A. Operating Results - Narrative Discussion
In the fiscal year ended April 30, 2013, the Company spent $
1.0
million on exploration costs and recovered $
0.4
million from our exploration partners for a net mineral property expenditure of $
0.6
million.
In Q113, the Company recognized mineral property impairments on the Arnold project for approximately $35,000 and in Q213, the Company recognized mineral property impairments on the Cree West project for approximately $48,000 as the Company did not renew its permit for these projects. In Q413, the Company recognized mineral property impairments on the Alberta project and on certain of the BC Copper and Carswell claims for approximately $54,000 as the Company did not renew its permit for these claims.
Camp and other miscellaneous exploration equipment owned by the Company is maintained at our La Ronge warehouse. Equipment rental income is comprised of income (cost recapture) from charging exploration projects for the rental of this equipment. In Q412, the equipment rental income is related to the winter drill programs for the Cree East and West McArthur projects. . In Q1 and Q2, 2013, the rental income is related to the summer work program on the BC Copper project. Equipment rental income in fiscal 2013 is lower compared to fiscal 2012 as the Company did not conduct a summer or winter exploration program in fiscal 2013.
Consulting, labour, and professional fees are lower than the same comparative prior period. The decrease is primarily attributed to a decrease in the salaries expense from the re-negotiated employment agreements for senior staff and management which began effective August 2012. The Company has terminated most of its staff and re-negotiated employment agreements with senior staff and management in efforts to minimize the Company’s operating costs. The Company also reduced it usage of professionals and consultants in Q413 compared to Q412.
Insurance, licenses and filing fees are lower for fiscal 2013 compared to fiscal 2012. In Q413, insurance, license and filing fees are consistent relative to the same comparative prior period.
Interest income was lower in 2013 compared to 2012. The decrease was attributed to the decreased cash balances held during the year.
Investor relations expenses were lower in 2013 compared to 2012. The decrease is primarily attributed to the decrease in services provided by a Canadian investor relations firm. During the three months ended April 30, 2012, we received contract services from the Canadian investor relations firm which started in June of 2011 and terminated in July 2012.
Rent expense was lower in Q413 compared to Q313 as a Company sublet its office space in its effort to reduce it cash operating costs going forward.
The share-based payments amount for the year is lower than the amount for the previous year. The decrease was primarily due to the decrease in the fair value calculation on the options granted in fiscal 2013 relative to fiscal 2012. During fiscal 2013, there were 1,357,500 options granted with an average fair value of $0.13 per option compared to 1,339,500 option granted with an average fair value of $0.24 per option in fiscal 2012.
A write-down on available-for-sale securities of approximately $83,000 was recorded in Q413. This was attributed to a significant or prolonged impairment on a number of investments. The Company wrote the balances down to their market values due to the significant decline in market value that was viewed as other than a temporary impairment.
Management fees were lower in fiscal 2013 compared to fiscal 2012. This was primarily due to the decrease in our exploration activities relative to last year. During the same period last year, the Company spent $6.2 million on exploration, of which the majority of the expenditures was related to our joint venture projects where management fees were generated.
B. Liquidity and Capital Resources
As of April 30, 2013, the Company had $1.3 million in cash and cash equivalents and working capital of $1.2 million compared to $4.4 million in cash and cash equivalents and working capital of $3.1 million at April 30, 2012
.
Operating Activities
The Company’s operating activities resulted in net cash outflows of $3.2 million and $6.5 million for the fiscal years ended April 30, 2013 and 2012 respectively. Operating activities and costs for fiscal 2013 are lower than fiscal 2012 as the Company reduced its exploration activities as well as continued its efforts to minimize it operating costs to conserve its cash reserves.
Financing Activities
Financing activities resulted in net cash outflows of $5,000 and net cash inflows of $1.3 million for the fiscal years ended April 30, 2013 and 2012 respectively. During the fiscal year ended April 30, 2012, the Company raised $0.9 million from flow-through and ordinary common share financings completed in March 2012, and $0.5 million from a flow-through financing completed in May 2011. In fiscal 2013, the Company incurred TSX listing fees related to the Company’s share compensation plan. Currently, junior uranium exploration companies are finding it difficult to seek financing. The Company is working to sell, option or joint-venture non-core assets.
Investing Activities
Investing activities resulted in net cash inflows of $72,000 for fiscal year ended April 30, 2013. During the year ended April 30, 2013, the Company acquired the Ruttan property and the Patterson Lake property by staking five blocks of claims totalling 7,742 hectares for approximately $20,000 and received $75,000 in option payments from Discovery Ventures Ltd. The Company also received approximately $19,000 from the sale of certain property and equipment. During the year ended April 30, 2012, the Company purchased additional property and equipment of approximately $43,000 and received proceeds approximately $26,000 from the sale of certain property and equipment. The new Ruttan and Patterson Lake projects and others are being actively marketed under non
-
disclosure agreements.
Cash and Working Capital
|
Table 8: ($000’s)
Cash and Working Capital
|
Apr-13
|
Apr-12
|
|
Cash and cash equivalents
|
1,265
|
4,394
|
|
Trade and other receivables
|
58
|
243
|
|
Available-for-sale securities
|
86
|
223
|
|
Trade and other payables
|
(195)
|
(1,792)
|
|
Working capital
|
1,214
|
3,068
|
For analysis and discussion of the movement in cash and cash equivalents reference should be made to Section 5, Cashflow and Liquidity Review, in the Company’s Management Discussion and Analysis for the year ended April 30, 2013. Included within cash and cash equivalents are $0.3 million in funds from the CKU Partnership which are dedicated to the Cree East project. For further details, reference should be made to note 5 of the audited financial statements for the year ended April 30, 2013. The referenced financial statements and Management’s Discussion and Analysis are available on the Company’s website at
www
.
canalaska.com
, and filed
SEDAR
and EDGAR.
As at April 30, 2013, included within trade and other receivables is approximately $5,
000
in Goods and Services Tax ("GST") refunds. The decrease in trade and other receivables for April 30, 2013 is due primarily to decrease in the GST receivable account as the Company reduced its exploration expenditures in winter 2013 compared to winter 2012.
The decrease in available-for-sale securities is a result of marking the securities to market as well as recording an impairment of approximately $61,000 on a number of investments.
The decrease in trade and other payables is consistent with the decrease in exploration activities compared with the fourth quarter of 2012. The Company did not operate an extensive winter 2013 exploration program compared to that of the winter 2012 season.
Other Assets and Liabilities
|
Table 9: ($000’s)
Other Assets and Liabilities
|
Apr-13
|
Apr-12
|
|
Reclamation bonds
|
203
|
345
|
|
Property and equipment
|
375
|
504
|
|
Mineral property interests (Section 2.2)
|
1,238
|
1,356
|
During the fiscal year ended April 30, 2013, approximately $110,000 of reclamation bonds were written down as these deficiency deposits were forfeited due to a lack of assessment credits.
During the fiscal year ended April 30, 2013, exploration and evaluation expenditures were made primarily on the West McArthur, Cree East, Hodgson and BC Copper (Section 2).
During fiscal 2013, the Company acquired the Ruttan property by staking two blocks of claims totalling 1,055 hectares for approximately $16,000 and the Patterson property by staking three blocks of claim totalling 6,687 hectares for approximately $4,000. In addition, the Company recognized an impairment on its Arnold, Cree West, Alberta and certain of its BC Copper and Carswell claims for approximately $137,000 as it did not renew its permits for these properties.
Equity and Financings
|
Table 10: ($000’s)
Shareholders’ Equity
|
Apr-13
|
Apr-12
|
|
Common shares
|
73,205
|
73,210
|
|
Equity reserve
|
10,682
|
10,506
|
|
Investment revaluation reserve
|
(1)
|
53
|
|
Deficit
|
(80,856)
|
(78,496)
|
|
Total shareholders’ equity
|
3,030
|
5,273
|
|
Table 11: (000’s)
Equity Instruments
|
Apr-13
|
Apr-12
|
|
Common shares outstanding
|
22,058
|
22,058
|
|
Options outstanding
|
|
|
|
Number
|
3,598
|
2,924
|
|
Weighted average price
|
$
0.55
|
$
0.81
|
|
Warrants outstanding
|
|
|
|
Number
|
72
|
1,311
|
|
Weighted average price
|
$
0.55
|
$
1.83
|
Equity instruments
As of July 18, 2013, the Company had the following securities outstanding. Common shares - 22,068,136; Stock options – 3,532,750; and Warrants – 72,200.
In July 2013, the Company issued 10,000 common shares under the option agreement for the Collins Bay Extension project.
In March 2012, the Company issued 283,000 common shares for gross proceeds of $121,690. A finder’s fee of $4,867 in cash and 11,320 warrants were issued in connection with the financing. Each finder’s warrant entitles the holder to purchase on additional common share for a period of eighteen months from the closing date, at a price of $0.55 per warrant share. The share purchase warrants issued as part of this placement have been recorded at a fair value of $1,825 using the Black Scholes model.
In March 2012, the Company issued 1,522,000 flow-through common shares for gross proceeds of $776,220. A finder’s fee of $31,049 in cash and 60,880 warrants were issued in connection with the financing. $68,490 was allocated to premium as the market value on the date of close was less than the offering price associated with this offering. Each finder’s warrant entitles the holder to purchase one additional common share for a period of eighteen months from the closing date at a price of $0.55 per warrant share. The share purchase warrants issued as part of this placement have been recorded at a fair value of $9,816 using the Black Scholes model.
