | $ 641,848 | $ 316,276 | $ (34,806) | $ (18,338,513) | $ 4,089,514 |
See accompanying notes to the condensed consolidated interim financial statements
ALIANZA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30
(Unaudited, presented in Canadian Dollars)
| Nine months ended June 30 | ||||
|---|---|---|---|---|
| 2020 | 2019 | |||
| Cash flows from (used in) operating activities | ||||
| Net loss for the period | $ | (776,148) | $ | (298,077) |
| Items not affecting cash: | ||||
| Depreciation | 140 | 309 | ||
| Flow-through share premium recovery | (21,459) | - | ||
| Changes in non-cash working capital items: | ||||
| Receivables | 45,710 | 8,070 | ||
| VAT Receivables | (1,008) | (6,331) | ||
| Prepaid expenses | 255,352 | (9,543) | ||
| Accounts payable and accrued liabilities | (2,822) | 17,127 | ||
| Due to related parties | (34,006) | (34,350) | ||
| Funds held for optionee | (8,571) | 200,864 | ||
| Net cash (used in) operating activities | (542,812) | (121,931) | ||
| Cash flows from (used in) investing activities | ||||
| Exploration and evaluation assets | (306,772) | 159,295 | ||
| Net cash provided by (used in) investing activities | (306,772) | 159,295 | ||
| Cash flows from (used in) financing activities | ||||
| Proceeds from issuance of common shares | 1,100,000 | 862,200 | ||
| Proceeds from exercise of finder’s warrants | 40,294 | - | ||
| Share issue costs | (92,386) | (50,821) | ||
| Net cash provided by financing activities | 1,047,908 | 811,379 | ||
| Effect of exchange rate changes on cash | (4,517) | (3,468) | ||
| Change in cash for the period | 193,807 | 845,275 | ||
| Cash, beginning of the period | 352,530 | 6,599 | ||
| Cash, end of the period | $ | 546,337 | $ | 851,874 |
| Cash comprised of: | ||||
| Cash | $ | 525,362 | $ | 651,010 |
| Restricted Cash | 20,975 | 200,864 | ||
| $ | 546,337 | $ | 851,874 |
Supplemental disclosure with respect to cash flows (Note 10)
Cash consists of $Nil (September 30, 2019 - $317,007) held for flow-through expenditures, while $Nil (September 30, 2019 - $227,873) included in accounts payable and accrued liabilities is related to flow-through expenditures.
See accompanying notes to the condensed consolidated interim financial statements
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
1.
NATURE OF OPERATIONS AND GOING CONCERN
Alianza Minerals Ltd. (the “Company” or “Alianza”) was incorporated in Alberta on October 21, 2005 under the Business Corporations Act of Alberta and its registered office is Suite 410, 325 Howe Street, Vancouver, BC, Canada, V6C 1Z7. On April 25, 2008 the Company filed for a certificate of continuance and is continuing as a BC Company under the Business Corporations Act (British Columbia).
The Company is an exploration stage company and is engaged principally in the acquisition and exploration of mineral properties. The recovery of the Company’s investment in its exploration and evaluation assets is dependent upon the future discovery, development and sale of minerals, upon the ability to raise sufficient capital to finance these activities, and/or upon the sale of these properties.
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The ability of the Company to continue as a going concern is dependent on obtaining additional financing through the issuance of common shares or obtaining joint venture or property sale agreements for one or more properties.
There can be no assurance that the Company will be able to continue to raise funds in which case the Company may be unable to meet its obligations. Should the Company be unable to realize on its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded on the condensed consolidated interim statement of financial position. The condensed consolidated interim financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations.
Adverse financial market conditions and volatility increase the uncertainty of the Company’s ability to continue as a going concern given the need to both manage expenditures and to raise additional funds. The Company is experiencing, and has experienced, negative operating cash flows. The Company will continue to search for new or alternate sources of financing but anticipates that the current market conditions may impact the ability to source such funds. Accordingly, these material uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern.
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.
As at June 30, 2020, the Company had working capital of $28,363 (September 30, 2019: $29,118) and shareholders’ equity of $4,089,514 (September 30, 2019: $3,801,190).
2.
BASIS OF PREPARATION
Statement of Compliance
These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) using accounting policies consistent with IFRS issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
2.
BASIS OF PREPARATION - continued
Basis of preparation
These condensed consolidated interim financial statements have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
The preparation of these condensed consolidated interim financial statements in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements.
These condensed consolidated interim financial statements, including comparatives, have been prepared on the basis of IFRS standards that are published at the time of preparation.
New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for the June 30, 2020 reporting period. The Company has not early adopted the following new and revised standards, amendments and interpretations that have been issued but are not yet effective:
·
IFRIC 23 Uncertainty over Income Tax Treatments (effective December 1, 2019)
The Company anticipates that the application of the above new and revised standards, amendments and interpretations will have no material impact on its results and financial position.
3.
SIGNIFICANT ACCOUNTING POLICIES
These unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS as issued by the IASB on a basis consistent with those followed in the Company’s most recent annual financial statements for the year ended September 30, 2019.
These unaudited condensed consolidated interim financial statements do not include all note disclosures required by IFRS for annual financial statements, and therefore should be read in conjunction with the annual financial statements for the year ended September 30, 2019. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine-month period ended June 30, 2020 are not necessarily indicative of the results that may be expected for the current fiscal year ending September 30, 2020.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
4.
EQUIPMENT
| Office equipment<br><br><br>and furniture | Vehicles and<br><br><br>other field<br><br><br>equipment | Total | ||||
|---|---|---|---|---|---|---|
| Cost | ||||||
| As at September 30, 2018 | $ | 5,113 | $ | 226 | $ | 5,339 |
| Disposal during the year | - | (226) | (226) | |||
| As at September 30, 2019 | 5,113 | - | 5,113 | |||
| As at June 30, 2020 | $ | 5,113 | $ | - | $ | 5,113 |
| Accumulated depreciation | ||||||
| As at September 30, 2018 | $ | 4,363 | $ | 226 | $ | 4,589 |
| Depreciation for the year | 412 | - | 412 | |||
| Depreciation for the year related to disposal | - | (226) | (226) | |||
| As at September 30, 2019 | 4,775 | - | 4,775 | |||
| Depreciation for the period | 140 | - | 140 | |||
| As at June 30, 2020 | $ | 4,915 | $ | - | $ | 4,915 |
| Net book value | ||||||
| As at September 30, 2019 | $ | 338 | $ | - | $ | 338 |
| As at June 30, 2020 | $ | 198 | $ | - | $ | 198 |
5.
EXPLORATION AND EVALUATION ASSETS
The Company follows the prospect generator model whereby it acquires projects on attractive terms, adds value through preliminary exploration efforts and then vends or options the project for further advancement.
Although the Company has taken steps to verify title to its unproven mineral right interests, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.
