EX-99.1 2 ex991.htm CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MAY 31, 2015




















_______________________________________________________________________________________________________________________________________
 

TASMAN METALS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)


_______________________________________________________________________________________________________________________________________



Page 1
























NOTICE OF NO AUDITOR REVIEW OF
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed consolidated interim financial statements they must be accompanied by a notice indicating that the condensed consolidated interim financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's auditors have not performed a review of these condensed consolidated interim financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.




Page 2
TASMAN METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________



   
 
Notes
    
May 31,
2015
$
    
August 31,
2014
$
  
ASSETS
            
 
Current assets
            
Cash
        
3,066,969
      
6,136,271
  
Amounts receivable
        
6,448
      
4,582
  
GST/VAT receivables
        
21,625
      
117,813
  
Prepaids
        
81,549
      
76,294
  
 
Total current assets
        
3,176,591
      
6,334,960
  
Non-current assets
                    
Investments
    
4
      
14,159
      
39,018
  
Property, plant and equipment
    
5
      
60,351
      
103,075
  
Exploration and evaluation assets
    
6
      
12,252,431
      
10,866,653
  
Bond deposit
            
31,883
      
31,865
  
Total non-current assets
            
12,358,824
      
11,040,611
  
 
TOTAL ASSETS
            
15,535,415
      
17,375,571
  
LIABILITIES
                        
Current liabilities
                        
Accounts payable and accrued liabilities
            
194,493
      
931,838
  
 
TOTAL LIABILITIES
            
194,493
      
931,838
  
 
SHAREHOLDERS' EQUITY
                        
Share capital
    
7
      
25,910,384
      
25,910,384
  
Share-based payments reserve
            
9,174,090
      
9,122,790
  
Deficit
            
(19,605,284
)
    
(18,476,032
)
Accumulated other comprehensive loss
            
(138,268
)
    
(113,409
)
 
TOTAL SHAREHOLDERS' EQUITY
            
15,340,922
      
16,443,733
  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
            
15,535,415
      
17,375,571
  


Event after the Reporting Period - See Note 12






These condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on July 15, 2015 and are signed on its behalf by:
 
 
The accompanying notes are an integral part of these condensed consolidated interim financial statements


 
/s/ Mark Saxon                                                          
/s/ Nick DeMare                                                          
Mark Saxon
Nick DeMare
Director
Director

Page 3
TASMAN METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________



       
Three Months Ended
    
Nine Months Ended
  
   
Note
    
May 31,
2015
$
    
May 31,
2014
$
    
May 31,
2015
$
    
May 31,
2014
$
  
Expenses
                    
Accounting and administration
  
8(b)(ii)
      
21,935
      
27,374
      
87,797
      
104,013
  
Audit
        
-
      
-
      
40,938
      
51,117
  
Corporate development
        
11,865
      
51,277
      
25,896
      
126,485
  
Depreciation
  
5
      
9,436
      
13,778
      
32,583
      
40,857
  
General exploration
          
3,666
      
18,641
      
13,862
      
37,320
  
Insurance
          
24,270
      
22,837
      
87,580
      
78,552
  
Legal
          
47,608
      
8,790
      
132,055
      
231,603
  
Management fees
  
8(a)(i)
 
    
45,000
      
40,500
      
135,000
      
121,500
  
Office
          
6,814
      
19,512
      
47,906
      
72,143
  
Professional fees
  
8
      
74,606
      
105,313
      
301,035
      
366,157
  
Regulatory fees
          
18,480
      
17,898
      
54,828
      
54,802
  
Rent
          
9,519
      
11,483
      
29,442
      
36,827
  
Salaries and benefits
          
6,490
      
93,841
      
21,680
      
272,304
  
Shareholder costs
          
17,448
      
18,270
      
21,188
      
23,646
  
Share-based compensation
  
7(e)
 
    
-
      
82,000
      
51,300
      
225,200
  
Transfer agent
          
12,268
      
14,619
      
20,260
      
21,048
  
Travel
          
8,377
      
31,950
      
66,430
      
119,390
  
 
 
          
317,782
      
578,083
      
1,169,780
      
1,982,964
  
 
Loss before other items
          
(317,782
)
    
(578,083
)
    
(1,169,780
)
    
(1,982,964
)
 
Other items
                                      
Gain on sale of equipment
  
5
      
11,041
      
-
      
11,041
      
-
  
Impairment of exploration and evaluation assets
  
6
      
-
      
(37,631
)
    
(7,154
)
    
(44,230
)
Interest income
          
8,802
      
25,993
      
37,812
      
60,854
  
Foreign exchange
          
(3,802
)
    
(22,075
)
    
(1,171
)
    
(24,263
)
 
 
          
16,041
      
(33,713
)
    
40,528
      
(7,639
)
 
Net loss for the period
          
(301,741
)
    
(611,796
)
    
(1,129,252
)
    
