EX-99.1 2 ff_ex991.htm FINANCIAL STATEMENTS Blueprint
 
 
 
 
 
 
 
First Mining Gold Corp.
 
Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2019 and 2018
 (Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST MINING GOLD CORP.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT MARCH 31, 2019 AND DECEMBER 31, 2018
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
 
 
March 31,
2019
 
 
December 31,
2018
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
 
 
Cash and cash equivalents
 $3,059 
 $5,115 
Accounts and other receivables
  78 
  149 
Prepaid expenditures
  212 
  257 
Marketable securities (Note 3)
  2,669 
  2,597 
Total current assets
  6,018 
  8,118 
 
    
    
Non-current
    
    
Mineral properties (Note 4)
  245,169 
  244,129 
Mineral property investments (Note 5)
  4,417 
  4,417 
Property and equipment
  651 
  662 
Reclamation deposit
  118 
  116 
Other receivables
  90 
  90 
Total non-current assets
  250,445 
  249,414 
TOTAL ASSETS
 $256,463
 $257,532 
 
    
    
LIABILITIES
    
    
 
    
    
   Current
    
    
  Accounts payable and accrued liabilities (Note 6)
 $527 
 $582 
 
    
    
 
    
    
   SHAREHOLDERS’ EQUITY
    
    
Share capital (Note 7)
  275,068 
  275,068 
Warrant and share-based payment reserve (Note 7)
  30,955 
  30,230 
Accumulated other comprehensive loss
  (5,304)
  (5,292)
Accumulated deficit
  (44,783)
  (43,056)
Total shareholders’ equity
  255,936 
  256,950 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 $256,463 
 $257,532 
 
    
    
 
Subsequent events (Note 12)
The consolidated financial statements were approved by the Board of Directors:
 
Signed: “Keith Neumeyer”, Director                                                  Signed: “Raymond Polman”, Director
 
 
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
 
 
1
FIRST MINING GOLD CORP.
INTERIM CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
 
 
Three months ended March 31,
 
 
 
 2019
 
 
 2018
 
 
 
 
 
 
 
 
EXPENDITURES (Note 8)
 
 
 
 
 
 
General and administration
 $867 
 $2,436 
Exploration and evaluation
  199 
  268 
Investor relations and marketing communications
  534 
  736 
Corporate development and due diligence
  145 
  327 
Loss from operational activities
  (1,745)
  (3,767)
 
    
    
OTHER ITEMS
    
    
Foreign exchange (loss) gain
  (2)
  2 
Other expenses
  (64)
  (45)
Interest and other income
  84 
  58 
Net loss for the period
 $(1,727)
 $(3,752)
 
    
    
OTHER COMPREHENSIVE LOSS
    
    
Items that will not be reclassified to net income or (loss):
    
    
Marketable securities fair value gain (loss) (Note 3)
  12 
  (22)
Items that may be reclassified to net income or (loss):
    
    
Currency translation adjustment
  (24)
  151 
Other comprehensive (loss) income
  (12)
  129 
 
    
    
Total comprehensive loss for the period
 $(1,739)
 $(3,623)
Basic and diluted loss per share (in dollars)
 $(0.00)
 $(0.01)
Weighted average number of shares outstanding – Basic and Diluted
  558,316,696 
  556,009,949 
 
 
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
 
 
2
FIRST MINING GOLD CORP.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
 
 Three months ended March 31,
 
 
 
 2019
 
 
 2018
 
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
Net loss for the period
 $(1,727)
 $(3,752)
Adjustments for:
    
    
   Depreciation
  43 
  54 
   Unrealized foreign exchange (gain) loss
  (1)
  3 
   Share-based payments (Note 7(d))
  574 
  2,528 
   Accrued interest receivable and other income
  (64)
  - 
   Accrued other expenses
  65 
  42 
Operating cash flows before movements in working capital
  (1,110)
  (1,125)
Changes in non-cash working capital items:
    