The Company has properties in Nevada and Colorado, USA (the “USA Properties”), in British Columbia and Yukon Territory of Canada (the “Canada Properties”) and in Peru (the “Peru Properties”). Following are summary tables of exploration and evaluation assets and brief summary descriptions of each of the exploration and evaluation assets:
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
| USA | Canada | Peru | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Twin | ||||||||||||||||||||||
| Horsethief | Canyon | Bellview | BP | Others | Haldane | KRL | Tim | Others | Yanac | Total | ||||||||||||
| Balance at September 30, 2019 | $ | 173,156 | $ | - | $ | 85,548 | $ | 248,975 | $ | 23,404 | $ | 1,433,291 | $ | 139,847 | $ | 1 | $ | 1,198,997 | $ | 425,012 | $ | 3,728,231 |
| Additions during the period | ||||||||||||||||||||||
| Acquisition costs: | ||||||||||||||||||||||
| Property acquisition | - | 79,042 | - | - | - | 31,250 | 25,000 | - | - | - | 135,292 | |||||||||||
| - | 79,042 | - | - | - | 31,250 | 25,000 | - | - | - | 135,292 | ||||||||||||
| Exploration expenditures: | ||||||||||||||||||||||
| Aircraft charter | - | - | - | - | 30,366 | - | - | - | - | 30,366 | ||||||||||||
| Camp, travel and meals | 32,348 | 1,182 | - | - | - | 11,274 | - | - | - | - | 44,804 | |||||||||||
| Community relations | - | - | - | - | - | 1,420 | - | - | - | - | 1,420 | |||||||||||
| Drilling | 291,576 | - | - | - | - | 7,020 | - | - | - | - | 298,596 | |||||||||||
| Field equipment rental | 2,044 | - | - | - | - | 6,788 | 4 | - | - | - | 8,836 | |||||||||||
| Field supplies and maps | 12,880 | 55 | - | - | - | 5,397 | - | - | - | - | 18,332 | |||||||||||
| Geochemical | 15,730 | - | 1.911 | 1,510 | - | 2,100 | - | - | - | - | 21,251 | |||||||||||
| Geological consulting | 193,206 | 16,574 | - | 1,738 | - | 59,424 | 13,188 | 50 | 400 | - | 284,580 | |||||||||||
| Legal and accounting | - | - | 38 | 500 | 538 | |||||||||||||||||
| Licence and permits | 22,856 | - | - | - | - | 5,335 | - | - | - | 6,115 | 34,306 | |||||||||||
| Management fees | 95,070 | - | - | - | - | - | - | - | - | - | 95,070 | |||||||||||
| Rent | - | - | - | 690 | - | - | 690 | |||||||||||||||
| Reporting, drafting, sampling, and analysis | - | - | - | - | - | 12,251 | 1,630 | - | - | - | 13,881 | |||||||||||
| Trenching | 25,130 | - | - | - | - | - | - | - | - | 25,130 | ||||||||||||
| 690,840 | 17,811 | 1,911 | 3,248 | - | 141,413 | 16,012 | 50 | 400 | 6,115 | 877,800 | ||||||||||||
| Less: | ||||||||||||||||||||||
| Recovered exploration expenditures | (684,870) | - | 4,058 | (29,609) | - | - | - | (10,000) | - | - | (720,421) | |||||||||||
| Net additions | 5,970 | 96,853 | 5,969 | (26,361) | - | 172,663 | 41,012 | (9,950) | 400 | 6,115 | 292,671 | |||||||||||
| Foreign currency translation | (1,451) | - | (283) | - | - | - | - | - | - | (1,940) | (3,675) | |||||||||||
| Balance at June 30, 2020 | $ | 177,675 | $ | 96,853 | $ | 91,234 | $ | 222,614 | $ | 23,404 | $ | 1,605,954 | $ | 180,859 | $ | (9,949) | $ | 1,199,397 | $ | 429,187 | $ | 4,017,227 |
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
| USA | Canada | Peru | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Horsethief | Bellview | BP | Others | Haldane | KRL | Others | Yanac | Total | ||||||||||
| Balance at September 30, 2018 | $ | 223,045 | $ | 95,291 | $ | 248,975 | $ | 23,038 | $ | 471,424 | $ | 21,545 | $ | 1,197,974 | $ | 419,219 | $ | 2,700,511 |
| Additions during the year | ||||||||||||||||||
| Acquisition costs: | ||||||||||||||||||
| Property acquisition | - | - | - | - | 178,125 | 21,500 | - | - | 199,625 | |||||||||
| - | - | - | - | 178,125 | 21,500 | - | - | 199,625 | ||||||||||
| Exploration expenditures: | ||||||||||||||||||
| Aircraft charter | - | - | - | - | 34,319 | 18,093 | - | - | 52,412 | |||||||||
| Camp, travel and meals | 37,230 | 24,749 | 23,130 | - | 129,498 | 15,595 | 37 | - | 230,239 | |||||||||
| Community relations | - | - | - | - | 2,840 | - | - | - | 2,840 | |||||||||
| Drilling | - | - | - | - | 315,801 | - | - | - | 315,801 | |||||||||
| Field equipment rental | 9,652 | 7,931 | 3,515 | - | 20,381 | 2,145 | 513 | - | 44,137 | |||||||||
| Field supplies and maps | 4,048 | 409 | 1,025 | - | 31,110 | 933 | - | - | 37,525 | |||||||||
| Geochemical | 7,133 | - | 12,101 | - | (804) | - | - | - | 18,430 | |||||||||
| Geological consulting | 141,211 | 20,196 | 72,553 | - | 268,826 | 46,880 | 474 | - | 550,140 | |||||||||
| Legal and accounting | 790 | 552 | 1,781 | 187 | 54 | - | - | - | 3,364 | |||||||||
| Licence and permits | 15,103 | 10,327 | 33,298 | 3,561 | 1,486 | - | - | 5,874 | 69,649 | |||||||||
| Management fees | 27,706 | 10,866 | 6,931 | - | - | - | - | - | 45,503 | |||||||||
| Reporting, drafting, sampling, and analysis | - | 39,729 | - | - | 20,231 | 13,156 | - | - | 73,116 | |||||||||
| 242,873 | 114,759 | 154,334 | 3,748 | 823,742 | 96,802 | 1,024 | 5,874 | 1,443,156 | ||||||||||
| Less: | ||||||||||||||||||
| Yukon Mining Incentive Refund | - | - | - | - | (40,000) | - | - | - | (40,000) | |||||||||
| Recovered exploration expenditures | (292,762) | (124,502) | (154,334) | (3,382) | - | - | - | - | (574,980) | |||||||||
| Net additions | (49,889) | (9,743) | - | 366 | 961,867 | 118,302 | 1,024 | 5,874 | 1,027,801 | |||||||||
| Foreign currency translation | - | - | - | - | - | - | - | (81) | (81) | |||||||||
| Balance at September 30, 2019 | $ | 173,156 | $ | 85,548 | $ | 248,975 | $ | 23,404 | $ | 1,433,291 | $ | 139,847 | $ | 1,198,998 | $ | 425,012 | $ | 3,728,231 |
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
USA
On January 27, 2015, the Company signed a binding agreement to acquire eight gold properties in Nevada, USA from Sandstorm Gold Ltd. (“Sandstorm”) by issuing 150,000 shares to Sandstorm and granting a net smelter returns royalty ranging from 0.5% to 1.0%. The Company also granted Sandstorm a right of first refusal on any future metal streaming agreements on these properties. In 2015 and 2016, the Company dropped four of the gold properties. The properties retained are:
·
Horsethief
·
Bellview
·
East Walker
·
Ashby
a)
Horsethief (Nevada)
The Horsethief property is located in Lincoln County Nevada, northeast of Pioche. A 2% NSR is payable to a previous owner of the property from production on certain claims on the property while a 1% NSR is payable to Sandstorm on all the claims on the property.
In 2017, the Company acquired new ground by staking an additional 33 BLM Iode mining claims at the Horsethief property.
On March 1, 2019 (“Effective Date”), the Company entered into an option agreement with Hochschild Mining (US) Inc. (“Hochschild”) whereby Hochschild could earn up to a 70% undivided interest in the Horsethief property.
Under the terms of the agreement, Hochschild could earn an initial 60% interest in the project by US$5,000,000 in exploration on the property over a 5.5 year period, with a minimum expenditure as below:
| Period | Defined Term | Minimum Qualifying Expenditure |
|---|---|---|
| 18 months from the Effective Date | Agreement Year 1 | US$500,000 |
| 12 months from the end of Agreement Year 1 | Agreement Year 2 | US$500,000 |
| 12 months from the end of Agreement Year 2 | Agreement Year 3 | US$500,000 |
| 12 months from the end of Agreement Year 3 | Agreement Year 4 | US$500,000 |
| 12 months from the end of Agreement Year 4 | Agreement Year 5 | US$500,000 |
Within 60 days of acceptance of the first option, Hochschild may elect to undertake a second option to earn an additional 10% (total 70%) in the property by funding a further US$5,000,000 in exploration over 3 years (minimum US$500,000 in exploration per year).
As of June 30, 2020, Hochschild had forwarded a total of $1,320,515 (US$968,972) for the Horsethief property. The Company held $20,975 (US$15,391) on behalf of Hochschild to be spent on the Horsethief property, which is recorded as restricted cash.
Subsequently, Hochschild forwarded $313,460 (US$231,842) for the Horsethief property.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
USA – continued
b)
Bellview (Nevada)
The Bellview property is located in White Pine County Nevada, near the Bald Mountain Gold Mine. A 2% NSR is payable to a previous owner of the property and a 1% NSR is payable to Sandstorm from production from all the claims on the property.
On February 7, 2019 (“Effective Date”), the Company entered into an option agreement with Hochschild whereby Hochschild could earn up to a 70% undivided interest in the Bellview property.
Under the terms of the agreement, Hochschild could earn an initial 60% interest in the project by US$3,500,000 in exploration on the property over a 5.5 year period, with a minimum expenditure as below:
| Period | Defined Term | Minimum Qualifying Expenditure |
|---|---|---|
| 18 months from the Effective Date | Agreement Year 1 | US$100,000 |
| From the end of Agreement Year 1 to 30 months after Effective Date | Agreement Year 2 | US$500,000 |
| From the end of Agreement Year 2 to 42 months after Effective Date | Agreement Year 3 | US$500,000 |
| From the end of Agreement Year 3 to 54 months after Effective Date | Agreement Year 4 | US$500,000 |
Within 60 days of acceptance of the first option, Hochschild may elect to undertake a second option to earn an additional 10% (total 70%) in the property by funding a further US$3,500,000 in exploration over 3 years (minimum US$500,000 in exploration per year).
During the option period, Hochschild had forwarded a total of $118,238 (US$91,036) for the Bellview property.
On November 25, 2019, the Company was informed by Hochschild that Hochschild would terminate the earn-in on the Bellview project. Thus, the Company retains 100% interest in Bellview project.
c)
BP (Nevada)
On June 10, 2013, the Company purchased from Almaden Minerals Ltd. (“Almaden”) the BP property in Nevada, USA. A 2% NSR is payable to Almadex Minerals Limited (“Almadex”) on future production on the property after Almaden transferred the NSR right to Almadex.
