CORONET METALS INC. Condensed Interim Consolidated Financial Statements (unaudited) For the Period Ended September 30, 2014 CORONET METALS INC.

Transcription

1 CORONET METALS INC. Condensed Interim Consolidated Financial Statements (unaudited) For the Period Ended CORONET METALS INC.-1

2 NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument , Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company s management. The Company s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity s auditor. December 01, CORONET METALS INC.-2

3 INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION EXPRESSED IN CANADIAN DOLLARS UNAUDITED March 31, As at (Audited) Assets Current assets Cash and cash equivalents 11, ,343 Receivables (note 4) 18,848 43,751 Prepaid expenses 13,433 34,588 44, ,682 Non-current assets Exploration and evaluation assets (note 5) 1,343,218 1,329,335 Property and equipment (note 6) 2,700,226 2,732,473 Total assets 4,087,448 4,287,490 Liabilities Current liabilities Accounts payable and accrued liabilities (note 7) 897, , , ,355 Non-current liabilities Long-term payable 60,860 60,067 Total liabilities 957, ,422 Shareholders Equity Share capital (note 8) 16,703,001 16,703,001 Contributed surplus and warrants (note 8) 2,584,637 2,582,563 Deficit (16,158,119) (15,687,496) 3,129,519 3,598,068 Total liabilities and shareholders equity 4,087,448 4,287,490 -See Accompanying Notes- Nature of Operations and Going Concern (note 1) Operating lease commitments (Note 14) Subsequent event (note 15) Approved on behalf of the Board on December 01, : "Joel Dumaresq" Director Steve Stine Director CORONET METALS INC.-3

4 INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS EXPRESSED IN CANADIAN DOLLARS UNAUDITED For the Three-month period ending Sept 30, Three-month period ending Sept 30, 2013 Six-month period ending Sept 30, Six-month period ending Sept 30, 2013 Professional fees 10,384 21,351 46,535 41,886 General and administrative (note 10) 84, , , ,996 Regulatory, transfer agent and filing fees 9,923 19,174 19,003 30,903 Automotive and general operating costs 86,242 81, , ,775 Management, consulting and director s fees 42,000 99,480 84, ,668 Stock-based compensation (note 9) - 13,509 2,074 28, , , , ,744 Loss before other items (233,468) (340,608) (491,702) (666,744) Other items: Interest income - 1,105-3,595 Foreign exchange (loss) gain 12,857 (46,571) (22,043) (37,925) Other income 26, , Loss and comprehensive loss for the period (194,222) (385,386) (470,623) (700,383) Loss per share Basic and diluted loss per share (0.00) (0.00) (0.00) (0.01) Weighted average number of shares outstanding 117,065,049 89, 335, ,065,049 88,969,706 -See Accompanying Notes- CORONET METALS INC.-4

5 INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY EXPRESSED IN CANADIAN DOLLARS UNAUDITED Attributable to equity shareholders of the Company Share capital # Share capital Contributed surplus and warrants Deficit Total equity Balance April 1, 117,065,049 16,703,001 2,582,563 (15,687,496) 3,598,068 Net loss, being comprehensive loss for the period (470,623) (470,623) Stock-based compensation - - 2,074-2,074 Balance 117,065,049 16,703,001 2,584,637 (16,158,119) 3,129,519 Balance April 1, ,600,389 15,326,795 2,524,547 (14,247,704) 3,603,638 Net loss, being comprehensive loss for the period (319,715) (319,715) Stock-based compensation ,007-15,007 Balance ,600,389 15,326,795 2,539,554 (14,567,419) 3,298,930 -See Accompanying Notes- CORONET METALS INC.-5