(1,990,603
)
 
Other comprehensive loss
          
(23,410
)
    
(10,141
)
    
(24,859
)
    
(19,134
)
 
Comprehensive loss for the period
          
(325,151
)
    
(621,937
)
    
(1,154,111
)
    
(2,009,737
)
 
 
Basic and diluted loss per common share
          
(0.00
)
    
(0.01
)
    
(0.02
)
    
(0.03
)
 
 
Weighted average number of
common shares outstanding
          
66,141,922
      
65,739,508
      
66,141,922
      
62,780,459
  

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page 4
TASMAN METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________



   
Nine Months Ended May 31, 2015
  
   
Share Capital
            
Accumulated
      
 
Number of
Shares
 
    
Amount
$
  
Share-Based
Payments
Reserve
$
  
Deficit
$ 
  
Other
Comprehensive
Loss
$
  
Total
Equity
$
 
Balance at August 31, 2014
    
66,141,922
      
25,910,384
      
9,122,790
      
(18,476,032
)
    
(113,409
)
    
16,443,733
  
 
Share-based compensation on share options
    
-
      
-
      
51,300
      
-
      
-
      
51,300
  
Unrealized loss on investments
    
-
      
-
      
-
      
-
      
(24,859
)
    
(24,859
)
Net loss for the period
    
-
      
-
      
-
      
(1,129,252
)
    
-
      
(1,129,252
)
 
Balance at May 31, 2015
    
66,141,922
      
25,910,384
      
9,174,090
      
(19,605,284
)
    
(138,268
)
    
15,340,922
  



   
Nine Months Ended May 31, 2014
  
   
Share Capital
            
Accumulated
      
 
Number of
Shares
 
    
Amount
$
  
Share-Based
Payments
Reserve
$
Deficit
$
Other
Comprehensive
Loss
$
Total
Equity
$
 
Balance at August 31, 2013
    
60,850,982
      
20,299,802
      
9,056,102
      
(16,034,024
)
    
(111,019
)
    
13,210,861
  
 
Common shares issued for:
                                                
     Cash - private placement
    
4,919,940
      
5,411,934
      
-
      
-
      
-
      
5,411,934
  
     Cash - exercise of share options
    
285,000
      
351,000
      
-
      
-
      
-
      
351,000
  
     Exploration and evaluation assets
    
86,000
      
104,420
      
-
      
-
      
-
      
104,420
  
Share issue costs
    
-
      
(620,282
)
    
-
      
-
      
-
      
(620,282
)
Share-based compensation on share options
    
-
      
-
      
225,200
      
-
      
-
      
225,200
  
Share-based compensation on finder's option
    
-
      
-
      
189,222
      
-
      
-
      
189,222
  
Share-based compensation on finders' warrants
    
-
      
-
      
10,072
      
-
      
-
      
10,072
  
Transfer on exercise of share options
    
-
      
386,900
      
(386,900
)
    
-
      
-
      
-
  
Unrealized loss on investment
    
-
      
-
      
-
      
-
      
(19,134
)
    
(19,134
)
Net loss for the period
    
-
      
-
      
-
      
(1,990,603
)
    
-
      
(1,990,603
)
 
Balance at May 31, 2014
    
66,141,922
      
24,933,774
      
9,093,696
      
(18,024,627
)
    
(130,153
)
    
16,872,690
  


The accompanying notes are an integral part of these condensed consolidated interim financial statements


Page 5
TASMAN METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________



   
Nine Months Ended
  
   
May 31,
2015
$
May 31,
2014
$ 
Operating activities
        
Net loss for the period
    
(1,129,252
)
    
(1,990,603
)
Adjustments for:
                
     Depreciation
    
32,583
      
40,857
  
     Share-based compensation
    
51,300
      
225,200
  
     Impairment of exploration and evaluation assets
    
7,154
      
44,230
  
     Gain on sale of equipment
    
(11,041
)
    
-
  
 
 
    
(1,049,256
)
    
(1,680,316
)
Changes in non-cash working capital items:
                
     Increase in amounts receivable
    
(1,866
)
    
(18,489
)
     Decrease (increase) in GST/VAT receivables
    
96,188
      
(988
)
     Increase in prepaids
    
(5,255
)
    
(27,637
)
     Increase (decrease) in accounts payable and accrued liabilities
    
70,168
      
(78,490
)
 
 
    
159,235
      
(125,604
)
 
Net cash used in operating activities
    
(890,021
)
    
(1,805,920
)
 
Investing activities
                
Proceeds on sale of equipment
    
21,182
      
-
  
Additions to exploration and evaluation assets
    
(2,200,445
)
    
(1,542,008
)
Additions to property, plant and equipment
    
-
      
(6,555
)
Increase in bond deposit
    
(18
)
    
(173
)
Increase in investments
    
-
      
(16,603
)
 
Net cash used in investing activities
    
(2,179,281
)
    
