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Management discussion and analysis of unaudited interim results for period ended 31 March 2014
Giyani Gold Corporation
(formerly 99 Capital Corporation)
(Incorporated and registered in Canada)
(Registration number BC-C0887454)
Share code on the TSXV: WDG
Share code on the JSE: GIY ISIN: CA37636L1076
(“Giyani Gold” or “the company” or “the group”)
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 2014
The following discussion and analysis of the financial position and results of operations for Giyani Gold Corp. (the
“Company” or “Giyani Gold”) should be read in conjunction with the unaudited condensed consolidated interim
financial statements for the three months ended March 31, 2014 and the audited consolidated financial statements for
the year ended December 31, 2013. Those statements were prepared under International Financial Reporting
Standards (“IFRS”). Except as otherwise disclosed, all dollar figures included therein and in the following management
discussion and analysis (“MD&A”) are quoted in Canadian dollars.
Certain information and discussion included in this MD&A constitutes forward looking information. Readers are
encouraged to refer to the cautionary notes contained in the section Forward-Looking Statements at the end of the
MD&A.
The Company’s financial statements and the financial data included in the MD&A have been prepared in accordance
with IFRS as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International
Financial Reporting Interpretations Committee.
Additional information and corporate documents may be found on SEDAR www.sedar.com, and the Giyani Gold
website www.giyanigold.com.
Company Overview and Going Concern
Giyani Gold was incorporated under the Canada Business Corporations Act on July 26, 2007 and continued under the
Business Corporations Act of British Columbia on August 4, 2010. The Company is engaged in the acquisition,
exploration, evaluation and development of principally gold resource properties in South Africa and Canada. The
Company’s primary focus is the development of the Rock Island Gold Project in South Africa and ongoing exploration
for gold at its properties in Northern Ontario, Canada. The registered address is Suite 403 - 277 Lakeshore Road East,
Oakville, Ontario, L6J 6J3.
The Company trades on the TSX Venture Exchange (“TSXV”) under the symbol “WDG”. The Company also trades on
the AltX board of the Johannesburg Stock Exchange under the symbol “JSE” and on the Alternative Investment Board
of the Namibian Stock Exchange under the symbol “GGC”.
Canoe Mining Ventures Corp. (“Canoe”) is currently owned 57.4% by the Company, and its financial results are
consolidated with the Company. In the year ended December 31, 2013, Canoe completed a Qualifying Transaction
(“QT”) which diluted the Company’s interest in Canoe. Details with respect to the QT are included in the accompanying
unaudited condensed consolidated financial statements for the period ended March 31, 2014.
The accompanying consolidated financial statements have been prepared using IFRS applicable to a “going concern”,
which assume that the Company will continue in operation for the foreseeable future and will be able to realize its
assets and discharge its liabilities in the normal course of operations.
1
The Company reported a net loss of $1,078,914 for the period ended March 31, 2014 (2013 - $736,644) and had an
accumulated deficit of $17,900,421 at March 31, 2014 (December 31, 2013 - $17,015,956). In addition to its working
capital requirements, the Company must secure sufficient funding for existing commitments and exploration costs.
These circumstances may cast significant doubt as to the ability of the Company to meet its obligations as they come
due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern.
Management plans to secure the necessary financing through a combination of the exercise of existing warrants for
the purchase of common shares, the issue of new equity instruments and the entering into joint venture arrangements.
Nevertheless, there is no assurance that these initiatives will be successful.
The recovery of amounts capitalized for exploration and evaluation assets at March 31, 2014 in the statement of
position is dependent upon the ability of the Company to arrange appropriate financing to complete the development
and continued exploration of the properties and upon future profitable production or proceeds from their disposition.
The financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported
expenses and statement of financial position classifications that would be necessary should the going concern
assumption be inappropriate, and those adjustments could be material. The Company will continue to pursue
opportunities to raise additional capital through equity markets and/or debt to fund investment in its exploration and
evaluation assets; however, there is no assurance of the success of sufficiency of these initiatives. Should the
Company fail to secure the necessary financing, judgements regarding the recoverability of the mineral property
acquisition costs and the exploration and evaluation assets could change resulting in a significant impairment to
existing assets.
Significant Events
Proposed Business Combination Agreement with Birch Hill Gold Corp.
On March 26, 2014 the Canoe and Birch Hill Gold Corp. ("Birch Hill") entered into a definitive business amalgamation
agreement (“Agreement”) pursuant to which Canoe will acquire all the issued and outstanding shares of Birch Hill.
Birch Hill holds a 100% interest in the rights of the Coldstream Property located 115km west of Thunder Bay, Ontario.
Pursuant to the terms of the Agreement, the Canoe will acquire all of the issued and outstanding common shares of
Birch Hill and the shareholders of Birch Hill will receive 0.4 of a common share of Canoe for each common share of
Birch Hill held. Holders of Birch Hill share purchase warrants will receive 0.4 of a share purchase warrants of Canoe
with a corresponding adjustment to the exercise price.
The currently issued and outstanding capital of Birch Hill consists of 13,421,385 Birch Hill Shares and 3,898,579 Birch
Hill share purchase warrants. In order to execute the Agreement, Canoe will issue approximately 5,368,554 common
shares in exchange for all the issued and outstanding Birch Hill Shares and reserve a further 1,559,432 common
shares for issuance on the exercise of share purchase warrants issued in exchange for the Birch Hill share purchase
warrants.
The Agreement is subject to approval by the shareholders of Birch Hill on May 15, 2014, certain closing conditions and
the approval of the TSXV.
Exploration and Evaluation Update
The Company’s exploration strategy is to acquire mineral resources properties and then conduct a strategic, focused
and aggressive geological, geochemical, and geophysical exploration program over that land package.
Rock Island Project – South Africa
The Company’s active project in South Africa is a joint operation with the Rock Island Project.
In supporting the Company’s strategy to develop gold exploration projects in prolific Archean greenstone belts, the
Rock Island Project comprises two prospecting rights across four properties which contain six previously producing
gold mines. The Klein Letaba-Frankie, Horseshoe, Birthday and Louis Moore properties represent an area of 3,960 Ha
located a short distance southwest and northwest of the town of Giyani in the province of Limpopo, South Africa. The
prospecting licenses expire in July of 2015. These properties enjoy a well-developed infrastructure including ready
access to necessary water, power, transportation capabilities and human resources.
Rock Island’s strategy, supported by Giyani Gold, is to develop the Giyani Gold gold exploration projects in the Giyani
region by conducting effective historical data investigation and thereafter fast-tracking exploration and development on
the most deserving projects.
Results from the extensive ground geophysical programs, which included Magnetometer, Max/Min, VLF
Electromagnetic & Induced Polarization surveys, identified certain anomalies which led to promising drill targets.
Subsequent drilling results have confirmed that gold mineralization remains nearby the historically past-producing gold
mines. Furthermore, the drilling has led to discoveries of new gold-bearing structures on the properties that were never
before identified.
The Company plans to conduct further exploration on the Rock Island Project by way of drilling and geophysics
(ground and airborne) with a view to developing a resource.
Based on positive results seen from the 2012 and 2013 diamond drilling program, the Company intends to continue
investing in the Rock Island project.
Pursuant to the joint venture agreement relating to the assets of Rock Island, the Company funds the joint venture with
its state-owned partner Corridor Mining Resources (“CMR”) on a 50:50 basis. Both parties are to share the costs
evenly on an ongoing basis. Exploration costs are recorded in a loan account with Rock Island where interest is
accrued at an agreed upon rate. The loan is unsecured, with no fixed repayment terms and bears interest at South
African prime +1%.
