FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Issuer
Pursuant to rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
CANARC RESOURCE CORP.
800, 850 West Hastings Street, Vancouver, British Columbia, V6C 1E1
EXHIBIT LIST
99.1 Condensed Consolidated Interim Financial Statements for the Three and Nine Months ended September 30, 2012
99.2 Management Discussion and Analysis for the Three and Nine Months ended September 30, 2012
99.3 Chief Executive Officer Certification of Interim Filings
99.4 Chief Financial Officer Certification of Interim Filings
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Canarc Resource Corp.
(Registrant)
·
|
Canarc significantly reduced the estimated cost to complete a feasibility study for the development of a 72,000 oz per year high grade, underground gold mine at the New Polaris project in northwestern BC from Cdn$26 million down to approximately Cdn$9 million.
|
·
|
The previous Cdn$26 million work program included underground mine development in order to complete a feasibility study for the project and under the revised program, an additional 15,000 meters (m) of infill core drilling will be completed in approximately 35 holes in order to provide sufficient measured and indicated resources for feasibility.
|
·
|
The Company closed a brokered private placement financing of 11.3 million units at Cdn$0.10 per unit for gross proceeds of Cdn$1.13 million. Canford Capital Inc. is the sole subscriber in the private placement and became an insider of the Company by virtue of holding more than 10% of the issued and outstanding share capital of the Company.
|
·
|
Canarc also granted Canford a 120-day period of exclusivity to complete its due diligence and execute an option agreement to earn up to a 51% interest in the New Polaris gold mine project in return for up to a CAD$30 million investment in exploration and development of the property with Canarc as the project manager during the option period.
|
·
|
Canford plans to carry out its due diligence on the New Polaris gold mine project, which is located only 4 kilometers from, and shares a common property boundary with, the larger and more advanced Tulsequah Chief poly-metallic mine project of Chieftain Metals.
|
·
|
Chieftain Metals announced in Ocotber 2012 that their amended Environmental Assessment certificate to develop a 120 kilometer road to their already permitted Tulsequah Chief poly-metallic mine project has now been approved by the BC government.
|
·
|
Having a newly permitted mine and road adjacent to New Polaris and a new major shareholder and potential partner for the project should help pave the way for Canarc to complete its feasibility program leading to the possible development of this robust high grade gold mine project.
|
·
|
Management continues to pursue new opportunities for growth by evaluating attractive gold projects in the USA and Canada for acquisition where management’s exploration and mining experience can add value.
|
September 30,
|
December 31,
|
|||||||||||
Notes
|
2012
|
2011
|
||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS
|
||||||||||||
Cash
|
$ | 1,003 | $ | 45 | ||||||||
Receivables and prepaids
|
15 | 137 | 92 | |||||||||
Marketable securities
|
6 | - | 93 | |||||||||
Total Current Assets
|
1,140 | 230 | ||||||||||
NON-CURRENT ASSETS
|
||||||||||||
Mineral property interests
|
7 | 13,549 | 12,948 | |||||||||
Equipment
|
8 | 6 | 7 | |||||||||
Long-term investments
|
9 | 95 | 92 | |||||||||
Total Non-Current Assets
|
13,650 | 13,047 | ||||||||||
Total Assets
|
$ | 14,790 | $ | 13,277 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Accounts payable and accrued liabilities
|
15 | $ | 1,006 | $ | 524 | |||||||
Notes payable
|
10 | 481 | 88 | |||||||||
Flow-through obligations
|
11 | 209 | 195 | |||||||||
Total Liabilities
|
1,696 | 807 | ||||||||||
SHAREHOLDERS' EQUITY
|
||||||||||||
Share capital
|
13 | 59,220 | 58,258 | |||||||||
Reserve for share-based payments
|
849 | 1,081 | ||||||||||
Accumulated other comprehensive income (loss)
|
234 | (54 | ) | |||||||||
Deficit
|
(47,209 | ) | (46,815 | ) | ||||||||
Total Shareholders' Equity
|
13,094 | 12,470 | ||||||||||
Total Liabilities and Shareholders' Equity
|
$ | 14,790 | $ | 13,277 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
Notes
|
2012
|
2011
|
2012
|
2011
|
||||||||||||||||
Expenses:
|
||||||||||||||||||||
Amortization
|
$ | 1 | $ | 1 | $ | 2 | $ | 2 | ||||||||||||
Corporate development
|
1 | 2 | 10 | 35 | ||||||||||||||||
Employee and director remuneration
|
15 | 105 | 87 | 379 | 321 | |||||||||||||||
General and administrative
|
14 | 51 | 63 | 169 | 201 | |||||||||||||||
Shareholder relations
|
39 | 13 | 169 | 64 | ||||||||||||||||
Share-based payments
|
13(c), 15 | 37 | 115 | 147 | 182 | |||||||||||||||
Loss before the undernoted
|
(234 | ) | (281 | ) | (876 | ) | (805 | ) | ||||||||||||
Interest and other investment income
|
1 | - | 2 | 1 | ||||||||||||||||
Gain from disposition of marketable securities
|
- | - | 77 | - | ||||||||||||||||
Interest and finance charges
|
(17 | ) | (2 | ) | (34 | ) | (7 | ) | ||||||||||||
Foreign exchange gain (loss)
|
(71 | ) | - | 8 | (15 | ) | ||||||||||||||
Due diligence cost on asset acquisition
|
7(c) | - | - | - | (60 | ) | ||||||||||||||
Write-off of mineral property interest
|
(27 | ) | - | (27 | ) | - | ||||||||||||||
Loss before income tax
|
(348 | ) | (283 | ) | (850 | ) | (886 | ) | ||||||||||||
Deferred income tax recovery
|
- | - | - | 1 | ||||||||||||||||
Net loss for the period
|
(348 | ) | (283 | ) | (850 | ) | (885 | ) | ||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||
Realized gain from available-for-sale securities
|
6 | - | - | (77 | ) | - | ||||||||||||||
Unrealized gain (loss) on available-for-sale securities
|
6 | - | (30 | ) | - | 9 | ||||||||||||||
Comprehensive loss for the period
|
$ | (348 | ) | $ | (313 | ) | $ | (927 | ) | $ | (876 | ) | ||||||||
Basic and diluted loss per share
|