(1,565,339
)
 
Financing activities
                
Issuance of common shares
    
-
      
5,762,934
  
Share issue costs
    
-
      
(420,988
)
 
Net cash provided by financing activities
    
-
      
5,341,946
  
 
Net change in cash
    
(3,069,302
)
    
1,970,687
  
 
Cash at beginning of period
    
6,136,271
      
5,601,492
  
 
Cash at end of period
    
3,066,969
      
7,572,179
  


Supplemental cash flow information - see Note 11

 
 
The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page 6
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 
 
1. Nature of Operations

Tasman Metals Ltd. ("Tasman" or the "Company") was incorporated under the laws of the Province of British Columbia on August 27, 2007.  The Company's common shares are listed and traded on the TSX Venture Exchange ("TSXV") under the symbol "TSM" and on the New York Stock Exchange Market ("NYSE MKT"), under the symbol "TAS".  The Company's head office is located at #1305 - 1090 West Georgia Street, Vancouver, British Columbia, V6E 3V7, Canada.

The Company is a junior resource company engaged in the acquisition and exploration of unproven mineral interests in Scandinavia.  As at May 31, 2015 the Company has not earned any production revenue, nor found proved reserves on any of its mineral interests.

The Company is in the process of exploring and evaluating its mineral properties.  On the basis of information to date, it has not yet determined whether these properties contain economically recoverable ore reserves.  The underlying value of the mineral properties and related deferred acquisition costs is entirely dependent on the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete development and upon future profitable production.  Exploration and evaluation assets represent costs incurred to date, less amounts depreciated and/or written off, and do not necessarily represent present or future values.

As at May 31, 2015 the Company had working capital of $2,982,098.  These condensed consolidated interim financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business operations for the foreseeable future.  The Company's ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to develop properties and to establish future profitable production.  The Company's operations are primarily funded from equity financings which are dependent upon many external factors and may be difficult to impossible to secure or raise when required.  Although management considers that the Company has adequate resources to maintain its core operations and planned work programs on its existing exploration and evaluation assets for the next twelve months, the Company recognizes that work programs may change with ongoing results and, as a result, it may be required to obtain additional financing.  While the Company has been successful in securing financings in the past, there can be no assurance that it will be able to do so in the future.


2. Basis of Preparation

Statement of Compliance

These condensed consolidated interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS"), and in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB").  These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2014, which have been prepared in accordance with IFRS as issued by the IASB.  The accounting policies followed in these condensed consolidated interim financial statements are consistent with those applied in the Company's consolidated financial statements for the year ended August 31, 2014.

Basis of Measurement

The Company's consolidated financial statements have been prepared on the historical cost basis except for the revaluation of certain financial assets and financial liabilities to fair value.

Basis of Presentation

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, revenue 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.

Page 7
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

 
2. Basis of Preparation (continued)

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognized 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.


3. Summary of Significant Accounting Policies

The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited annual consolidated financial statements as at August 31, 2014.  The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended August 31, 2014.


4. Investments
   
May 31, 2015
  
   
Number
of Shares
 
    
Cost
$
  
Accumulated
Compre-
hensive
Loss
$
    
Carrying Value
$
  
Hannans Reward Limited ("Hannans")
    
2,647,059
      
135,824
      
(130,791
)
    
5,033
  
Thomson Resources Ltd. ("Thomson")
    
600,000
      
16,603
      
(7,477
)
    
9,126
  
 
 
            
152,427
      
(138,268
)
    
14,159
  

   
August 31, 2014
  
   
Number
of Shares
 
 
Cost
$
  
Accumulated
Compre-
hensive
Loss
$
  
Carrying Value
$
 
Hannans
    
2,647,059
      
135,824
      
(108,977
)
    
 
26,847 
Thomson
    
600,000
      
16,603
      
(4,432
)
    
12,171 
 
 
            
152,427
      
(113,409
)
    
39,018 

The carrying values of the investments were determined using quoted market values.

Page 8
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 
 
5.             Property, Plant and Equipment
 
 
Cost:
  
Computers
$
  
Office Furniture
and
Equipment
$
  
Field
Equipment
$
  
Vehicles
$
  
Total
$
 
Balance at August 31, 2013
    
18,032
      
19,767
      
98,081
      
134,475
      
270,355
  
Additions
    
-
      
-
      
6,555
      
-
      
6,555
  
Disposals
    
-
      
-
      
-
      
(44,168
)
    
(44,168
)
 
Balance at August 31, 2014
    
18,032
      
19,767
      
104,636
      
90,307
      
232,742
  
Disposals
    
-
      
-
      
-
      
(44,347
)
    
(44,347
)
 
Balance at May 31, 2015
    
18,032
      
19,767
      
104,636
      
45,960
      
188,395
  
 
Accumulated Depreciation:
                                        
 
Balance at August 31, 2013
    
(8,542
)
    