In July 2011, the Company issued 5,000 common shares under the option agreement for the Black Lake project.
In May 2011, the Company issued 418,141 flow-through common shares for gross proceeds of $472,500, of which $133,805 was allocated to the flow-through share premium as the market value on the date of close was less than the offering price associated with this offering.
|
Table 12: Proceeds from Financings
|
|
|
Date
|
Type
|
Intended Use
|
Actual Use
|
|
|
|
|
|
|
March
,
2012
|
$0.1 million – 283,000 common shares
|
Uranium exploration in Saskatchewan
|
As Intended
|
|
March
,
2012
|
$0.8 million – 1,522,000 flow-through common shares
|
Uranium exploration in Saskatchewan
|
As Intended
|
|
May
,
2011
|
$0.5 million – 418,141 flow through common shares
|
Uranium exploration in Saskatchewan
|
As Intended
|
C. Research and Development, Patents and Licenses, etc.
As the Company is a mineral exploration company with no research and development, the information required by this section is not applicable.
D. Trend Information
As the Company is a mineral exploration company with no producing properties, the information required by this section is not applicable.
E. Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
F. Tabular Disclosure of Contractual Obligations
The Company has the following commitments in respect of operating leases for office space, land, or computer equipment:
|
$000’s
|
Payments due by period
|
|
Contractual Obligations:
|
Total
|
< 1 year
|
1 – 3 years
|
3 – 5 years
|
> 5 years
|
|
Operating Lease Obligations
|
440
|
150
|
283
|
7
|
-
|
|
TOTAL
|
440
|
150
|
283
|
7
|
-
|
The Company has outstanding future commitments under mineral property agreements to issue common shares of the Company. Reference should be made to Note 8 of the consolidated financial statements filed herewith.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table the name, province or state and country of residence for each director and executive officer of the Company, their principle occupation over the past five years, years of service and the number of securities held. Each director will hold office until the next annual general meeting of the shareholders and until such director’s successor is elected and qualifies, or until the director’s earlier death, resignation or removal. The executive officers and committee members of the Company are elected annually at the first directors’ meeting immediately following the annual general meeting of shareholders.
|
Name, Residence and Current
Position(s)
with the Company
|
Principle
Occupation
|
Director of the
Company Since
|
Number of
Securities Held
|
|
Peter Dasler
Tsawwassen, BC, Canada
President, Chief Executive
Officer & Director
|
President, CEO and Director of the Company (2004-present). Mr. Dasler has over 35 years of experience in exploration geology including twenty years of geological consulting and contracting for junior and senior companies based out of Vancouver, BC. Mr. Dasler holds Bachelor’s (1974) and Master’s (1981) degrees from Canterbury University, New Zealand, and is a member of the professional Engineers and Geoscientists Association of BC. His background includes senior geological positions in New Zealand, and Mine Manager of the 10 million ton per annum Taharoa Irons and Mine, as well as management of junior exploration companies in Canada.
|
Sept 20, 2006
|
286,538
(6)
Common shares
703,000
Stock Options
|
|
Amb. Thomas Graham, Jr
.
(1)(2)(3)
Bethesda, MD, United States
Chairman & Director
|
Appointed Chairman of the Board on June 3, 2011. Director of the Company (2007-present);
appointed as a member of the International Advisory Board for the nuclear program of the United Arab Emirates in 2010;
Chairman of the Board of Mexco Energy Corporation (July 1997-2012); Executive Chairman of Lightbridge Corporation (formerly Thorium Power, Ltd.) (2006-present).
Ambassador Graham is one of the world's leading experts in nuclear non-proliferation. He has served under four successive U.S. Presidents as a senior U.S. diplomat involved in the negotiation of every major international arms control and non-proliferation agreement for the past 35 years. This includes the SALT, START, ABM, INF, NPT, CFE and CTBT Treaties. Amb. Graham has served with the U.S. Arms Control and Disarmament Agency and as the Special Representative of the President of the United States for Arms Control, Non-Proliferation, and Disarmament, in which role he successfully led U.S. government efforts to achieve the permanent extension of the Nuclear Non-Proliferation Treaty.
|
Mar 30, 2007
|
20,000
Common shares
200,000
Stock Options
|
|
Jean Luc Roy
(1)(2)(4)
Burkina Faso, Africa
Director
|
Independent Director of the Company (2007-present); Former President and CEO of El Nino Ventures Inc.(2006-2009); Manager for SOMISY SA (2008 – 2009); COO of Ampella Mining Limited (2009 – present). Mr. Roy has over 20 years’ experience in the mining industry. The majority of his experience has been in Africa for companies such as International Gold Resources, Ashanti Goldfields Inc., Senafo, and First Quantum Minerals. Mr. Roy has managed projects from exploration through to production in three different countries. As Managing Director for First Quantum Minerals, Jean Luc played a crucial role in securing extensive land positions and by successfully placing a mining operation into production in the Democratic Republic of Congo during a period of major unrest in the country. Mr. Roy is presently a resident of Burkina Faso where is COO of Ampella Mining Ltd. an Australian listed company focused on gold exploration in West Africa with their flagship property, Batie West.
|
Oct 31, 2007
|
200,000
Stock Options
|
|
Name, Residence and Current Position(s)
with the Company
|
Principle Occupation
|
Director of the
Company Since
|
Number of
Securities Held
|
|
Victor Fern
(2)(3)
Fond du Lac, SK, Canada
Director
|
Independent Director of the Company (2007-present);Road Maintenance Supervisor for Athabasca Development Corporation (2009-present); Mill Training Foreman and a Mill Process Operator for Cameco Corporation; former Chief of the Fond Du Lac Denesuline First Nation (2005–2007).
|
Mar 25, 2008
|
150,000
Stock Options
|
|
Michael E. Riley
(1)(3)(5)
Surrey, BC, Canada
Director
|
Independent Director of the Company since June 3, 2011; Director and Chair of the Audit Committee of BC Lottery Corporation (2008 – present); Director and Chair of the Audit Committee of Primero Mining Corp. (2010 – present); Director and member of the Finance Committee of Vancouver Symphony Society; former audit partner with Ernst & Young LLP (1985 – 2006).
|
June 3, 2011
|
100,000
Common shares
150,000
Stock Options
|
|
Karl Schimann
Vancouver, BC, Canada
Vice-President Exploration
|
Dr. Schimann joined CanAlaska in late 2004 as exploration manager where he directs a top-flight team of geophysicist and geologists. He was appointed Vice-President on June 28, 2007. Dr. Schimann holds a Ph.D. from the University of Alberta and has worked extensively in the Uranium industry. He is a member of the Association of Professional Engineers and Geoscientists of British Columbia, the Canadian Institute of Mining, Metallurgy, and Petroleum, the Geological Association of Canada, and the Association of Exploration Geochemists.
|
June 7, 2004
|
423,375
Common shares
475,250
Stock Options
|
|
Harry Chan
Vancouver, BC, Canada
Chief Financial Officer
|
Mr. Chan has over 20 years of experience working in several different industries ranging from public practice, sports entertainment, wholesale distribution and telecommunications. He is a graduate of the University of British Columbia and received his Certified General Accountant designation in BC in 1996.
|
Jan 1, 2013
|
142,500
Stock Options
|
|
Dianne Szigety
Vancouver, BC, Canada
Corporate Secretary
|
President, PubliCo Services Ltd., a private consulting company, since 1994. Served as President of Excalibur Resources Ltd. (2009-2010). Director and Corporate Secretary of Excalibur Resources Ltd. (1996-present). Corporate Secretary, Canadian Mining Company Inc. (2007-present); Corporate Secretary, Shamrock Enterprises Inc. (2008-present); Corporate Secretary, Victory Ventures Ltd. (2011-present); Corporate Secretary, Great Quest Metals Ltd. (2011-2013) and Corporate Secretary, CanAlaska Uranium Ltd. (2012-present).
|
Aug 1, 2012
|
5,500
Common shares
142,500
Stock Options
|
Notes:
|
(1)
|
Member of Audit Committee
|
|
(2)
|
Member of Compensation Committee
|
|
(3)
|
Member of Governance Committee
|
|
(4)
|
Chair of the Audit Committee and Compensation Committee
|
|
(5)
|
Chair of the Governance Committee
|
|
(6)
|
Of these shares, 179,380 are held indirectly in the name of Bay Geological Inc., a private company controlled by Mr. Dasler.
|
Cease Trade Orders, Bankruptcies, Penalties or Sanctions
None of the directors or officers of the Company:
|
(a)
|
is, as at the date of this Form 20-F, or has been, within ten years before the date of this Form 20-F, a director, chief executive officer or chief financial officer of any company (including the Company) that:
|
|
|
(i)
|
was subject to a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, which order was in effect for a period of more than 30 consecutive days (an “Order”) that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer;
|
|
|
(ii)
|
was subject to an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer,
|
|
(b)
|
is, as at the date of this Form 20-F, or has been, within ten years before the date of this Form 20-F, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;
|
|
(c)
|
has, within the ten years before the date of this Form 20-F, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.
|
Other Principle Directorships
In addition to their positions on the Board, the following Directors also serve as Directors of the following reporting issuers or reporting issuer equivalents:
|
Name of Director
|
Reporting Issuer(s) or Equivalent(s)
|
|
Amb. Thomas Graham Jr.
|
Lightbridge Corporation (LTBR)
|
|
Michael E. Riley
|
Primero Mining Corp. (TSX - P)
|
B. Compensation
In this Form 20-F:
Chief Executive Officer (“CEO”)
means an individual who acted as chief executive officer of the Company, or acted in a similar capacity, for any part of the most recently completed financial year
;
Chief Financial Officer (“CFO”)
means an individual who acted as chief financial officer of the Company, or acted in a similar capacity, for any part of the most recently completed financial year
;
Named Executive Officer (“NEO”)
means each of the following individuals:
|
(c)
|
each of the three most highly compensated executive officers of the company including any of its subsidiaries, or the three most highly compensated individuals acting in a similar capacity, other than CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000, as determined in accordance with subsection 1.3(6), for that financial year; and
|
|
(d)
|
each individual who would be an NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the Company or its subsidiaries, nor acting in a similar capacity, at the end of that financial year;
|
Named Executive Officers
During the financial year ended April 30, 2013, the Company had the following NEOs: Peter Dasler, President and CEO; Harry Chan, CFO; Ram Ramachandran, Former CFO; and Karl Schimann, Vice-President, Exploration.