$ | - | $ | - | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||||
Weighted average number of shares outstanding
|
94,687,823 | 93,625,591 | 94,413,492 | 92,948,652 |
Accumulated
|
||||||||||||||||||||||||
Share Capital |
Reserve for
|
Other
|
||||||||||||||||||||||
Number of
|
Share-Based
|
Comprehensive
|
||||||||||||||||||||||
Shares
|
Amount
|
Payments
|
Income (Loss)
|
Deficit
|
Total
|
|||||||||||||||||||
Balance, December 31, 2010
|
90,985,890 | $ | 57,685 | $ | 1,239 | $ | 10 | $ | (47,041 | ) | $ | 11,893 | ||||||||||||
Conversion of convertible debenture
|
1,282,051 | 300 | - | - | - | 300 | ||||||||||||||||||
Exercise of stock options
|
44,000 | 7 | (3 | ) | - | - | 4 | |||||||||||||||||
Exercise of warrants
|
1,313,650 | 205 | - | - | - | 205 | ||||||||||||||||||
Renunciation of flow-through expenditures
|
- | (1 | ) | - | - | - | (1 | ) | ||||||||||||||||
Share-based payments
|
- | - | 182 | - | - | 182 | ||||||||||||||||||
Expiry of stock options
|
- | - | (378 | ) | - | 378 | - | |||||||||||||||||
Other comprehensive income:
|
||||||||||||||||||||||||
Unrealized gain on available-for-sale securities
|
- | - | - | 9 | - | 9 | ||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | (585 | ) | 5 | (580 | ) | ||||||||||||||||
Elimination of derivative liability
|
- | - | - | - | 1,049 | 1,049 | ||||||||||||||||||
Net loss for the period
|
- | - | - | - | (885 | ) | (885 | ) | ||||||||||||||||
Balance, September 30, 2011
|
93,625,591 | $ | 58,196 | $ | 1,040 | $ | (566 | ) | $ | (46,494 | ) | $ | 12,176 | |||||||||||
Balance, December 31, 2011
|
94,096,171 | $ | 58,258 | $ | 1,081 | $ | (54 | ) | $ | (46,815 | ) | $ | 12,470 | |||||||||||
Private placement, net of share issue costs
|
11,300,000 | 999 | - | - | - | 999 | ||||||||||||||||||
Exercise of stock options
|
346,000 | 60 | (25 | ) | - | - | 35 | |||||||||||||||||
Share-based payments
|
- | - | 147 | - | - | 147 | ||||||||||||||||||
Expiry of stock options
|
- | - | (454 | ) | - | 454 | - | |||||||||||||||||
Finders fee warrants
|
- | (97 | ) | 97 | - | - | - | |||||||||||||||||
Other comprehensive income:
|
||||||||||||||||||||||||
Realized gain on available-for-sale securities
|
- | - | - | (77 | ) | - | (77 | ) | ||||||||||||||||
Foreign currency translation adjustment
|
- | - | 3 | 365 | 2 | 370 | ||||||||||||||||||
Net loss for the period
|
- | - | - | - | (850 | ) | (850 | ) | ||||||||||||||||
Balance, September 30, 2012
|
105,742,171 | $ | 59,220 | $ | 849 | $ | 234 | $ | (47,209 | ) | $ | 13,094 |
Nine Months Ended September 30, | ||||||||
2012
|
2011
|
|||||||
Cash provided from (used for):
|
||||||||
Operations:
|
||||||||
Loss for the period
|
$ | (850 | ) | $ | (885 | ) | ||
Items not involving cash:
|
||||||||
Accrued interest
|
34 | 7 | ||||||
Amortization
|
2 | 2 | ||||||
Share-based payments
|
147 | 182 | ||||||
Gain on disposition of marketable securities
|
(77 | ) | - | |||||
Write-off of mineral property interest
|
27 | - | ||||||
Deferred income tax recovery
|
- | (1 | ) | |||||
Unrealized currency translation gain
|
(28 | ) | 1 | |||||
(745 | ) | (694 | ) | |||||
Changes in non-cash working capital items:
|
||||||||
Receivables and prepaids
|
(45 | ) | (26 | ) | ||||
Accounts payable and accrued liabilities
|
482 | (72 | ) | |||||
Flow through obligations
|
- | (39 | ) | |||||
Cash used by operating activities
|
(308 | ) | (831 | ) | ||||
Financing:
|
||||||||
Issuance of common shares, net of share issuance costs
|
1,034 | 509 | ||||||
Proceeds from demand loans
|
364 | - | ||||||
Cash provided from financing activities
|
1,398 | 509 | ||||||
Investing:
|
||||||||
Royalty receivable
|
- | 25 | ||||||
Proceeds from disposition of marketable securities
|
92 | - | ||||||
Mineral properties, net of recoveries
|
(224 | ) | (337 | ) | ||||
Disposition of asset held for sale, net of acquisition
|
- | 300 | ||||||
Cash used by investing activities
|
(132) | (12) | ||||||
Increase (decrease) in cash
|
958 | (334 | ) | |||||
Cash, beginning of period
|
45 | 592 | ||||||
Cash, end of period
|
$ | 1,003 | $ | 258 |
Nine Months Ended September 30, | ||||||||
2012
|
2011
|
|||||||
Non-cash financing and investing activities:
|
||||||||
Derivative liability for warrants
|
$ | - | $ | 1,049 | ||||
Cumulative translation adjustment
|
366 | 585 | ||||||
Advance applied to acquisition of asset held for sale
|
- | 300 | ||||||
Fair value of stock options allocated to shares issued on exercise of stock options
|
25 | 3 | ||||||
Fair value of finders fee warrants
|
97 | - | ||||||
Expiration for stock options
|
454 | 378 | ||||||
Income taxes paid
|
- | - | ||||||
Interest paid
|
- | - |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
|
Ÿ
|
Monetary assets and liabilities at the exchange rate at the statement of financial position date;
|
|
Ÿ
|
Non-monetary assets and liabilities at the historical exchange rates, unless such items are carried at fair value, in which case they are translated at the date when the fair value was determined;
|
|
Ÿ
|
Shareholders’ equity items at historical exchange rates; and
|
|
Ÿ
|
Revenue and expense items at the rate of exchange in effect on the transaction date.
|
(e)
|
Critical accounting estimates:
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
·
|
Debt instruments meeting both a “business model” test and a “cash flow characteristics” test are measured at amortized cost (the use of fair value is optional in some limited circumstances).
|
·
|
Investments in equity instruments can be designated as “fair value through other comprehensive income” with only dividends being recognized in profit or loss.
|
·
|
All other instruments (including all derivatives) are measured at fair value with changes recognized in the profit or loss.
|
·
|
The concept of “embedded derivatives” does not apply to financial assets within the scope of the standard and the entire instrument must be classified and measured in accordance with the above guidelines.
