EX-99.1 2 fins.htm CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2017

 

Emgold Mining Corporation

(An Exploration Stage Company)

Unaudited Condensed Interim Consolidated Financial Statements
For Three Months Ended 31 March 2017 and 2016
Stated in US Dollars

Notice of No Auditor Review of

Condensed Interim Consolidated Financial Statements

 
The accompanying unaudited condensed interim consolidated 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 condensed interim consolidated financial statements.
 

Table of Contents
 

Management’s Responsibility i
Condensed Interim Consolidated Statement of Financial Position 1
Consolidated Interim Consolidated Statement of Comprehensive Loss 2
Condensed Interim Consolidated Statement of Changes in Equity 3
Condensed Interim Consolidated Statement of Cash Flows 4
Notes to the Condensed Interim Consolidated Financial Statements  
1)   Nature of operations and going concern 5
2)   Basis of preparation – Statement of Compliance 5
3)   Summary of significant accounting policies 6
4)   Financial instruments and risk management 6
5)   Equipment 8
6)   Assets held for sale 8
7)   Exploration and evaluation assets 9
8)   Related party transactions 11
9)   Share capital 12
10)   Capital disclosures 12
11)   Segmented disclosure 13
 

Management’s Responsibility

To the Shareholders of Emgold Mining Corporation:

Management is responsible for the preparation and presentation of the accompanying unaudited condensed interim consolidated financial statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required.

In discharging its responsibilities for the integrity and fairness of the unaudited condensed interim consolidated financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of financial statements.

The Board of Directors and the Audit Committee are composed primarily of Directors who are neither management nor employees of the Company. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial information presented. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and the external auditors. The Audit Committee has the responsibility of meeting with management, and the external auditors to discuss the internal controls over the financial reporting process, auditing matters and financial reporting issues. The Board is also responsible for recommending the appointment of the Company’s external auditors.

We draw attention to Note 1 in the condensed interim consolidated financial statements which indicates the existence of a material uncertainty that may cast substantial doubt on the Company’s ability to continue as a going concern.

The Company’s independent auditor has not performed a review of these unaudited condensed interim consolidated financial statements.

26 May 2017 

The consolidated financial statements were approved by the Board of Directors on 26 May 2017 and were signed on its behalf by:
“David Watkinson”   “Grant T. Smith”
David Watkinson, President & CEO   Grant T. Smith, CFO
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Emgold Mining Corporation Statement 1

US Dollars

(Unaudited)

  

Condensed Interim Consolidated Statement of Financial Position

      As at    
  Note  

31 March

2017

  

31 December

2016

Assets          
Current Assets          
Cash and cash equivalents   $ 56,717 $ 73,470
Amounts receivable     3,019   3,846
Prepaid amounts and deposits     9,036   8,990
      68,772   86,306
Non-current Assets          
Reclamation bonds     9,383   9,309
Assets held for sale (6)   154,452   154,452
Exploration and evaluation assets (7)   629,113   594,113
      792,948   757,874
    $ 861,720 $ 844,180
Liabilities          
Current Liabilities          
Accounts payable and accrued liabilities   $ 157,069 $ 159,482
Due to related parties (8)   142,370   708,541
      299,439   868,023
Equity (statement 3)          
Share capital     44,095,360   44,035,360
Warrants – contributed surplus     686,349   686,349
Options – contributed surplus     7,062,781   7,062,781
Deficit     (51,282,209)   (51,808,333)
      562,281   (23,843)
    $ 861,720 $ 844,180
Nature of operations and going concern (1)  
Basis of preparation - Statement of Compliance (2)  
Capital disclosure (10)  
Segmented disclosures (11)  

 

 

The condensed interim consolidated financial statements were approved by the Board of Directors on 26 May 2017 and were signed on its behalf by:
“David Watkinson”   “Andrew MacRitchie”
David Watkinson, Director   Andrew MacRitchie, Director

 

--The accompanying notes form an integral part of the condensed interim consolidated financial statements--

 

 

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Emgold Mining Corporation Statement 2

US Dollars

(Unaudited)

  

Condensed Interim Consolidated Statement of Comprehensive Loss

     

Three months

ended

  