Compensation Discussion & Analysis
Due to increasingly difficult conditions facing junior uranium exploration, in April 2012 the Company’s management and Board of Directors, approved a plan to significantly reduce the overhead of the Company. Employment and consulting contracts with all of the Company’s NEOS were amended or terminated as discussed below.
Ram Ramachndran Consulting Agreement
Effective May 1, 2012 the Company amended a consulting agreement with Ram Ramachandran (dba 1530622 Ontario Inc.) to provide Chief Financial Officer services. The Company agreed to pay an annual fee of $30,000 for production of the interim and annual financial statements and management discussion and analysis, production of the Annual Information Form, liaison with the Company’s auditors, IFRS conversion and restatement. Mr. Ramachandran resigned from the Company on January 1, 2013 and his consulting agreement was terminated.
Dasler Employment Agreement
The Company entered into an employment agreement dated August 1, 2012 (the “Dasler Employment Agreement”) with Peter Dasler, President, CEO and a director of the Company. Pursuant to the terms of the Dasler Employment Agreement, Mr. Dasler is paid a monthly retainer fee of $10,000 (the “Fee”) for approximately 60% of his professional time on a monthly basis. The Fee shall be increased annually at the discretion of the Company’s Compensation Committee, which increase shall be not less than the greater of: (a) the annual percentage rate of inflation; (b) five per cent (5%).
The Dasler Employment Agreement may be terminated for any reason upon provision of 90 days written notice. The Company may also, in its sole discretion, waive this notice requirement if Mr. Dasler terminates the Dasler Employment Agreement.
In addition to the Dasler Employment Agreement, the Company and Mr. Dasler have also entered into a Contingency Agreement dated August 1, 2012. The Contingency Agreement governs the termination or modification of Mr. Dasler’s consulting agreement in the event that a change of control of the Company occurs during the term of the Dasler Employment Agreement.
Chan Consulting Agreement
The Company entered into an employment agreement dated February 1, 2013 (the “Chan Employment Agreement”) with Harry Chan, CFO of the Company. Pursuant to the terms of the Chan Employment Agreement, Mr. Chan is paid a monthly retainer fee of $8,333 for approximately 80% of his professional time on a monthly basis. The Fee shall be increased annually at the discretion of the Company’s Compensation Committee, which increase shall be not less than the greater of: (a) the annual percentage rate of inflation; (b) five per cent (5%).
Schimann Consulting Agreement
The Company entered into a consulting agreement dated August 1, 2012 (the “Schimann Consulting Agreement”) with Schimann Consulting Inc., a company in which Mr. Karl Schimann, Vice-President of Exploration, holds a beneficial interest. Schimann Consulting Inc. is paid a monthly retainer fee of $5,000. This Fee is based on priority access up to 30% (7 days) of Mr. Schimann’s time. The Schimann Consulting Agreement may be terminated prior to the end of the term by the Company or Schimann Consulting for any reason upon provision of 90 days written notice. The Company may also, in its sole discretion, waive this notice requirement if Schimann Consulting terminates the Agreement.
In addition to the Schimann Consulting Agreement, the Company and Mr. Schimann have also entered into a contingency agreement dated August 1, 2012. The Contingency Agreement governs the termination or modification of Mr. Schimann’s consulting agreement in the event that a change of control of the Company occurs during the term of the Schimann Consulting Agreement.
Performance Graph
The common shares of the Company commenced trading on the TSX on June 21, 2011 under the symbol “CVV”. The following chart compares the total cumulative shareholder return for CDN $100 invested in common shares of the Company on April 30, 2009, with the cumulative total return of the S&P/TSX Composite Index (formally the TSE 300 Composite Index) for the period from April 30, 2009 to April 30, 2013. The performance of common shares of the Company as set out in the graph does not necessarily indicate future price performance.
|
|
Apr. 2009
|
Apr. 2010
|
Apr. 2011
|
Apr. 2012
|
Apr. 2013
|
|
S&P/TSX Composite Index
|
$100
|
$130.95
|
$149.54
|
$131.83
|
$131.05
|
|
CanAlaska Uranium Ltd.
|
$100
|
$93.75
|
$52.50
|
$26.88
|
$8.75
|
Share Based and Option Based Awards
The Company maintains a stock option plan to provide additional long-term incentives to the Company’s executive officers, as well as its directors, employees and consultants. The Compensation Committee reviews the level of incentive options periodically and makes any new issuance recommendations to the Board for approval. Previous grants of option-based awards are taken into account when considering new grants. See “Narrative Discussion” under “Incentive Plan Awards” below for details of the Company’s stock option plan.
Compensation Governance
Compensation of the NEOs of the Company is set by the Board as recommended by the Company’s compensation committee (the “Compensation Committee”). The Compensation Committee consists of three independent directors namely Jean Luc Roy, Chair, Victor Fern, and Amb. Thomas Graham, Jr.
The Compensation Committee reviews, on an annual basis, the cash compensation, performance and overall compensation package for each NEO. The Compensation Committee then presents its findings and any recommendations to the Board for consideration and approval, if acceptable to the Board .
The Compensation Committee recognizes the need to provide a total compensation package that will attract and retain qualified and experienced executives as well as align the compensation level of each of the NEOs.
The Company’s executive compensation practices are intended to provide both current and long term rewards to its NEOs that are competitive within the compensation practices of the industry and consistent with their individual performance and contribution to the Company’s objectives. Compensation components include base salary, bonus and long term incentives in the form of stock options.
In determining the appropriate base salary of an executive officer, the Compensation Committee considers the responsibilities of the individual, comparable salaries in the industry, the experience level of the individual and overall performance. Once the base salary has been established, it is reviewed by the Compensation Committee on an annual basis. The Committee meets at least annually or more frequently if required. On an annual basis, the Compensation Committee will report to the Board that it is compliant with its Charter.
The Compensation committee has formulated polices that are flexible and reflective of current market conditions, while limiting any risks arising out of compensation practices.
Summary Compensation Table
The following table sets out compensation of the NEOs of the Company for the three most recently completed financial years of the Company:
|
Name and
principal position
(a)
|
Year
Ended April 30
(b)
|
Salary
($)
(c)
|
Option-based
awards ($)
(4)
(e)
|
Non-equity incentive plan compensation
($)
(f)
|
All other compensation
($)
(h)
|
Total
compensation
($)
(i)
|
|
Annual incentive
plans
(f1)
|
Long-term
incentive plans
(f2)
|
|
Peter Dasler
President, CEO and Director
|
2013
2012
2011
|
158,885
191,016
191,016
|
31,238
48,213
29,769
|
Nil
Nil
28,750
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
190,123
239,229
249,535
|
|
Harry Chan
CFO
(1)
|
2013
2012
2011
|
33,333
N/A
N/A
|
12,640
N/A
N/A
|
Nil
N/A
N/A
|
Nil
N/A
N/A
|
Nil
N/A
N/A
|
45,973
N/A
N/A
|
|
Ram Ramachandran
Former CFO
( 2)
|
2013
2012
2011
|
20,000
67,500
80,000
|
833
6,027
15,835
|
Nil
Nil
2,000
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
20,833
73,527
97,835
|
|
Karl Schimann
(3)
Vice-President
Exploration
|
2013
2012
2011
|
130,914
160,160
175,975
|
32,229
48,213
59,538
|
Nil
Nil
28,750
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
163,143
208,373
264,263
|
|
Emil Fung
(5)
Former Vice- President Corporate Development
|
2013
2012
2011
|
59,891
191,016
191,016
|
Nil
48,213
6,334
|
Nil
Nil
28,750
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
59,891
239,229
226,100
|
|
(1)
|
Mr. Chan was appointed CFO of the Company on January 1, 2013. Mr. Chan’s compensation was paid as a management fee.
|
|
(2)
|
Mr. Ramachandran resigned as CFO of the Company on January 1, 2013. Mr. Ramachandran’s compensation was paid as a management fee to a consulting company in which he holds a beneficial interest.
|
|
(3)
|
Mr. Schimann’s compensation is paid as consulting fees to a consulting company in which he holds a beneficial interest.