    
   Decrease in accounts and other receivables
  4 
  102 
   Decrease (increase) in prepaid expenditures
  61 
  (250)
  (Decrease) increase in accounts payables and accrued liabilities
  (28)
  381 
Total cash used in operating activities
  (1,073)
  (892)
 
    
    
Cash flows from investing activities
    
    
Property and equipment purchases
  (37)
  (34)
Mineral property expenditures (Note 4)
  (1,001)
  (3,044)
Option payments and expenditures recovered (Note 4)
  55 
  - 
Total cash used in investing activities
  (983)
  (3,078)
 
    
  836 
Cash flows from financing activity
    
    
Proceeds from exercise of warrants and stock options
  - 
  836 
Total cash provided by financing activity
  - 
  836 
 
    
    
Foreign exchange effect on cash
  - 
  23 
 
    
    
Change in cash and cash equivalents
  (2,056)
  (3,111)
Cash and cash equivalents, beginning
  5,115 
  15,400 
Cash and cash equivalents, ending
 $3,059 
 $12,289 
 
    
    
 
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
 
 
3
FIRST MINING GOLD CORP.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
 
Number of common shares
 
 
Share capital
 
 
Warrant reserve
 
 
Share-based payment reserve
 
 
Accumulated other comprehensive income (loss)
 
 
Accumulated deficit
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as at December 31, 2017
  552,547,616 
 $272,501 
 $15,007 
 $12,600 
 $(4,043)
 $(31,411)
 $264,654 
Exercise of options (Note 7(d))
  164,000 
  71 
  - 
  (44)
  - 
  - 
  27 
Exercise of warrants (Note 7(c))
  4,760,000 
  2,107 
  (1,298)
  - 
  - 
  - 
  809 
Share-based payments
  - 
  - 
  - 
  3,416 
  - 
  - 
  3,416 
Loss for the period
  - 
  - 
  - 
  - 
  - 
  (3,752)
  (3,752)
Other comprehensive income
  - 
  - 
  - 
  - 
  129 
  - 
  129 
Balance as at March 31, 2018
  557,471,616 
 $274,679 
 $13,709 
 $15,972 
 $(3,914)
 $(35,163)
 $265,283 
Balance as at December 31, 2018
  558,316,916 
 $275,068 
 $13,600 
 $16,630 
 $(5,292)
 $(43,056)
 $256,950 
Share-based payments
  - 
  - 
  - 
  725 
  - 
  - 
  725 
Loss for the period
  - 
  - 
  - 
  - 
  - 
  (1,727)
  (1,727)
Other comprehensive loss
  - 
  - 
  - 
  - 
  (12)
  - 
  (12)
Balance as at March 31, 2019
  558,316,916 
 $275,068 
 $13,600 
 $17,355 
 $(5,304)
 $(44,783)
 $255,936 
 
    
    
    
    
    
    
    
 
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
 
 
4
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
1. NATURE OF OPERATIONS
 
 
First Mining Gold Corp. (formerly First Mining Finance Corp.) (the “Company” or “First Mining”) was incorporated in Canada on April 4, 2005. The Company changed its name to First Mining Gold Corp. in January 2018.
 
The Company is an emerging mineral development company with a diversified portfolio of gold projects in North America. The Company’s vision is to advance its materials assets towards a construction decision and, ultimately, to production, and continues to assess mineral asset acquisition targets on an ongoing basis. These condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries. The following table highlights the Company’s material subsidiaries together with their projects:
 
Name of the subsidiary
Ownership Percentage
Project
Location
Gold Canyon Resources Inc.
100%
Springpole Gold Project (“Springpole”)
Northern Ontario, Canada
Goldlund Resources Inc.
100%
Goldlund Gold Project (“Goldlund”)
Northern Ontario, Canada
Coastal Gold Corp.
100%
Hope Brook Gold Project (“Hope Brook”)
Newfoundland, Canada
Cameron Gold Operations Ltd.
100%
Cameron Gold Project (“Cameron”)
Northern Ontario, Canada
PC Gold Inc.
100%
Pickle Crow Gold Project (“Pickle Crow”)
Northern Ontario, Canada
Clifton Star Resources Inc.
100%
Duquesne Gold Project (“Duquesne”)10% indirect interest in the Duparquet Gold Project (“Duparquet”)
Pitt Gold Project (“Pitt”)
Québec, Canada
 
First Mining is a public company which is listed on the Toronto Stock Exchange (the “TSX”) under the symbol “FF”, on the OTCQX under the symbol “FFMGF”, and on the Frankfurt Stock Exchange under the symbol “FMG”.
 