Khavagari and Siyandani – South Africa
On November 17, 2011 the Company entered into a binding agreement to acquire prospecting rights from Sephaku
Gold Exploration (Proprietary) Limited ("SGE"), the holder of the rights, which are located in the Giyani Greenstone
Belt ("GGB"), South Africa. The transaction will be structured as an outright purchase of the prospecting rights from
SGE, which owns the rights for the Khavagari and Siyandani gold projects. Upon the execution of a definitive sale
agreement and closing of the transaction, the Company will have 100% interest in these projects.
As consideration for the interest in the Khavagari and Siyandani gold projects, the Company will provide the vendor a
nominal cash payment of approximately Rand 1,000,000.
This transaction has not closed.
Rock Island Property Expenditures
The following table sets out the material components of costs and expenditures relating to the Rock Island Project.
The amounts shown for acquisition costs represent costs incurred to date and do not necessarily reflect present or
future values.
Total
Balance, December 31, 2012 $1,638,020
Expenditures for the year 110,803
Balance, December 31, 2013 1,748,823
Expenditures for the period 23,909
Currency translation adjustment 64,683
Balance, March 31, 2014 $1,837,415
Iron Lake Gold Project – Ontario, Canada (Canoe Mining Ventures Corp.)
The Iron Lake Gold Project is Canoe’s primary mining property in Canada and was assembled through option
agreements, licensing agreements and by staking claims. The Iron Lake Gold Project is an assembly of approximately
140 square kilometres of options and licenses within the western part of the Mishibishu Greenstone Belt near Wawa,
Ontario.
The Iron Lake Gold Project was acquired by Canoe through the QT executed in December 2013. Previous to the QT,
Giyani Gold initiated a focused and aggressive geological, geochemistry, and geophysical exploration program over
the Iron Lake land package. Canoe is now in a position to drill test the eastern extension of the trend identified and the
Tundra Gold zone within the Abbie Lake Property with the intention to assemble a compliant resource.
The exploration work at Iron Lake is being funded with flow-through capital on hand with a view to developing a
geological model for the property. To date, extensive airborne and ground geophysical programs have been conducted
with 17 holes totalling approximately 1,950 metres of “NQ” core drilled primarily in the Keating portion of the Iron Lake
Gold Project.
Approximately $1.5 million has been spent by the Company in the Iron Lake region on the geophysical and drilling
programs. The Iron Lake Gold Project covers a 38 kilometre section of the Kabenung Lake greenstone belt that hosts
the Iron Lake Deformation Zone and subsidiary shear zones which have been proven to contain significant gold
showings.
An exploration budget will be prepared and assessed to further evaluate the Iron Lake Gold Project over the next 12-
18 months. The proposed exploration program will be comprised of diamond drilling and Induced Polarization
surveying to potentially extend the known gold bearing alteration zones.
The terms of the option and license agreements for the properties included in the Iron Lake Gold Project package are
detailed in the accompanying condensed consolidated interim financial statements for the three months ended March
31, 2014. The Technical Report on the Iron Lake Gold Project is dated November 19, 2013 and is filed on Canoe’s
website at www.canoemining.com.
Iron Lake Property Expenditures
The following table sets out the material components of costs and expenditures relating to each property in the Iron
Lake Gold Project. The amounts shown for acquisition costs represent costs incurred to date and do not necessarily
reflect present or future values. Canoe did not incur any exploration expenditures in the three months ended March 31,
2014.
Keating,
Abbie Lake Emerald, Killins
Property Properties Total
Balance, December 31, 2012 $563,148 $920,669 $1,483,817
Acquisition costs 62,000 107,480 169,480
Exploration expenditures 22,823 31,230 54,053
(1)
Write-off of intercompany loan (30,690) (26,215) (56,905)
Balance, December 31, 2013 and March 31, 2014 $617,281 $1,033,164 $1,650,445
(1)
In conjunction with the QT, the Company wrote off its inter-company balance of $56,905 with Canoe that was used
primarily to fund exploration and acquisition costs related to the properties.