|
|
(4)
|
In determining the fair value of the options granted, the Company followed the principles established under International Financial Reporting Standards, which requires the determination of the fair value of options granted using the Black-Scholes methodology. The Black-Scholes methodology requires making estimates of the risk free rate, expected life of the options, expected volatility and expected dividends. The Company used the following assumptions in determining the fair value of the options:
|
|
Risk-free rate:
|
1.1% to 1.26%
|
|
Expected Life
|
2.4 to 2.54 years
|
|
Expected volatility
|
78.7% to 93.8%
|
|
(5)
|
Mr. Fung`s employment as Vice-President, Corporate Development was terminated on August 12, 2012.
|
Outstanding Share-Based and Option-Based Awards
The following table sets forth details of all awards outstanding for the Company’s NEOs as at the year ended April 30, 2013, and includes awards granted to the NEOs in prior years.
|
|
Option-based Awards
|
Share-based Awards
|
|
Name
|
Number of securities underlying unexercised options
(#)
|
Option
exercise
price
($)
|
Option
expiration
date
|
Value of unexercised
in-the-money options
($)
(1)
|
Number of shares or
units of shares that
have not vested
(#)
|
Market or payout value
of share-based awards
that have not vested
($)
|
|
Peter Dasler
President, CEO and Director
|
81,000
35,000
90,000
47,000
200,000
45,000
5,000
200,000
|
$1.00
$1.00
$1.00
$1.00
$0.50
$0.25
$0.25
$0.25
|
Jan 25/14
Apr 30/14
Dec 3/14
Oct 31/13
Nov 7/14
Aug 12/17
Oct 3/17
Feb 1/18
|
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
|
|
|
703,000
|
|
|
|
|
|
|
Harry Chan
CFO
|
20,000
5,000
17,500
100,000
|
$1.00
$1.00
$0.50
$0.25
|
Oct 28/14
Oct 31/13
Nov 7/14
Feb 1/18
|
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
|
|
|
142,500
|
|
|
|
|
|
|
Ram Ramachandran
Former CFO
|
25,000
25,000
5,000
|
$1.00
$0.50
$0.42
|
Oct 31/13
Nov 7/14
Apr 30/15
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
|
|
55,000
|
|
|
|
|
|
|
Karl Schimann
Vice-President Exploration
|
20,250
200,000
5,000
50,000
200,000
|
$1.00
$0.50
$0.42
$0.25
$0.25
|
Jan 25/14
Nov 7/14
Apr 30/15
Aug 13/17
Feb 1/18
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
|
|
475,250
|
|
|
|
|
|
The following table sets forth details of the value vested or earned by the Company’s NEOs for all incentive plan awards during the year ended April 30, 2013:
|
Name
|
Option-based awards –
Value vested during the year
($)
(1)
|
Share-based awards –
Value vested during the year ($)
|
Non-equity incentive plan compensation –
Value earned during the year ($)
|
|
Peter Dasler
|
Nil
|
Nil
|
Nil
|
|
Harry Chan
|
Nil
|
Nil
|
Nil
|
|
Ram Ramachandran
|
Nil
|
Nil
|
Nil
|
|
Karl Schimann
|
Nil
|
Nil
|
Nil
|
Notes:
|
(1)
|
The value of the option-based awards – vested during the year is calculated by using the number of fully vested options at the financial year end and multiplying that number of options by the difference between the market price and the exercise price of the option. The market value of $0.135 per share is the closing price of the Company’s shares at April 30, 2013.
|
Stock Option Plan - Narrative Discussion
The Company adopted a stock option plan (the “Plan”) dated September 30, 2010 (which was last approved by the shareholders of the Company at an annual general meeting on September 27, 2012). On November 8, 2010 the Company consolidated its share capital on a ten old for one new basis resulting in the maximum shares issuable under the Plan having been reduced to a maximum issuable of 3,400,000 shares and the exercise price of the outstanding stock options were adjusted accordingly to the exercise price of $1.00 per share. At the Company’s annual general meeting held September 27, 2012, shareholders approved that the Plan be increased to the maximum aggregate number of common shares of the Company which may be reserved for issuance under the Plan to 4,400,000 common shares, which represented approximately 20% of the issued and outstanding common shares of the Company. In addition, the exercise price of all of the qualified stock options outstanding under the Plan as at September 23, 2010 was adjusted to the minimum exercise price permitted by the TSX-V of $0.10 per share.
The principal purpose of the Plan is to give directors, officers, employees and consultants the opportunity to participate in the profitability and growth of the Company by granting to such individuals options, exercisable over periods of up to ten years as determined by the Board, to buy shares of the Company at a price not less than the closing market price of the Company’s shares on the day preceding the date of granting of the option.
The Plan provides that the maximum aggregate number of common shares reserved for issuance under the Plan and all other share compensation arrangements of the Company is 4,400,000 common shares, representing approximately 20% of the Company’s issued and outstanding share capital.
The Plan is administered by the Compensation Committee of the Company. Management will make recommendations to the Compensation Committee for proposed allocations. Once the Compensation Committee approves the allotment, the proposed issuance is forwarded to the Board of Directors for acceptance.
The full text of the Plan is available by contacting the Company and has been posted on SEDAR at www.sedar.com and EDGAR at www.edgar.com.
The current status of the Plan is as follows:
|
Shares reserved for issuance pursuant to unexercised incentive stock options
Unallocated shares available for future grants of incentive stock options
|
|
|
3,532,750
867,250
|
|
|
TOTAL
|
|
|
4,400,000
|
|
Management believes that incentive plan awards are an effective means of rewarding corporate and individual performance and that they are a necessary component of compensation packages that are currently an industry standard.
Director Compensation Table
The following table sets forth the details of compensation provided to the directors, other than the NEOs, during the Company’s most recently completed financial year:
|
Name
|
Fees
Earned
($)
|
Share-based
Awards
($)
|
Option-based
Awards
(1)
($)
|
Non-Equity Incentive Plan Compensation
($)
|
All Other Compensation
($)
|
Total
($)
|
|
Hubert Marleau
(2)
|
$14,700
|
Nil
|
$12,008
|
Nil
|
Nil
|
$26,708
|
|
Amb. Thomas Graham, Jr.
|
$16,666
(3)
|
Nil
|
$14,650
|
Nil
|
Nil
|
$31,316
|
|
Jean Luc Roy
|
$18,666
|
Nil
|
$12,640
|
Nil
|
Nil
|
$31,306
|
|
Victor Fern
|
$13,400
|
Nil
|
$6,320
|
Nil
|
Nil
|
$19,720
|
|
Michael Riley
|
$16,225
|
Nil
|
$6,320
|
Nil
|
Nil
|
$22,545
|
|
Emil Fung
(4)
|
$59,891
|
Nil
|
Nil
|
Nil
|
Nil
|
$59,891
|
Notes:
|
|
(1)
|
In determining the fair value of the options granted, the Company followed the principles established under International Financial Reporting Standards, which requires the determination of the fair value of options granted using the Black-Scholes methodology. The Black-Scholes methodology requires making estimates of the risk free rate, expected life of the options, expected volatility and expected dividends. The Company used the following assumptions in determining the fair value of the options:
|
|
Forfeiture rate:
|
15.4%%
|
|
Risk-free rate:
|
1.1% to 1.26%
|
|
Expected Life
|
2.4 to 2.54 years
|
|
Expected volatility
|
78.7% to 93.8%
|
|
Expected dividends
|
0%
|
|
|
(2)
|
Mr. Marleau resigned as a Director of the Company on June 20, 2013.
|
|
|
(3)
|
Fees earned were US$25,000; this amount has been
exchanged into Canadian dollars at the year end exchange rate of 0.9862 as of April 30, 2013.
|
|
|
(4)
|
Mr. Fung resigned as a Director of the Company on September 6, 2012.
|
Director Compensation - Narrative Discussion
During the year ended April 30, 2013, the following cash payments were made to the independent Directors:
|
(i)
|
Amb. Thomas Graham Jr., the Chairman of the Company, was paid a fee of US$12,500, converted to Canadian dollars $12,328 using the exchange rate of 0.9862 as at April 30, 2013;
|
|
(ii)
|
The independent Directors, Jean Luc Roy, Michael Riley, Victor Fern and Hubert Marleau were each paid a pro-rated annual retainer fee of $15,000 per year;
|
|
(iii)
|
The Chairman of the Audit Committee, Jean Luc Roy, received a pro-rated annual retainer of $2,500 per year;
|
|
(iv)
|
the Compensation Committee Chair, Jean Luc Roy, and Corporate Governance Committee Chair, Michael Riley, each received a pro-rated annual retainer of $1,500 per year;
|
|
(v)
|
A meeting fee of $700 was paid to each independent directors for each board meeting attended, and a fee of $600 was paid for each committee meeting attended.
|
In December 2012, the Company discussed plans to change the form of directors’ compensation from cash to a mechanism for share compensation. As of January 1, 2013, the independent directors of the Company have not received directors’ fees in the form of cash or otherwise, in order to assist the Company in its plans to control its operation costs.
Pension Plan Benefits
As at the year ended April 30, 2013, the Company did not maintain any defined benefit plans, defined contribution plans or deferred compensation plans
for the NEOs or the other Directors.