6 INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS EXPRESSED IN CANADIAN DOLLARS UNAUDITED Three-month period ending Three-month period ending 2013 Six-month period ending Six-month period ending 2013 For the Cash flows from operating activities Net loss, being comprehensive loss, for the periods (194,222) (385,386) (470,623) (700,383) Adjustments for items not involving cash: Depreciation 1,419 3,082 9,033 6,259 Finance charges Unrealized foreign exchange (gain) loss 188,050 5, ,241 7,123 Share-based compensation - 13,508 2,074 28,515 (4,753) (362,919) (292,275) (658,486) Changes in non-cash working capital items: Increase in receivables 12,258 (1,345) 24,903 (7,460) (Increase) decrease in prepaid expenses 17,886 82,423 23,805 39,765 (Decrease) Increase in accounts payable and accrued liabilities (4,171) 24,427 98,612 (27,182) Net cash used for operating activities 21,221 (257,414) (144,954) (653,363) Financing activities Proceeds on issuance of common shares - 587, ,600 Share issuance costs - (6,379) - (6,379) Net cash used for financing activities - 581, ,221 Investing activities Property and equipment - (633,416) 23,213 (1,358,142) Exploration and evaluation (13,883) (52,731) (13,883) (103,531) Net cash used for investing activities (13,883) (686,147) 9,330 (1,461,673) Net increase in cash and cash equivalents 7,338 (362,340) (135,624) (1,533,815) Cash and cash equivalents, beginning of the period 4, , ,343 1,796,020 Cash and cash equivalents, end of the period 11, ,205 11, ,205 Cash and cash equivalents are comprised of the following: Cash on hand and balances with banks 11, ,205 11, ,205 Short-term investments , ,205 -See Accompanying Notes- There were no significant non cash investing and financing activities for the period ended. The significant non cash investing and financing activities for the period ended 2013 included: a) exploration and evaluation additions of 18,304 was included in accounts payable and accrued liabilities. b) the issuance of 500,000 warrants valued at 19,535 as finder s fees on a private placement (Note 9). CORONET METALS INC.-6

7 FOR THE PERIOD ENDED SEPTEMBER 30, 1. Nature of operations and going concern Coronet Metals Inc. ( the Company or Coronet ) was incorporated pursuant to the Business Corporation Act (British Columbia). The Company is a listed issuer on the TSX-V under the symbol "CRF", the Frankfurt Stock Exchange under the symbol FWB: 2CM and on the United States OTC stock market s premier tier, OTCQX, under the symbol CORMF. The Company s registered office is at Oceanic Plaza, West Hastings Street, Vancouver, British Columbia, V6E 3X1, Canada and its head office is located at Suite West Georgia Street, Vancouver, British Columbia, V6E 3C9, Canada. The Company is engaged in the business of acquiring, exploring and developing natural resource properties, with a focus on precious mineral properties located primarily in the Americas. These consolidated financial statements for the six months ended and 2013 have been prepared on a going-concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of business. Several material uncertainties may cast a significant doubt on the validity of this assumption. The Company has incurred losses since inception and has no current source of revenue. Continuing operations, as intended, are dependent on management s ability to raise required funding through future equity issuances, its ability to acquire resource property or business interests and develop profitable operations or a combination thereof, which is not assured given the volatile and uncertain financial markets. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At, the Company had a deficit of 16,158,119 (March 31, - 15,687,495) and a working capital deficit of 853,065 (March 31, - 403,670). There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to continue as a going concern, the net realizable values of its assets may be materially less than the amounts recorded on the consolidated statements of financial position. 2. Basis of presentation These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ), and in accordance with IAS 34 Interim Financial Reporting. The Financial Statements do not include all of the information required for annual financial statements and should be read in conjunction with the Company's audited financial statements for the year ended March 31,. These Financial Statements have been prepared following the same accounting policies as the Company s audited financial statements for the year ended March 31,, except as disclosed in note 3. The Board of Directors approved these Financial Statements on December 01,. Basis of measurement These consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. In addition these consolidated financial statements have been prepared on the historical-cost basis, except for the revaluation of certain financial assets and financial liabilities to fair value. Basis of consolidation These consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All significant intercompany transactions and balances have been eliminated. CORONET METALS INC.-7