(7,043
)
    
(34,087
)
    
(45,198
)
    
(94,870
)
Depreciation
    
(3,500
)
    
(3,833
)
    
(20,888
)
    
(26,414
)
    
(54,635
)
Disposals
    
-
      
-
      
-
      
19,838
      
19,838
  
 
Balance at August 31, 2014
    
(12,042
)
    
(10,876
)
    
(54,975
)
    
(51,774
)
    
(129,667
)
Depreciation
    
(2,625
)
    
(2,875
)
    
(16,022
)
    
(11,061
)
    
(32,583
)
Disposals
    
-
      
-
      
-
      
34,206
      
34,206
  
 
Balance at May 31, 2015
    
(14,667
)
    
(13,751
)
    
(70,997
)
    
(28,629
)
    
(128,044
)
 
Carrying Value:
                                        
 
Balance at August 31, 2014
    
5,990
      
8,891
      
49,661
      
38,533
      
103,075
  
 
Balance at May 31, 2015
    
3,365
      
6,016
      
33,639
      
17,331
      
60,351
  
 
 
During the nine months ended May 31, 2015 the Company sold a vehicle for $21,182 realizing a gain of $11,041.


6. Exploration and Evaluation Assets

   
May 31, 2015
  
   
Acquisition
Costs
$
    
Deferred
Exploration Costs
$
    
Total
$
  
Rare Earth Properties
            
     Norra Kärr
    
94,877
      
11,210,723
      
11,305,600
  
     Olserum
    
143,357
      
575,251
      
718,608
  
     Other
    
38,701
      
5,287
      
43,988
  
Other Properties
    
122,752
      
61,483
      
184,235
  
 
 
    
399,687
      
11,852,744
      
12,252,431
  

   
August 31, 2014
  
   
Acquisition
Costs
$
    
Deferred
Exploration Costs
$
    
Total
$
  
Rare Earth Properties
            
     Norra Kärr
    
92,797
      
9,889,283
      
9,982,080
  
     Olserum
    
143,357
      
568,594
      
711,951
  
     Other
    
15,960
      
4,758
      
20,718
  
Other Properties
    
112,853
      
39,051
      
151,904
  
 
 
    
364,967
      
10,501,686
      
10,866,653
  
 
 
 
Page 9
 
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 
6.            Exploration and Evaluation Assets (continued)

   
Rare Earth Element Properties
    
Other
      
   
Norra Kärr
$
    
Olserum
$
    
Other
$
    
Properties
$
    
Total
$
  
 
Balance at August 31, 2013
    
7,202,949
      
613,182
      
64,948
      
2,860
      
7,883,939
  
 
Exploration costs
                                        
Consulting
    
579,055
      
72,570
      
-
      
33,436
      
685,061
  
Database
    
2,424
      
-
      
-
      
191
      
2,615
  
Exploration site
    
8,490
      
1,069
      
-
      
265
      
9,824
  
Geochemical
    
94,575
      
3,723
      
-
      
4,192
      
102,490
  
Geological
    
156,299
      
-
      
-
      
-
      
156,299
  
Maps
    
1,442
      
-
      
-
      
437
      
1,879
  
Metallurgical testing
    
429,895
      
-
      
-
      
-
      
429,895
  
Recovery
    
(69,808
)
    
-
      
-
      
-
      
(69,808
)
Salaries
    
43,853
      
-
      
-
      
-
      
43,853
  
Surface rights
    
76,364
      
-
      
-
      
-
      
76,364
  
Technical report
    
1,364,575
      
-
      
-
      
-
      
1,364,575
  
Travel
    
22,215
      
2,896
      
-
      
76
      
25,187
  
 
 
    
2,709,379
      
80,258
      
-
      
38,597
      
2,828,234
  
Acquisition costs
                                        
 
Mining rights
    
16,832
      
18,511
      
-
      
16,353
      
51,696
  
Issuance of common shares
    
52,920
      
-
      
-
      
51,500
      
104,420
  
Acquisition
    
-
      
-
      
-
      
45,000
      
45,000
  
 
 
    
69,752
      
18,511
      
-
      
112,853
      
201,116
  
 
 
Impairment
    
-
      
-
      
(44,230
)
    
(2,406
)
    
(46,636
)
 
 
Balance at August 31, 2014
    
9,982,080
      
711,951
      
20,718
      
151,904
      
10,866,653
  
 
 
Exploration costs
                                        
Consulting
    
286,578
      
4,755
      
-
      
5,178
      
296,511
  
Drilling
    
107,778
      
-
      
-
      
-
      
107,778
  
Exploration site
    
1,635
      
-
      
-
      
201
      
1,836
  
Geochemical
    
34,113
      
-
      
-
      
2,525
      
36,638
  
Geological
    
60,182
      
-
      
-
      
-
      
60,182
  
Maps
    
-
      
-
      
1,157
      
2,671
      
3,828
  
Recovery
    
(52,632
)
    