Termination and Change of Control Benefits
As of July 19, 2013, all senior management contracts may be terminated by providing the required 90 day working notice. In addition, all change of control compensatory provisions will be terminated at that time.
Directors and Officers Insurance
The Company subscribes to a Directors and Officers Liability Insurance to a limit of $5,000,000 per claim. The policy insures the Company against any wrongful act committed by its Directors and Officers, including any actual or alleged breach of duty, neglect, error, omission, misstatement, misrepresentation, or act done or attempted by the Directors and Officers of the Company in their capacity to act for the Company. In addition, the Company has further indemnified its Directors and Officers, to the fullest extent of the law, by entering into personal indemnity agreements with all of the Company’s Directors and Officers.
The Directors are also compensated through the grant of incentive stock options
.
Outstanding Share-Based Awards and Option-Based Awards
The following table sets forth details of all awards outstanding for Directors of the Company, other than the NEOs, as at the year ended April 30, 2013, and includes awards granted to the Directors in prior years.
|
|
Option-based Awards
|
Share-based Awards
|
|
Name
|
Number of securities underlying unexercised options
(#)
|
Option
exercise
price
($)
|
Option
expiration
date
|
Value of unexercised
in-the-money
options
($)
(1)
|
Number of shares or
units of shares that
have not vested
(#)
|
Market or payout value
of share-based awards
that have not vested
($)
|
|
Amb. Thomas Graham Jr.
|
15,000
7,500
17,500
60,000
50,000
50,000
|
$1.00
$1.00
$1.00
$0.50
$0.42
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Apr 30/15
Feb 1/18
|
Nil
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
Nil
|
|
|
200,000
|
|
|
|
|
|
|
Hubert Marleau
(2)
|
15,000
7,500
28,750
53,750
95,000
|
$1.00
$1.00
$1.00
$0.50
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Feb 1/18
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
|
|
200,000
|
|
|
|
|
|
|
Jean Luc Roy
|
15,000
7,500
27,500
50,000
100,000
|
$1.00
$1.00
$1.00
$0.50
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Feb 1/18
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
|
|
200,000
|
|
|
|
|
|
|
Victor Fern
|
15,000
7,500
27,500
50,000
50,000
|
$1.00
$1.00
$1.00
$0.50
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Feb 1/18
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
Nil
Nil
Nil
Nil
Nil
|
|
|
150,000
|
|
|
|
|
|
|
Michael Riley
|
100,000
50,000
50,000
|
$1.00
$0.50
$0.25
|
July 24/16
Nov 7/14
Feb 1/18
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
Nil
Nil
Nil
|
|
|
200,000
|
|
|
|
|
|
Notes:
(1) The Company’s common shares closed at $0.135 per share on April 30, 2013, therefore the options were not in the money as at that date.
(2) Mr. Marleau resigned as a Director of the Company on June 20, 2013.
C. Board Practices
1. The election and retirement of our directors are provided for in the Company’s Articles. An election of directors takes place at each annual meeting of shareholders. A director retains office only until the election of his successor. The number of directors to be elected at such meeting is the number of directors then in office, unless the directors or the shareholders otherwise determine. The election is by ordinary resolution of shareholders. If an election of directors is not held at the proper time, the incumbent directors continue in office until their successors are elected. The last annual general meeting was held on September 27, 2012. Company Articles permit the directors to add additional directors to the board between annual general meetings as long as the number appointed does not exceed one-third of the number directors elected at the last annual general meeting. Individuals appointed as directors to fill casual vacancies created on the board or added as additional directors hold office like any other director until the next annual general meeting at which time they may be re-elected or replaced.
The officers of the Company are re-appointed at a directors' meeting following each annual general meeting.
2. As at July 19, 2013 the Company, or any of its subsidiaries, had service contracts with any of its directors providing for benefits upon termination of employment.
3. The members of our audit committee included Jean Luc Roy (Chairperson), Michael Riley and Amb. Thomas Graham, Jr. The audit committee reviews and approves the scope of the audit procedures employed by our independent auditors, reviews the results of the auditor's examination, the scope of audits, the auditor's opinion on the adequacy of internal controls and quality of financial reporting and our accounting and reporting principles, policies and practices, as well as the accounting, financial and operating controls. The audit committee also reports to the Board of Directors with respect to such matters and recommends the selection of independent auditors. Before financial statements that are to be submitted to the shareholders at an annual general meeting are considered by the Board of Directors, such financial statements are submitted to the audit committee for review with the independent auditors, following which the report of the audit committee on the financial statements is submitted to the Board of Directors.
The members of the nominating and corporate governance committee included Michael Riley (Chairperson), Victor Fern and Amb. Thomas Graham, Jr. The mandate of the nominating and corporate governance committee is to identify individuals qualified to be nominated for election as directors of the Company or any of the Board's committees, evaluate the qualifications and independence of each member of the Board and its committees and recommend to the Board any appropriate changes in the composition of the Board and any of its committees, evaluate the performance of the Board and its committees; and develop and recommend to the Board corporate governance principles.
The members of the compensation committee included Jean Luc Roy (Chairperson), Victor Fern and Amb. Thomas Graham, Jr. The compensation committee reviews and approves the total compensation package for the Company’s senior executives including, without limitation, their base salaries, annual incentives, deferred compensation and stock options.
D. Employees
At July 19, 2013 the Company had four part-time employees. At the fiscal year end April 30, 2013, the Company employed one full-time, three part-time and one fixed term personnel. The Company also engages contractors and consultants from time to time to work on specific projects and for administration, legal and other services that are required. Management continues to reduce the staffing requirements of the Company in response to the downturn in the financial markets and the decrease in exploration activity for the Company. Management intends to satisfy the staffing requirements on a consulting or fixed term basis
.
E. Share Ownership
The following tables set forth the share ownership of those persons listed in Subsection 6B above and include details of warrants, options to purchase shares of the Company and common shares beneficially owned by such persons for the most recently completed fiscal year ending April 30, 2013:
Common Shares and Stock Options
|
Name Position
|
Number
of Common
Shares
Beneficially
Owned
#
|
Number of
Securities
underlying
unexercised
Options
#
|
Option
Issue
Date
|
Option
Exercise
price
($)
|
Option
Expiration
Date
|
Number
of
Warrants
|
Exercise
Price
($)
|
Warrant
Expiry
Date
|
|
Peter Dasler
President, Chief Executive Officer and Director
|
|
81,000
35,000
90,000
47,000
200,000
45,000
5,000
200,000
|
Jan 26/09
May 1/09
Dec 4/09
Nov 1/10
Nov 8/11
Aug 3/12
Oct 3/12
Feb 1/13
|
$1.00
$1.00
$1.00
$1.00
$0.50
$0.25
$0.25
$0.25
|
Jan 25/14
Apr 30/14
Dec 3/14
Oct 31/13
Nov 7/14
Aug 13/17
Oct 3/17
Feb 1/18
|
|
|
|
|
|
286,538
|
703,000
|
|
|
|
Nil
|
|
|
|
Name Position
|
Number
of Common
Shares
Beneficially
Owned
#
|
Number of
Securities
underlying
unexercised
Options
#
|
Option
Issue
Date
|
Option
Exercise
price
($)
|
Option
Expiration
Date
|
Number
of
Warrants
|
Exercise
Price
($)
|
Warrant
Expiry
Date
|
|
Amb. Thomas Graham Jr.
Chairman and Director
|
|
15,000
7,500
17,500
60,000
50,000
50,000
|
Jan 26/09
May 1/09
Nov 1/10
Nov 8/11
May 9/12
Feb 1/13
|
$1.00
$1.00
$1.00
$0.50
$0.42
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Apr 30/15
Feb 1/18
|
|
|
|
|
|
20,000
|
200,000
|
|
|
|
N
il
|
|
|
|
Hubert Marleau
Former Director
|
|
15,000
7,500
28,750
53,750
95,000
|
Jan 26/09
May 1/09
Nov 1/10
Nov 8/11
Feb 1/13
|
$1.00
$1.00
$1.00
$0.50
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Feb 1/18
|
|
|
|
|
|
Nil
|
200,000
|
|
|
|
Nil
|
|
|
|
Jean Luc Roy
Director
|
|
15,000
7,500
27,500
50,000
100,000
|
Jan 26/09
May 1/09
Nov 1/10
Nov 8/11
Feb 1/13
|
$1.00
$1.00
$1.00
$0.50
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Feb 1/18
|
|
|
|
|
|
Nil
|
200,000
|
|
|
|
Nil
|
|
|
|
Victor Fern
Director
|
|
15,000
7,500
27,500
50,000
50,000
|
Jan 26/09
May 1/09
Nov 1/10
Nov 8/11
Feb 1/13
|
$1.00
$1.00
$1.00
$0.50
$0.25
|
Jan 25/14
Apr 30/14
Oct 31/13
Nov 7/14
Feb 1/18
|
|
|
|
|
|
Nil
|
150,000
|
|
|
|
Nil
|
|
|
|
Michael Riley
Director
|
|
100,000
50,000
50,000
|
Jul 25/11
Nov 8/11
Feb 1/13
|
$1.00
$0.50
$0.25
|
Jul 24/16
Nov 7/14
Feb 1/18
|
|
|
|
|
|
100,000
|
200,000
|
|
|
|
Nil
|
|
|
|
Karl Schimann
Vice-President Exploration
|
|
20,250
200,000
5,000
50,000
200,000
|
Jan 26/09
Nov 8/11
May 9/12
Aug 13/12
Feb 1/13
|
$1.00
$0.50
$0.42
$0.25
$0.25
|
Jan 25/14
Nov 7/14
Apr 30/15
Aug 13/17
Feb 1/18
|
|
|
|
|
|
423,375
|
475,250
|
|
|
|
Nil
|
|
|
|
Harry Chan
Chief Financial Officer
|
|
20,000
5,000
17,500
100,000
|
Oct 29/09
Nov 1/10
Nov 8/11
Feb 1/13
|
$1.00
$1.00
$0.50
$0.25
|
Oct 28/14
Oct 31/13
Nov 7/14
Feb 1/18
|
|
|
|
|
|
Nil
|
142,500
|
|
|
|
Nil
|
|
|
|
Dianne Szigety
Corporate Secretary
|
|
50,000
50,000
42,500
|
Aug 13/12
Oct 3/12
Feb 1/13
|
$0.25
$0.25
$0.25
|
Aug 13/17
Oct 3/17
Feb 1/18
|
|
|
|
|
|
5,500
|
142,500
|
|
|
|
Nil
|
|
|
Share Option Plan
Management believes that incentive plan awards are an effective means of rewarding corporate and individual performance and that they are a necessary component of compensation packages that are currently an industry standard. For a description of the share option plan please refer to Item 6. Directors, Senior Management and Employees; Subsection B. Compensation.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
|
1. (a)
|
To the knowledge of the directors and executive officers of the Company, and based upon the Company’s review of the records maintained by CIBC Mellon Trust Company and insider reports filed with System for Electronic Disclosure by Insiders (SEDI), as at April 30, 2013, the Company had 22,058,136 shares issued and there are no shareholders beneficially owning, directly or indirectly, or exercised control or direction over, shares carrying more than 5% of the voting rights attached to all outstanding shares of the Company.