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
·
|
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint operators recognize their assets, liabilities, revenue and expenses in relation to its interest in a joint operation (including their share of any such items arising jointly).
|
·
|
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (joint venturers) have rights to the net assets of the arrangement. A joint venturer applies the equity method of accounting for its investment in a joint venture in accordance with IAS 28 Investments in Associates and Joint Ventures (2011). Unlike IAS 31, the use of “proportionate consolidation” to account for joint ventures is not permitted.
|
·
|
Significant judgments and assumptions - such as how control, joint control, significant influence has been determined.
|
·
|
Interests in subsidiaries - including details of the structure of the group, risks associated with structured entities, changes in control, and so on.
|
·
|
Interests in joint arrangements and associates - the nature, extent and financial effects of interests in joint arrangements and associates (including names, details and summarized financial information).
|
·
|
Interests in unconsolidated structured entities - information to allow an understanding of the nature and extent of interests in unconsolidated structured entities and to evaluate the nature of, and changes in, the risks associated with its interests in unconsolidated structured entities.
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
·
|
Level 1 - quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
|
·
|
Level 2 - inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
·
|
Level 3 - unobservable inputs for the asset or liability.
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
|
(xi)
|
Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendments to IFRS 1)
|
·
|
Replace references to a fixed date of “January 1, 2004” with “the date of transition to IFRSs”, thus eliminating the need for companies adopting IFRSs for the first time to restate de-recognition transactions that occurred before the date of transition to IFRSs.
|
·
|
Provide guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation.
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
·
|
Preserve the amendments made to IAS 1 in 2007 to require profit or loss and OCI to be presented together, i.e., either as a single “statement of profit or loss and comprehensive income”, or a separate “statement of profit or loss” and a “statement of comprehensive income” – rather than requiring a single continuous statement as was proposed in the exposure draft.
|
·
|
Require entities to group items presented in OCI based on whether they are potentially reclassifiable to profit or loss subsequently. i.e., those that might be reclassified and those that will not be reclassified.
|
·
|
Require tax associated with items presented before tax to be shown separately for each of the two groups of OCI items (without changing the option to present items of OCI either before tax or net of tax).
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(b)
|
Financial instruments:
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(b)
|
Financial instruments: (continued)
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(b)
|
Financial instruments: (continued)
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(h)
|
Share-based payments:
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(h)
|
Share-based payments: (continued)
|
(i)
|
Environmental rehabilitation:
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(k)
|
Provisions:
|
4.
|
Management of Capital
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5.
|
Management of Financial Risk
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5.
|
Management of Financial Risk (continued)
|
Held in Canadian dollars
|
||||
Cash
|
$ | 1,002 | ||
Accounts payable and accrued liabilities
|
(818 | ) | ||
Net assets (liabilities)
|
$ | 184 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
5.
|
Management of Financial Risk (continued)
|
|
(iii)
|
Other price risk:
|
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Balance, begin of period
|
$ | 93 | $ | 25 | ||||
Unrealized gain on available-for-sale securities
|
- | 71 | ||||||
Realized gain from disposition of available-for-sale securities
|
(77 | ) | - | |||||
Disposition of available-for-sale securities at cost
|
(14 | ) | - | |||||
Foreign currency translation adjustment
|
(2 | ) | (3 | ) | ||||
Balance, end of period
|
$ | - | $ | 93 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
British Columbia (Canada)
|
Yukon (Canada)
|
|||||||||||||||||||
New Polaris
|
Windfall Hills
|
Devil's Thumb
|
Tay-LP
|
Total
|
||||||||||||||||
(Note 7(a)(i))
|
(Note 7(a)(iii))
|
(Note 7(a)(iv))
|
(Note 7(a)(ii))
|
|||||||||||||||||
Acquisition Costs:
|
||||||||||||||||||||
Balance, December 31, 2010
|
$ | 3,605 | $ | - | $ | - | $ | 74 | $ | 3,679 | ||||||||||
Additions
|
- | 67 | 6 | 72 | 145 | |||||||||||||||
Adjustments from change in functional currency
|
295 | - | - | - | 295 | |||||||||||||||
Balance, December 31, 2011
|
3,900 | 67 | 6 | 146 | 4,119 | |||||||||||||||
Additions
|
- | 92 | - | - | 92 | |||||||||||||||
Foreign currency translation adjustment
|
7 | 2 | - | 5 | 14 | |||||||||||||||
Write-off
|
- | - | (6 | ) | - | (6 | ) | |||||||||||||
Balance, September 30, 2012
|
$ | 3,907 | $ | 161 | $ | - | $ | 151 | $ | 4,219 | ||||||||||
Deferred Exploration Expenditures:
|
||||||||||||||||||||
Balance, December 31, 2010
|
$ | 8,660 | $ | - | $ | - | $ | 385 | $ | 9,045 | ||||||||||
Additions
|
166 | 106 | 15 | 48 | 335 | |||||||||||||||
Adjustments from change in functional currency
|
(541 | ) | - | - | (10 | ) | (551 | ) | ||||||||||||
Balance, December 31, 2011
|
8,285 | 106 | 15 | 423 | 8,829 | |||||||||||||||
Additions
|
86 | 7 | 5 | 34 | 132 | |||||||||||||||
Foreign currency translation adjustment
|
371 | 4 | 1 | 14 | 390 | |||||||||||||||
Write-off
|
- | - | (21 | ) | - | (21 | ) | |||||||||||||
Balance, September 30, 2012
|
$ | 8,742 | $ | 117 | $ | - | $ | 471 | $ | 9,330 | ||||||||||
Mineral property interests:
|
||||||||||||||||||||
Balance, December 31, 2010
|
$ | 12,265 | $ | - | $ | - | $ | 459 | $ | 12,724 | ||||||||||
Balance, December 31, 2011
|
12,185 | 173 | 21 | 569 | 12,948 | |||||||||||||||
Balance, September 30, 2012
|
12,649 | 278 | - | 622 | 13,549 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Present value of expected cash flows from royalties as at December 31, 2010
|
$ | 50 | ||
Less: Royalty received during the year
|
(50 | ) | ||
Royalty receivable as at December 31, 2011
|
$ | - |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Option
|
Option
|
Exploration
|
Advance Royalty
|
Net Smelter
|
Number of
|
|||||||||||||||||||
Payments
|
Payments
|
Commitments (1)
|
Payments
|
Reduction
|
Shares
|
|||||||||||||||||||
(CAD$000s)
|
(US$000s)
|
(CAD$000s)
|
(CAD$000s)
|
(US$000s)
|
||||||||||||||||||||
New Polaris (Note 7(a)(i)):
|
||||||||||||||||||||||||
Net profit interest reduction
|
150,000 | |||||||||||||||||||||||
or buydown
|
||||||||||||||||||||||||
Tay-LP (Note 7(a)(ii)):
|
||||||||||||||||||||||||
December 21, 2012
|
$ | 25 | ||||||||||||||||||||||
December 21, 2013
|
$ | 378 | ||||||||||||||||||||||
December 21, 2014
|
850 | 600 | ||||||||||||||||||||||
Annual advance royalty payments
|
||||||||||||||||||||||||
until commercial production
|
$ | 25 | ||||||||||||||||||||||
Net smelter reduction from 3% to 1.5%
|
$ | 1,950 | ||||||||||||||||||||||
Windfall Hills (Note 7(a)(iii)):
|
||||||||||||||||||||||||
Atna properties:
|
||||||||||||||||||||||||
October 21, 2012 (paid)
|
$ | 8 | ||||||||||||||||||||||
November 21, 2012
|
8 | |||||||||||||||||||||||
December 21, 2012
|
9 | |||||||||||||||||||||||
January 21, 2013
|
9 | |||||||||||||||||||||||
February 21, 2013
|
9 | |||||||||||||||||||||||
March 21, 2013
|
9 | |||||||||||||||||||||||
April 21, 2013
|
150 | |||||||||||||||||||||||
April 21, 2014
|
200 | |||||||||||||||||||||||
April 21, 2015
|
250 | |||||||||||||||||||||||
Dunn properties:
|
||||||||||||||||||||||||
April 20, 2013
|
35 | |||||||||||||||||||||||
April 20, 2014
|
50 | |||||||||||||||||||||||
April 20, 2015
|
125 | |||||||||||||||||||||||
$ | 1,085 | $ | 652 | $ | 978 | $ | 25 | $ | 1,950 | 150,000 |
|
(1)
|
Exploration commitments for the Tay-LP property are adjusted for management fees of 5% and 10% and exploration expenditures incurred by Cap-Ex.