Three months

ended

  Note  

31 March

2017

   31 March 2016
Continuing Operations          
Expenses          
Exploration and Evaluation          
Resource property expense (7) $ 2,959 $ 13,467
General and Administrative          
Management and consulting     29,928   26,817
Listing and filing fees     9,326   5,119
Professional fees     7,950   9,204
Office and administration     2,958   490
Shareholder communication     4,429   4,070
Insurance     1,955   1,547
Banking costs     403   215
Amortization (5)   -   152
      56,949   47,614
Net Loss and Comprehensive Loss Before Other Items     59,908   61,081
Other Loss          
Foreign exchange loss     1,468   11,467
(Gain) on write-off of related party debt (8)   (587,500)   -
Loss on sale of property     -   16,351
      (586,032)   27,818
Net (Gain) Loss and Comprehensive Loss   $ (526,124) $ 88,899
Basic and Diluted (Gain) Loss per Common Share   $ (0.00) $ 0.00
Weighted Average Number of Shares Outstanding     79,515,591   78,165,953

 

 

--The accompanying notes form an integral part of the condensed interim consolidated financial statements--

 

 

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Emgold Mining Corporation Statement 3

US Dollars

(Unaudited)

  

 

Condensed Interim Consolidated Statement of Changes in Equity

    Shares   Amount Warrants   Amount Options   Amount   Deficit  

Shareholders’

Equity

Balance at 01 January 2016   78,295,684 $ 43,975,360 2,500,000 $ 686,349 5,000,000 $ 7,062,781 $ (51,536,140) $ 188,350
Shares issued for properties   708,333   60,000 -   - -   -   -   60,000
Warrants expired   -   - -   - -   -   -   -
Comprehensive (loss) for the period   -   - -   - -   -   (88,899)   (88,899)
Balance at 31 March 2016   79,004,017 $ 44,035,360 2,500,000 $ 686,349 5,000,000 $ 7,062,781 $ (51,625,039) $ 159,451
Comprehensive (loss) for the period   -   - -   - -   -   (18,127)   (18,127)
Balance at 30 June 2016   79,004,017 $ 44,035,360 2,500,000 $ 686,349 5,000,000 $ 7,062,781 $ (51,643,166) $ 141,324
Comprehensive (loss) for the period   -   - -     -   -   (72,824)   (72,824)
Balance at 30 September 2016   79,004,017 $ 44,035,360 2,500,000 $ 686,349 5,000,000 $ 7,062,781 $ (51,715,990) $ 68,500
Comprehensive (loss) for the period   -   - -   - -   -   (92,343)   (92,343)
Balance at 31 December 2016   79,004,017 $ 44,035,360 - $ 686,349 5,000,000 $ 7,062,781 $ (51,808,333) $ (23,843)
Balance at 01 January 2017   79,004,017 $ 44,035,360 - $ 686,349 5,000,000 $ 7,062,781 $ (51,808,333) $ (23,843)
Shares issued for properties   708,333   60,000 -   - -   -   -   60,000
Comprehensive gain for the period   -   - -   - -   -   526,124   526,124
Balance at 31 March 2017   79,712,350 $ 44,095,360 - $ 686,349 5,000,000 $ 7,062,781 $ (51,282,209) $ 562,281

 

--The accompanying notes form an integral part of the condensed interim consolidated financial statements--

 

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Emgold Mining Corporation Statement 4

US Dollars

(Unaudited)

  

Condensed Interim Consolidated Statement of Cash Flows

     

Three months

ended

  

Three months

ended

     

31 March

2017

  

31 March

2016

Operating Activities          
Gain (Loss) for the Period   $ 526,124 $ (88,899)
Items not Affecting Cash          
Effect of currency translation     (74)   (605)
(Gain) on write-off of related party debt (8)   (587,500)   -
Amortization     -   152
Loss on sale of property     -   16,351
      (61,450)   (73,001)
Net Change in Non-cash Working Capital          
Due to related parties     21,329   45,726
Accounts receivable     827   24
Prepaid expenses and deposits     (46)   (542)
Accounts payable and accrued liabilities     (2,413)   (1,808)
      19,697   43,400
      (41,753)   (29,601)
INVESTING ACTIVITIES          
Proceeds from sale of property     -   350,000
Resource property payments     25,000   -
Cash expenses for property sale     -   (30,295)
      25,000   319,705
Net Increase (Decrease) in Cash     (16,753)   290,104
Cash position – beginning of period     73,470   3,226
Cash Position – End of Period   $ 56,717 $ 293,330
Schedule of Non-cash Investing and Financing Transactions          
Shares issued for mineral property acquisition (7) $ 60,000 $ 60,000