In 2017, the Company acquired new ground by staking an additional 48 BLM Iode mining claims at the BP property.
On March 1, 2019 (“Effective Date”), the Company entered into an option agreement with Hochschild whereby Hochschild could earn up to a 70% undivided interest in the Horsethief property.
Under the terms of the agreement, Hochschild could earn an initial 60% interest in the project by US$2,500,000 in exploration on the property over a 4.5 year period, with a minimum expenditure as below:
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
USA – continued
c)
BP (Nevada) - continued
| Period | Defined Term | Minimum Qualifying Expenditure |
|---|---|---|
| 18 months from the Effective Date | Agreement Year 1 | US$100,000 |
| 12 months from the end of Agreement Year 1 | Agreement Year 2 | US$500,000 |
| 12 months from the end of Agreement Year 2 | Agreement Year 3 | US$500,000 |
| 12 months from the end of Agreement Year 3 | Agreement Year 4 | US$500,000 |
Within 60 days of acceptance of the first option, Hochschild may elect to undertake a second option to earn an additional 10% (total 70%) in the property by funding a further US$2,500,000 in exploration over 3 years (minimum US$500,000 in exploration per year).
During the option period, Hochschild had forwarded a total of $179,581 (US$138,267) for the BP property.
On November 25, 2019, the Company was informed by Hochschild that Hochschild would terminate the earn-in on the BP project. Thus, the Company retains 100% interest in BP project.
| June 30, 2020 | September 30, 2019 | |||
|---|---|---|---|---|
| Restricted cash & Funds held for optionee | ||||
| Horsethief - Hochschild | $ | 20,975 | $ | 29,546 |
| $ | 20,975 | $ | 29,546 |
d)
Twin Canyon (Colorado)
On June 17, 2020, the Company acquired a lease of the Twin Canyon gold property in southwest Colorado under the terms as the followings:
·
Make cash payments of US$26,000 to Myron Goldstein and US$32,000 to Jon Thorson (paid) and issue 250,000 shares to Myron Goldstein and 250,000 shares to Jon Thorson (shares issued);
·
500,000 shares on the date that is five business days following the date that the Company, directly or indirectly, stake any mineral claims adjacent to the property;
·
500,000 shares on the date that is five business days following the date that the Company enters into a joint venture, option or similar agreement with a third party in respect of the property; and
·
500,000 shares on the date that is five business days following the date that the Company, directly or indirectly, commence a drill program in respect of the property.
The Company agrees to assume the terms of Myron Goldstein and Jon Thorson commitments under the lease, namely the annual lease payments of US$15,000 for ten years, with the right to extend the lease for 2 additional terms of ten years each.
As of June 30, 2020, the Company had spent $96,853 on advancing this property, including the acquisition costs.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
USA – continued
e)
Others – Ashby (Nevada)
On August 2, 2017, the Company signed an exploration lease agreement to lease the Ashby gold property to Nevada Canyon Gold Corp. (“Nevada Canyon”). Under the terms of the agreement, Nevada Canyon made a US$1,000 payment on signing, will make annual payments of US$2,000 and will grant a 2% Net Smelter Royalty (“NSR”) on future production from the Lazy 1-3 claims comprising the Ashby property. Nevada Canyon will also be responsible for all claim fees and certain reclamation work to be undertaken on the property. The initial term of the lease is 10 years and can be extended for an additional 20 years.
Subsequent to June 30, 2020, Nevada Canyon reimbursed the Company an amount of US$543 for the 2020 annual property claim fee and paid US$2,000 for the 2020 annual payment.
f)
Others – East Walker (Nevada)
The East Walker property is located in Lyon County, west of Hawthorne. A 2% NSR is payable to a previous owner of the property from production on certain claims on the property.
As of June 30, 2020, the Company had spent $24,213 on advancing this property.
Canada
a)
Haldane (Yukon)
On March 2, 2018, the Haldane property was purchased from Equity Exploration Consultants Ltd. (“Equity”), and is located in Yukon Territory, Canada. Equity has a 2% NSR royalty on the Haldane property.
The Company purchased the Haldane property from Equity for the following consideration:
·
issue 2 million shares to Equity upon receipt of TSX-Venture approval (shares issued);
·
make two staged cash payments of $50,000 each to Equity by June 30, 2018 (paid) and June 30, 2019 (paid);
·
make a final $100,000 cash payment or issue the number of shares of equivalent value at the Company’s election, on June 30, 2019 ($25,000 paid and shares of $75,000 issued); and
·
make bonus share payments to Equity:
o
issue 250,000 shares to Equity upon the public disclosure of a Measured Mineral Resource (as such term is defined in National Instrument 43-101- Standards of Disclosure for Mineral Projects) of 5 million oz silver-equivalent at 500g/t silver-equivalent;
o
500,000 shares to be issued upon the decision to commence construction of a mine or processing plant.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
Canada – continued
a)
Haldane (Yukon) - continued
On April 12, 2018, the Company purchased the Nur, Clarkston and Fara claims which are contiguous to and grouped with the Haldane property from the estate of Yukon prospector John Peter Ross (the “Estate”) for the following consideration:
·
issue 100,000 shares to the Estate upon receipt of TSX-Venture approval (shares issued);
·
make cash payment of $10,000 to the Estate by June 30, 2018 (paid);
·
make cash payment of $20,000 (paid) and issue 125,000 shares to the Estate by April 12, 2019 (issued);
·
make cash payment of $20,000 (paid) and issue 125,000 shares to the Estate by April 12, 2020 (issued);
·
make cash payment of $25,000 and issue 150,000 shares to the Estate by April 12, 2021; and
·
make bonus share payments to the Estate as follows:
o
issue 250,000 shares to the Estate upon the public disclosure of a Measured Mineral Resource (as such term is defined in National Instrument 43-101- Standards of Disclosure for Mineral Projects) of 5 million oz silver-equivalent at 500g/t silver-equivalent; and
o
500,000 shares to be issued upon the decision to commence construction of a mine or processing plant.
As of June 30, 2020, the Company had spent $1,605,954 on advancing this property.
b)
KRL (British Columbia)
On September 1, 2018, the Company optioned the KRL property from prospector Bernie Kreft (“Kreft”), and is located in British Columbia’s prolific Golden Triangle, Canada. Kreft has a 1% NSR royalty on the KRL property.
The Company optioned the KRL property from Kreft for the following consideration:
·
make cash payments of $10,000 (paid) and issue 100,000 shares to Kreft upon receipt of TSX-Venture approval (issued);
·
make cash payments of $15,000 to Kreft by October 15, 2018 (paid);
·
make cash payments of $5,000 by October 31, 2019 (paid) and a further $20,000 by January 1, 2020 (paid) and issue 100,000 shares (issued) to Kreft by September 30, 2019;
·
make cash payments of $50,000 and issue 200,000 shares to Kreft by September 30,2020;
·
make cash payments of $50,000 and issue 200,000 shares to Kreft by September 30,2021;
·
make cash payments of $100,000 and issue 200,000 shares to Kreft by September 30,2022;
·
make bonus share payments to Kreft as follows:
o
issue additional shares upon the disclosure of an NI43-101 inferred resource estimate equal to 1 share per ounce of inferred resource, to a maximum of 350,000 shares;
o
500,000 shares to be issued on the commencement of commercial production.
As of June 30, 2020, the Company had spent $180,859 on advancing this property.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
Canada – continued
c)
Tim property (Yukon)
On January 24, 2020, the Company entered into an option agreement with a wholly owned subsidiary of Coeur Mining Inc. (“Coeur”) to explore the Tim property in southern Yukon.
Coeur can earn an 80% interest in the Tim property by (i) financing $3.55-million in exploration over five years and (ii) making scheduled cash payments totalling $575,000 over eight years as follows.
| Date/Period | Expenditures | Option Payment |
|---|---|---|
| On the Effective Date | None | $10,000 (received) |
| On or before 1^st^ anniversary of the Class 1 Notification Date | $50,000 | $15,000 |
| On or before 2^nd^ anniversary of the Class 1 Notification Date | $500,000 | $25,000 |
| On or before 3^rd^ anniversary of the Class 1 Notification Date | $500,000 | $50,000 |
| On or before 4^th^ anniversary of the Class 1 Notification Date | $1,000,000 | $75,000 |
| On or before 5^th^ anniversary of the Class 1 Notification Date | $1,500,000 | $100,000 |
| On or before 6^th^ anniversary of the Class 1 Notification Date | None | $100,000 |
| On or before 7^th^ anniversary of the Class 1 Notification Date | None | $100,000 |
| On or before 8^th^ anniversary of the Class 1 Notification Date | None | $100,000 |
Coeur must also finance a feasibility study and notify the Company of its intention to develop a commercial mine on the property on or before the eighth anniversary from the date of notification of the Class 1 exploration permit.
d)
Others
In 2010, the Company acquired the White River property through staking. The White River property is located in the Yukon Territory, northwest of Whitehorse.
On July 23, 2007, the Company purchased from Almaden certain properties in the Yukon and Almaden assigned the 2% NSR royalty on future production from these mineral claims to Almadex:
·
Goz Creek – located 180 kilometers north east of Mayo, Yukon.