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Accumulated
|
Net Book
|
|||||||||||
Cost
|
Amortization
|
Value
|
||||||||||
Balance, December 31, 2010
|
$ | 10 | $ | - | $ | 10 | ||||||
Additions
|
- | 3 | (3 | ) | ||||||||
Balance, December 31, 2011
|
10 | 3 | 7 | |||||||||
Additions
|
- | 2 | (2 | ) | ||||||||
Foreign currency translation adjustment
|
- | (1 | ) | 1 | ||||||||
Balance, September 30, 2012
|
$ | 10 | $ | 4 | $ | 6 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Balance, December 31, 2010
|
$ | 81 | ||
Add: Accrued interest during the year
|
9 | |||
Less: Foreign currency translation adjustment
|
(2 | ) | ||
Balance, December 31, 2011
|
88 | |||
Add:
|
||||
Proceeds from demand loans
|
364 | |||
Accrued interest during the period
|
26 | |||
Foreign currency translation adjustment
|
3 | |||
Balance, September 30, 2012
|
$ | 481 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Balance, January 1, 2010
|
$ | 193 | ||
Add: Unrealized gain from derivative warrants
|
913 | |||
Less: Fair value from the exercise of derivative warrants
|
(24 | ) | ||
Balance, December 31, 2010
|
1,082 | |||
Less: Elimination of derivative liability for warrants due to change in functional currency
|
(1,082 | ) | ||
Balance, December 31, 2011
|
$ | - |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
|
(i)
|
On September 28, 2012, the Company closed a brokered private placement for 11.3 million units at a price of CAD$0.10 per unit for gross proceeds of CAD$1.13 million, with each unit comprised of one common share and one transferrable common share purchase warrant. Each whole warrant is exercisable for a period of 36 months at a price of CAD$0.15 per share during the initial period of 24 months until September 28, 2014, and at $0.20 per share for the remaining 12 months until September 28, 2015. The warrants are subject to an accelerated expiry whereby if after January 29, 2013, the volume weighted average trading price as traded on the Toronto Stock Exchange equals or exceeds CAD$0.30 per share for a period of 10 consecutive trading days, the Company will have the right, within five business days, to accelerate the expiry date of the warrants by giving not fewer than 30 days written notice to the warrant holder whereby the warrants shall expire 30 days after such date of the notice. Agent’s fees are comprised of a cash commission of CAD$90,400 plus 904,000 agent’s warrants with the identical terms as the underlying warrants in the unit private placement and a corporate finance fee of CAD$37,500.
|
|
(ii)
|
In February 2011, the Company issued a convertible debenture for CAD$300,000 to Effisolar for the interest-free loan from Effisolar, which was then converted into 1,282,051 common shares of the Company on March 2, 2011. Note 7(c) provides further details.