8 FOR THE PERIOD ENDED SEPTEMBER 30, 2. Basis of presentation (continued) Significant Subsidiaries (Consolidated) - ownership September 30, March 31, Coronet Metals Peru S.A.C. 100% 100% Coronet Metals (US) Inc. 100% 100% White Caps Gold Mining Company Inc. 100% 100% Functional and presentation currency Items included in the consolidated financial statements of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the Functional Currency ). The consolidated financial statements are presented in Canadian dollars, which is the Functional Currency of the Company and its subsidiaries. 3. Changes in accounting policies The IASB issued or amended the following standards which are relevant but have not yet been adopted by the Company: IFRS 9, Financial Instruments; IFRIC 21, Levies; IAS 32, Offsetting Financial Assets and Financial Liabilities. The Company has not yet completed the process of assessing the impact that the new and amended standards will have on its consolidated financial statements or determining whether to adopt in advance any of the new requirements. The Company does not expect to early adopt the following revised standards and amendments. The following is a brief summary of these new standards: IFRS 9 Financial Instruments ( IFRS 9 ) IFRS 9 will replace IAS 39, Financial Instruments: Recognition and Measurement ( IAS 39 ). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. There are two measurement categories: amortized cost and fair value. All equity instruments are measured at fair value. A debt instrument is at amortized cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is at fair value through profit or loss. Retrospective application of this standard is effective for fiscal years beginning on or after January 1, 2015, with early adoption permitted. The Company has not elected for early adoption of this standard and is in the process of assessing the impact, if any, to the consolidated financial statements. IFRIC 21, Levies In May 2013, the IASB issued IFRIC 21, "Levies", an interpretation on the accounting for levies imposed by governments. IFRIC 21 is an interpretation of IAS 37, Provisions, contingent liabilities and contingent assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. IFRIC 21 is effective for annual periods beginning on or after January 1,. The Company is currently assessing the impact of adopting IFRIC 21. IAS 32, Offsetting Financial Assets and Financial Liabilities IAS 32, Offsetting Financial Assets and Financial Liabilities, was issued in December 2011 and amends the criterion for an entity being allowed to report financial assets and liabilities on a net basis. Retrospective application of this standard is effective for fiscal years beginning on or after January 1,, with early adoption permitted. The Company does not anticipate early adoption of this standard and does not expect there to be any financial impact upon adoption. CORONET METALS INC.-8

9 FOR THE PERIOD ENDED SEPTEMBER 30, 4. Receivables March 31, HST receivable 3,651 14,577 Other receivables 15,197 29,174 18,848 43, Exploration and evaluation assets Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing. White Caps Gold Project Balance, March 31, ,138,756 Exploration expenditures 190,579 Balance, March 31, 1,329,335 Exploration expenditures 13,883 Balance, 1,343,218 CORONET METALS INC.-9

10 FOR THE PERIOD ENDED SEPTEMBER 30, 6. Property and Equipment Six month period ended Rolling stock Office furniture and other equipment Comm. and computer equipment Leasehold improvements Buildings and equipment related to mining production Opening net book value 95,992 87,431 12,680 1,062,961 1,473,410 2,732,475 Additions Disposals (23,214) (23,214) Depreciation charge - (2,776) (6,257) - - (9,033) Closing net book value 72,778 84,655 6,423 1,062,961 1,473,410 2,700,228 As at Cost 72,778 98,266 34,784 1,062,961 1,473,410 2,742,200 Accumulated depreciation - (13,611) (28,361) - - (41,972) Closing net book value 72,778 84,655 6,423 1,062,961 1,473,410 2,700,228 As at March 31, Opening net book value 65,554 8,117 16, , , ,623 Additions 37, , ,123 1,376,514 1,965,471 Depreciation charge (6,626) (1,812) (4,183) - - (12,621) Closing net book value 95, ,075 12, ,098 1,895,628 2,732,473 As at March 31, Cost 111, ,911 34, ,098 1,895,628 2,780,864 Accumulated depreciation (15,451) (10,836) (22,104) - - (48,391) Closing net book value 95, ,075 12, ,098 1,895,628 2,732,473 The Company plans to refurbish the assets acquired as part of the WCGM acquisition and as at the assets were not available for use and, consequently, were not depreciated. Property and equipment associated with leasing the Liberty precious metals processing facility are not being depreciated as the facility was not considered available for use as at. 7. Accounts payable and accrued liabilities Total March 31, Accounts payable 620, ,104 Accrued liabilities 279,920 71, , ,355 All payables are unsecured, non-interest bearing, incurred in the normal course of the Company s business operations and are within the credit terms of each relevant supplier or service provider. CORONET METALS INC.-10