Outlook
Canoe Mining Ventures Corp.
In the short term, the Company is facilitating the completion of the Agreement with Birch Hill.
The Company intends to commence an exploration program in fiscal 2014 on its Ontario properties. In November
2013, the Company raised $508,000 of flow through proceeds which will be spent on exploration in fiscal 2014.
Additional funds will need to be raised to further advance the exploration program. The Company is currently reviewing
its geological information and supplementary data to plan and initiate the exploration program.
Giyani Gold Corp.
The Company’s primary objectives for 2014 include the following:
- Continue exploration activities on the Company’s Giyani Gold properties in South Africa
- Close the Khavagari and Siyandani transactions in South Africa.
- Evaluate prospective exploration and production acquisition properties in South Africa to support the Company’s
strategic focus on Southern Africa.
Results of Operations
Selected Quarterly Financial Information
The following table summarizes information derived from the Company’s consolidated financial statements for each of the
eight mostly recently completed quarters:
Loss per Share
Three months ended Total Revenues Net Loss (Income) (basic and diluted)
March 31, 2014 $- $1,078,914 $0.02
December 31, 2013 - 1,569,658 0.03
September 30, 2013 - 692,253 0.01
June 30, 2013 - 956,369 0.02
March 31, 2013 - 736,644 0.01
December 31, 2012 - 2,289,727 0.05
September 30, 2012 - 1,966,625 0.04
June 30, 2012 - 664,276 0.02
Significant fluctuations to the net loss of the Company over the periods presented include:
- Stock-based compensation expense of $1,349,775 for options of the Company granted and vesting in the three months
ended September 30, 2012.
- A write-down of exploration and evaluation assets of $1,046,058 in the three months ended December 31, 2012 on an
option agreement the Company elected to allow to lapse.
- A one-time, non-cash listing expense of $645,361 in the three months ended December 31, 2013 related to the
execution of the QT of Canoe (Note 3 of the accompanying unaudited condensed consolidated financial statements for
the period ended March 31, 2014).
- Stock-based compensation expense of $687,249 for options granted and vesting in the three months ended March 31,
2014 for options of the Company and Canoe.
Results of Operations for the three month period ended March 31, 2014 compared to 2013
The Company had a net loss of $1,078,914 for the period ending March 31, 2014, compared to a loss of $736,644 for
the same period in the previous year.
Corporate, general and administration expenses decreased from $739,341 for the three months ended March 31, 2013
to $413,591 for the current period. In general, this is due to lower exploration activity in the current quarter while the
Company works to close the Khavagari and Siyandani property transactions and Birch Hill acquisition by Canoe.
Most significantly, management and consulting fees included in corporate, general and administration expenses
decreased by $143,083 to $243,683 (2013 - $386,766) as the Company reduced compensation payments to directors
and officers.
Stock-based compensation expense of $687,249 (2013 - $38,869) is a valuation of the stock options granted to
directors, officer and consultants which vested in the period by each of the Company and Canoe.
Liquidity and Capital Resources
The Company is subject to the risks and challenges experienced by other companies at a comparable stage. These
risks include, but are not limited to, continuing losses, dependence on key individuals and the ability to secure
adequate financing or to complete corporate transactions to meet the minimum capital required to successfully
complete its projects and fund other operating expenses. Advancing the Company’s projects through exploration and
development to the production stage will require significant financings. Given the current economic climate, the ability
to raise funds may prove difficult.
None of the Company’s projects have commenced commercial production and, accordingly, the Company is
dependent upon debt and/or equity financings and the optioning and/or sale of resource or resource-related assets for
its funding. The recoverability of the carrying value of exploration and evaluation projects, and ultimately the
Company’s ability to continue as a going concern, is dependent upon exploration results which indicate the potential
for the discovery of economically recoverable reserves and resources, and the Company’s ability to finance exploration
of its projects through debt and/or equity financings and the optioning and/or sale of resource or resource-related
assets such as royalty interests for its funding.