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
2012
|
||||||||
Weighted
|
||||||||
average
|
||||||||
exercise
|
||||||||
Number
|
price
|
|||||||
of Shares
|
(CAD$)
|
|||||||
Outstanding balance, beginning of period
|
10,115,000 | $0.24 | ||||||
Granted
|
2,860,000 | $0.12 | ||||||
Exercised
|
(346,000 | ) | $0.10 | |||||
Forfeited
|
(145,000 | ) | $0.13 | |||||
Expired
|
(2,140,000 | ) | $0.54 | |||||
Outstanding balance, end of period
|
10,344,000 | $0.15 | ||||||
Exercise price range (CAD$)
|
$ | 0.10 - $0.29 |
Options Outstanding
|
Options Exercisable
|
|||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||
Exercise
|
Number
|
Remaining
|
Exercise
|
Number
|
Remaining
|
Exercise
|
||||||
Prices
|
Outstanding at
|
Contractual Life
|
Prices
|
Exercisable at
|
Contractual Life
|
Prices
|
||||||
(CAD$)
|
Sept 30, 2012
|
(Number of Years)
|
(CAD$)
|
Sept 30, 2012
|
(Number of Years)
|
(CAD$)
|
||||||
$0.10
|
1,400,000
|
0.48
|
$0.10
|
1,050,000
|
0.48
|
$0.10
|
||||||
$0.29
|
1,730,000
|
0.62
|
$0.29
|
1,730,000
|
0.62
|
$0.29
|
||||||
$0.11
|
1,440,000
|
1.79
|
$0.11
|
1,440,000
|
1.79
|
$0.11
|
||||||
$0.10
|
2,234,000
|
2.94
|
$0.10
|
2,234,000
|
2.94
|
$0.10
|
||||||
$0.135
|
2,080,000
|
3.76
|
$0.135
|
1,262,000
|
3.76
|
$0.135
|
||||||
$0.145
|
1,460,000
|
4.71
|
$0.145
|
-
|
-
|
-
|
||||||
10,344,000
|
2.47
|
$0.15
|
7,716,000
|
2.00
|
$0.15
|
|||||||
September 30,
|
||||||||
2012
|
2011
|
|||||||
Directors and officers
|
$ | 82 | $ | 170 | ||||
Employees
|
6 | 12 | ||||||
Consultants
|
59 | - | ||||||
$ | 147 | $ | 182 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
September 30,
|
||||||||
2012
|
2011
|
|||||||
Number of stock options granted
|
2,860,000 | 2,220,000 | ||||||
Fair value of stock options granted (CAD$)
|
$ | 0.09 | $ | 0.11 | ||||
Market price of shares on grant date (CAD$)
|
$ | 0.14 | $ | 0.14 | ||||
Pre-vest forfeiture rate
|
1.03 | % | 1.43 | % | ||||
Risk-free interest rate
|
1.17 | % | 2.22 | % | ||||
Expected dividend yield
|
0 | % | 0 | % | ||||
Expected stock price volatility
|
113 | % | 108 | % | ||||
Expected option life in years
|
2.93 | 4.86 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
|
At September 30, 2012, the Company had outstanding warrants as follows:
|
Exercise
|
||||||
Prices
|
Oustanding at
|
Oustanding at
|
||||
(CAD$)
|
Expiry Dates
|
December 31, 2011
|
Issued
|
Exercised
|
Expired
|
September 30, 2012
|
$0.22
|
June 13, 2012
|
4,250,000
|
-
|
-
|
(4,250,000)
|
-
|
$0.15 /
|
until September 28, 2014
|
-
|
11,300,000
|
-
|
-
|
11,300,000
|
$0.20
|
expiry September 28, 2015 (1)
|
|||||
$0.15 /
|
until September 28, 2014
|
-
|
904,000
|
-
|
-
|
904,000
|
$0.20
|
expiry September 28, 2015 (1) (2)
|
|||||
4,250,000
|
12,204,000
|
-
|
(4,250,000)
|
12,204,000
|
|
(1)
|
These warrants are subject to an accelerated expiry whereby if after January 29, 2013, the volume weighted average trading price as traded on the Toronto Stock Exchange equals or exceeds CAD$0.30 per share for a period of 10 consecutive trading days, the Company will have the right, within five business days, to accelerate the expiry date of the warrants by giving not fewer than 30 days written notice to the warrant holder whereby the warrants shall expire 30 days after such date of the notice. Note 13(b)(i) provides further details.
|
|
(2)
|
As these warrants are agent’s warrants, a fair value of $97,470 was recorded as share issuance expense as applied to share capital with a corresponding credit to reserve for share-based payments calculated using the Black-Scholes option pricing model with the following assumptions: volatility 107%, risk-free rate 1.14%, expected life 3 years, and expected dividend yield 0%. Note 13(b)(i) provides further details.
|
Number of Shares
|
|
Stock options (Note 13(c))
|
10,344,000
|
Warrants (Note 13(d))
|
12,204,000
|
Balance, September 30, 2012
|
22,548,000
|
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Three Months ended September 30,
|
Nine Months ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
General and Administrative:
|
||||||||||||||||
Accounting and audit
|
$ | - | $ | 5 | $ | 2 | $ | 11 | ||||||||
Legal
|
8 | 21 | 18 | 72 | ||||||||||||
Office and sundry
|
14 | 20 | 50 | 31 | ||||||||||||
Regulatory
|
12 | 5 | 49 | 53 | ||||||||||||
Rent
|
17 | 12 | 50 | 34 | ||||||||||||
$ | 51 | $ | 63 | $ | 169 | $ | 201 |
(tabular dollar amounts expressed in thousands of United States dollars, except per share amounts) |
Net balance
|
||||||||
receivable (payable)
|
||||||||
September 30, 2012
|
as at September 30, 2012
|
|||||||
Key management compensation:
|
||||||||
Executive salaries and remuneration (1)
|
$ | 380 | $ | (217 | ) | |||
Directors fees
|
27 | (179 | ) | |||||
Share-based payments
|
77 | - | ||||||
$ | 484 | $ | (396 | ) | ||||
Legal fees incurred to a law firm in which a senior officer of the Company is a partner
|
$ | 41 | $ | (124 | ) | |||
Net office, sundry, rent and salary allocations recovered from (incurred to) company(s) sharing certain common director(s)
|
$ | 37 | $ | (70) |
CORPORATE INFORMATION
|
|||
HEAD OFFICE |
#301 – 700 West Pender Street
Vancouver, BC, Canada, V6C 1G8
|
||
Telephone: (604) 685-9700
|
|||
Facsimile: (604) 685-9744
|
|||
Website: www.canarc.net | |||
DIRECTORS
|
Bradford Cooke
|
||
Bruce Bried
Leonard Harris
William Price
|
|||
OFFICERS
|
Bradford Cooke ~ Chairman and Chief Executive Officer
|
||
Garry Biles ~ President and Chief Operating Officer
James Moors ~ Vice-President, Exploration
Gregg Wilson ~ Vice-President, Investor Relations
Philip Yee ~ Chief Financial Officer
Stewart Lockwood ~ Secretary
|
|||
REGISTRAR AND
|
Computershare Investor Services Inc.