|
|
|
(c)
|
No shareholders have any special voting rights, one common share, one vote.
|
|
2.
|
The most recent records show that the Company has approximately 550 shareholders of record, holding 22,058,136 common shares of the Company. Approximately 82% of the shareholders are located in Canada, 16% in the United States, and the balance in Asia, Africa, New Zealand and Europe.
|
|
3.
|
To the extent known to the Company, the Company is not owned or controlled directly or indirectly by another corporation, by any foreign government, or any other legal person(s) severally or jointly.
|
|
4.
|
There are no arrangements known to the Company of which may at a subsequent date result in a change of control of the Company.
|
B. Related Party Transactions
There were no material related party transactions from the last fiscal year end April 30, 2012, to the current date of this report. There are no proposed material related party transactions between the Company or any of its subsidiaries, except as previously disclosed in the audited year ended April 30, 2013 consolidated financial statements filed herewith.
C. Interests of Experts and Counsel
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
This Form 20-F contains consolidated financial statements for the Company for fiscal year end April 30, 2013 which contains an audit report dated July 16, 2013 filed herewith under Item 19.
B.
Significant Changes
There have been no significant changes since the financial year ended April 30, 2013, other than disclosed in this Form 20-F.
ITEM 9. THE OFFER AND LISTING
This Form 20-F is being filed as an annual report under the Exchange Act, and as such provides information called for by items 9.A.4 and 9.C.
A. Offer and Listing Details
Information regarding pricing history of the stock shall be disclosed as follows:
1. TSX Venture Exchange and Toronto Stock Exchange Trading Activity
(a) The annual high and low market prices for the five most recent financial years as quoted on the TSX Venture Exchange and the Toronto Stock Exchange:
|
Year Ended
|
High
|
Low
|
|
May 2012 – April 2013
May 2011 – April 2012
May 2010 – April 2011
May 2009 – April 2010
May 2008 – April 2009
|
0.43
0.83
1.79
1.95
3.10
|
0.12
0.30
0.84
1.45
0.45
|
(b) The two most recent full financial years and any subsequent period: the high and low market prices for each full financial quarter as quoted on the TSX or the TSX Venture Exchange:
|
TSX Venture Exchange
|
High
|
Low
|
|
2013
|
|
|
|
First Quarter
|
0.43
|
0.25
|
|
Second Quarter
|
0.26
|
0.15
|
|
Third Quarter
|
0.32
|
0.15
|
|
Fourth Quarter
|
0.25
|
0.12
|
|
2012
|
|
|
|
First Quarter
|
0.83
|
0.64
|
|
Second Quarter
|
0.66
|
0.42
|
|
Third Quarter
|
0.53
|
0.30
|
|
Fourth Quarter
|
0.52
|
0.41
|
(c) The high and low market prices for the most recent six months as quoted on the Toronto Stock Exchange:
|
2013
|
High
|
Low
|
|
January
|
0.32
|
0.17
|
|
February
|
0.25
|
0.12
|
|
March
|
0.19
|
0.15
|
|
April
|
0.17
|
0.12
|
|
May
|
0.15
|
0.11
|
|
June
|
0.13
|
0.10
|
The Company’s common shares have traded on the TSX Venture Exchange since January 4, 1988 under the trading symbol “CVV”. On June 21, 2011 the shares of the Company were delisted from the TSX Venture Exchange and commenced trading on the Toronto Stock Exchange under the same symbol “CVV”.
2. Over-the-Counter Bulletin Board Trading Activity
(a) The annual high and low market prices for the five most recent financial years as quoted on the Over-the-Counter Bulletin Board:
|
Year Ended
|
High
|
Low
|
|
May 2012 – April 2013
May 2011 – April 2012
May 2010 – April 2011
May 2009 – April 2010
May 2008 – April 2009
|
0.44
0.87
1.79
2.00
3.50
|
0.11
0.30
0.70
1.30
0.40
|
(b) The two most recent full financial years and any subsequent period: the high and low market prices for each full financial quarter as quoted on the Over-the-Counter Bulletin Board:
|
Quarter Ended
|
High
|
Low
|
|
2013
|
|
|
|
First Quarter
|
0.44
|
0.25
|
|
Second Quarter
|
0.27
|
0.16
|
|
Third Quarter
|
0.30
|
0.15
|
|
Fourth Quarter
|
0.24
|
0.11
|
|
2012
|
|
|
|
First Quarter
|
0.87
|
0.67
|
|
Second Quarter
|
0.72
|
0.40
|
|
Third Quarter
|
0.52
|
0.30
|
|
Fourth Quarter
|
0.54
|
0.40
|
(c) The high and low market prices for the most recent six months as quoted on the Over-the-Counter Bulletin Board:
|
2013
|
High
|
Low
|
|
January
|
0.30
|
0.17
|
|
February
|
0.24
|
0.13
|
|
March
|
0.17
|
0.14
|
|
April
|
0.17
|
0.11
|
|
May
|
0.15
|
0.11
|
|
June
|
0.13
|
0.09
|
B. Plan of Distribution
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
C. Markets
The Company’s common shares have traded on the TSX Venture Exchange since January 4, 1988 under the trading symbol “CVV” and are listed on the OTCBB from December 3, 1999 and under the trading symbol of “CVVUF” and on the Frankfurt Stock Exchange, Open Market under the trading symbol DH7N. On June 21, 2011, the shares of the Company were delisted from the TSX Venture Exchange and commenced trading on the Toronto Stock Exchange under the same symbol “CVV”.
D. Selling Shareholders
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
E. Dilution
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
F. Expenses of the Issue
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
B. Memorandum and Articles of Association
|
1
.
|
The Company is permitted to conduct any lawful business, that it is not restricted from conducting by its Memorandum and Articles, neither of which contain any restriction on the lawful business that the Company may conduct. CanAlaska Uranium Ltd. executive, registered and records office is located at 1020 – 625 Howe Street, Vancouver, British Columbia, Canada, V6C 2T6, telephone number 604.688.3211.
|
|
|
The Company was incorporated on May 22, 1985 under the laws of the Province of British Columbia, Canada under the name Canadian Gravity Recovery Group Ltd. On June 14, 1985, the Company changed its name to CanAlaska Resources Ltd. On September 15, 1993, the Company consolidated its share capital on a four for one basis and changed its name to International CanAlaska Resources Ltd. On October 19, 1999, the Company consolidated its share capital on a five for one basis and changed its name to CanAlaska Ventures Ltd. The Company was transitioned under the
Business Corporations Act
(British Columbia) on September 24, 2004. The Company changed its name to CanAlaska Uranium Ltd. on October 11, 2006.
|
The Company’s common stock (the “Common Shares”) has been listed on the Vancouver Stock Exchange (now the TSX Venture Exchange) (the “Exchange”) since January 4, 1988 as a Tier 1 Company. The Company has been trading on the OTC Bulletin Board in the United States under the symbol ICSKF from July 20, 1999 and under the symbol CVVUF since December 3, 1999, and on the Frankfurt Stock Exchange, Open Market under the trading symbol DH7. On June 21, 2011, the Company delisted its shares from the TSX-Venture Exchange and listed on the Toronto Stock Exchange.