The Company reported a net loss of $1,078,914 for the period ended March 31, 2014 (2013 - $736,644) and has an
accumulated deficit of $17,900,421 (December 31, 2013 - $17,015,956). In addition to its ongoing working capital
requirements, the Company must secure sufficient funding for existing commitments and exploration costs. These
circumstances may cast significant doubt as to the ability of the Company to meet its obligations as they come due
and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern.
The Company's financial statements have been presented on the basis that the Company will continue as a going
concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of the
business. As of March 31, 2014, the Company had working capital of $760,379, including cash of $1,068,852,
compared to working capital of $1,195,930, including cash of $1,429,699, as at December 31, 2013.
Management is continuing to actively pursue strategies to realize on the potential of its assets or secure additional
financings in order to funds its operations. The Company intends to seek equity financings through private placements
and/or public offerings. The Company will require additional funding in the near future in order to obtain the necessary
working capital for general overhead and to further its intended exploration efforts.
While the Company cannot provide any assurances that it will be successful in securing equity financings in order to
conduct its operations uninterruptedly, it is the Company’s intention to obtain the required funding. Management is
continuing to actively pursue strategies to realize on the potential of its assets or secure one or more financings in order to
provide funds for operations. However, there is no assurance of the success of sufficiency of these initiatives. Should
the Company fail to secure the necessary financing, judgements regarding the recoverability of the exploration and
evaluation assets could change resulting in a significant impairment to existing assets.
As at the date of this MD&A, the Company had 4,850,000 stock options with an exercise price of $0.25 to $2.35 and
4,671,876 warrants with an exercise price of $1.88 outstanding which, if exercised, would result in cash proceeds of
$13,476,877. There is no assurance that these exercises will occur.
Commitments
The Company has committed to approximately $1,085,120 over the next five years for obligations under operating
leases, rent, exploration, and option payments.
2014 2015 2016 2017 2018
Exploration commitments $165,454 $407,500 $7,500 $- $-
Licenses and taxes 63,000 63,000 - - -
(i)
Option payments 35,000 50,000 - - -
Rent (Oakville office) 95,243 95,243 95,243 7,937 -
$358,697 $615,743 $102,743 $7,937 $
(i)
The option payment of $35,000 due in fiscal 2014 was paid subsequent to the period ended March 31, 2014.
Commitments, totaling $791,454, inclusive of exploration commitments, licenses and taxes and option payments are
those of Canoe.
Changes in Accounting Principles
The accompanying condensed consolidated interim financial statements, including comparatives, have been prepared
in accordance with International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ (“IAS 34”) using
accounting policies consistent with IFRS issued by the International Accounting Standards Board (“IASB”) and
Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The accounting policies
and methods of computation applied by the Company in these condensed consolidated interim financial statements
are the same as those applied in the Company’s annual financial statements for the year ended December 31, 2013.
Future Accounting Pronouncements
International Financial Reporting Standard 9, Financial Instruments (“IFRS 9”) IFRS 9 was issued in November 2009
and contained requirements for financial assets. This standard addresses classification and measurement of financial
assets and replaces the multiple category and measurement models in IAS 39 for debt instruments with a new mixed
measurement model having only two categories: amortized cost and fair value through profit or loss.
IFRS 9 also replaces the models for measuring equity instruments, and such instruments are either recognized at fair
value through profit or loss or at fair value through other comprehensive income. Where such equity instruments are
measured at fair value through other comprehensive income, dividends are recognized in profit or loss to the extent
not clearly representing a return of investment; however, other gains and losses (including impairments) associated
with such instruments remain in accumulated comprehensive income indefinitely.
Requirements for financial liabilities were added in October 2010 and they largely carried forward existing
requirements in IAS 39, Financial Instruments – Recognition and Measurement, except that fair value changes due to
credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other
comprehensive income rather than the income statement, unless this creates an accounting mismatch. IFRS 9 is
effective for annual periods beginning on or after January 1, 2018. The Company is in the process of assessing the
impact of this pronouncement.