·
MOR – located 35 kilometers east of Teslin, Yukon and is 1.5 kilometers north of the paved Alaska Highway.
On June 10, 2008, the Company signed another agreement with Almaden to acquire a 100% interest in the Prospector Mountain gold-silver-copper property, located in central Yukon. Almaden assigned the 2% NSR over any minerals produced from the property to Almadex. Half of the NSR may be purchased by the Company at any time after the production commences for fair value as determined by an independent valuator. The Company will also issue to Almadex 50,000 fully paid common shares upon receipt of a positive bankable feasibility study for the property.
As of June 30, 2020, the Company had spent $1,199,397 on advancing these properties.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
5.
EXPLORATION AND EVALUATION ASSETS – continued
Peru
On April 29, 2015, the Company acquired the Yanac property which is located in Chincha region of the Department of Ica, south-central Peru.
Yanac
On February 27, 2013, Cliffs Natural Resources Exploration Inc., a wholly owned subsidiary of Cliffs Natural Resources Inc. (“Cliffs”) and the Company’s wholly-owned subsidiary entered into a Limited Liability Company Membership Agreement (“agreement”) in respect of the Yanac property. In December 2015, Cliffs’ interest in Yanac was acquired by 50 King Capital Exploration Inc. (“50 King”), a private company, which took over all previous obligations of Cliffs.
On July 6, 2016, 50 King terminated the agreement, retaining only a 0.5% net smelter royalty (“NSR”) on the Yanac property based on prior expenditures and transferred the ownership of the property back to the Company.
As of June 30, 2020, the Company had spent $429,187 on advancing this property.
Mexico
The Company holds a 1% Net Smelter Royalty on certain Mexican properties which is capped at $1,000,000.
6.
INVESTMENT IN ASSOCIATES – ROYALTY INTEREST
On April 29, 2015, the Company acquired a 36% interest in Pucarana S.A.C. (“Pucarana”), an exploration company in Peru holding the Pucarana property.
On May 22, 2015, Pucarana signed an Assignment Agreement with Compania de Minas Buenaventura S.A.A. (“Buenaventura”) whereby Pucarana assigned to Buenaventura the rights to the Pucarana property. In consideration, Buenaventura granted a 3% NSR royalty to Pucarana that is then distributed as to 60% to Alamos Gold Inc. (1.8% NSR), 36% to the Company (1.08% NSR) and 4% to Gallant Minerals Ltd (0.12% NSR).
Prior to the Company’s investment in Pucarana, the Company had capitalized, as exploration and evaluation assets, $566,782 in exploration and evaluation expenditures incurred on its Pucarana property. This amount, with minor adjustments, has been carried forward as the cost of the Company’s 36% investment. The investment is accounted for using the equity method. To date, no dividends have been received from the associate.
To date, there is no profit or loss from continuing operations. As of September 30, 2019, the Company wrote off $560,139 in investment in associates – royalty interest.
7.
SHARE CAPITAL
a)
Authorized:
As at June 30, 2020, the authorized share capital is comprised of an unlimited number of common shares without par value and an unlimited number of preferred shares issuable in series. All issued shares are fully paid.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
7.
SHARE CAPITAL – continued
b)
Issued:
During the year ended September 30, 2019, the Company:
i)
Completed a non-brokered private placement on December 24, 2018 by issuing 5,000,000 non-flow-through units (“Unit”) at a price of $0.05 per Unit for gross proceeds of $250,000 and 10,203,333 flow-through shares (“FT Share”) at a price of $0.06 per FT Share for gross proceeds of $612,200. Each Unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a 24 month period at a price of $0.10. In connect with the financing, the Company paid $50,760 as a cash finder’s fee and issued 887,250 finder’s warrants, each of which is exercisable into one common share at a price of $0.05 for a period of 12 months. The value of the finder’s warrants was determined to be $30,078 and was calculated using the Black-Scholes option pricing model. Under the residual value approach, no value was assigned to the warrant component of the Units. The Company recorded a flow-through premium liability of $102,034 and incurred additional share issue costs of $36,721 in connection with this financing.
ii)
Issued 125,000 common shares to the Estate at a price of $0.065 per share for a total consideration of $8,125 to pay for the Haldane property (see Note 5).
iii)
Completed a non-brokered private placement on July 9, 2019 by issuing 13,820,000 non-flow-through units (“Unit”) at a price of $0.05 per Unit for gross proceeds of $691,000 and 6,908,333 flow-through shares (“FT Share”) at a price of $0.06 per FT Share for gross proceeds of $414,500. Each Unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a 36 month period at a price of $0.10. In connect with the financing, the Company paid $55,050 as a cash finder’s fee and issued 1,007,125 finder’s warrants, each of which is exercisable into one common share at a price of $0.05 for a period of 12 months. The value of the finder’s warrants was determined to be $33,738 and was calculated using the Black-Scholes option pricing model. Under the residual value approach, no value was assigned to the warrant component of the Units. The Company recorded a flow-through premium liability of $69,083 and incurred additional share issue costs of $56,659 in connection with this financing.
iv)
Issued 1,136,363 common shares to the Equity at a price of $0.066 per share for a total consideration of $75,000 to pay for the Haldane property (see Note 5).
v)
Issued 100,000 common shares to Kreft at a price of $0.065 per share for a total consideration of $6,500 to pay for the KRL property (see Note 5).
During the nine months ended June 30, 2020, the Company:
vi)
Completed a non-brokered private placement on February 25, 2020 by issuing 22,000,000 units (“Unit”) at a price of $0.05 per Unit for gross proceeds of $1,100,000. Each Unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a 36 month period at a price of $0.10. In connect with the financing, the Company paid $50,100 as a cash finder’s fee and issued 1,002,000 finder’s warrants, each of which is exercisable into one common share at a price of $0.05 for a period of 12 months. The value of the finder’s warrants was determined to be $32,665 and was calculated using the Black-Scholes option pricing model. Under the residual value approach, no value was assigned to the warrant component of the Units. The Company incurred additional share issue costs of $28,785 in connection with this financing.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
7.
SHARE CAPITAL – continued
b)
Issued: - continued
vii)
Issued 125,000 common shares to the Estate at a price of $0.09 per share for a total consideration of $11,250 to pay for the Haldane property (see Note 5).
viii)
Issued common shares pursuant to the exercise of 805,875 finder’s warrants for cash proceeds of $40,294.
8.
STOCK OPTIONS AND WARRANTS
a)
Stock option compensation plan
The Company grants stock options to directors, officers, employees and consultants pursuant to the Company’s Stock Option Plan (the “Plan”). The number of options that may be issued pursuant to the Plan are limited to 10% of the Company’s issued and outstanding common shares and to other restrictions with respect to any single participant (not greater than 5% of the issued common shares) or any one consultant (not greater than 2% of the issued common shares).
Options granted to consultants performing investor relations activities will contain vesting provisions such that vesting occurs over at least 12 months with no more than one quarter of the options vesting in any 3 month period.
Vesting provisions may also be applied to other option grants, at the discretion of the directors. Options issued pursuant to the Plan will have an exercise price as determined by the directors, and permitted by the TSX-V, at the time of the grant. Options have a maximum expiry date of 5 years from the grant date.
Stock option transactions and the number of stock options for the nine months ended June 30, 2020 are summarized as follows:
| Expiry date | Exercise price | September 30,<br><br><br>2019 | Granted | Exercised | Expired / cancelled | June 30,<br><br>2020 |
|---|---|---|---|---|---|---|
| April 29, 2020 | $0.25 | 1,264,500 | - | - | (1,264,500) | - |
| April 29, 2021 | $0.25 | 100,000 | - | - | - | 100,000 |
| September 30, 2021 | $0.15 | 1,270,000 | - | - | (25,000) | 1,245,000 |
| March 14, 2023 | $0.10 | 850,000 | - | - | (10,000) | 840,000 |
| July 30, 2024 * | $0.10 | 2,015,000 | - | - | (40,000) | 1,975,000 |
| Options outstanding | 5,499,500 | - | - | (1,339,500) | 4,160,000 | |
| Options exercisable | 5,499,500 | - | - | (1,339,500) | 4,160,000 | |
| Weighted average exercise price | $0.15 | $Nil | $Nil | $0.24 | $0.12 |
*Subsequently, 250,000 options were exercised.
As at June 30, 2020, the weighted average contractual remaining life of options is 2.88 years (September 30, 2019 – 2.93 years). The weighted average fair value of stock options granted during the nine months ended June 30, 2020 was $Nil (2018 - $Nil).
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
8.