The Company is a reporting company in British Columbia, Alberta, Ontario and Labrador and Newfoundland. The Company is extra-provincially registered in Labrador and Newfoundland, Saskatchewan, Manitoba, and Alberta, Canada.
|
2.
|
A director who is, in any way, directly or indirectly interested in an existing proposal or contract or transaction with the Company, where a conflict of interest is declared, the nature and extent of the conflict which must be disclosed as required by the
Business Corporations Act
(British Columbia), may not vote in respect to the approval of the transaction.
|
|
3.
|
All of the shares of common stock of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets and in all other respects, on liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. The holders of the common shares are entitled to one vote for each common share on all matters to be voted on by the shareholders. There are no sinking fund provisions. All common shares must be fully paid prior to issue and are thereafter subject to no further capital calls by the Company. There exists no discriminatory provision affecting any existing or prospective holder of common shares as a result of such shareholder owning a substantial number of shares.
|
|
4.
|
The rights of the shareholders may be changed only by the shareholders passing a special resolution approved by members holding two thirds of the votes cast.
|
|
5
.
|
The Board of Directors must call an annual general meeting once each calendar year, not later than 15 months after the last such meeting. The Board may call an extraordinary meeting of shareholders at any time. Notice of such meetings must be accompanied by an Information Circular describing the proposed business to be dealt with and disclosures as prescribed by statute. Not less than 21 days’ notice shall be given for any meeting. A quorum shall be two members in person or proxy not representing less than 5% of the issued shares.
|
|
6.
|
The Articles of the Company contain no limitations on the rights of non-resident or foreign shareholders.
|
|
7.
|
There are no provisions in the Company’s Articles that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company or its subsidiaries.
|
|
8.
|
There are no provisions in the Company’s Articles governing ownership threshold.
|
|
9.
|
With respect to items 2 through 8 above, the law applicable to the Company in these areas is not significantly different from that in the host country.
|
|
10.
|
Conditions imposed by the Memorandum and Articles governing changes in the capital require a special resolution of shareholders requiring two-thirds of the votes cast.
|
A copy of our Articles of Incorporation are incorporated by reference as Exhibit 1.1 to this Annual Report on Form 20-F.
C. Material Contracts
During the two years immediately preceding April 30, 2013, there were no material contracts entered into by the Company other than entered into during the normal course of business as disclosed in Item 4, Section D, Property, Plant and Equipment and Item 5 Section F, Tabular Disclosure of Contractual Obligations. For disclosure of the private placements conducted in the preceding two years, see the audited consolidated financial statements for the year ending April 30, 2013 attached at Part III, Item 18.
D. Exchange Controls
There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements.
There is no limitation imposed by Canadian law or by the constituent documents of the Company on the right of a non-resident to hold or vote common shares, other than are provided in the
Investment Canada Act (Canada
). The following summarizes the material features of the
Investment Canada Act (Canada).
The
Investment Canada Act
(Canada)
requires certain "non-Canadian" individuals, governments, corporations or other entities who wish to acquire a "Canadian business" (as defined in the
Investment Canada Act
), or establish a "new Canadian business" (as defined in the
Investment Canada Act
) to file either a notification or an application for review with a governmental agency known as "Investment Canada". The
Investment Canada Act
requires that certain acquisitions of control of a Canadian business by a "non-Canadian" must be reviewed and approved by the Minister responsible for the
Investment Canada Act
on the basis that the Minister is satisfied that the acquisition is "likely to be of net benefit to Canada", having regard to criteria set forth in the
Investment Canada Act
. Only acquisitions of control are reviewable under the
Investment Canada Act
; however, the Investment Canada
Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those
rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition which has been completed, the acquired Canadian business be divested. Failure to comply with the review provisions of the
Investment Canada Act
could result in, among other things, an injunction or a court order directing disposition of assets or shares.
E. Taxation
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares. This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares. Each prospective U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares. No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.
Scope of this Summary
Authorities
This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.
U.S. Holders
For purposes of this summary, the term "U.S. Holder" means a beneficial owner of common shares that is for U.S. federal income tax purposes:
|
·
|
an individual who is a citizen or resident of the U.S.;
|
|
·
|
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia;
|
|
·
|
an estate whose income is subject to U.S. federal income taxation regardless of its source; or
|
|
·
|
a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
|
Non-U.S. Holders
For purposes of this summary, a “non-U.S. Holder” is a beneficial owner of common shares that is not a U.S. Holder. This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from and relating to the acquisition, ownership, and disposition of common shares. Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences (including the potential application of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.
U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed
This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following: (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a “functional currency” other than the U.S. dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) U.S. Holders that own or have owned (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute “taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares.
If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such entity and the partners (or other owners) of such entity generally will depend on the activities of the entity and the status of such partners (or owners). This summary does not address the tax consequences to any such owner. Partners (or other owners) of entities or arrangements that are classified as partnerships or as “pass-through” entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares.
Passive Foreign Investment Company Rules
If the Company were to constitute a “passive foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”, as defined below) for any year during a U.S. Holder’s holding period, then certain potentially adverse rules will affect the U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition, ownership and disposition of common shares. The Company believes that it was classified as a PFIC during the tax year ended April 30, 2013, and may be a PFIC in future tax years. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status. Each U.S. Holder should consult its own tax advisor regarding the PFIC status of the Company and any subsidiary of the Company.
In addition, in any year in which the Company is classified as a PFIC, such holder would be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file a IRS Form 8621.
PFIC Status of the Company
The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the “income test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the “asset test”). “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.
Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation’s commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in a trade or business and certain other requirements are satisfied. For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and asset test described above, and assuming certain other requirements are met, “passive income” does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related persons” (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.
Under certain attribution rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company’s direct or indirect equity interest in any company that is also a PFIC (a ‘‘Subsidiary PFIC’’), and will be subject to U.S. federal income tax on their proportionate share of (a) any “excess distributions,” as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of common shares. Accordingly, U.S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of common shares are made.
Default PFIC Rules Under Section 1291 of the Code
If the Company is a PFIC for any tax year during which a U.S. Holder owns common shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether and when such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF” under Section 1295 of the Code (a “QEF Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.” A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of common shares and (b) any excess distribution received on the common shares. A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for the common shares, if shorter). Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on common shares or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective common shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible. If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such common shares were sold on the last day of the last tax year for which the Company was a PFIC.
QEF Election
A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which its holding period of its common shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.
A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares.
The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding period for the common shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder’s holding period for the common shares, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a “purging” election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.
A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.
U.S. Holders should be aware that there can be no assurances that the Company will satisfy the record keeping requirements that apply to a QEF, or that the Company will supply U.S. Holders with information that such U.S. Holders are required to report under the QEF rules, in the event that the Company is a PFIC. Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares. Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a QEF Election.
A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Company cannot provide the required information with regard to the Company or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.
Mark-to-Market Election
A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock. The common shares generally will be “marketable stock” if the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holding period for the common shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common shares.
A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holder’s tax basis in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in the common shares, over (b) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).
A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.
A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a Mark-to-Market Election.
Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to eliminate the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC.
Other PFIC Rules
Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are transferred.
Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.
Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.
The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.
Ownership and Disposition of Common Shares
The following discussion is subject to the rules described above under the heading “Passive Foreign Investment Company Rules.”
Distributions on Common Shares
A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a common share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares. (See “Sale or Other Taxable Disposition of common shares” below). However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will constitute ordinary dividend income. Dividends received on common shares generally will not be eligible for the “dividends received deduction”. In addition, the Company does not anticipate that its distributions will constitute qualified dividend income eligible for the preferential tax rates applicable to long-term capital gains. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.
Sale or Other Taxable Disposition of Common Shares
Upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such common shares sold or otherwise disposed of. A U.S. Holder’s tax basis in common shares generally will be such holder’s U.S. dollar cost for such common shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the common shares have been held for more than one year.
Preferential tax rates currently apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.
Additional Considerations
Additional Tax on Passive Income
For tax years beginning after December 31, 2012, certain individuals, estates and trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net investment income” including, among other things, dividends and net gain from dispositions of property (other than property held in a trade or business). U.S. Holders should consult with their own tax advisors regarding the effect, if any, of this tax on their ownership and disposition of common shares.
Receipt of Foreign Currency
The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.
Foreign Tax Credit
Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.
Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to the common shares that is treated as a “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.
Backup Withholding and Information Reporting
Under U.S. federal income tax law and Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, recently enacted legislation generally imposes new U.S. return disclosure obligations (and related penalties) on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of $50,000. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their common shares are held in an account at a domestic financial institution. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938. Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares will generally be subject to information reporting and backup withholding tax, at the rate of 28% (and increasing to 31% for payments made after December 31, 2012), if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.
F. Dividends and Paying Agents
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
G. Statements by Experts
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
H. Documents on Display
Any statement in this annual report about any of the Company's contracts or other documents is not necessarily complete. If the contract or document is filed as an exhibit to this annual report, the contract or document is deemed to modify the description contained in this annual report. Readers must review the exhibits themselves for a complete description of the contract or document.
Readers may review a copy of the Company's filings with the SEC, including exhibits and schedules filed with it, at the SEC's public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. Readers may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC maintains a Web site (http://www.sec.gov) that contains reports, submissions and other information regarding registrants that file electronically with the SEC. The Company also files electronically through the EDGAR system.
Readers may read and copy any reports, statements or other information that the Company files with the SEC at the address indicated above and may also access them electronically at the Web site set forth above. These SEC filings are also available to the public from commercial document retrieval services.