 

-- The accompanying notes form an integral part of the condensed interim consolidated financial statements --

 

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Emgold Mining Corporation

US Dollars

(Unaudited)

 

Notes to the Condensed Interim Consolidated Financial Statements

 

1)Nature of operations and going concern

Emgold Mining Corporation (“the Company” or “Emgold”) is incorporated under the British Columbia Corporations Act and the principle place of business is located at 1010 - 789 West Pender Street, Vancouver, British Columbia, V6C 1H2. The Company is in the process of exploring its mineral property interests and has not yet determined whether its mineral property interests contain mineral reserves that are economically recoverable. The Company’s shares are traded on the TSX Venture Exchange (“TSX-V”) and the OTC.

These condensed interim consolidated financial statements (“Financial Statements”) have been prepared on the basis of the accounting principles applicable to a going concern, which assumes the Company’s ability to continue in operation for the foreseeable future and to realize its assets and discharge its liabilities in the normal course of operations.

There are several adverse conditions that cast substantial doubt upon the soundness of this assumption. The Company has negative working capital, has incurred operating losses since inception, has no source of significant revenue at this time, is unable to self-finance operations, and has significant on-going cash needs to meet its overhead requirements and maintain its exploration and evaluation assets. Further, the business of mining and exploration involves a high degree of risk and there can be no assurance that current or future exploration programs will result in profitable mining operations. The recoverability of exploration and evaluation assets is dependent upon several factors, which include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of mineral properties.

For the Company to continue to operate as a going concern it must obtain additional financing; there can be no assurance that this will continue in the future.

If the going concern assumption were not appropriate for these financial statements then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the statement of financial position classifications used, and such adjustments could be material.

Rounded (‘000’s)  

31 March

2017

  

31 December

2016

Working capital $ (231,000)   (782,000)
Accumulated deficit $ (51,282,000)   (51,808,000)

 

2)Basis of preparation – Statement of Compliance

These Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting. The Financial Statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting except for cash flow information.

Since the condensed interim consolidated financial statements do not include all requirements in IAS1, “Presentation of Financial Statement” (IAS1), they should be read in conjunction with the Company’s audited annual financial statements for the year ended 31 December 2016.

The preparation of these financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company’s accounting policies. The judgements, estimates and assumptions made by management affect the application of policies and reported amounts of assets and liabilities, profit and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Critical estimates and judgement are disclosed more fully in the Company’s audited annual consolidated financial statements for the year ended 31 December 2016.

3)Summary of significant accounting policies

The accounting policies and methods of computation followed in preparing these Financial Statements are the same as those followed in preparing the most recent audited annual financial statements. For a summary of significant accounting policies, please refer to the Company’s audited annual financial statements for the year ended 31 December 2016.

4)Financial instruments and risk management
a)Financial instrument classification and measurement

Financial instruments of the Company carried on the Consolidated Statement of Financial Position are carried at amortized cost with the exception of cash and cash equivalents, which is carried at fair value. There are no significant differences between the carrying value of financial instruments and their estimated fair values as at 31 March 2017 and 31 December 2016.

The Company classifies the fair value of these transactions according to the following hierarchy.

·Level 1 – quoted prices in active markets for identical financial instruments.
·Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
·Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s cash and cash equivalents have been assessed on the fair value hierarchy described above and classified as Level 1. There have been no changes between levels during the period.

b)Fair values of financial assets and liabilities

The Company’s financial instruments include cash and cash equivalents, amounts receivable, reclamation bonds, assets held for sale, due to related parties, and accounts payable and accrued liabilities. At 31 March 2017 and 31 December 2016, the carrying value of cash and cash equivalents is fair value. Amounts receivable, due to related parties deposits and accounts payable and accrued liabilities approximate their fair value due to their short-term nature.

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

c)Market risk

Market risk is the risk that changes in market prices will affect the Company’s earnings or the value of its financial instruments. Market risk is comprised of commodity price risk and interest rate risk. The objective of market risk management is to manage and control exposures within acceptable limits, while maximizing returns. The Company is not exposed to significant market risk.

d)Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its bank accounts. The Company’s bank accounts are held with major banks in Canada, accordingly the Company believes it is not exposed to significant credit risk.

e)Interest rate risk

Interest rate risk is the risk of losses that arise as a result of changes in contracted interest rates. The Company is nominally exposed to interest rate risk.

f)Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. To manage this risk the Company maintains only the minimum amount of foreign cash required to fund its on-going exploration expenditures. The Company is not exposed to significant foreign currency risk. At 31 March 2017 the Company held currency totalling the following:

Rounded (‘000’s)  

31 March

2017

  

31 December

2016

Canadian dollars $ 6,000   19,000
United States dollars $ 52,000   59,000

 

g)Liquidity risk

Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time. As the Company has no significant source of cash flows this is a significant risk.