The Company’s head office and principal address is located at Suite 1800 – 925 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3L2.
 
2. BASIS OF PRESENTATION
 
These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting using policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The Company uses the same accounting policies and methods of computation as in the annual consolidated financial statements for the year ended December 31, 2018, except for the following: the Company has adopted IFRS 16 Leases (“IFRS 16”) which is effective for annual periods beginning on or after January 1, 2019.
 
IFRS 16 specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. The adoption of IFRS 16 did not have an impact on the Company’s condensed interim consolidated financial statements.
 
These condensed interim consolidated financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2018, as some disclosures from the annual consolidated financial statements have been condensed or omitted.
 
 
5
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
2. BASIS OF PRESENTATION (continued)
 
These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit and loss or fair value through other comprehensive income (loss), which are stated at their fair value. The condensed interim consolidated financial statements are presented in thousands of Canadian dollars, unless otherwise noted. The functional currency of the Company and its Canadian subsidiaries is the Canadian dollar while the functional currency of the Company’s non-Canadian subsidiaries is the US dollar.
 
The use of judgments, estimates and assumptions affects the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
 
These condensed interim consolidated financial statements were approved by the Board of Directors on May 14, 2019.
 
3. MARKETABLE SECURITIES
 
The movements in marketable securities during the three months ended March 31, 2019, and year ended December 31, 2018 are summarized as follows:
 
 
 
 Silver One Resources Inc.
 
 
 Other Marketable Securities
 
 
 Total
 
 Balance as at December 31, 2018
  990 
 $1,607 
  2,597
 
 Additions
  60 
  - 
  60
 
 Gain (loss) recorded in other comprehensive loss
  13 
  (1)
  12
 
   Balance as at March 31, 2019
  1,063 
 $1,606 
  2,669
 
 
 
 
 Silver One Resources Inc.
 
 
 Other Marketable Securities
 
 
 Total
 
 Balance as at December 31, 2017
 $2,280 
  1,997 
  4,277
 
 Loss recorded in other comprehensive loss
  (1,290)
  (390)
  (1,680)
 Balance as at December 31, 2018
 $990 
  1,607 
  2,597 
 
The Company holds marketable securities as strategic investments and has less than a 10% equity interest in each of the investees.
 
 
 
6
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
4. MINERAL PROPERTIES
 
As at March 31, 2019 and December 31, 2018, the Company has capitalized the following acquisition, exploration and evaluation costs on its mineral properties:
 
 
 