|
||
TRANSFER AGENT
|
3rd Floor, 510 Burrard Street
|
||
Vancouver, BC, Canada, V6C 3B9 | |||
AUDITORS
|
Smythe Ratcliffe LLP
|
||
7th Floor, 355 Burrard Street
Vancouver, BC, Canada, V6C 2G8
|
|||
SOLICITORS AND
|
Vector Corporate Finance Lawyers | ||
REGISTERED OFFICE | #1040 – 999 West Hastings Street | ||
Vancouver, BC, Canada, V6C 2W2 | |||
SHARES LISTED | Trading Symbols | ||
TSX: CCM | |||
OTC-BB: CRCUF | |||
DBFrankfurt: CAN |
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
MEASURED UNDILUTED RESOURCE
|
||||||
Cutoff Grade
|
Mineralized Tonnage
|
Average Grade
|
Contained Gold
|
|||
(g/tonne)
|
(oz/ton)*
|
(tonnes)
|
(tons)
|
(g/tonne)
|
(oz/ton)
|
Au (oz)
|
2
|
0.058
|
390,000
|
429,902
|
9.48
|
0.277
|
119,000
|
4
|
0.117
|
330,000
|
363,763
|
10.62
|
0.310
|
113,000
|
6
|
0.175
|
271,000
|
298,727
|
11.89
|
0.347
|
104,000
|
8
|
0.233
|
203,000
|
223,769
|
13.54
|
0.395
|
88,000
|
INDICATED UNDILUTED RESOURCE
|
||||||
Cutoff Grade
|
Mineralized Tonnage
|
Average Grade
|
Contained Gold
|
|||
(g/tonne)
|
(oz/ton)*
|
(tonnes)
|
(tons)
|
(g/tonne)
|
(oz/ton)
|
Au (oz)
|
2
|
0.058
|
1,280,000
|
1,410,960
|
10.97
|
0.320
|
451,000
|
4
|
0.117
|
1,180,000
|
1,300,728
|
11.65
|
0.340
|
442,000
|
6
|
0.175
|
1,017,000
|
1,121,052
|
12.71
|
0.371
|
416,000
|
8
|
0.233
|
806,000
|
888,464
|
14.22
|
0.415
|
368,000
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
MEASURED PLUS INDICATED UNDILUTED RESOURCE
|
||||||
Cutoff Grade
|
Mineralized Tonnage
|
Average Grade
|
Contained Gold
|
|||
(g/tonne)
|
(oz/ton)*
|
(tonnes)
|
(tons)
|
(g/tonne)
|
(oz/ton)
|
Au (oz)
|
2
|
0.058
|
1,670,000
|
1,840,861
|
10.62
|
0.310
|
570,000
|
4
|
0.117
|
1,510,000
|
1,664,491
|
11.42
|
0.333
|
555,000
|
6
|
0.175
|
1,288,000
|
1,419,778
|
12.54
|
0.366
|
519,000
|
8
|
0.233
|
1,009,000
|
1,112,233
|
14.08
|
0.411
|
457,000
|
INFERRED UNDILUTED RESOURCE
|
||||||
Cutoff Grade
|
Mineralized Tonnage
|
Average Grade
|
Contained Gold
|
|||
(g/tonne)
|
(oz/ton)*
|
(tonnes)
|
(tons)
|
(g/tonne)
|
(oz/ton)
|
Au (oz)
|
2
|
0.058
|
2,060,000
|
2,270,763
|
10.5
|
0.307
|
697,000
|
4
|
0.117
|
1,925,000
|
2,121,951
|
11.0
|
0.322
|
683,000
|
6
|
0.175
|
1,628,000
|
1,794,564
|
12.2
|
0.354
|
636,000
|
8
|
0.233
|
1,340,000
|
1,477,098
|
13.3
|
0.387
|
571,000
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
Scheduled Resources
|
1,056,000 tonnes measured and indicated grading 11.7 gpt Au (after dilution) and 1,132,000 tonnes inferred grading 10.8 gpt Au (after dilution) and a 7 gpt cutoff
|
|
Production Rate
|
600 tonnes per day
|
|
Grade
|
11.3 grams per tonne (diluted 13%)
|
|
Recoveries
|
91% gold into concentrate
|
|
Average Output
|
72,000 oz gold per year
|
|
Mine life
|
10 years
|
|
The base case financial parameters are (in Canadian dollars):
|
||
Gold Price
|
US$ 1200 per oz
|
|
Exchange Rate
|
US$ 1.00 = CA$ 1.00
|
|
Capital Cost
|
$101.1 million
|
|
Cash Cost
|
US$ 481 per oz (excluding offsites)
|
|
Pre-Tax
|
After-Tax
|
|
Cash Flow (LoM)
|
$280.8 million
|
$188.1 million
|
Net Present Value (NPV)
|
||
NPV (5%)
|
$197.2 million
|
$129.8 million
|
NPV (8%)
|
$160.0 million
|
$103.7 million
|
NPV (10%)
|
$139.3 million
|
$ 89.0 million
|
Pre-Tax
|
After Tax
|
|
Internal Rate of Return
|
38.1%
|
31.4%
|
Payback Period
|
2.41 years
|
2.51 years
|
New Polaris AFTER TAX CASH FLOW SENSITIVITY ANALYSIS
|
|||
Description of Sensitivity
|
Cash Flow
|
NPV @ 5%
|
NPV @ 8%
|
CAD$ (000)s
|
CAD$ (000)s
|
CAD$ (000)s
|
|
Gold US$1,000/oz -17%
|
$104,287
|
$63,920
|
$45,788
|
Gold US$1,100/oz -8%
|
$146,197
|
$96,981
|
$74,907
|
Base Case US$1,200/oz
|
$188,107
|
$129,819
|
$103,707
|
Gold US$1,300/oz +8%
|
$230,017
|
$162,657
|
$132,507
|
Gold US$1,400/oz +17%
|
$271,927
|
$195,347
|
$161,090
|
Grade -10%
|
$137,815
|
$90,403
|
$69,132
|
Grade -5%
|
$162,961
|
$110,116
|
$86,427
|
Base Case Grade 11.25 gpt
|
$188,107
|
$129,819
|
$103,707
|
Grade +5%
|
$213,253
|
$149,522
|
$120,987
|
Grade +10%
|
$238,399
|
$169,225
|
$138,267
|
Capital Cost -10%
|
$193,775
|
$135,816
|
$109,850
|
Capital Cost -5%
|
$190,941
|
$132,817
|
$106,778
|
Base Case $101M Capital
|
$188,107
|
$129,819
|
$103,707
|
Capital Cost +5%
|
$185,273
|
$126,821
|
$100,635
|
Capital Cost +10%
|
$182,440
|
$123,822
|
$97,564
|
Operating Cost -10%
|
$208,383
|
$145,818
|
$117,799
|
Operating Cost -5%
|
$198,245
|
$137,819
|
$110,753
|
Base Case
|
$188,107
|
$129,819
|
$103,707
|
Operating Cost +5%
|
$177,969
|
$121,819
|
$96,661
|
Operating Cost +10%
|
$167,831
|
$113,820
|
$89,614
|
Exchange rate $0.90 -10%
|
$238,750
|
$169,523
|
$138,540
|
Exchange rate $0.95 -5%
|
$212,104
|
$148,633
|
$120,213
|
Base Case $1.00
|
$188,107
|
$129,819
|
$103,707
|
Exchange rate $1.05 +5%
|
$166,384
|
$112,788
|
$88,765
|
Exchange rate $1.10 +10%
|
$146,625
|
$97,297
|
$75,174
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
Years Ended December 31,
|
||||||||||||
(in $000s except per share amounts)
|
2011
|
2010
|
2009 (1)
|
|||||||||
Total revenues
|
$ | - | $ | - | $ | - | ||||||
Loss before discontinued operations and extraordinary items:
|
||||||||||||
(i) Total
|
$ | (1,209 | ) | $ | (1,396 | ) | $ | (1,579 | ) | |||
(ii) Basic per share
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
(iii) Fully diluted per share
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
Net loss:
|
||||||||||||
(i) Total
|
$ | (1,209 | ) | $ | (1,396 | ) | $ | (1,579 | ) | |||
(ii) Basic per share
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
(iii) Fully diluted per share
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
Total assets
|
$ | 13,277 | $ | 13,900 | $ | 13,215 | ||||||
Total long-term liabilities
|
$ | - | $ | - | $ | - | ||||||
Dividends per share
|
$ | - | $ | - | $ | - | ||||||
|
(1)
|
Financial information for the year ended December 31, 2009 has been prepared in accordance with Canadian GAAP.