STOCK OPTIONS AND WARRANTS – continued
a)
Stock option compensation plan - continued
Stock option transactions and the number of stock options for the year ended September 30, 2019 are summarized as follows:
| Expiry date | Exercise price | September 30,<br><br><br>2018 | Granted | Exercised | Expired / cancelled | September 30,<br><br>2019 |
|---|---|---|---|---|---|---|
| February 25, 2019 | $0.25 | 22,500 | - | - | (22,500) | - |
| April 29, 2020 | $0.25 | 1,264,500 | - | - | - | 1,264,500 |
| April 29, 2021 | $0.25 | 100,000 | - | - | - | 100,000 |
| September 30, 2021 | $0.15 | 1,270,000 | - | - | - | 1,270,000 |
| March 14, 2023 | $0.10 | 850,000 | - | - | - | 850,000 |
| July 30, 2024 | $0.10 | - | 2,015,000 | - | - | 2,015,000 |
| Options outstanding | 3,507,000 | 2,015,000 | - | (22,500) | 5,499,500 | |
| Options exercisable | 3,507,000 | 2,015,000 | - | (22,500) | 5,499,500 | |
| Weighted average exercise price | $0.18 | $0.10 | $Nil | $0.25 | $0.15 |
The weighted average assumptions used to estimate the fair value of options for the nine months ended June 30, 2020 and 2019 were as follows:
| June 30, 2020 | June 30, 2019 | |
|---|---|---|
| Risk-free interest rate | n/a | n/a |
| Expected life | n/a | n/a |
| Expected volatility | n/a | n/a |
| Expected dividend yield | n/a | n/a |
b)
Warrants
The continuity of warrants for the nine months ended June 30, 2020 is as follows:
| Expiry date | Exercise price | September 30,<br><br><br>2019 | Issued | Exercised | Expired | June 30,<br><br><br>2020 |
|---|---|---|---|---|---|---|
| March 6, 2020 | $0.20 | 2,500,000 | - | - | (2,500,000) | - |
| March 8, 2020 | $0.15 | 7,221,875 | - | - | (7,221,875) | - |
| April 7, 2020 | $0.15 | 3,255,000 | - | - | (3,255,000) | - |
| April 25, 2020 | $0.15 | 5,000,000 | - | - | (5,000,000) | - |
| August 16, 2020 * | $0.20 | 892,857 | - | - | - | 892,857 |
| December 24, 2020 | $0.10 | 5,000,000 | - | - | - | 5,000,000 |
| July 9, 2022 ** | $0.10 | 13,820,000 | - | - | - | 13,820,000 |
| February 25, 2023 | $0.10 | - | 22,000,000 | - | - | 22,000,000 |
| Outstanding | 37,689,732 | 22,000,000 | - | (17,976,875) | 41,712,857 | |
| Weighted average exercise price | $0.13 | $0.05 | $Nil | $Nil | $0.10 |
*Subsequently, 892,857 warrants expired unexercised.
**Subsequently, 420,000 warrants were exercised.
As at June 30, 2020, the weighted average contractual remaining life of warrants is 2.13 years (September 30, 2019 – 1.44 years).
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
8.
STOCK OPTIONS AND WARRANTS – continued
b)
Warrants - continued
The continuity of warrants for the year ended September 30, 2019 is as follows:
| Expiry date | Exercise price | September 30,<br><br><br>2018 | Issued | Exercised | Expired | September 30,<br><br>2019 |
|---|---|---|---|---|---|---|
| September 28, 2019 | $0.20 | 1,200,000 | - | - | (1,200,000) | - |
| March 6, 2020 | $0.20 | 2,500,000 | - | - | - | 2,500,000 |
| March 8, 2020 | $0.15 | 7,221,875 | - | - | - | 7,221,875 |
| April 7, 2020 | $0.15 | 3,255,000 | - | - | - | 3,255,000 |
| April 25, 2020 | $0.15 | 5,000,000 | - | - | - | 5,000,000 |
| August 16, 2020 | $0.20 | 892,857 | - | - | - | 892,857 |
| December 24, 2020 | $0.10 | - | 5,000,000 | - | - | 5,000,000 |
| July 9, 2022 | $0.10 | - | 13,820,000 | - | - | 13,820,000 |
| Outstanding | 20,069,732 | 18,820,000 | - | (1,200,000) | 37,689,732 | |
| Weighted average exercise price | $0.16 | $0.10 | $Nil | $0.20 | $0.13 |
c)
Finder’s warrants
The continuity of finder’s warrants for the nine months ended June 30, 2020 is as follows:
| Expiry date | Exercise<br><br><br>price | September 30,<br><br><br>2019 | Issued | Exercised | Expired | June 30,<br><br><br>2020 |
|---|---|---|---|---|---|---|
| December 24, 2018 | $0.05 | 887,250 | - | - | (887,250) | - |
| April 25, 2020 | $0.10 | 240,000 | - | - | (240,000) | - |
| July 9, 2020 * | $0.05 | 1,007,125 | - | (805,875) | - | 201,250 |
| August 16, 2020 ** | $0.14 | 26,100 | - | - | - | 26,100 |
| February 25, 2021 *** | $0.05 | - | 1,002,000 | - | - | 1,002,000 |
| Outstanding | 2,160,475 | 1,002,000 | (805,875) | (1,127,250) | 1,229,350 | |
| Weighted average<br><br><br>exercise price | $0.06 | $0.10 | $0.05 | $0.06 | $0.05 |
*Subsequently, 201,250 finder’s warrants were exercised.
**Subsequently, 26,100 warrants expired unexercised.
***Subsequently, 35,100 finder’s warrants were exercised.
As at June 30, 2020, the weighted average contractual remaining life of finder’s warrants is 0.54 years (September 30, 2019 – 0.53 years).
The continuity of finder’s warrants for the year ended September 30, 2019 is as follows:
| Expiry date | Exercise<br><br><br>price | September 30,<br><br><br>2018 | Issued | Exercised | Expired | September 30,<br><br><br>2019 |
|---|---|---|---|---|---|---|
| December 24, 2018 | $0.05 | - | 887,250 | - | - | 887,250 |
| April 25, 2020 | $0.10 | 240,000 | - | - | - | 240,000 |
| August 16, 2020 | $0.14 | 26,100 | - | - | - | 26,100 |
| July 9, 2020 | $0.05 | - | 1,007,125 | - | - | 1,007,125 |
| Outstanding | 266,100 | 1,894,375 | - | - | 2,160,475 | |
| Weighted average<br><br><br>exercise price | $0.10 | $0.05 | $Nil | $Nil | $0.06 |
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
8.
STOCK OPTIONS AND WARRANTS – continued
c)
Finder’s warrants – continued
The weighted average assumptions used to estimate the fair value of finder’s warrants for the nine months ended June 30, 2020 and 2019 were as follows:
| June 30, 2020 | June 30, 2019 | |
|---|---|---|
| Risk-free interest rate | 1.58% | 1.96% |
| Expected life | 1 year | 1 year |
| Expected volatility | 110.77% | 96.79% |
| Expected dividend yield | nil | nil |
9.
RELATED PARTY TRANSACTIONS
The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:
| For the nine months ended June 30, 2020 | ||||||
|---|---|---|---|---|---|---|
| Short-term<br><br><br>employee<br><br><br>benefits | Post-<br><br><br>employment<br><br><br>benefits | Other long-<br><br><br>term benefits | Termination<br><br><br>benefits | Share-based<br><br><br>payments | Total | |
| Jason Weber<br><br><br>Chief Executive Officer,<br><br><br>Director | $ 108,000 | $ Nil | $ Nil | $ Nil | $ Nil | $ 108,000 |
| For the nine months ended June 30, 2019 | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| Short-term<br><br><br>employee<br><br><br>benefits | Post-<br><br><br>employment<br><br><br>benefits | Other long-<br><br><br>term benefits | Termination<br><br><br>benefits | Share-based<br><br><br>payments | Total | |
| Jason Weber<br><br><br>Chief Executive Officer,<br><br><br>Director | $ 90,000 | $ Nil | $ Nil | $ Nil | $ Nil | $ 90,000 |
Related party transactions and balances
| Nine months ended | Balance due | ||||
|---|---|---|---|---|---|
| Services | June 30,<br><br><br>2020 | June 30,<br><br><br>2019 | As at<br><br><br>June 30,<br><br><br>2020 | As at<br><br><br>September 30,<br><br><br>2019 | |
| Amounts due to: | |||||
| Jason Weber | Consulting fee and<br><br><br>share-based payment | $ 108,000 | $ 90,000 | $ Nil | $ 7,536 |
| Pacific Opportunity<br><br><br>Capital Ltd. ^(a)^ | Accounting, financing and shareholder<br><br><br>communication<br><br><br>services | $ 173,030 | $ 148,860 | $ 278,931 | $ 318,901 |
| TOTAL: | $ 281,030 | $ 238,860 | $ 278,931 | $ 326,437 |
(a)
The president of Pacific Opportunity Capital Ltd., a private company, is a director of the Company.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
10.
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
The significant non-cash investing and financing transactions during the nine months ended June 30, 2020 were as follows:
·
As at June 30, 2020, a total of $220,552 in exploration and evaluation asset costs was included in accounts payable and accrued liabilities;
·
As at June 30, 2020, a total of $57,750 in share issues costs was included in due to related parties;
·
The Company recorded $32,665 in share issue costs related to the issue of finder’s warrants pursuant to the private placement financing completed;
·
The Company recorded $11,250 in share capital related to the issue of common shares pursuant to the acquisition of exploration and evaluation assets;
·
The Company recorded $26,997 in share capital related to the issue of common shares pursuant to the exercise of finder’s warrants; and
·
The Company recorded $310,499 in prepaid expenses related to exploration and evaluation assets.