Balance December 31, 2018
 
 
Concessions, taxes, and royalties
 
 
Salaries and share-based payments
 
 
Drilling, exploration, and technical consulting
 
 
Assaying, field supplies, and environmental
 
 
Travel and other expenditures
 
 
Option payments and expenditures recovered
 
 
Currency translation adjustments
 
 
Disposal or write-down of mineral properties
 
 
Balance March 31, 2019
 
Springpole
 $73,378 
 $83 
 $249 
 $179 
 $45 
 $104 
 $- 
 $- 
 $- 
 $74,038 
Goldlund
  96,604 
  2 
  191 
  28 
  30 
  14 
  - 
  - 
  - 
  96,869 
Hope Brook
  19,581 
  20 
  17 
  18 
  6 
  7 
  - 
  - 
  - 
  19,649 
Cameron
  27,032 
  48 
  9 
  1 
  3 
  - 
  - 
  - 
  - 
  27,093 
Pickle Crow
  16,754 
  16 
  16 
  - 
  1 
  - 
  (50)
  - 
  - 
  16,737 
Duquesne
  5,091 
  1 
  - 
  3 
  1 
  - 
  - 
  - 
  - 
  5,096 
Pitt
  2,082 
  - 
  - 
  1 
  - 
  - 
  - 
  - 
  - 
  2,083 
Others(1)
  2,559 
  2 
  1 
  3 
  5 
  - 
  - 
  - 
  - 
  2,570 
Canada Total
 $243,081 
 $172 
 $483 
 $233 
 $91 
 $125 
 $(50)
 $- 
 $- 
 $244,135 
Miranda
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
Socorro
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
San Ricardo
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
Las Margaritas
  244 
  5 
  - 
  8 
  - 
  - 
  (5)
  (5)
  - 
  247 
Others(2)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
Mexico Total
 $244 
 $5 
 $- 
 $8 
 $- 
 $- 
 $(5)
 $(5)
 $- 
 $247 
USA
  804 
  - 
  - 
  - 
  - 
  - 
  - 
  (17)
  - 
  787 
Total
 $244,129 
 $177 
 $483 
 $241 
 $91 
 $125 
 $(55)
 $(22)
 $- 
 $245,169 
 
 
 
Balance December 31, 2017
 
 
Concessions, taxes, and royalties
 
 
Salaries and share-based payments
 
 
Drilling, exploration, and technical consulting
 
 
Assaying, field supplies, and environmental
 
 
Travel and other expenditures
 
 
Option payments and expenditures recovered
 
 
Currency translation adjustments
 
 
Disposal or write-down of mineral properties
 
 
Balance December 31, 2018
 
Springpole
 $70,398 
 $237 
 $1,048 
 $657 
 $479 
 $559 
 $- 
 $- 
 $- 
 $73,378 
Goldlund
  93,807 
  2 
  928 
  1,045 
  596 
  226 
  - 
  - 
  - 
  96,604 
Hope Brook
  18,665 
  123 
  459 
  136 
  116 
  82 
  - 
  - 
  - 
  19,581 
Cameron
  26,676 
  39 
  193 
  57 
  39 
  28 
  - 
  - 
  - 
  27,032 
Pickle Crow
  16,496 
  50 
  92 
  58 
  36 
  22 
  - 
  - 
  - 
  16,754 
Duquesne
  5,053 
  6 
  4 
  27 
  - 
  1 
  - 
  - 
  - 
  5,091 
Pitt
  2,080 
  - 
  - 
  1 
  - 
  1 
  - 
  - 
  - 
  2,082 
Others(1)
  2,515 
  2 
  10 
  21 
  9 
  2 
  - 
  - 
  - 
  2,559 
Canada Total
 $235,690 
 $459 
 $2,734 
 $2,002 
 $1,275 
 $921 
 $- 
 $- 
 $- 
 $243,081 
Miranda
  810 
  48 
  18 
  9 
  1 
  - 
  - 
  76 
  (962)
  - 
Socorro
  782 
  107 
  3 
  4 
  - 
  - 
  - 
  77 
  (973)
  - 
San Ricardo
  969 
  140 
  1 
  6 
  - 
  4 
  - 
  96 
  (1,216)
  - 
Las Margaritas
  183 
  41 
  4 
  25 
  4 
  1 
  (33)
  19 
  - 
  244 
Others(2)
  739 
  195 
  7 
  7 
  - 
  1 
  - 
  81 
  (1,030)
  - 
Mexico Total
 $3,483 
 $531 
 $33 
 $51 
 $5 
 $6 
 $(33)
 $349 
 $(4,181)
 $244 
USA
  698 
  43 
  - 
  - 
  - 
  - 
  - 
  63 
  - 
  804 
Total
 $239,871 
 $1,033 
 $2,767 
 $2,053 
 $1,280 
 $927 
 $(33)
 $412 
 $(4,181)
 $244,129 
 
(1)
Other mineral properties in Canada as at March 31, 2019 and December 31, 2018 include the mining claims and concessions located in the Township of Duparquet, Quebéc, which are near the Company’s Duquesne gold project and the Duparquet gold project (in which the Company holds a 10% indirect interest).
(2)
Other mineral properties in Mexico as at March 31, 2019 and December 31, 2018 include Puertecitos, Los Tamales, Geranio, El Apache, El Roble, Batacosa and Lachatao.
 