-
      
-
      
-
      
(52,632
)
Salaries
    
33,598
      
1,902
      
-
      
11,857
      
47,357
  
Surface rights
    
79,651
      
-
      
-
      
-
      
79,651
  
Technical report
    
768,199
      
-
      
-
      
-
      
768,199
  
Travel
    
2,338
      
-
      
-
      
-
      
2,338
  
 
 
      
1,321,440
      
6,657
      
1,157
      
22,432
      
1,351,686
  
Acquisition costs
                                        
Mining rights
    
2,080
      
-
      
29,267
      
9,899
      
41,246
  
 
 
Impairment
    
-
      
-
      
(7,154
)
    
-
      
(7,154
)
 
 
Balance at May 31, 2015
    
11,305,600
      
718,608
      
43,988
      
184,235
      
12,252,431
  

(a) Rare Earth Element Properties

Norra Kärr

The Norra Kärr property consists of four staked exploration claims and a mining lease located in southern Sweden.

During fiscal 2014 the Company issued 36,000 common shares at a fair value of $52,920 to acquire certain surface access rights to the Norra Kärr property.
Page 10
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

6.              Exploration and Evaluation Assets (continued)

Olserum

During fiscal 2012 the Company acquired a 100 % interest in the Olserum property, comprising one claim, in southern Sweden.  The Olserum property was purchased from Norrsken Energy Limited, a private company registered in the United Kingdom, for total consideration of 37,746 common shares of the Company issued at a fair value of $95,120.  The Company subsequently staked a further five claims surrounding the Olserum property.

Other

During the nine months ended May 31, 2015 the Company relinquished certain exploration claims and recorded an impairment charge of $7,154 (fiscal 2014 - $44,230) to exploration and evaluation assets.

As at May 31, 2015 the Company has 10 exploration claims and one mining lease in Sweden.

(b) Other Properties

(i) Tungsten Properties

On October 7, 2013 the Company entered into a letter agreement with Tumi Resources Ltd. ("Tumi") and acquired a 100% interest in seven exploration licenses (the "Tungsten Projects") located in south-central Sweden by paying $45,000 cash and issuing 50,000 common shares of the Company at a fair value of $51,500.  A further 50,000 common shares are issuable upon commencement of production from any of the Tungsten Projects.  Tumi has two common directors.

(ii) Iron Ore Properties

On May 16, 2010 the Company entered into an option agreement with Hannans whereby Hannans subsequently earned a 75% interest in the Sautusvaara, Vieto, Harrejaure and Lauukujarvi exploration claims (the "Iron Ore Claims") in Sweden.  Hannans could earn a further 15% interest in the Iron Ore Claims by funding a feasibility study on at least one Iron Ore Claim prior to June 30, 2018, including minimum expenditures of AUS $100,000 per annum.  On June 10, 2015 the Company was notified by Hannans of its termination of the option agreement.

There were no costs attributable to the Iron Ore Claims as at May 31, 2015 or August 31, 2014.

(iii) Other

During fiscal 2014 the Company relinquished certain exploration claims in Sweden and recorded an impairment charge of $2,406 to exploration and evaluation assets.

See also Note 12.


7. Share Capital

(a)                  Authorized Share Capital

The Company's authorized share capital consists of an unlimited number of common shares without par value.  All issued common shares are fully paid.

(b) Reconciliation of Changes in Share Capital

(i) No equity financings were conducted by the Company during the nine months ended May 31, 2015.
Page 11
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

7. Share Capital (continued)


(ii) During fiscal 2014 the Company completed a private placement in two tranches as follows:

·
In February 2014 the Company completed the first tranche of a private placement of 3,875,863 units at a price of $1.10 per unit for gross proceeds of $4,263,449.  Each unit comprised one common share and one non-transferable share purchase warrant.  Each warrant entitles the holder to purchase an additional common share at a price of $1.50 per share on or before February 11, 2017.  The Company paid a finders' fee of $168,735 cash and issued finders' warrants which entitles the holder to purchase 15,495 common shares at a price of $1.50 per share on or before February 11, 2017.  The fair value of the finders' warrants, estimated using the Black-Scholes option pricing model, is $10,072.  The assumptions used were: a risk-free interest rate of 1.39%; an estimated volatility of 88%; an expected life of 3 years; an expected dividend yield of 0%; and an estimated forfeiture rate of 0%.  The Company also issued 192,000 compensation options exercisable into units with each unit having the same terms as the units issued under the private placement.  The fair value of the compensation options, estimated using the Black-Scholes option pricing model, is $124,800.  The assumptions used were: a risk-free interest rate of 1.39%; an estimated volatility of 88%; an expected life of 3 years; an expected dividend yield of 0%; and an estimated forfeiture rate of 0%.