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
British Columbia (Canada)
|
Yukon (Canada)
|
|||||||||||||||||||
($000s)
|
New Polaris
|
Windfall Hills
|
Devil's Thumb
|
Tay-LP
|
Total
|
|||||||||||||||
Acquisition Costs:
|
||||||||||||||||||||
Balance, December 31, 2010
|
$ | 3,605 | $ | - | $ | - | $ | 74 | $ | 3,679 | ||||||||||
Additions
|
- | 67 | 6 | 72 | 145 | |||||||||||||||
Adjustments from change in functional currency
|
295 | - | - | - | 295 | |||||||||||||||
Balance, December 31, 2011
|
3,900 | 67 | 6 | 146 | 4,119 | |||||||||||||||
Additions
|
- | 92 | - | - | 92 | |||||||||||||||
Foreign currency translation adjustment
|
7 | 2 | - | 5 | 14 | |||||||||||||||
Write-off
|
- | - | (6 | ) | - | (6 | ) | |||||||||||||
Balance, September 30, 2012
|
$ | 3,907 | $ | 161 | $ | - | $ | 151 | $ | 4,219 | ||||||||||
Deferred Exploration Expenditures:
|
||||||||||||||||||||
Balance, December 31, 2010
|
$ | 8,660 | $ | - | $ | - | $ | 385 | $ | 9,045 | ||||||||||
Additions
|
166 | 106 | 15 | 48 | 335 | |||||||||||||||
Adjustments from change in functional currency
|
(541 | ) | - | - | (10 | ) | (551 | ) | ||||||||||||
Balance, December 31, 2011
|
8,285 | 106 | 15 | 423 | 8,829 | |||||||||||||||
Additions
|
86 | 7 | 5 | 34 | 132 | |||||||||||||||
Foreign currency translation adjustment
|
371 | 4 | 1 | 14 | 390 | |||||||||||||||
Write-off
|
- | - | (21 | ) | - | (21 | ) | |||||||||||||
Balance, September 30, 2012
|
$ | 8,742 | $ | 117 | $ | - | $ | 471 | $ | 9,330 | ||||||||||
Mineral property interests:
|
||||||||||||||||||||
Balance, December 31, 2010
|
$ | 12,265 | $ | - | $ | - | $ | 459 | $ | 12,724 | ||||||||||
Balance, December 31, 2011
|
12,185 | 173 | 21 | 569 | 12,948 | |||||||||||||||
Balance, September 30, 2012
|
12,649 | 278 | - | 622 | 13,549 |
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
Option
Payments
|
Option
Payments |
Exploration Commitments (1) |
Advance Royalty Payments |
Net Smelter
Reduction
|
Number of
Shares
|
|||||||
(CAD$000s)
|
(US $000s)
|
(CAD$000s)
|
(CAD$000s)
|
|
(US $000s)
|
|||||||
New Polaris:
|
||||||||||||
Net profit interest reduction
|
150,000
|
|||||||||||
or buy down
|
||||||||||||
Ta y- LP :
|
||||||||||||
December 21,2012
|
$
|
25
|
||||||||||
December 21,2013
|
$ |
378
|
||||||||||
December 21,2014
|
850
|
600
|
||||||||||
Annual advance royalty payments
|
||||||||||||
until commercial production
|
$
|
25
|
||||||||||
Net smelter reduction from 3% to 1.5%
|
$
|
1,950
|
||||||||||
Windfall Hills:
|
||||||||||||
Atna properties:
|
||||||||||||
October 21,2012 (pa id)
|
$
|
8
|
||||||||||
November 21,2012
|
8
|
|||||||||||
December 21,2012
|
9
|
|||||||||||
January 21,2013
|
9
|
|||||||||||
February 21,2013
|
9
|
|||||||||||
Marc h 21,2013
|
9
|
|||||||||||
April 21,2013
|
150
|
|||||||||||
April 21,2014
|
200
|
|||||||||||
April 21,2015
|
250
|
|||||||||||
Dunn properties:
|
||||||||||||
April 20,2013
|
35
|
|||||||||||
April 20,2014
|
50
|
|||||||||||
April 20,2015
|
125
|
|||||||||||
$
|
1,085
|
$
|
652
|
$
|
978
|
$
|
25
|
$
|
1,950
|
150,000
|
|
(1)
|
Exploration commitments for the Tay-LP property are adjusted for management fees of 5% and 10% and exploration expenditures incurred by Cap-Ex.