11 FOR THE PERIOD ENDED SEPTEMBER 30, 8. Share capital and contributed surplus and warrants Authorized share capital Unlimited common shares without nominal or par value. Issuance of shares and warrants On September 25, 2013, the Company closed a non-brokered private placement of 13,517,000 units for proceeds of 675,850 ( the Private Placement ). Each unit is comprised of one common share and one common share purchase warrant (the Warrants ) entitling the holder to purchase one additional share of Coronet at 0.10 at any time for a period of two years from the closing date of the Private Placement. The Company paid finders fees of 3,400 and other share issuance costs of 9,494 in cash in connection with the Private Placement. In addition to the Warrants, the Company issued 500,000 broker warrants as finder s fees. The fair value of the broker warrants issued is estimated using the Black-Scholes option pricing model. The fair value of 19,535 was offset against share capital as share issuance costs together with a corresponding increase to contributed surplus. Average forecasted volatility was %, average risk-free interest rate was 1.240%, average expected life was 2 years and the fair value weighted average of broker warrants issued was On February 6, the Company closed a non-brokered private placement of 14,947,660 units at a price of 0.05 per unit for gross proceeds of 747,383 (the February Private Placement ). Each unit is comprised of one common share and one common share purchase warrant entitling the holder to purchase one additional common share of Coronet at an exercise price of 0.10 at any time for a period of two years from the closing date of the February Private Placement. The Company paid finders fees of 1,800 in cash and other share issuance costs of 11,962 in cash. The Company also issued 36,000 finders warrants in connection with the February Private Placement. The fair value of the broker warrants issued is estimated using the Black-Scholes option pricing model. The fair value of 1,529 was offset against share capital as share issuance costs together with a corresponding increase to contributed surplus. Average forecasted volatility was %, average riskfree interest rate was 0.98%, average expected life was 2 years and the fair value weighted average of broker warrants issued was On October 31, 2012, the Company issued 6,428,862 common shares as part of the consideration for the acquisition of WCGM. Warrant transactions outstanding and exercisable for the three month period ending were as follows: Number of Warrants # Weighted average exercise price Balance, April 1, 29,000, Issued during the period - - Balance, 29,000, Stock options The Company has an incentive stock option plan (the Option Plan ) which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and technical consultants to the Company, non-transferable options to purchase common shares. The Company has a fixed option plan which allows for the issuance of up to 16,554,305 options, being 20% of the total number of issued and outstanding common shares of the Company as at August 11, 2011 (record date set for the annual and special general meeting where shareholders of the Company approved the plan). Such options will be exercisable for a period of up to 4 years from the date of grant. Vesting terms are determined by the Board of Directors at the time of grant. CORONET METALS INC.-11