·
In March 2014 the Company completed the final tranche of its private placement and issued 1,044,077 units as a price of $1.10 per unit for gross proceeds of $1,148,485.  Each unit comprised one common share and one non-transferable share purchase warrant.  Each warrant entitles the holder to purchase an additional common share at a price of $1.50 per share on or before March 31, 2017.  The Company paid a finder's fee of $80,009 cash and issued 103,907 compensation options exercisable into units with each unit having the same terms as the units issued under the private placement.  The fair value of the compensation options, estimated using the Black-Scholes option pricing model, is $93,516.  The assumptions used were: a risk-free interest rate of 1.26%; an estimated volatility of 87%; an expected life of 3 years; an expected dividend yield of 0%; and an estimated forfeiture rate of 0%.

The Company incurred $166,540 for legal and filing fees associated with this private placement.

Directors and officers of the Company purchased 83,000 units of this private placement.

See also Notes 6(b)(i).

(c) Compensation Options

A summary of the Company's compensation options at May 31, 2015 and 2014 and the changes for the nine months ended on those dates is presented below:

   
2015
    
2014
  
   
Number
 
    
Weighted
Average
Exercise
Price
$
  
Number
  
  
Weighted
Average
Exercise
Price
$
 
Balance, beginning and
     end of period
    
295,907
      
1.10
      
-
      
-
  

Page 12
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

7. Share Capital (continued)

The following table summarizes information about the compensation options outstanding and exercisable at May 31, 2015:

Number
Outstanding
 		  
Exercise
Price
$
  
Expiry Date
 
 
 
192,000
      
1.10
  
February 11, 2017
103,907
      
1.10
  
March 31, 2017
 
 
295,907
             

(d) Warrants

A summary of the number of common shares reserved pursuant to the Company's warrants outstanding at May 31, 2015 and 2014, and the changes for the nine months ended on those dates is as follows:

   
2015
    
2014
  
   
Number
 		  
Weighted
Average
Exercise
Price
$
  
Number
 		  
Weighted
Average
Exercise
Price
$
  
 
Balance, beginning of period
    
4,935,435
    
1.50
      
2,090,667
      
1.85
  
Issued
    
-
    
-
      
4,935,435
      
1.50
  
Expired
    
-
    
-
      
(2,090,667
)
    
1.85
  
 
 
Balance, end of period
    
4,935,435
    
1.50
      
4,935,435
      
1.50
  

The following table summarizes information about the number of common shares reserved pursuant to the Company's warrants outstanding and exercisable at May 31, 2015:

Number
Outstanding
 		  
Exercise
Price
$
  
Expiry Date
 
 
 
  
3,891,358
    
1.50
  
February 11, 2017
 
1,044,077
    
1.50
  
March 31, 2017
 
 
  
4,935,435
           

(e)                 Share Option Plan

The Company has established a rolling share option plan (the "Plan"), in which the maximum number of common shares which can be reserved for issuance under the Plan is 10% of the issued and outstanding shares of the Company.  The minimum exercise price of the options is set at the Company's closing share price on the day before the grant date, less allowable discounts in accordance with the policies of the TSXV.  Options granted may be subject to vesting provisions as determined by the Board of Directors and have a maximum term of ten years.

During the nine months ended May 31, 2015 the Company granted 135,000 (2014 - 360,000) share options and recorded compensation expense of $51,300 (2014 - $225,200).

Page 13
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

7. Share Capital (continued)

The fair value of share options granted and/or vested during the nine months ended May 31, 2015 and 2014 is estimated using the Black-Scholes option pricing model using the following assumptions:

 
2015
2014
 
Risk-free interest rate
1.22%
1.26% - 1.46%
Estimated volatility
82%
87% - 96%
Expected life
3 years
3 years
Expected dividend yield
0%
0%
Expected forfeiture rate
0%
0%

The weighted average fair value of all share options granted and/or vested during the nine months ended May 31, 2015 was $0.38 (2014 - $0.63) per option.

Option-pricing models require the use of estimates and assumptions including the expected volatility.  Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide a reliable measure of the fair value of the Company's share options.

A summary of the Company's share options at May 31, 2015 and 2014 and the changes for the nine months ended on those dates is presented below:

   
2015
    
2014
  
   
Number
of Options
  
  
Weighted
Average
Exercise Price
$
    
Number
of Options
 
    
Weighted
Average
Exercise Price
$
  
 
Balance, beginning of period
    
2,535,000
    
1.92
      
3,781,500
      
2.01
  
Granted
    
135,000
    
0.60
      
360,000
      
0.85
  
Exercised
    
-
    
-
      
(285,000
)
    
1.23
  
Expired
    
(2,145,000
)
  
2.07
      
(1,011,500
)
    
1.91
  
 
Balance, end of period
    
525,000
    
0.97
      
2,845,000
      
1.99
  

The following table summarizes information about the share options outstanding and exercisable at May 31, 2015:

Number
Outstanding
 
    
Exercise
Price
$
  
Expiry Date
 
 
 
  
50,000
    
1.40
  
September 13, 2015
 
25,000
    
1.44
  
October 31, 2015
 
30,000
    
1.07
  
February 11, 2016
 
60,000
    
0.65
  
September 2, 2016
 
85,000
    
0.76
  
September 23, 2016
 
40,000
    
0.95
  
January 3, 2017
 
100,000
    
1.47
  
April 7, 2017
 
135,000
    
0.60
  
October 7, 2017
 
 
  
525,000
           

(f)                  Escrow Shares

As at May 31, 2015, 30,575 common shares are held in escrow.