Any documents referred to in this annual report may be inspected at the head office of the Company, 1020 – 625 Howe Street, Vancouver, British Columbia, V6C 2T6, Canada, during normal business hours.
I. Subsidiary Information
There is no information relating to the Company’s subsidiaries which must be provided in Canada and which are not otherwise called for by the body of generally accepted accounting principles used in preparing the consolidated financial statements.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company anticipates its primary market risk, if any, to be related to fluctuations in exchange rates. Exchange rate risk may arise if the Company is required to use different currencies for various aspects of its operations. At present, the functional currency for the Company is the Canadian dollar. Based on the Company’s overall exchange rate risk as at April 30, 2013, the Company believes that a 10% change in exchange rates would not have a material adverse effect on its financial position, financial performance, or changes in financial position. The Company intends to monitor its exchange rate risk and take reasonable steps to reduce its exposure. The Company does not intend to purchase or sell derivative instruments for speculative purposes.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
This Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES
There has not been a material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within thirty days, relating to indebtedness of the Company or any of its significant subsidiaries. There are no payments of dividends by the Company in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
At the end of the period covered by this annual report for the fiscal year ended April 30, 2013, an evaluation was carried out under the supervision of, and with the participation of, our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, our CEO and CFO have concluded that the disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by us in reports that are filed or submitted under the Exchange Act are (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual report on internal control over financial reporting
As at the end of the period covered by this annual report, management of the Company, with the participation of the CEO and the CFO, evaluated the effectiveness of the Company's disclosure controls and procedures and internal control over financial reporting as required by Canadian securities laws. Based on that evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by this annual report, the disclosure controls and procedures were effective to provide reasonable assurance that material information relating to the Company was made known to senior management by others and information required to be disclosed by the Company in its annual filings, interim filings (as such terms are defined under National Instrument 52-109
– Certification of Disclosure in Issuers'
Annual and Interim Filings
) or other reports filed or submitted by it under securities legislation were recorded, processed, summarized and reported within the time periods specified in securities legislation. The CEO and the CFO have also concluded that, as of the end of the period covered by this annual report, the internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. To design its internal control over financial reporting, the Company used the
Internal Control – Integrated Framework
(COSO Framework) published by the Committee of Sponsoring Organizations of the Treadway Commission. There are no material weaknesses in the Company's internal control over financial reporting. During the year ended April 30, 2012, there were no changes to the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which permits the company to provide only management’s report in this annual report. The Dodd-Frank Act permits a “non-accelerated filer” to provide only management’s report on internal control over financial reporting in an annual report and omit an attestation report of the issuer’s registered public accounting firm regarding management’s report on internal control over financial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Composition of the Audit Committee
The Company’s audit committee members are Jean Luc Roy, Michael Riley and Amb Thomas Graham, Jr. Messrs. Roy and Riley are independent directors as such term is defined by the listing standards of the NYSE MKT. The board of directors has determined that the Chairman of the Company’s Audit Committee, Jean Luc Roy, qualifies as an “audit committee financial expert” as that term is defined in Item 16A(b) of Form 20-F. As a result of their education and experience, each member of the audit committee has familiarity with, and understanding of, or experience in accounting principles used by the Company to prepare its financial statements, in reviewing and evaluating the financial statements and are familiar with internal controls and procedures for financial reporting.
Mr. Roy is chairman and an independent member of the audit committee and is financially literate. Mr. Roy has an understanding of IFRS and financial statements. He has the ability to assess the general application of such principles in connection with accounting for estimates, accruals and reserves. In addition he has the background and experience to deal with the complexity of accounting issues that can be reasonably raised by the registrant’s financial statements. Mr. Roy has an understanding of internal controls and the functioning of the audit committee and has experience overseeing the financial reporting function. Mr. Roy has been a director or executive officer of several exploration and mining companies for the past 20 years. Mr. Roy was the past President and CEO of El Nino Ventures Inc. Mr. Roy is presently a resident of Burkina Faso where is he COO of Ampella Mining Ltd., an Australian-listed company focused on gold exploration in West Africa, with their flagship property, Batie West.
Mr. Riley in an independent member of the audit committee and is financially literate. Mr. Riley is a Chartered Accountant and was a former audit partner with Ernst & Young LLP from 1985 to 2006. Mr. Riley has a B.Comm. (Honors) degree in Quantitative Methods, from Concordia University and has a Graduate Diploma in Public Accounting from McGill University. He is currently chair of the Audit Committee of BC Lottery Corporation and Chair of the Audit Committee of Primero Mining Corp.
Amb. Thomas Graham, Jr. is not an independent member of the audit committee, due to his position as Chairman of the Company. Amb. Graham has the ability to assess the general application of such principles in connection with accounting for estimates, accruals and reserves. He also has background and experience to deal with the complexity of accounting issues that can be reasonably raised by the registrant’s financial statements. Amb. Graham has an understanding of internal controls and the functioning of the audit committee and has experience overseeing the financial reporting function.
A copy of the audit committee charter is available on the Company’s web site and is available by contacting the Company directly. The Audit Committee Charter is filed herewith.
ITEM 16B. CODE OF ETHICS
The Company has adopted a Code of Ethics (“COE”) which defines certain fundamental principles, policies and procedures that govern the directors, officers, employees, advisors and contractors. The Company is committed to conducting its business in accordance with applicable laws, rules and regulations and to the highest standard of business ethics. A copy of the COE is provided to all individuals associated with the Company including outside contractors.
The COE establishes a level of awareness and expectations in certain areas of behaviour such as conflicts of interest, gifts and entertainment, competitive practices, disclosure policies, legal compliance, financial reporting, records, company assets, workplace environment and Health and Safety. A whistle blower system for reporting violations to the COE has been established and is routinely revisited during regular employee meeting and orientations.
The COE is posted on the Company’s web site, and has been posted on SEDAR and EDGAR
.
A copy of the COE may be requested by contacting the head office at #1020 – 625 Howe Street, Vancouver, BC, V6C 2T6, by telephone 604.688.3211, fax 604.688.3217 or via e-mail at dszigety@canalaska.com. The Code of Ethics is included as Exhibit 11.1 herewith.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table discloses the aggregate fees billed for each of the last two financial years for professional services rendered by the Company’s audit firm, Deloitte LLP, for various services in Canadian Dollars.
|
Financial Year Ended
|
Audit Fees
|
Audit-Related Fees
|
Tax Advisory Fees
|
All Other Fees
|
|
2013
|
$40,000
|
$24,610
|
$17,280
|
$Nil
|
|
2012
|
$50,290
|
$40,125
|
$79,981
|
$Nil
|
From time to time, management of the Company recommends to and requests approval from the audit committee for non-audit services to be provided by the Company’s auditors. The audit committee routinely considers such requests at committee meetings, and if acceptable to a majority of the audit committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company’s auditors for such non-audit services, with set maximum dollar amount for each itemized service. During such deliberations, the audit committee assesses, among other factors, whether the services requested would be considered “prohibited services” as contemplated by the US Securities and Exchange Commission, and whether the services requested and the fees related to such services could impair the independence of the auditors.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E.
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
There have been no purchases made on behalf of the issuer or any affiliate issuer during this reporting period.
ITEM 16F.
CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
None.
ITEM 16G.
CORPORATE GOVERNANCE
Not applicable.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable
PART III
ITEM 17. CONSOLIDATED FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS
See the consolidated financial statements and Exhibits listed in Item 19 hereof and filed as part of this Annual Report.
ITEM 19. EXHIBITS
The audited consolidated financial statements of the Company and exhibits listed below are filed with this annual report on Form 20-F in the United States. The financial statements appear on Pages F-1 through F-41. This report is also filed in Canada as an Annual Information Form and the Canadian filing includes the audited consolidated financial statements and exhibits listed below.
The following financial statements are attached to and form a part of this report filed with the SEC:
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Consolidated Financial Statements of the Company:
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Report of Independent Registered Chartered Accountants on Consolidated Financial Statements for the years ended April 30, 2013 and 2012.
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Consolidated Statements of Financial Position as at April 30, 2013 and 2012.
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Consolidated Statements of Loss, Comprehensive Loss and Deficit for the years ended April 30, 2013 and 2012.
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Consolidated Statements of Changes in Equity for the years ended April 30, 2013 and 2012.
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Consolidated Statements of Cash Flows for the years ended April 30, 2013 and 2012.
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Notes to the Consolidated Financial Statements.
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EXHIBIT INDEX
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The following exhibits are attached to and form part of this Annual Report:
Exhibit
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1.1
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Articles of Incorporation
*
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11.1
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Code of Ethics
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12.1
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Section 302 Certification of the Company's Chief Executive Officer
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12.2
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Section 302 Certification of the Company's Chief Financial Officer
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13.1
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Section 906 Certification of the Company's Chief Executive Officer
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13.2
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Section 906 Certification of the Company's Chief Financial Officer
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14.1
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Management Discussion and Analysis dated July 19, 2012
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14.2
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Audit Committee Charter
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14.3
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Corporate Governance Policy
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99.1
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Consolidated Financial Statements for the year ended April 30, 2013 and 2012
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* Previously filed and incorporated by reference from our Form 20-F filed with the SEC on September 14, 2010
SIGNATURES
The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Date: July 29, 2013
CANALASKA URANIUM LTD.
“Peter Dasler”
President & CEO
“Harry Chan”
Chief Financial Officer