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
(in $000s except
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
per share amounts) | Sept 30 | June 30 | Mar 31 | Dec 31 | Sept 30 | June 30 | Mar 31 |
Dec 31
|
||||||||||||||||
Total revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
(Loss) income before
|
||||||||||||||||||||||||
discontinued operations and
|
||||||||||||||||||||||||
extraordinary items:
|
||||||||||||||||||||||||
(i) Total
|
$
|
(348)
|
$
|
(281)
|
$
|
(221)
|
$
|
(323)
|
$
|
(283)
|
$
|
(280)
|
$
|
(323)
|
$
|
(1,473)
|
||||||||
(ii) Basic per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.01)
|
$
|
-
|
$
|
(0.02)
|
||||||||
(iii) Fully diluted
|
||||||||||||||||||||||||
per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.01)
|
$
|
-
|
$
|
(0.02)
|
||||||||
Net (loss) income:
|
||||||||||||||||||||||||
(i) Total
|
$
|
(348)
|
$
|
(281)
|
$
|
(221)
|
$
|
(323)
|
$
|
(283)
|
$
|
(280)
|
$
|
(323)
|
$
|
(1,473)
|
||||||||
(ii) Basic per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.01)
|
$
|
-
|
$
|
(0.02)
|
||||||||
(iii) Fully diluted
|
||||||||||||||||||||||||
per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.01)
|
$
|
-
|
$
|
(0.02)
|
||||||||
Total assets
|
$
|
14,790
|
$
|
13,293
|
$
|
13,582
|
$
|
13,277
|
$
|
13,019
|
$
|
14,203
|
$
|
14,349
|
$
|
13,900
|
||||||||
Total long-term liabilities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
113
|
$
|
123
|
$
|
123
|
$
|
-
|
||||||||
Dividends per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
||||||||
(in $000s)
|
September 30 2012
|
December 31,2011
|
||||||
Cash
|
$ | 1,003 | $ | 45 | ||||
Working capital (deficiency)
|
$ | (556 | ) | $ | (577 | ) |
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
Net balance
|
||||||||
($000s)
|
receivable (payable)
|
|||||||
September 30, 2012
|
as at September 30, 2012
|
|||||||
Key management compensation:
|
||||||||
Executive salaries and remuneration
|
$ | 380 | $ | (217 | ) | |||
Directors fees
|
27 | (179 | ) | |||||
Share-based payments
|
77 | - | ||||||
$ | 484 | $ | (396 | ) | ||||
Legal fees incurred to a law firm in which a senior officer of the Company is a partner
|
$ | 41 | $ | (124 | ) | |||
Net office, sundry, rent and salary allocations recovered from (incurred to) company(s) sharing certain common director(s)
|
$ | 37 | $ | (70 | ) | |||
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
-
|
cash as financial assets at fair value through profit or loss (“FVTPL”),
|
-
|
marketable securities and long term investments as available-for-sale (“AFS”) financial assets,
|
-
|
receivables as loans and receivables,
|
-
|
royalties receivable as loans and receivables,
|
-
|
accounts payable and accrued liabilities, notes payables and flow-through obligations as other financial liabilities, and
|
-
|
derivative liability for warrants as derivative financial liabilities.
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
($000s)
|
Held in Canadian dollars
|
|||
Cash
|
$ | 1,002 | ||
Accounts payable and accrued liabilities
|
(818 | ) | ||
Net assets (liabilities)
|
$ | 184 |
|
(iii)
|
Other price risk:
|
(a)
|
may be found on SEDAR at www.sedar.com;
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
(b)
|
may be found in the Company’s annual information form; and
|
(c)
|
is also provided in the Company’s unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2012 and audited consolidated financial statements for the year ended December 31, 2011.
|
Number of Shares
|
Amount
|
|||||||
(in $000s)
|
||||||||
Balance at December 31, 2011
|
94,096,171 | $ | 58,258 | |||||
Issued:
|
||||||||
Private placement, net of share issue costs
|
11,300,000 | 902 | ||||||
Exercise of stock options
|
346,000 | 60 | ||||||
Balance at September 30, 2012
|
105,742,171 | $ | 59,220 |
2012
|
||||||||
Weighted
|
||||||||
average
|
||||||||
exercise
|
||||||||
Number
|
price
|
|||||||
of Shares
|
(CAD$)
|
|||||||
Outstanding balance, beginning of period
|
10,115,000 | $ | 0.24 | |||||
Granted
|
2,860,000 | $ | 0.12 | |||||
Exercised
|
(346,000 | ) | $ | 0.10 | ||||
Forfeited
|
(145,000 | ) | $ | 0.13 | ||||
Expired
|
(2,140,000 | ) | $ | 0.54 | ||||
Outstanding balance, end of period
|
10,344,000 | $ | 0.15 | |||||
Exercise price range (CAD$)
|
$ | 0.10 - $0.29 |
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
Exercise
|
|||||||||||||||||||||||
Prices
|
Oustanding at
|
Oustanding at
|
|||||||||||||||||||||
(CAD$)
|
Expiry Dates
|
December 31, 2011
|
Issued
|
Exercised
|
Expired
|
September 30, 2012
|
|||||||||||||||||
$0.22 |
June 13, 2012
|
4,250,000 | - | - | (4,250,000 | ) | - | ||||||||||||||||
$0.15 / |
until September 28, 2014
|
- | 11,300,000 | - | - | 11,300,000 | |||||||||||||||||
$0.20 |
expiry September 28, 2015 (1)
|
||||||||||||||||||||||
$0.15 / |
until September 28, 2014
|
- | 904,000 | - | - | 904,000 | |||||||||||||||||
$0.20 |
expiry September 28, 2015 (1) (2)
|
||||||||||||||||||||||
4,250,000 | 12,204,000 | - | (4,250,000) | 12,204,000 |
|
(1)
|
These warrants are subject to an accelerated expiry whereby if after January 29, 2013, the volume weighted average trading price as traded on the Toronto Stock Exchange equals or exceeds CAD$0.30 per share for a period of 10 consecutive trading days, the Company will have the right, within five business days, to accelerate the expiry date of the warrants by giving not fewer than 30 days written notice to the warrant holder whereby the warrants shall expire 30 days after such date of the notice.
|
|
(2)
|
As these warrants are agent’s warrants, a fair value of $97,470 was recorded as share issuance expense as applied to share capital with a corresponding credit to reserve for share-based payments calculated using the Black-Scholes option pricing model with the following assumptions: volatility 107%, risk-free rate 1.14%, expected life 3 years, and expected dividend yield 0%.
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
CANARC RESOURCE CORP.
Management’s Discussion and Analysis
For the Three and Nine Months ended September 30, 2012
(expressed in United States dollars)
|
This is an unofficial consolidation of Form 52-109F2 Certification of Interim Filings Full Certificate reflecting amendments made effective January 1, 2011 in connection with Canada’s changeover to IFRS. The amendments apply for financial periods relating to financial years beginning on or after January 1, 2011. This document is for reference purposes only and is not an official statement of the law.
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Canarc Resource Corp. (the “issuer”) for the interim period ended September 30, 2012.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control over Financial Reporting – Guidance for Smaller Public Companies published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2
|
ICFR – material weakness relating to design: - N/A
|
5.3
|
Limitation on scope of design: - N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
This is an unofficial consolidation of Form 52-109F2 Certification of Interim Filings Full Certificate reflecting amendments made effective January 1, 2011 in connection with Canada’s changeover to IFRS. The amendments apply for financial periods relating to financial years beginning on or after January 1, 2011. This document is for reference purposes only and is not an official statement of the law.
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Canarc Resource Corp. (the “issuer”) for the interim period ended September 30, 2012.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control over Financial Reporting – Guidance for Smaller Public Companies published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2
|
ICFR – material weakness relating to design: - N/A
|
5.3
|
Limitation on scope of design: - N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2012 and ended on September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
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