Page 14
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

8. Related Party Disclosures

A number of key management personnel hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities.  Certain of these entities transacted with the Company during the reporting period.

(a) Transactions with Key Management Personnel

(i) During the nine months ended May 31, 2015 and 2014 the following amounts were incurred with respect to the Company's executive officers, comprising the President, former Vice-President of Corporate Development ("VPCD") and Chief Financial Officer ("CFO"):

   
2015
$
  
2014
$
 
Management fees
    
135,000
      
121,500
  
Professional fees
    
73,000
      
97,500
  
 
 
    
208,000
      
219,000
  

As at May 31, 2015, $49,500 (2014 - $46,000) of the above amounts remained unpaid and has been included in accounts payable and accrued liabilities.

The Company has a management agreement with the President which provides that, in the event the President's services are terminated without cause or upon a change of control of the Company, a termination payment of two years of compensation, at $15,000 per month, is payable.  If the termination had occurred on May 31, 2015 the amount payable under the agreement would be $360,000.

(ii)                See also Note 12.

(b)            Transactions with Other Related Parties

During the nine months ended May 31, 2015 the Company:

(i) incurred a total of $90,000 (2014 - $93,000) for professional services provided by the non-management directors of the Company.  As at May 31, 2015, $23,500 (2014 - $23,500) remained unpaid and has been included in accounts payable and accrued liabilities;

(ii) incurred a total of $42,770 (2014 - $49,300) to Chase Management Ltd. ("Chase"), a private corporation owned by the CFO of the Company, for accounting and administration services provided by Chase personnel, excluding the CFO, and $3,015 (2014 - $3,015) for rent.  As at May 31, 2015, $4,335 (2014 - $5,135) remained unpaid and has been included in accounts payable and accrued liabilities;

(iii) incurred $16,568 (2014 - $21,650) for shared administration costs with public companies with common directors and officers.  As at May 31, 2015, $1,088 (2014 - $4,100) of the amount remained unpaid and has been included in accounts payable and accrued liabilities;  and

(iv) recorded a recovery of $18,671 (2014 - $37,252) for shared office personnel and costs from public companies with common directors and officers.  As at May 31, 2015, $2,382 (2014 - $3,645) of the amount remained outstanding and has been included in amounts receivable.

See also Notes 6(b)(i) and 12.


Page 15
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

9.                   Segmented Information

The Company is involved in the exploration and development of resource properties in certain Scandinavian countries, with corporate operations in Canada.  The Company is in the exploration stage and accordingly, has no reportable segment revenues or operating results.

The Company's total assets are segmented geographically as follows:

   
May 31, 2015
  
   
Canada
$
  
Scandinavia
$
  
Total
$
 
Current assets
    
2,969,673
      
206,918
      
3,176,591
  
Investments
    
14,159
      
-
      
14,159
  
Property, plant and equipment
    
-
      
60,351
      
60,351
  
Exploration and evaluation assets
    
-
      
12,252,431
      
12,252,431
  
Bond deposit
    
-
      
31,883
      
31,883
  
 
 
    
2,983,832
      
12,551,583
      
15,535,415
  
 

 
   
August 31, 2014
  
   
Canada
$
  
Scandinavia
$ 
  
Total
$ 
 
Current assets
    
5,945,775
      
389,185
      
6,334,960
  
Investments
    
39,018
      
-
      
39,018
  
Property, plant and equipment
    
-
      
103,075
      
103,075
  
Exploration and evaluation assets
    
-
      
10,866,653
      
10,866,653
  
Bond deposit
    
-
      
31,865
      
31,865
  
 
 
    
5,984,793
      
11,390,778
      
17,375,571
  


10. Financial Instruments and Risk Management

Categories of Financial Assets and Financial Liabilities

Financial assets are classified into one of the following four categories:  FVTPL; held-to-maturity investments; loans and receivables; and available-for-sale.  Financial liabilities are classified as FVTPL or other temporary liabilities.  The carrying values of the Company's financial instruments are classified into the following categories:

Financial Instrument
 
Category
 
  
May 31,
2015
$
  
August 31,
2014
$
 
Cash
FVTPL
    
3,066,969
      
6,136,271
  
Investments
Available-for-sale
    
14,159
      
39,018
  
Amounts receivable
Loans and receivables
    
6,448
      
4,582
  
Accounts payable and accrued liabilities
Other liabilities
    
(194,493
)
    
(931,838
)

The Company's financial instruments recorded at fair value require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis.
Page 16
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________

 
10. Financial Instruments and Risk Management (continued)

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1.  Prices in Level 2 are either directly or indirectly observable as of the reporting date.  Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the market place.