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

 

5)Equipment
    Plant & Equipment   Furniture & Equipment  

Computer

Hardware

  

Asset Under

Capital Lease

   Total
Cost or Deemed Cost                    
Balance at 01 January 2016 $ 18,712   46,164   71,945   38,833   175,654
Additions   -   -   -   -   -
Balance at 31 December 2016 and 31 March 2017 $ 18,712   46,164   71,945   38,833   175,654
Depreciation                    
Balance at 01 January 2016 $ 18,102   46,164   71,945   38,833   175,044
Depreciation for the period   610   -   -   -   610
Balance at 31 December 2016 and 31 March 2017 $ 18,712   46,164   71,945   38,833   175,654
Carrying Amounts                    
At 01 January 2016 $ 610   -   -   -   610
At 31 December 2016 and 31 March 2017 $ -   -   -   -   -

 

6)Assets held for sale

Emgold has two real estate properties located in Nevada County that were part of the Company’s former Idaho-Maryland Project. On 15 March 2016, the Company sold 27 acres of land in the gross amount of $350,000; the cost of the property was $336,056, after selling costs of $30,295 the net proceeds were $319,705. The proceeds of the sale are being used for general working capital. Emgold has a remaining 7.13 acre parcel of land that is currently listed for sale.

Assets Held for Sale   Assets Held for Sale
Balance at 01 January 2016 $ 490,508
Disposition of assets   (336,056)
Balance at 31 December 2016 and 31 March 2017 $ 154,452

 

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

7)Exploration and evaluation assets
Property Acquisition Costs   Idaho-Maryland   Buckskin Rawhide East   Buckskin Rawhide West   Koegel Property   Stewart Property   Rozan Property   Total
Balance at 01 January 2016 $ - $ 519,052 $ 50,029 $ 50,030 $ 1 $ 1 $ 619,113
Acquisitions   -   -   30,000   30,000   -   -   60,000
Royalty payments received   -   (85,000)   -   -   -   -   (85,000)
Balance at 31 December 2016 $ - $ 434,052 $ 80,029 $ 80,030 $ 1 $ 1 $ 594,113
Balance at 01 January 2016 $ - $ 434,052 $ 80,029 $ 80,030 $ 1 $ 1 $ 594,113
Acquisitions   -   -   30,000   30,000   -   -   60,000
Royalty payments received   -   (25,000)   -   -   -   -   (25,000)
Balance at 31 March 2017 $ - $ 409,052 $ 110,029 $ 110,030 $ 1 $ 1 $ 629,113
a)Idaho-Maryland Property, California

In 2015, the Company classified the former Idaho-Maryland project of $490,508 as assets held for sale (Note 6).

b)Buckskin Rawhide East Property, Nevada

The Company has a 100% interest in the 52 unpatented mineral claims, totalling 835 acres that make up Buckskin Rawhide East Property, which is located near Fallon, Nevada.

The Buckskin Rawhide Property is leased to Rawhide Mining LLC (RMC), owners of the Denton Rawhide Mine under the following terms:

  1. The Lease Term is 20 years (start date of 01 June 2013).
  2. Advance royalty payments will be $10,000 per year, paid by RMC to Emgold, with the first payment due at signing and subsequent payments due on the anniversary of the Lease Agreement.
  3. During the Lease Term, RMC will make all underlying claim fees to keep the claims in good standing.
  4. RMC will conduct a minimum of US$250,000 in exploration activities by the end of Year 1.
  5. RMC will conduct an additional minimum of US$250,000 in exploration activities by the end of Year 3, for a total of US$500,000 in exploration activities by the end of Year 3.
  6. RMC will have the option of earning a 100% interest in the Property by bringing it into commercial production.
  7. Upon bringing the property into commercial production, RMC will make "Bonus Payments" to Emgold. Bonus Payments will be US$15 per ounce of gold when the price of gold ranges between US$1,200 per ounce and US$1,799 per ounce. If the price of gold exceeds US$1,800 per ounce, the Bonus Payment will increase to US$20 per ounce
  8. After meeting its exploration requirements, should RMC subsequently elect to drop the Property or decide not to advance it, the Property will be returned to Emgold. Should Emgold subsequently advance the Property into production, RMC shall then be entitled to the same type of Bonus Payments as contemplated in 7 above.

