UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For December 23, 2014 |
Commission
File Number: 0-28792 |
|
|
CANALASKA
URANIUM LTD.
(Translation of registrant’s name into
English)
#1020 – 625 Howe Street, Vancouver,
B.C. V6C 2T6
(Address of principal executive office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F
Form 20-F __X___ Form 40-F_____
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
Note: Regulation S-T Rule 101(b)(1)
only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____
Note: Regulation S-T Rule 101(b)(7)
only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled
or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which
the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to
be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been
the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant
by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934. Yes: _____ No: __X___
If “Yes” is marked, indicate below
the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ___________.
Exhibits
Signatures
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CanAlaska Uranium Ltd.
Registrant
_____”Dianne Szigety”_______________________
Dianne Szigety (Corporate Secretary)
_____December 23, 2014_______________________
Date
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Peter Dasler, Chief Executive
Officer of CanAlaska Uranium Ltd., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim M&DA
(together the “interim filings”) of CanAlaska Uranium Ltd. (the “issuer”) for the interim period
ended October 31, 2014. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for
the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence,
the interim financial report together with the other financial information included in the interim filings fairly present in all
material respects the financial condition, financial performance and cash flows of the issuer, as of the date and for the period
presented in the interim filings. |
| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR),
as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings,
for the issuer. |
| 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3,
the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance
that |
| (i) | material information relating to the issuer is made known to us by others, particularly during
the period in which the interim filings are being prepared; and |
| (ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other
reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods
specified in securities legislation; and |
| (b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with the issuer’s GAAP. |
| 5.1 | Control framework: The control framework the issuer’s other certifying officer(s)
and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (COSO Framework) published
by The Committee of Sponsoring Organizations of the Treadway Commission (COSO). |
| 6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change
in the issuer’s ICFR that occurred during the period beginning on May 1, 2014 and ended on October 31,
2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
“P. Dasler”
____________________________
Peter Dasler
Chief Executive Officer
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Harry Chan, Chief Financial
Officer of CanAlaska Uranium Ltd., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim M&DA
(together the “interim filings”) of CanAlaska Uranium Ltd. (the “issuer”) for the interim period
ended October 31, 2014. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for
the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence,
the interim financial report together with the other financial information included in the interim filings fairly present in all
material respects the financial condition, financial performance and cash flows of the issuer, as of the date and for the period
presented in the interim filings. |
| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR),
as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings,
for the issuer. |
| 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3,
the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance
that |
| (i) | material information relating to the issuer is made known to us by others, particularly during
the period in which the interim filings are being prepared; and |
| (ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other
reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods
specified in securities legislation; and |
| (b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with the issuer’s GAAP. |
| 5.1 | Control framework: The control framework the issuer’s other certifying officer(s)
and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (COSO Framework) published
by The Committee of Sponsoring Organizations of the Treadway Commission (COSO). |
| 6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change
in the issuer’s ICFR that occurred during the period beginning on May 1, 2014 and ended on October 31,
2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
“H. Chan”
____________________________
Harry Chan
Chief Financial Officer
![](image_001.jpg)
CanAlaska Uranium Ltd.
Condensed Interim Consolidated Financial Statements
Second Quarter - October 31, 2014
(Unaudited)
(Expressed in Canadian dollars, except where
indicated)
NOTICE OF NO AUDITOR REVIEW
OF
CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
Under National Instrument 51-102, if an auditor
has not performed a review of the condensed interim consolidated financial statements required to be filed, they must be accompanied
by a notice indicating that the condensed interim consolidated financial statements have not been reviewed by an auditor.
The accompanying condensed interim consolidated
financial statements 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 condensed interim consolidated financial statements in accordance with standards established by
the Canadian Institute of Chartered Accountants for a review of condensed interim consolidated financial statements by an entity’s
auditor.
CanAlaska Uranium Ltd.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
(Expressed in Canadian dollars except where indicated)
|
October 31
2014
$000’s |
April 30
2014
$000’s |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents (note 4) |
1,801 |
1,044 |
Trade and other receivables |
71 |
52 |
Available-for-sale securities (note 5) |
336 |
414 |
Total current assets |
2,208 |
1,510 |
|
|
|
Non-current assets |
|
|
Reclamation bonds |
189 |
189 |
Property and equipment (note 6) |
261 |
294 |
Mineral property interests (note 7) |
748 |
813 |
Total assets |
3,406 |
2,806 |
|
|
|
Liabilities |
|
|
Current liabilities |
|
|
Trade and other payables |
215 |
382 |
|
|
|
Equity |
|
|
Common shares (note 8) |
73,205 |
73,205 |
Equity reserve (note 8) |
10,868 |
10,807 |
Investment revaluation reserve |
(352) |
(24) |
Deficit |
(80,530) |
(81,564) |
|
3,191 |
2,424 |
|
3,406 |
2,806 |
|
|
|
Going Concern (note 2) |
|
|
Commitments (note 11) |
|
|
Subsequent Events (note 14) |
|
|
Approved by the Audit Committee of the Board of Directors
“Peter Dasler” “Jean Luc Roy”
_________________________ ______________________
Director
Director
The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements.