Level 3 - Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.

The recorded amounts for amounts receivable and accounts payable and accrued liabilities approximate their fair value due to their short-term nature.  The Company's cash and investments under the fair value hierarchy are measured using Level 1 inputs.

The Company's risk exposures and the impact on the Company's financial instruments are summarized below:   

Credit Risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations.  The Company's credit risk is primarily attributable to cash and amounts receivable.  Management believes that the credit risk concentration with respect to financial instruments included in cash and amounts receivable is remote.

Liquidity Risk

Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due.  The Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will have sufficient liquidity to meet its obligations.  All of the Company's financial liabilities are classified as current and are anticipated to mature within the next fiscal period.  The following table is based on the contractual maturity dates of financial assets and the earliest date on which the Company can be required to settle financial liabilities.

   
Contractual Maturity Analysis at May 31, 2015
  
   
Less than
3 Months
$
  
3 - 12
Months
$
  
1 - 5
Years
$
  
Over
5 Years
$
  
Total
$
  
 
Cash
    
3,066,969
      
-
      
-
      
-
      
3,066,969
  
Investments
    
-
      
-
      
14,159
      
-
      
14,159
  
Amounts receivable
    
6,448
      
-
      
-
      
-
      
6,448
  
Accounts payable and
     accrued liabilities
    
(194,493
)
    
-
      
-
      
-
      
(194,493
)

   
Contractual Maturity Analysis at August 31, 2014
  
   
Less than
3 Months
$
  
3 - 12
Months
$
  
1 - 5
Years
$ 
  
Over
5 Years
$ 
  
Total
$
  
 
Cash
    
6,136,271
      
-
      
-
      
-
      
6,136,271
  
Investments
    
-
      
-
      
39,018
      
-
      
39,018
  
Amounts receivable
    
4,582
      
-
      
-
      
-
      
4,582
  
Accounts payable and
     accrued liabilities
    
(931,838
)
    
-
      
-
      
-
      
(931,838
)

Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.  These fluctuations may be significant.
Page 17
TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 

 
10. Financial Instruments and Risk Management (continued)

(a) Interest Rate Risk

The Company is exposed to interest rate risk to the extent that the cash bears floating rates of interest.  The interest rate risk on cash and on the Company's obligations are not considered significant.

(b) Foreign Currency Risk

The Company's functional currency is the Canadian dollar and major transactions are transacted in Canadian Dollars and Swedish Kronors ("SEK").  The Company maintains SEK bank accounts in Sweden to support the cash needs of its foreign operation.  Management believes the foreign exchange risk related to currency conversions are minimal and therefore does not hedge its foreign exchange risk.  At May 31, 2015, 1 Canadian Dollar was equal to 6.86 SEK.

Balances are as follows:
   
Swedish
Kronors
  
CDN $
Equivalent
 
Cash
    
1,212,048
      
176,683
  
Amounts receivable
    
22,040
      
3,213
  
VAT receivable
    
80,597
      
11,749
  
Accounts payable and accrued liabilities
    
(438,806
)
    
(63,966
)
 
 
    
875,879
      
127,679
  

Based on the net exposures as of May 31, 2015 and assuming that all other variables remain constant, a 10% fluctuation on the Canadian Dollar against the SEK would result in the Company's net loss to be approximately $11,500 higher (or lower).

Capital Management

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, cash and cash equivalents and short-term investments.  The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.  Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.


11.                Supplemental Cash Flow Information

Non-cash activities were conducted by the Company as follows:
   
2015
$
  
2014
$ 
 
Operating activity
        
     (Decrease) increase in accounts payable and accrued liabilities
    
(807,513
)
    
215,668
  
 
Financing activities
                
     Issuance of common shares
    
-
      
386,000
  
     Share issue costs
    
-
      
(199,294
)
     Share-based payments reserve
    
-
      
(187,606
 )
     
-
      
-
  
 
Investing activity
                
     Change in exploration and evaluation assets
    
807,513
      
(215,668
)
 
 
 
 
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TASMAN METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2015
(Unaudited - Expressed in Canadian Dollars)
______________________________________________________________________________________________________________________________________
 
12.                Event after the Reporting Period

On June 2, 2015 the Company completed the purchase of 100% interests in two chromite projects (Akanvaara and Koitelainen), comprising of 120 exploration claims and claim applications located in north-eastern Finland.  The Company paid $45,529 to the vendor, Kipu Metals Corp. ("Kipu"), a private corporation of which the President of the Company and a director of the Company are also directors and shareholders of Kipu.

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