  The Company has various underlying agreements and commitments with respect to its Canadian mineral properties, which define annual or future payments in connection with royalty buy-backs or maintenance of property interests. 
 
 
7
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
4. MINERAL PROPERTIES (Continued)
 
On July 30, 2018, the Company entered into an option agreement (the “Option Agreement”) with Gainey Capital Corp. (“Gainey”), granting Gainey the right to earn a 100% interest in First Mining’s Las Margaritas gold project (“Las Margaritas”) located in the State of Durango in Mexico. Under the terms of the Option Agreement, Gainey can elect to make either annual share or cash payments to the Company for aggregate consideration of between $900 and $1,015 over the four year option period. In addition, as per the terms of the Option Agreement, Gainey will make annual payments of USD $25,000 in September 2018 (paid), September 2019, September 2020 and USD $250,000 in September 2021 in connection with an existing agreement on the property, and exploration expenditures totaling USD $1,000,000 over the four year option period on Las Margaritas. Upon completion of the four year option period, Gainey obtains a 100% ownership interest in Las Margaritas, except that First Mining will retain a 2% net smelter returns (“NSR”) royalty interest, with Gainey having the right to buy back 1% of the NSR royalty interest for USD $1,000,000 up until the first anniversary of the commencement of commercial production at Las Margaritas. As at March 31, 2019, the carrying value of the Las Margaritas property is $247 (December 31, 2018 - $244). Subsequent to March 31, 2019, the Company received initial consideration in the form of Gainey shares with a value of $75 and cash of $12 under the terms of the Option Agreement, following TSX Venture Exchange approval.
 
5. MINERAL PROPERTY INVESTMENTS
 
Mineral property investments (which comprise equity interests in the shares of three private companies) are designated as fair value through other comprehensive income (loss) (“FVTOCI”), with changes in fair value recorded in other comprehensive income (loss).
 
The Company, through its subsidiary Clifton, has a 10% equity interest in the shares of Beattie Gold Mines Ltd., 2699681 Canada Ltd., and 2588111 Manitoba Ltd which directly or indirectly own various mining concessions and surface rights, collectively known as the Duparquet gold project. As at March 31, 2019, the fair value of mineral property investments is $4,417 (December 31, 2018 - $4,417). As at March 31, 2019, there was no change in the carrying value of mineral property investments given management concluded that there was no material change in fair value (Note 11).
 
6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
Category
 
March 31,
2019
 
 
December 31,
2018
 
Accounts payable
 $214 
 $341 
Other accrued liabilities
  313 
  241 
Total
 $527 
 $582 
 
7. SHARE CAPITAL
 
a)
Authorized
 
Unlimited number of common shares with no par value.
Unlimited number of preferred shares with no par value.
 
b)
Issued and Fully Paid
 
Common shares: 558,316,916 (December 31, 2018 – 558,316,916).
Preferred shares: nil (December 31, 2018 – nil).
 
 
8
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
7. SHARE CAPITAL (Continued)
 
c)
Warrants
 
The movements in warrants during the three months ended March 31, 2019 and year ended December 31, 2018 are summarized as follows:
 
 
 
Number

 
Weighted average exercise price

Balance as at December 31, 2017
  49,693,409 
 $0.81 
Warrants exercised
  (5,131,300)
  0.17 
Warrants expired
  (24,445,254)
  0.80 
Balance as at December 31, 2018 and March 31, 2019
  20,116,855 
 $0.99 
 
The following table summarizes information about the warrants outstanding as at March 31, 2019:
 
Exercise price
Number of warrants outstanding
Weighted average exercise price
($ per share)
Weighted average remaining life (years)
$ 0.01 – 0.50
3,241,855
$            0.42
2.07
$ 0.51 – 1.00
-
                   -
-
$ 1.01 – 1.50
16,875,000
              1.10
0.35

20,116,855
$            0.99
0.63
 
d)
Stock Options
 
The Company has adopted a stock option plan that allows for the granting of incentive stock options to Directors, Officers, employees and certain consultants of the Company for up to 10% of the Company’s issued and outstanding common shares. Stock options granted under the plan may be subject to vesting provisions as determined by the Board of Directors.
 