12 FOR THE PERIOD ENDED SEPTEMBER 30, 8. Share capital and contributed surplus and warrants (continued) Stock options (continued) The following table summarizes the changes in the outstanding stock options: For the three-month period ended 2013 Number of options Weighted average exercise price Number of options Weighted average exercise price Balance - beginning of period 8,404, ,706, Issued Balance - end of period 8,404, ,706, Options exercisable - end of period 8,304, ,006, For the period ended, the Company recorded stock-based compensation expense with an offsetting increase to contributed surplus of 2,074 ( ,515). The range of exercise prices of stock options outstanding and exercisable as at is as follows: Outstanding options Exercisable options Exercise prices Number of options outstanding Weighted average remaining term (years) Weighted average exercise price Number of options exercisable Weighted average exercise price ,830, ,730, , , ,204, ,204, ,404, ,304, Expenses by nature General and administrative expenses by nature consist of the following: For the period ended 2013 Staff costs 68,143 69,948 Depreciation 2,920 6,259 Office expenses 20,414 42,742 Travel and promotion 27,500 51,608 Insurance 23,333 24,384 Other administrative expenses 23,800 23, , ,997 CORONET METALS INC.-12

13 FOR THE PERIOD ENDED SEPTEMBER 30, 10. Financial instruments and risks The Company s financial instruments consist of cash and cash equivalents, receivables, loans payable, contingent consideration and accounts payable and accrued liabilities. The fair value of these financial instruments approximates their carrying values, unless otherwise noted. The Company s risk exposures and the impact on the Company s financial instruments are summarized below: Credit risk Credit risk arises from the non-performance by counterparties of contractual financial obligations. The Company s exposure to credit risk includes cash and cash equivalents and receivables. The Company reduces its credit risk by maintaining its bank accounts at large international financial institutions. Receivables are GST/HST and VAT due from Canadian and Peruvian governments. The maximum exposure to credit risk is equal to the fair value or carrying value of the financial assets. Liquidity risk Liquidity risk is the risk that the Company will not have sufficient liquidity to meet liabilities as they come due. As at, the Company had a cash balance of 11,723 to settle current liabilities of 897,069. The Company does not have sufficient working capital to carry out all budgeted programs in 2015 and must finance during 2015 to avoid disruption in planned expenditures (see note 1). Market risk Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign currency and price risk. a) Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The Company has non-material exposure at to interest rate risk through its financial instruments. b) Foreign currency risk The operations of the Company in Peru and in the USA are subject to currency fluctuations where exploration and administrative expenses are being incurred in the local currency, the Peruvian New Sol and USD. The Company s ability to advance funds to Peru and USA is subject to changes in the valuation of the New Sol and the US dollar as well as rules and regulations of the Peruvian and USA government. Fluctuations in the value of the New Sol and the US dollar may have an adverse effect on the operations and operating costs of the Company. Certain other costs are incurred in other currencies, but mostly the US dollar. The appreciation of non- US dollar currencies against the US Dollar can increase the cost of exploration and potential production in US dollar terms. The Company does not use derivatives to mitigate its exposure to foreign currency risk. The Company s consolidated statement of financial position contains balances of cash and cash equivalents, receivables, accounts payable and accrued liabilities and contingent consideration in currencies other than its functional currency. The Company is thus exposed to foreign exchange risk. A +- 5% change on the USD:CAD rate relating to US63,274 in assets (cash, receivables and prepaid expenses held in USD) could have an ~3,543 impact either way. The impact on US Dollar denominated current liabilities of US396,031 is about 22,178 either way. c) Price risk The Company s exposure to price risk with respect to commodity and equity prices is minimal due to the fact that the Company is still in the exploration stage with no earnings. Equity price risk is defined as the potential adverse impact on the Company s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company intends to closely monitor commodity prices of gold and other precious and base metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company when warranted. CORONET METALS INC.-13

14 FOR THE PERIOD ENDED SEPTEMBER 30, 11. Related party transactions The Company incurred the following related party transactions, with associated persons or corporations, which were undertaken in the normal course of operations and were measured at the exchange amount as follows: a) The Company pays a monthly corporate administration fee that includes accounting and office rent to a company controlled by an officer and director. During the six- month period ended, this amount was 8,868 ( ,450). b) Effective April 11, the company issued a promissory note to related party, Pashleth Investments Inc. The principal amount 190,900 bears interest at a rate of equal to 10% per annum, compounded monthly. Principal and accrued interest are due by October 11,. On July 02, the company issued a second promissory note to a related party, Pashleth Investments Inc. The principal amount 50,000 bears interest at a rate of equal to 10% per annum, compounded monthly. Principal and accrued interest are due by December 31,. c) Key management includes directors, executive officers and officers which constitutes the management team. The Company paid or accrued compensation in form of consulting fees to companies controlled by directors, executive officers and officers and share based compensation directly to directors, executive officers and officers as follows: Three-month period ended 2013 Consulting fees 42, ,313 Share-based compensation , ,313 CORONET METALS INC.-14