The significant non-cash investing and financing transactions during the nine months ended June 30, 2019 were as follows:
·
As at June 30, 2019, a total of $196,743 in exploration and evaluation asset costs was included in accounts payable and accrued liabilities;
·
As at June 30, 2019, a total of $27,500 in deferred financing costs and a total of $51,000 in share issue costs was included in due to related parties;
·
The Company recorded $30,078 in share issue costs related to the issue of finder’s warrants pursuant to the private placement financing completed;
·
The Company recorded $8,125 in share capital related to the issue of common shares pursuant to the acquisition of exploration and evaluation assets; and
·
The Company recorded $51,458 in prepaid expenses related to exploration and evaluation assets.
11.
SEGMENTED INFORMATION
The Company has one reportable operating segment, that being the acquisition and exploration of mineral properties. Geographical information is as follows:
| June 30, 2020 | September 30, 2019 | |||
|---|---|---|---|---|
| Non-current assets | ||||
| USA | $ | 611,779 | $ | 531,083 |
| Peru | 472,913 | 468,515 | ||
| Canada | 2,976,459 | 2,772,474 | ||
| $ | 4,061,151 | $ | 3,772,072 |
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
12.
FINANCIAL INSTRUMENTS
The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, market risk and commodity price risk.
(a)
Currency risk
The Company’s property interests in Peru and USA make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks. The Company’s exploration program, some of its general and administrative expenses and financial instruments denoted in a foreign currency are exposed to currency risk. A 10% change in the Peruvian nuevo sol and US dollar over the Canadian dollar would change the results of operations by approximately $3,500.
(b)
Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to the liquidity of its cash. The Company limits exposure to credit risk by maintaining its cash with a large Canadian financial institution.
i.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company’s holdings of cash. The Company does not have sufficient cash to settle its current liabilities, and further funding will be required to meet the Company’s short-term and long-term operating needs. The Company manages liquidity risk through the management of its capital structure.
Accounts payable and accrued liabilities are due within the current operating period.
ii.
Market risk
Market risks to which the Company is exposed include unfavorable movements in commodity prices, interest rates, and foreign exchange rates. As at June 30, 2020, the Company has no producing assets and holds the majority of its cash in secure, Canadian dollar-denominated deposits. Consequently, its exposure to these risks has been significantly reduced, but as the Company redeploys its cash, exposure to these risks may increase. The objective of the Company is to mitigate exposure to these risks while maximizing returns.
(d)
Market risk
The Company may from time-to-time own available-for-sale marketable securities, in the mineral resource sector. Changes in the future pricing and demand of commodities can have a material impact on the market value of the investments. The nature of such investments is normally dependent on the invested company being able to raise additional capital to further develop and to determine the commercial viability of its resource properties. Management mitigates the risk of loss resulting from this concentration by monitoring the trading value of the investments on a regular basis.
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
12.
FINANCIAL INSTRUMENTS – continued
(d)
Market risk - continued
i)
Interest rate risk
As at June 30, 2020, the Company’s exposure to movements in interest rates was limited to potential decreases in interest income from changes to the variable portion of interest rates for its cash. Market interest rates in Canada are at historically low levels, so management does not consider the risk of interest rate declines to be significant, but should such risks increase the Company may mitigate future exposure by entering into fixed-rate deposits. A 1% change in the interest rate, with other variables unchanged, would not significantly affect the Company.
ii)
Foreign exchange risk
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company may maintain cash and other financial instruments, or may incur revenues and expenditures in currencies other than the Canadian dollar. Significant changes in the currency exchange rates between the Canadian dollar relative to these foreign currencies, which may include but are not limited to US dollars and Peruvian nuevo sol, could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations.
(e)
Commodity price risk
The ability of the Company to develop its mineral properties and the future profitability of the Company are directly related to the market price of minerals such as gold, zinc, lead and copper. The Company’s input costs are also affected by the price of fuel. The Company closely monitors mineral and fuel prices to determine the appropriate course of action to be taken by the Company.
IFRS 7 establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy.
| As at June 30, 2020 | Level 1 | Level 2 | Level 3 | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Assets: | ||||||||
| Cash | $ | 525,362 | $ | - | $ | - | $ | 525,362 |
| Restricted cash | 20,975 | - | - | 20,975 | ||||
| As at September 30, 2019 | Level 1 | Level 2 | Level 3 | Total | ||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Assets: | ||||||||
| Cash | $ | 322,984 | $ | - | $ | - | $ | 322,984 |
| Restricted cash | 29,546 | - | - | 29,546 |
ALIANZA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited, presented in Canadian Dollars)
13.
MANAGEMENT OF CAPITAL RISK
The Company considers items included in shareholders’ equity as capital. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its mineral properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents.
In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.
In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company’s approach to managing capital remains unchanged from the year ended September 30, 2019.
14.
CONTINGENT LIABILITIES
As a result of the administrative practices with respect to mining taxation in Mexico, there can be significant uncertainty, in regards to when, or if, taxes are payable and the amount that may ultimately be payable. As at September 30, 2015, Mexican claim taxes totalling approximately $766,000 had been levied. Of this amount, $563,000 ($193,000 for 2014 and $370,000 for 2015) related to properties that were held by Minera Tarsis, S.A. de C.V., which the Company had applied to wind up, and $203,000 ($63,000 for 2014 and $140,000 for 2015) related to properties being acquired. On February 16, 2016, the Company sold all its Mexican properties, Yago, Mezquites and San Pedro, to Almadex, and reduced the claim taxes to $173,783. These taxes will never be paid in full and any amount that will, or might, be payable cannot realistically be determined at this time. Accordingly, these taxes have been disclosed as a contingent liability, and not recognized as a liability or provision.
15.
EVENTS AFTER THE REPORTING PERIOD
Subsequently, the Company issued 906,350 common shares pursuant to the exercised 250,000 options, 236,350 finder’s warrants and 420,000 warrants for cash proceeds of $78,818.
Alianza MD&A
![[alianzajune2020mda001.jpg]](alianzajune2020mda001.jpg)
ALIANZA MINERALS LTD.
MANAGEMENT’S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS
FOR THE NINE MONTHS ENDED JUNE 30, 2020
OVERVIEW AND INTRODUCTORY COMMENT
Alianza Minerals Ltd. (“Alianza” or the “Company”) is a growth-oriented junior exploration and development company listed on the TSX Venture Exchange under the trading symbol “ANZ”. The Company is a prospect generator focused on the Americas, particularly the Cordilleran regions that characterize western North and South America. As a prospect generator, the goal of Alianza is to acquire mineral exploration and evaluation assets (Mineral Properties) on attractive terms, add value through early stage exploration and then vend or option some or all of a value-added Mineral Property to a third party explorer for further advancement. The Company has properties in Nevada USA, Yukon and British Columbia Canada, and Peru. The Company also has a 1% NSR (capped at $1,000,000) on certain properties in Mexico.
This MD&A is dated August 18, 2020 and discloses specified information up to that date. Unless otherwise noted, all currency amounts are expressed in Canadian dollars. The following information should be read in conjunction with the unaudited condensed consolidated interim financial statements and the related notes for the nine months ended June 30, 2020 and the Company’s audited consolidated financial statements for the year ended September 30, 2019 and the related notes thereto.
Additional information relevant to the Company and the Company’s activities can be found on SEDAR at www.sedar.com, and/or on the Company’s website at www.alianzaminerals.com.
MAJOR INTERIM PERIOD OPERATING MILESTONES
Horsethief, Nevada, USA
On October 30, 2019, the Company reported the results of 2019 fieldwork at the Horsethief gold property. A detailed mapping program was conducted on the property and surrounding area to refine property stratigraphy, identify new targets and prioritize targets for drilling. Highlights of the program include the discovery of new gold-bearing jasperoid, the identification of favourable carbonate host stratigraphy, and the mapping of alteration and structural features that may act as pathways for gold-bearing fluids at Horsethief. Based on the results of the field program, the property was expanded.
On January 20, 2020, the Company announced that the planning was under way for drilling at the Horsethief property, with financing from partner Hochschild Mining (“Hochschild”). Drilling will target disseminated gold mineralization near the contact of Cambrian-aged and Ordovician-aged rocks -- an important age that hosts large gold deposits elsewhere in Nevada, such as the Long Canyon mine. Prior to drilling, an induced polarization and magnetic survey, slated to start in February, will investigate the new claims added to the property subsequent to the completion of the 2019 program. These claims were acquired in light of the discovery of gold-bearing jasperoid alteration in carbonate rocks east of the property.
On April 20, 2020, the Company reported that the Caliente, Nevada Field Office of United States Bureau of Land Management for the Ely District, Nevada has accepted the amended Notice of Intent (“NOI”) for the Company’s proposed reverse-circulation (“RC”) drilling program at the Horsethief Gold Property, Nevada. The current NOI was updated to reflect the expansion of the program to 3,000 metres in ten holes from the 1,500 metres in the original NOI.