 
8
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
7. SHARE CAPITAL (Continued)
 
The movements in stock options during the three months ended March 31, 2019 and year ended December 31, 2018 are summarized as follows:
 
 
Number
 
Weighted average exercise price
 
Balance as at December 31, 2017
30,608,000
$0.74
Granted – January 15, 2018
9,575,000
0.60
Granted – April 16, 2018
120,000
0.50
Granted – July 20, 2018
50,000
0.43
Granted – October 16, 2018
1,400,000
0.40
Granted – December 10, 2018
12,075,000
0.40
Options exercised
(638,000)
0.17
Options expired
(1,950,000)
1.27
Options forfeited
(2,975,000)
0.68
Balance as at December 31, 2018
48,265,000
$0.61
Granted – January 7, 2019
5,000,000
0.40
Options expired
(7,325,000)
0.69
Options forfeited
(412,500)
0.57
Balance as at March 31, 2019
45,527,500
$0.57
 
The weighted average closing share price at the date of exercise for the three months ended March 31, 2019 was $nil (March 31, 2018 – $0.51). No stock options were exercised during the three months ended March 31, 2019 (March 31, 2018 – 164,000).
 
The following table summarizes information about the stock options outstanding as at March 31, 2019:
 
 
Options Outstanding
 
Options Exercisable
 
Exercise price
Number of options
Weighted average exercise
price ($ per share)
Weighted average remaining life (years)
Number of options
Weighted average exercise
price ($ per share)
Weighted average remaining life (years)
$ 0.01 – 0.50
22,817,500
$       0.40
4.06
8,901,875
$      0.39
3.02
$ 0.51 – 1.00
22,710,000
         0.75
2.90
22,710,000
        0.75
2.90

45,527,500
$      0.57
3.48
31,611,875
$      0.65
2.93
 
During the three months ended March 31, 2019, there were 5,000,000 (March 31, 2018 – 9,575,000) incentive stock option granted with an aggregate fair value of $1,126 (March 31, 2018 – $3,499), or a weighted average fair value of $0.23 per option (March 31, 2018 – $0.37). As at March 31, 2019, 13,915,625 (March 31, 2018 – 485) incentive stock options remain unvested with an aggregate grant date fair value of $1,268 (March 31, 2018 - $192).
 
 
9
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
7. SHARE CAPITAL (Continued)
 
Certain incentive stock options granted were directly attributable to exploration and evaluation expenditures on mineral properties and were therefore capitalized to mineral properties. In addition, certain incentive stock options were subject to vesting provisions. These two factors result in differences between the aggregate fair value of incentive stock options granted and total share-based payments expenses during the periods. Total share-based payments expense during the periods ended March 31, 2019 and March 31, 2018 was classified within the financial statements as follows:
 
 
 
 For the three months ended March 31, 
 
 Statements of Net Loss:
 
 2019
 
 
 2018
 
 General and administration
 $330 
 $1,828 
 Exploration and evaluation
  11 
  89 
 Investor relations and marketing communications
  120 
  383 
 Corporate development and due diligence
  113 
  228 
 Subtotal
 $574 
 $2,528 
 
 
 
 For the three months ended March 31, 
 
 Statements of Financial Position:
 
 2019
 
 
 2018
 
 Mineral Properties
 $151 
 $888 
 Total
 $725 
 $3,416 
 
 
The grant date fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model with the following weighted average assumptions:
 
 
Three months ended
March 31,
2019
 
Year ended
December 31,
2018
 
Risk-free interest rate
  2.20%
  1.91%
Share price at grant date (in dollars)
 $0.40 
 $0.41 
Exercise price (in dollars)
 $0.40 
 $0.48 
Expected life (years)
  5.00 years
 
  5.00 years 
Expected volatility(1)
  72.21%
  70.87%
Forfeiture rate
  5.07%
  2.64%
Expected dividend yield
  Nil 
  Nil 
(1)
The computation of expected volatility prior to the December 10, 2018 option grant was based on the historical volatility of comparable companies from a representative peer group of publicly traded mineral exploration companies. Commencing December 10, 2018, the computation of expected volatility was based on the Company’s historical price volatility, over a period which approximates the expected life of the option.
 