15 FOR THE PERIOD ENDED SEPTEMBER 30, 12. Segmented information The Company operates in one segment, being mineral exploration and development. Losses for the period and total assets by geographic location are as follows: For the six-month period ending 2013 Loss Canada 80, ,418 United States 252, ,324 Peru 137, ,641 Total losses 470, ,383 March 31, Total assets Canada 23, ,454 United States 4,044,171 4,030,975 Peru 19,573 64,061 Total assets 4,087,448 4,287, Management of capital The Company s objectives when managing capital are to safeguard the Company s ability to continue as a going concern in order to pursue suitable business opportunities and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. As the Company is in the exploration stage and has not achieved commercial operations from its projects, its principal source of funds is from the issuance of common shares. Further information relating to liquidity risk is disclosed in note 10. In the management of capital, the Company includes the components of Shareholders equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, enter into joint venture property arrangements, acquire or dispose of assets or adjust the amount of cash and cash equivalents and investments. In order to facilitate the management of its capital requirements, the Company prepares monthly and annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The annual and updated budgets are approved by the Board of Directors. The Company s investment policy is to invest its cash in highly liquid short-term interest-bearing investments with maturities of three months or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations. The Company is uncertain as to whether its current capital resources will be sufficient to carry its exploration and development plans and operations through its current operating period and, accordingly, management is reviewing the timing and scope of current exploration plans and is also pursuing other financing alternatives to fund the Company s operations. The Company is not currently subject to externally imposed capital requirements. There are no changes in the Company s approach to capital management. CORONET METALS INC.-15

16 FOR THE PERIOD ENDED SEPTEMBER 30, 14. Operating lease commitments The Company through its subsidiary, Coronet Metals (US) Inc., entered into a two year operating lease for a precious metals processing facility commencing February 2013 through February The total minimum lease payments are 20,000 per month. From April 1, to March 31, 2015 the Company will incur 210,715 in lease payments. The Company has the option to purchase the Facility for 4,000,000 at any time during the lease-term. The term will renew automatically for another 24 months after the initial period. 15. Subsequent events On October 27, Coronet completed a definitive share purchase agreement to sell a 50% operational interest in Coronet Metals US Inc. which operates the Liberty Precious Metals Processing Facility to First Liberty Power Corp. ( FLPC ). In exchange for FLPC acquiring 50% of the shares of Coronet US from Coronet, FLPC shall provide to Coronet a total of US 200,000 in cash consideration, spread over a period of time. The funds will be used to bring all outstanding payments current, funding ongoing operational costs associated with Coronet US, including costs required to bring the facility back into full operational status. The Annual and Special General Meeting of Shareholders of the Company was held on October 10, in Vancouver, BC. At the Meeting, shareholders approved all resolutions put before them by management including the consolidation of capital and the change of Company name. The shareholders approved by special resolution the consolidation of capital on the basis of up to 12 old shares to 1 new share or such lesser ratio as the directors may approve. The consolidation of capital remains subject to further action by the board of directors and TSX Venture Exchange approval. The current name of the Company will be changed to "CMC Metals Corp." or such other name as the Board determines appropriate and which all applicable regulatory authorities may accept. The change of name remains subject to further actions by the board of directors and to TSX Venture Exchange approval. Other resolutions approved included the election of all management nominees as directors, the re-appointment of the auditor and the proposed changes to the Articles. CORONET METALS INC.-16