Critical Accounting Estimates
The Company performed an analysis of risk factors which, if any should realize, could materially and adversely affect
the results, financial position and/or market price of its securities.
The preparation of financial statements in conformity with IFRS requires Management to make estimates and
assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of expenses and other income for the year. These
estimates and assumptions were based on Management’s knowledge of the relevant facts and awareness of
circumstances, having regard to prior experience. Significant estimates and assumptions include the following:
i) Recoverability of Exploration and Evaluation Properties
Management considered the economics of its exploration and evaluation assets, including the drill and geophysical
results.
ii) Other Accounting Estimates
Other estimates included the benefits of future income tax assets and whether or not to recognize the resulting assets
on the Statement of Financial Position, estimated useful lives of capital assets, and determinations as to whether
exploration costs are expensed or capitalized.
While Management believes that these estimates and assumptions are reasonable, actual results may differ from the
amounts included in the financial statements.
iii) Stock-based compensation
Management is required to make certain estimates when determining the fair value of stock options awards, and the
number of awards that are expected to vest. These estimates affect the amount recognized as stock-based
compensation in the statements of loss based on estimates of forfeiture and expected lives of the underlying stock
options.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Related Party Transactions
Remuneration of directors and key management personnel of the Company was as follows:
2014 2013
Payments to key management personnel:
Cash compensation $80,954 $194,002
Stock-based compensation 295,684 -
Management and consulting fees of $80,954 (2013 - $194,002) were paid to officers and directors or to companies
controlled by officers or directors.
During the period ended March 31, 2014, the Company paid or accrued $Nil (2013 - $27,480) to McCarthy Tétrault
LLP, a law firm where one of the Company’s directors is a Partner.
During the year ended December 31, 2012, the Company issued funds to 2299895 of $2,252,515, by means of an
unsecured loan, with no due date, bearing no interest. During the year ended December 31, 2013, the loan was
settled through the issuance of 2,252,515 common shares of 2299895, ascribed a fair value of $2,252,515. These
shares were exchanged for 3,505,174 of the Company on the closing of the QT.
During the year ended December 31, 2013, the Company reversed an intercompany loan payable from Canoe for
$56,905.
Proposed Transactions
Except as otherwise disclosed in this MD&A, there are no proposed transactions that have been approved or which
management reasonably believes will be approved by the Board.
Outstanding Share Data
As at the date of this MD&A the following equity instruments are outstanding:
Range of Exercise Number of shares
Prices issued or issuable
Common shares 54,978,578
Stock options $0.25 - $2.35 4,850,000
Warrants $1.88 4,671,876
As of the date of this MD&A, Canoe has 2,483,392 stock options outstanding of which 483,392 are exercisable at
$0.20 until December 5, 2014 and 2,000,000 are exercisable at $0.25 until February 27, 2019. Additionally, Canoe
has 7,698,521 warrants outstanding with a weighted average exercise price of $0.25 and a weighted average
remaining life of 1.65 years.