 
10
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
8. EXPENDITURES
 
Components by nature of the Company’s functional operating expenditure categories are as follows:
 
 
  For the three months ended March 31, 2019      
 
 
 
General and administration
 
 
Exploration and evaluation
 
 
Investor relations and marketing communications
 
 
Corporate development and due diligence
 
 
Total
 
Administrative and office
 $98 
 $42 
 $5 
 $- 
 $145 
Depreciation
  3 
  40 
  - 
  - 
  43 
Consultants
  26 
  12 
  23 
  - 
  61 
Directors fees
  34 
  - 
  - 
  - 
  34 
Exploration and evaluation
  - 
  10 
  - 
  - 
  10 
Investor relations and marketing communications
  - 
  2 
  363 
  - 
  365 
Professional fees
  86 
  - 
  - 
  - 
  86 
Salaries
  204 
  41 
  18 
  28 
  291 
Share-based payments (non-cash) (Note 7(d))
  330 
  11 
  120 
  113 
  574 
Transfer agent and filing fees
  74 
  - 
  - 
  - 
  74 
Travel and accommodation
  12 
  41 
  5 
  4 
  62 
Operating expenditures total
 $867 
 $199 
 $534 
 $145 
 $1,745 
 
 
 
For the three months ended March 31, 2018
 
 
 
General and administration
 
 
Exploration and evaluation
 
 
Investor relations and marketing communications
 
 
Corporate development and due diligence
 
 
Total
 
Administrative and office
 $93 
 $30 
 $12 
 $2 
 $137 
Depreciation
  2 
  52 
  - 
  - 
  54 
Consultants
  7 
  18 
  - 
  - 
  25 
Directors fees
  35 
  - 
  - 
  - 
  35 
Exploration and evaluation
  - 
  1 
  - 
  - 
  1 
Investor relations and marketing communications
  1 
  2 
  214 
  1 
  218 
Professional fees
  77 
  - 
  - 
  - 
  77 
Salaries
  311 
  38 
  94 
  85 
  528 
Share-based payments (non-cash) (Note 7(d))
  1,828 
  89 
  383 
  228 
  2,528 
Transfer agent and filing fees
  50 
  - 
  - 
  - 
  50 
Travel and accommodation
  32 
  38 
  33 
  11 
  114 
Operating expenditures total
 $2,436 
 $268 
 $736 
 $327 
 $3,767 
 
 
11
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
9. SEGMENT INFORMATION
 
The Company operates in a single reportable operating segment, being the acquisition, exploration, and development of North American mineral properties. Geographic information about the Company’s non-current assets, excluding financial instruments, as at March 31, 2019 and December 31, 2018 is as follows:
 
 Non-current assets
 
March 31,
2019
 
 
December 31,
2018
 
Canada
 $244,897 
 $243,854 
Mexico
  339 
  334 
USA
  792 
  809 
Total
 $246,028 
 $244,997 
 
10. RELATED PARTY TRANSACTIONS
 
Key management includes the Directors and Officers of the Company. The compensation paid or payable to key management for services during the three months ended March 31, 2019 and 2018 are as follows:
 
Service or Item
 
Three months ended March 31,
 

 
2019
 
 
2018
 
Directors’ fees
 $34 
 $35 
Salaries and consultants’ fees
  274 
  393 
Share-based payments (non-cash)
  568 
  2,475 
Total
 $876 
 $2,903 
 
11. FAIR VALUE
 
Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
 
The Company characterizes fair value measurements using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The three levels of the fair value hierarchy are as follows:
 
Level 1: fair value measurements are quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: fair value measurements are those derived from inputs other than quoted prices included within 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: fair value measurements are those derived from valuation techniques that include significant inputs for the asset or liability that are not based on observable market data (unobservable inputs).
 