Under the terms of the lease agreement, RMC was to complete $500,000 in exploration related expenditures on the property by the third anniversary or 1 June 2016. However, as at 1 June 2016, RMC has completed US$325,000 in exploration activities on the property.

On 1 June 2016, RMC and Emgold mutually agreed to amend the original Lease Agreement whereby RMC can pay Emgold US$175,000, in seven quarterly payments of US$25,000, starting 1 June 2016, to keep the Lease Agreement in good standing. These payments will be in lieu of completing the additional US$175,000 in exploration work required in the original Lease Agreement. The proceeds of these payments will be used by Emgold for general working capital. Payments of $25,000 each were completed for 01 June 2016, 01 September 2016, 01 December 2016, and 01 March 2017 respectively. In addition, Emgold received the $10,000 annual advance royalty payment for the Buckskin Rawhide Property from RMC, due 01 June 2016.

 

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

c)Buckskin Rawhide West Property, Nevada

Previously, the Company entered a Lease and Option to Purchase Agreement with Jeremy C. Wire to acquire the PC and RH mineral claims, located 0.3 miles west of Emgold’s existing Buckskin Rawhide Property, in Mineral County, Nevada. The PC and RH claims, called Buckskin Rawhide West, comprise 21 unpatented lode mining claims totalling 420 acres. Pursuant to the lease agreement, advance royalty payments were paid to Jeremy C. Wire in the amount of $10,000 per year during years 2013 to 2014 and $20,000 in 2015. The amount payable escalates to $30,000 per year in years 2016 to 2018. Payments were made in cash or shares, based on the discretion of the Company or the owner, depending on the year. The Company has met all current and past commitments on this property. The Company issued 375,000 common shares during the period for the advance royalty payment for the Buckskin Rawhide West property of $30,000.

d)Koegel Rawhide , Nevada

Previously the Company entered a Lease and Option to Purchase Agreement with Jeremy C. Wire to acquire the RHT and GEL claims, located four miles south of the Company’s Buckskin Rawhide Property in Mineral County, Nevada. The RHT and GEL claims comprise 19 unpatented lode mining claims totalling 380 acres. In addition, Emgold staked 17 additional unpatented lode claims totalling 340 acres. Together, the claims totalling 720 acres make up the Koegel Rawhide Property. Pursuant to the lease agreement, advance royalty payments were paid to Jeremy C. Wire in the amount of $10,000 per year during years 2013 to 2014 and $20,000 in 2015. The liability increases to $30,000 per year in years 2016 to 2018. The Company has met all current and past commitments on this property. The Company issued 333,333 common shares during the period for the advance royalty payment for the Buckskin Rawhide West property of $30,000.

e)Stewart Property, British Columbia

The Company holds the rights to the Stewart mineral claims, near Ymir British Columbia, totalling 5,789 hectares. Since the Company did not have any substantive expenditure in the past three years, there are no current exploration plans for this property, and the property is safely held to January 2023 without additional work. An impairment loss has been previously recognized in the consolidated statement of comprehensive loss bringing the carrying value to $1.

f)Rozan Property, British Columbia

The Company holds the rights to the Rozan mineral claims, near Ymir British Columbia, totalling 1,950 hectares. Since, the Company did not have any substantive expenditure in the past three years, there are no current exploration plans for this property, and the property is safely held until March 2023 without additional work. An impairment loss has been previously recognized in the consolidated statement of comprehensive loss bringing the carrying value to $1.

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

 

g)Exploration and evaluation expenditures
Exploration expenditures   Idaho-Maryland   Buckskin Rawhide East   Buckskin Rawhide West   Koegel Property   Stewart Property   Rozan Property   Total
Claim fees(i)   -   -   5,053   4,486   -   -   9,539
Carrying costs   44,301   -   -   -   -   -   44,301
General property search   4,860   -   -   -   -   -   4,860
Year ended 31 December 2016 $ 49,161 $ - $ 5,053 $ 4,486 $ - $ - $ 58,700
General property search   2,959   -   -   -   -   -   2,959
Period ended 31 March 2017 $ 2,959 $ - $ - $ - $ - $ - $ 2,959
(i)RMC paid the Buckskin Rawhide East claim fees for the year ended 31 December 2016.