On June 1, 2020, the Company reported that the RC drilling program at the Horsethief Gold Property had commenced.
On July 2, 2020 and July 17, 2020, the Company reported that crews had completed six holes totalling 1,770 metres (5,805 feet) of RC drilling.
The Company also mobilized a geophysical crew to conduct approximately 20 line-kilometres of magnetics and 5 line-kilometres of Induced Polarization (IP) survey, extending the existing survey coverage. This work was undertaken to investigate newly acquired claims that were not included in the original survey.
On August 6, 2020, the Company reported that the 2020 RC drilling program at the Horsethief Gold Property had been completed. Ten widely-spaced holes totalling 2,804 metres were completed, testing five target areas over 3.5 square kilometres.
Gold assays have been received for the first three holes of the program, with the remaining seven holes in process. These three holes confirmed the presence of favorable host stratigraphy, alteration, and/or anomalous gold mineralization at the Horsethief North (20HT-001 and 002) and the Horsethief South (20HT-003) targets. Both targets received exploratory drilling in the early 1980’s. All three holes were collared in Ordovician limestone or dolomite and were drilled deep enough to test Cambrian limestones and dolostones. Anomalous gold values were intersected in the upper sections of 20HT-001 and 003 predominantly from intervals of silicification, jasperoid, hematitic brecciation, and karst or fault fill within limestones. .
The remaining 7 holes explore untested targets in the Thoroughbred (20HT-010), Horsethief South (20HT-004, 20HT-005) and extensions eastward of the primary carbonate window under volcanic cover (Mustang) towards the recently identified Stallion target (20HT-006, 20HT-007, 20HT-008 and 20HT-009). Drill holes intersected favorable carbonate stratigraphy beneath volcanic cover, confirming the continuity of the carbonate stratigraphy east of the main carbonate window.
Multi-element geochemical results are pending and gold results from the remaining holes are not expected before mid-August.
BP & Bellview, Nevada, USA
On November 26, 2019, the Company was informed by Hochschild that Hochschild would terminate the earn-in on the BP & Bellview projects. Thus, the Company retains 100% interest in both the BP & Bellview projects.
On January 20, 2020, Alianza announced that it was planning mapping and sampling programs at its BP and Bellview properties in the southern extension of the Carlin trend and in the vicinity of the Bald Mountain gold mine. At BP, work will focus on refining the carbonate stratigraphy on the property to focus further exploration. At Bellview, work will concentrate on the CS showing. In both cases, the 2020 fieldwork will be completed in order to upgrade the properties for potential option/joint venture partnerships.
Given the situation with the Covid-19 pandemic, the Company continues its planning work. As soon as the local government declares that work can be performed at the properties, the Company will start the programs, with extra health and safety measures to ensure the crews can perform the work safely.
Twin Canyon, Colorado, USA
On June 17, 2020, the Company acquired a lease of the Twin Canyon gold property in southwest Colorado under the terms as the followings:
·
Make cash payments of US$26,000 to Myron Goldstein and US$32,000 to Jon Thorson (paid) and issue 250,000 shares to Myron Goldstein and 250,000 shares to Jon Thorson (shares issued);
·
500,000 shares on the date that is five business days following the date that the Company, directly or indirectly, stake any mineral claims adjacent to the property;
·
500,000 shares on the date that is five business days following the date that the Company enters into a joint venture, option or similar agreement with a third party in respect of the property; and
·
500,000 shares on the date that is five business days following the date that the Company, directly or indirectly, commence a drill program in respect of the property.
The Company agrees to assume the terms of Myron Goldstein and Jon Thorson commitments under the lease, namely the annual lease payments of US$15,000 for ten years, with the right to extend the lease for 2 additional terms of ten years each.
Twin Canyon hosts disseminated gold mineralization that has been recognized since the 1950s. The property is located 20 km from the town of Mancos, Colorado.
Gold mineralization at Twin Canyon is hosted within bleached, friable sandstone of the Junction Creek Sandstone. Gold occurs near the crest of an anticline in the upper portion of the Junction Creek unit, under a cap of Morrison Formation sandstones and shale. Where gold mineralization is present, the host sandstone unit is bleached and spotted with bitumen and small amounts limonite after pyrite. Optical and microprobe work carried out on mineralized samples indicate a direct gold – bitumen association raising the novel possibility that the mineralizing process at Twin Canyon is driven by those associated with petroleum basin development. More discussion on the historical work done on the Twin Canyon properly can be found in the Company’s news release on June 24, 2020.
The Company will expand the soil geochemical coverage with a 200-sample survey to assess the potential for additional gold mineralization in the Junction Creek sandstone and prioritize targets for follow-up. This program has commenced.
Haldane, Yukon Territory, Canada
On October 22, 2019, the Company reported that drilling at the Haldane silver property has confirmed the presence of new silver-bearing vein targets at the Bighorn Zone. The first two holes of the program tested the Ross and Bighorn soil geochemical anomalies, neither of which has been previously tested by drilling. Highlights of the first hole at the Bighorn Anomaly include 125 g/t Ag and 4.4% Pb over 2.35 metres from 154.15 metres depth. Additional assay results are pending for the two additional holes drilled at the Mt. Haldane Vein System (MHVS) area and will be reported next.
On November 1, 2019, the Company reported that the remaining two holes were drilled at the Middlecoff zone at the Mt Haldane Vein System, targeting high-grade silver mineralization found in historic underground workings. Highlights include a 1.02 metre sample within the Middlecoff Zone that assayed 455.0 g/t silver in HLD19-16 from a broader 10.66 metre section that averaged 125.6 g/t silver. A separate intersection returned 996 g/t silver, 1.486 g/t gold and 28.35% lead over 0.35 metres. These results follow the recent confirmation of a second target area at the Bighorn Zone, three kilometres east of the Middlecoff Zone.
On January 20, 2020, the Company announced that the Haldane property would be the second property Alianza planned to test with drilling in 2020. This program will follow up the 2019 drill program, which resulted in the discovery of a new high-grade silver target at the Bighorn zone, as well as following up high-grade silver mineralization intersected in drilling at the Middlecoff zone. The results of the 2019 program are being compiled, and detailed planning for 2020 will commence once that work is complete.
Given the situation with the Covid-19 pandemic, the Company does not have a precise start date and continues its planning work in the meantime. As soon as the local government declares that work can be performed at the property, the Company will start the program, with extra health and safety measures to ensure the crews can perform the work safely.
KRL, British Columbia, Canada
On December 12, 2019, the Company released results of the 2019 exploration program at the KRL gold property, located in British Columbia's prolific Golden Triangle. This program consisted of mapping, prospecting, and rock and soil geochemical sampling in order to provide context and guide further exploration in the vicinity of the high-grade KRL gold showing. The 2019 program identified a potential corridor to host high-grade gold mineralization (Alianza highlights include 122.8 grams per tonne gold over 30 centimetres).
On January 20, 2020, the Company announced that it was also planning a follow-up program at the KRL gold property. The 2020 program will consist of detailed mapping of this target to assess the potential for additional high-grade gold veins and to prioritize targets for drilling.
Given the situation with the Covid-19 pandemic, the Company is currently working on its planning work. As soon as the local government declares that work can be performed at the property, the Company will start the program, with extra health and safety measures to ensure the crews can perform the work safely.
Tim, Yukon Territory, Canada
On January 27, 2020, the Company announced that it signed an option agreement with a wholly owned subsidiary of Coeur Mining Inc. (“Coeur”) to explore the road-accessible Tim property in southern Yukon. Exploration at Tim property is targeting high-grade silver-lead mineralization similar to that being mined by Coeur at its Silvertip operation, located 12 kilometres south of the Tim property.
Highlights:
·
High-grade silver mineralization in historic trenches;
·
Detailed mapping, trenching and soils program for 2020;
·
Tim property is 12 kilometres from Coeur's Silvertip mine.
Coeur can earn an 80% interest in the Tim property by (i) financing $3.55-million in exploration over five years and (ii) making scheduled cash payments totalling $575,000 over eight years as follows:
| Date/Period | Expenditures | Option Payment |
|---|---|---|
| On the Effective Date | None | $10,000 (received) |
| On or before 1^st^ anniversary of the Class 1 Notification Date | $50,000 | $15,000 |
| On or before 2^nd^ anniversary of the Class 1 Notification Date | $500,000 | $25,000 |
| On or before 3^rd^ anniversary of the Class 1 Notification Date | $500,000 | $50,000 |
| On or before 4^th^ anniversary of the Class 1 Notification Date | $1,000,000 | $75,000 |
| On or before 5^th^ anniversary of the Class 1 Notification Date | $1,500,000 | $100,000 |
| On or before 6^th^ anniversary of the Class 1 Notification Date | None | $100,000 |
| On or before 7^th^ anniversary of the Class 1 Notification Date | None | $100,000 |
| On or before 8^th^ anniversary of the Class 1 Notification Date | None | $100,000 |
Coeur must also finance a feasibility study and notify Alianza of its intention to develop a commercial mine on the property on or before the eighth anniversary from the date of the Class 1 Notification regarding the exploration permit.