The carrying values of cash and cash equivalents, current accounts and other receivables, and accounts payable and accrued liabilities approximated their fair values because of the short-term nature of these financial instruments. These financial instruments are classified as financial assets and liabilities at amortized cost.
 
The carrying values of non-current reclamation deposit and other receivables approximated their fair values. These financial instruments are classified as financial assets at amortized cost.
 
 
12
FIRST MINING GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of Canadian dollars unless otherwise noted)
(Unaudited)
 
 
11. FAIR VALUE (Continued)
 
The carrying value of marketable securities was based on the quoted market prices of the shares as at March 31, 2019 and was therefore considered to be Level 1. These financial instruments are classified as financial assets at FVTOCI.
 
The mineral property investments (First Mining’s 10% equity interest in three privately held companies that own the Duparquet Gold Project) are classified as financial assets at FVTOCI. The carrying value of the mineral property investments was not based on observable market data and was therefore considered to be Level 3. The initial fair value of the mineral property investments was determined based on attributable pro-rata gold ounces for the Company’s 10% indirect interest in the Duparquet project, which formed part of the identifiable assets from the acquisition of Clifton. Subsequently, the fair value has been reassessed at each period end. Scenarios which may result in a significant change in fair value include, among others, a change in the performance of the investee, a change in the market for the investee’s future products, a change in the performance of comparable entities, a change in gold price, a change in the economic environment, or evidence from external transactions in the investee’s equity. As at March 31, 2019, management concluded that there was no significant change in the fair value of the mineral property investments.
 
The following table presents the Company’s fair value hierarchy for financial assets that are measured at fair value:
 
 
 
March 31, 2019
 
 
December 31, 2018
 
 
 
 
 
 
Fair value measurement
 
 
 
 
 
Fair value measurement
 
 
 
Carrying value
 
 
Level 1
 
 
Level 3
 
 
Carrying value
 
 
Level 1
 
 
Level 3
 
Financial assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable securities (Note 3)
 $2,669 
 $2,669 
 $- 
 $2,597 
 $2,597 
 $- 
Mineral property investments (Note 5)
  4,417 
  - 
  4,417 
  4,417 
  - 
  4,417 
Total
 $7,086 
 $2,669 
 $4,417 
 $7,014 
 $2,597 
 $4,417 
 
None of the Company’s financial liabilities are subsequently measured at fair value after initial recognition.
 
During the three months ended March 31, 2019 there have been no transfers of amounts between Level 1, Level 2, and Level 3 of the fair value hierarchy.
 
12. SUBSEQUENT EVENTS
 
Non-Brokered Private Placement Financing
 
On April 29, 2019, the Company announced a non-brokered private placement for aggregate gross proceeds of up to $6,012 (the “Offering”). The Offering will consist of up to 15,600,000 units of the Company (the "Units") at a price of $0.27 per Unit for gross proceeds of up to $4,212 and up to 5,000,000 flow-through units of the Company (the "FT Units") at a price of $0.36 per FT Unit for gross proceeds of up to $1,800.
 
Each Unit will consist of one common share of the Company and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant will entitle the holder to acquire one common share of the Company at a price of $0.40 at any time prior to the date which is three years following the closing date of the Offering.
 
Each FT Unit will consist of one flow-through common share of the Company that qualifies as a "flow-through share" for the purposes of the Income Tax Act (Canada) and one-half of one Warrant on the same terms as the Warrants forming part of the Units.
 
Exercise of Warrants
 
Subsequent to March 31, 2019 and as at the date of filing these condensed interim consolidated financial statements, a total of 214,200 warrants were exercised for gross proceeds of $43.
 
Stock Options Grant
 
Subsequent to March 31, 2019, the Company has granted 2,750,000 incentive stock options to certain Officers of the Company under the terms of its stock option plan. The stock options have an exercise price of $0.40 per share and are exercisable for a period of five years from the grant date.
 
 
 
13