 

8)Related party transactions

Related party transactions and balances not disclosed elsewhere in the consolidated financial statements are as follows:

Related Party Disclosure      
Name and Principal Position Period (i)  

Remuneration

or fees(ii)

CEO and President - management fees

2017

2016

$

$

23,125

23,125

Clearline CPA Corp., A company of which the CFO is a director – management fees

2017

2016

 $$

6,803

6,675

Clearline CPA Corp., A company of which the CFO is a director – accounting

2017

2016

 $$

1,439

2,000

(i)For the three month periods ended 31 March 2017 and 2016.
(ii)Amounts disclosed were paid or accrued to the related party.

 

The following table reports amounts included in due to related parties.

         

31 March

2017

   31 December
2016
Clearline CPA Corp.       $ 9,155   11,177
David Watkinson, the CEO         124,519   688,894
Andrew MacRitchie, Director         4,348   4,235
William Witte, Director         4,348   4,235
Total       $ 142,370   708,541

During the period ended 31 March 2017, the Company recognized a gain of $587,500 from settlement of salary payable to the CEO.

As at 31 March 2017, Andrew MacRitchie and William Witte loaned the Company CAD$5,000 each. The loans bear interest at 1% per month and are repayable on demand. Remaining related party balances are measured at their exchange amount, which is the amount of consideration established and agreed to by the related parties. Amounts due to related parties are unsecured, non-interest bearing and have no fixed term of repayment.

 

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

 

9)Share capital
a)Authorized

Unlimited - Number of common shares without par value.

Unlimited - Number of preference shares without par value.

b)Common shares, issued and fully paid

As at 31 March 2017, the Company had issued 79,712,350 (31 December 2016 – 79,004,017) common shares. On 26 January 2017, the Company issued 708,333 common shares as advance royalty payment for its mineral property options.

c)Stock options

The Company has a rolling stock option plan for its directors and employees to acquire common shares of the Company at a price determined by the fair market value of the shares at the date of grant. The maximum aggregate number of common shares reserved for issuance pursuant to the plan is 10% of the issued and outstanding common shares.

As at 31 March 2017, all 5,000,000 (31 December 2016 – 5,000,000) of these outstanding options had vested. As at 31 March 2017 and 31 December 2016, none of the outstanding options were in the money.

d)Warrants

As at 31 March 2017 and 31 December 2016, the Company has no warrants outstanding.

e)Stock-based compensation

For the period ended 31 March 2017 and the year ended 31 December 2016, the Company did not issue additional stock options.

10)Capital disclosures

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company defines capital that it manages as share capital.

Management reviews its capital management approach on an on-going basis and believes that this approach is reasonable and appropriate relative to the size of the Company.

The Company is in the business of mineral exploration and has no source of operating revenue. Operations are financed through the issuance of capital stock or liability instruments, or through the sale of property, plant, and equipment. Capital raised is held in cash in an interest bearing bank account until such time as it is required to pay operating expenses or resource property costs. The Company is not subject to any externally imposed capital restrictions. Its objectives in managing its capital are to safeguard its cash and its ability to continue as a going concern, and to utilize as much of its available capital as possible for exploration activities. The Company’s objectives have not changed during the period ended 31 March 2017.

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Emgold Mining Corporation

US Dollars

(Unaudited)

Notes to the Condensed Interim Consolidated Financial Statements

11)Segmented disclosure

The Company operates in one operating segment, which is acquisition, and exploration of mineral properties. The following provides segmented disclosure on assets and liabilities as reviewed by management regularly:

Segmented Disclosure (Rounded to 000’s)     Canada   United States   Total
31 March 2017              
Current assets   $ 11,000   58,000   69,000
Long-term Assets              
Assets held for sale     -   154,000   154,000
Resource properties     -   629,000   629,000
Other     9,000   -   9,000
Liabilities              
Current liabilities   $ (74,000)   (225,000)   (299,000)
31 December 2016              
Current assets   $ 19,000   67,000   86,000
Long-term Assets              
Assets held for sale     -   154,000   154,000
Resource properties     -   594,000   594,000
Other     9,000   -   9,000
Liabilities              
Current liabilities   $ (77,000)   (791,000)   (868,000)

 

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