The 2020 exploration program at Tim property is expected to target high-grade silver-lead-zinc carbonate replacement mineralization (CRM), similar to that found at Coeur's Silvertip operation. Coeur's tentative exploration plans are in line with those announced by Alianza on January 20, 2020 and will consist of detailed mapping, soil geochemical surveys and reopening old trenches, which date back to 1988.
Corporate
On August 1, 2020, the Company appointed Rob Duncan as Vice President, Exploration.
INTERIM PERIOD FINANCIAL CONDITION
Capital Resources
On February 25, 2020, the Company closed a financing for $1,100,000 (22,000,000 units) to further advance its projects in British Columbia, Yukon, Nevada and Peru. Each unit comprises one common share and one common share purchase warrant at $0.05 per unit. The warrant is valid for three years until February 25, 2023 and is exercisable at $0.10 to acquire one common share. The Company paid $50,100 as cash finder’s fee and issued 1,002,000 finder’s warrants, each of which is exercisable into one common share at a price of $0.05 for a period of 12 months. The value of the finder’s warrants was determined to be $32,665.
On June 3, 2020, the Company issued 125,000 common shares as part of the acquisition cost for the claims contiguous to the Haldane property
During the nine months ended June 30, 2020, the Company issued common shares pursuant to the exercise of 805,875 finder’s warrants for cash proceeds of $40,294.
Subsequent to June 30, 2020, the Company issued 906,350 common shares pursuant to the exercised 250,000 options, 236,350 finder’s warrants and 420,000 warrants for cash proceeds of $78,818.
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.
The Company is aware of the current conditions in the financial markets and has planned accordingly. The Company’s current treasury and the future cash flows from equity issuances and the potential exercise of warrants, finders’ warrants and options, along with the planned developments within the Company will allow its efforts to continue throughout 2020. If the market conditions prevail or improve, the Company will make adjustment to budgets accordingly.
Liquidity
As at June 30, 2020, the Company had working capital of $28,363 (September 30, 2019 – $29,118). As at June 30, 2020, $525,362 was held in cash (September 30, 2019 - $322,984) and $20,975 was held in restricted cash (September 30, 2019 - $29,546). The total increase of $193,807 was due to: (a) net proceeds from the private placement of $1,007,614; (b) net proceeds from the exercise of finder’s warrants of $40,294; while being offset by (c) net exploration and expenditures assets expenditures of $306,772; and (d) operating activities of $542,812.
Operations
For the three months ended June 30, 2020 compared with the three months ended June 30, 2019:
Excluding the non-cash depreciation of $47 (2019 - $103), the Company’s general and administrative expenses amounted to $167,350 (2019 - $82,114), an increase of $85,236. The change in the expenses was mainly due to increases in: (a) accounting and legal fees (2020 - $64,002; 2019 - $34,475) and (b) investor relations and shareholder information (2020 - $57,235; 2019 - $3,869) as the Company has been active in promoting to its shareholders and potential investors regarding the Company’s operating activities as well as its exploration programs on its properties, either funded by the partners or the Company itself.
The other major item for the three months ended June 30, 2020, compared with June 30, 2019, was:
·
Management fees of $79,179 (2019 - $nil) as the Company is entitled to administrative and overhead fee as the operator of Horsethief Project.
For the nine months ended June 30, 2020 compared with the nine months ended June 30, 2019:
Excluding the non-cash depreciation of $140 (2019 - $309), the Company’s general and administrative expenses amounted to $868,136 (2019 - $294,836), an increase of $573,300. The change in the expenses was mainly due to increases in: (a) investor relations and shareholder information (2020 - $470,128; 2019 - $25,462); (b) accounting and legal fees (2020 - $181,788; 2019 - $120,473) and (c) wages, benefits and consulting fees (2020 - $122,070; 2019 - $96,517) as the Company has been active in promoting to its shareholders and potential investors regarding the Company’s operating activities as well as its exploration programs on its properties, either funded by the partners or the Company itself.
The other major item for the nine months ended June 30, 2020, compared with June 30, 2019, was:
·
Management fees of $79,179 (2019 - $nil) as the Company is entitled to administrative and overhead fee as the operator of Horsethief Project.
SIGNIFICANT RELATED PARTY TRANSACTIONS
During the quarter, there was no significant transaction between related parties.
COMMITMENTS, EXPECTED OR UNEXPECTED, OR UNCERTAINTIES
As a result of the administrative practices with respect to mining taxation in Mexico, there can be significant uncertainty, in regards to when, or if, taxes are payable and the amount that may ultimately be payable. As at September 30, 2015, Mexican claim taxes totaling approximately $766,000 had been levied. Of this amount, $563,000 relates to properties that were held by Minera Tarsis, S.A. de C.V., which the Company has applied to wind up, and $203,000 relates to properties being acquired. On February 16, 2016, the Company sold all its Mexican properties to Almadex, and reduced the claim taxes to $173,783. These taxes will never be paid in full and any amount that will, or might, be payable cannot realistically be determined at this time. Accordingly, these taxes have been disclosed as a contingent liability, and not recognized as a liability or provision.
As of the date of the MD&A, the Company has no outstanding commitments.
Other than disclosed in this MD&A – Quarterly Highlights, the Company does not have any commitments, expected or unexpected, or uncertainties.
RISK FACTORS
In our MD&A filed on SEDAR January 17, 2020 in connection with our annual financial statements (the “Annual MD&A”), we have set out our discussion of the risk factors Exploration risks, Market risks and Financing risk which we believe are the most significant risks faced by Alianza. An adverse development in any one risk factor or any combination of risk factors could result in material adverse outcomes to the Company’s undertakings and to the interests of stakeholders in the Company including its investors. Readers are cautioned to take into account the risk factors to which the Company and its operations are exposed. To the date of this document, there have been no significant changes to the risk factors set out in our Annual MD&A.
DISCLOSURE OF OUTSTANDING SHARE DATA
The authorized share capital of the Company consists of an unlimited number of common shares without par value. The following is a summary of the Company’s outstanding share data as at June 30, 2020:
| Issued and Outstanding | ||
|---|---|---|
| June 30, 2020 | August 18, 2020 | |
| Common shares outstanding | 105,365,572 | 106,771,922 |
| Stock options | 4,160,000 | 3,910,000 |
| Warrants | 41,712,857 | 40,400,000 |
| Finder’s options | 1,229,350 | 966,900 |
| Fully diluted common shares outstanding | 152,467,779 | 152,048,822 |
QUALIFIED PERSON
Jason Weber, BSc., P.Geo is the Qualified Person as defined under National Instrument 43-101 responsible for the technical disclosure in this document. Mr. Weber is the President and Chief Executive Officer of Alianza and prepared the technical information contained in this MD&A – Quarterly Highlights.
| Cautionary Statements<br><br><br><br><br><br>This document contains “forward-looking statements” within the meaning of applicable Canadian securities regulations. All statements other than statements of historical fact herein, including, without limitation, statements regarding exploration results and plans, and our other future plans and objectives, are forward-looking statements that involve various risks and uncertainties. Such forward-looking statements include, without limitation, our estimates of exploration investment, the scope of our exploration programs, and our expectations of ongoing administrative costs. There can be no assurance that such statements will prove to be accurate, and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations are disclosed in the Company’s documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates or opinions change, except as required by law. Forward-looking statements are subject to risks, uncertainties and other factors, including risks associated with mineral exploration, price volatility in the mineral commodities we seek, and operational and political risks. Readers are cautioned not to place undue reliance on forward-looking statements. |
|---|
Certification
| This is an unofficial consolidation of Form 52-109FV2 Certification of Interim Filings Venture Issuer Basic Certificate **** reflecting amendments made effective January 1, 2011 in connection with Canada’s changeover to IFRS. The amendments apply for financial periods relating to financial years beginning on or after January 1, 2011. This document is for reference purposes only and is not an official statement of the law. |
|---|
Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate
I, Jason Weber, Chief Executive Officer, Alianza Minerals Ltd.**, certify the following:
1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Alianza Minerals Ltd., (the “issuer”) for the interim period ended June 30, 2020.
2.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. ****
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Date: August 18*,* 2020
“Jason Weber”
_______________________
Jason Weber
Chief Executive Officer
NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
i)
controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
ii)
a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
Certification
| This is an unofficial consolidation of Form 52-109FV2 Certification of Interim Filings Venture Issuer Basic Certificate **** reflecting amendments made effective January 1, 2011 in connection with Canada’s changeover to IFRS. The amendments apply for financial periods relating to financial years beginning on or after January 1, 2011. This document is for reference purposes only and is not an official statement of the law. |
|---|
Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate
I, Winnie Wong, Chief Financial Officer, Alianza Minerals Ltd.**, certify the following:
1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Alianza Minerals Ltd. (the “issuer”) for the interim period ended June 30, 2020.
2.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. ****
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Date: August 18, 2020
“Winnie Wong”
_______________________
Winnie Wong
Chief Financial Officer
NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
i)
controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
ii)
a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.