Corporate Structure
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company. Control is achieved where the Company has the power to govern the financial and operating policies of
an invested entity so as to obtain benefits from its activities. All intercompany transactions, balances, income and
expenses are eliminated on consolidation. The consolidated financial statements include the accounts of the Company
and the following subsidiaries:
Company
Ownership Place of Method of
Entity Name (%) Incorporation Functional Currency Consolidation
Canoe Mining Ventures Corp. 57.4 Canada Canadian Dollar Consolidated
Alpha 111 Holdings Co. Ltd. 100.0 Barbados Canadian Dollar Consolidated
Beta 222 Holdings Co. Ltd. 100.0 Barbados Canadian Dollar Consolidated
Giyani Gold Holdings 333 (Pty) Ltd. 100.0 South Africa Canadian Dollar Consolidated
Giyani Gold South Africa (Pty) Ltd. 100.0 South Africa South African Rand Consolidated
Lexshell 831 Investments (Pty) Ltd. 100.0 South Africa South African Rand Consolidated
GGC South Africa Mining 111 (Pty) Ltd. 100.0 South Africa South African Rand Consolidated
Obliwize (Pty) Ltd. 100.0 South Africa South African Rand Consolidated
Obliweb (Pty) Ltd. 100.0 South Africa South African Rand Consolidated
Lexshell 837 Investments (Pty) Ltd. 64.0 South Africa South African Rand Consolidated
(1)
Rock Island Trading 17 (Pty) Ltd. 28.8 South Africa South African Rand Proportionate
Risk Factors
Prior to making an investment decision investors should consider the investment risks set out in the Annual Information
Form (“AIF”), located on SEDAR at www.sedar.com, which are in addition to the usual risks associated with an
investment in a business at an early stage of development. The directors of the Company consider the risks set out in
the AIF to be the most significant to potential investors in the Company, but are not all of the risks associated with an
investment in securities of the Company. If any of these risks materialize into actual events or circumstances or other
possible additional risks and uncertainties of which the Directors are currently unaware, or which they consider not to
be material in relation to the Company’s business, actually occur, the Company’s assets, liabilities, financial condition,
results of operations (including future results of operations), business and business prospects, are likely to be
materially and adversely affected. In such circumstances, the price of the Company’s securities could decline and
investors may lose all or part of their investment. relating to the Company.
Internal Controls over Financial Reporting
Disclosure Controls and Procedures (“DC&P”)
The Company has established disclosure controls and procedures to ensure that information disclosed in this MD & A
and the related interim condensed consolidated financial statements was properly recorded, processed, summarized
and reported to the Company’s Board and Audit Committee. The Company’s certifying officers conducted or caused to
be conducted under their supervision an evaluation of the disclosure controls and procedures as required under
Canadian Securities Administration regulations, as at March 31, 2014. Based on the evaluation, the Company’s
certifying officers concluded that the disclosure controls and procedures were effective to provide a reasonable level of
assurance that information required to be disclosed by the Company in its annual filings and other reports that it files or
submits under Canadian securities legislation is recorded, processed, summarized and reported within the time period
specified and that such information is accumulated and communicated to the Company’s management, including the
certifying officers, as appropriate to allow for timely decisions regarding required disclosure.
It should be noted that while the Company’s certifying officers believe that the Company’s disclosure controls and
procedures provide a reasonable level of assurance and that they are effective, they do not expect that the disclosure
controls and procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Internal Control over Financial Reporting (“ICFR”)
The Company’s certifying officers acknowledge that they are responsible for designing internal controls over financial
reporting, or causing them to be designed under their supervision in order to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
IFRS.
The Company did not have any significant changes to its ICFR systems from the date of its last MD&A.
Limitations of Controls and Procedures
The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believe that any
disclosure controls and procedures or internal controls over financial reporting, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they
cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been
prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty,
and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control.
The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due
to error or fraud may occur and not be detected.
Forward-Looking Statements
All statements made in this MD&A, other than statements of historical fact, are forward-looking statements. The
Company’s actual results may differ significantly from those anticipated in the forward-looking statements and readers
are cautioned not to place undue reliance on these forward-looking statements. Except as required by securities
regulations, the Company undertakes no obligation to publicly release the results of any revisions to forward-looking
statements that may be made to reflect events or circumstances after the date of this MD&A or to reflect the
occurrence of unanticipated events. Forward-looking statements include, but are not limited to, statements with respect
to the future metal prices, success of exploration activities, permitting time lines, currency fluctuations, requirements
for additional capital, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on
insurance coverage and the timing and possible outcome of pending litigation.
In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does
not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not
anticipate”, or “believes”, or variations of such words and phrases, or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include, among others, risks related to the integration of acquisitions;
future price of metals; accidents, labour disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
16 May 2014
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
10
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