CanAlaska Uranium Ltd.
Condensed Interim Consolidated Statements of Comprehensive Earnings
(Loss)
(Unaudited)
(Expressed in Canadian dollars except where indicated)
|
Three months
ended
October 31
2014 |
Three months
ended
October 31
2013 |
Six months
ended
October 31
2014 |
Six months
ended
October 31
2013 |
|
($000's) |
($000's) |
($000's) |
($000's) |
|
|
|
|
|
EXPLORATION COSTS |
|
|
|
|
Mineral property expenditures net of reimbursements |
114 |
87 |
168 |
116 |
Write-down on reclamation bonds |
- |
- |
- |
3 |
Mineral property write-offs (note 7) |
15 |
33 |
65 |
176 |
Recoveries on option payments received (note 7) |
- |
(240) |
(1,881) |
(240) |
Equipment rental income |
- |
- |
(4) |
- |
|
129 |
(120) |
(1,652) |
55 |
OTHER EXPENSES (INCOME) |
|
|
|
|
Consulting, labour and professional fees |
98 |
87 |
386 |
187 |
Depreciation and amortization (note 6) |
16 |
20 |
32 |
40 |
Loss on disposal of property and equipment |
- |
- |
- |
1 |
Insurance, licenses and filing fees |
38 |
29 |
48 |
48 |
Interest income |
(5) |
(2) |
(8) |
(6) |
Other corporate costs |
12 |
9 |
22 |
18 |
Investor relations and presentations |
56 |
2 |
62 |
3 |
Rent (note 11) |
7 |
7 |
13 |
11 |
Share-based payments (note 9) |
- |
20 |
61 |
20 |
Travel and accommodation |
2 |
2 |
3 |
4 |
Impairment of available-for-sale securities (note 5) |
9 |
16 |
15 |
24 |
Management fees |
(10) |
(5) |
(16) |
(6) |
|
223 |
185 |
618 |
344 |
|
|
|
|
|
Net Earnings (loss) for the period |
(352) |
(65) |
1,034 |
(399) |
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
Unrealized (gain) loss on available-for-sale securities |
198 |
(40) |
328 |
(17) |
Total comprehensive earnings (loss) for the period |
(550) |
(25) |
706 |
(382) |
|
|
|
|
|
Basic and diluted earnings (loss) per share ($ per share) |
(0.02) |
(0.00) |
0.05 |
(0.02) |
|
|
|
|
|
Basic and diluted weighted average common
shares
outstanding (000's) |
22,068 |
22,068 |
22,068 |
22,064 |
The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements.
CanAlaska Uranium Ltd.
Condensed Interim Consolidated Statements of Changes in Equity
For the six months ended October 31, 2014 and 2013
(Unaudited)
(Expressed in Canadian dollars except where indicated)
|
|
|
Investment Revaluation Reserve
$000’s |
Accumulated
Deficit
$000’s |
Total
Equity
$000’s |
|
|
|
|
|
|
|
Equity
Reserve
$000’s |
|
Common Shares |
|
Shares
000’s |
Amount
$000’s |
Balance-May 1, 2013 |
22,058 |
73,205 |
10,682 |
(1) |
(80,856) |
3,030 |
Issued to acquire mineral property interest (note 8) |
10 |
1 |
- |
- |
- |
1 |
Share issuance costs |
- |
(1) |
- |
- |
- |
(1) |
Share-based payments |
- |
- |
20 |
- |
- |
20 |
Unrealized gain on available-for-sale securities |
- |
- |
- |
17 |
- |
17 |
Loss for the period |
- |
- |
- |
- |
(399) |
(399) |
Balance-October 31, 2013 |
22,068 |
73,205 |
10,702 |
16 |
(81,255) |
2,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance-May 1, 2014 |
22,068 |
73,205 |
10,807 |
(24) |
(81,564) |
2,424 |
Share-based payments |
- |
- |
61 |
- |
- |
61 |
Unrealized loss on available-for-sale securities |
- |
- |
- |
(328) |
- |
(328) |
Income for the period |
- |
- |
- |
- |
1,034 |
1,034 |
Balance-October 31, 2014 |
22,068 |
73,205 |
10,868 |
(352) |
(80,530) |
3,191 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements.
CanAlaska Uranium Ltd.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in Canadian dollars except where indicated)
|
|
|
Six months
ended October 31
2014 |
Six months
ended October 31
2013 |
|
|
|
$000’s |
$000’s |
Cash flows used in operating activities |
|
|
|
|
Income (loss) for the period |
|
|
1,034 |
(399) |
Items not affecting cash |
|
|
|
|
Loss (gain) on disposal of property and equipment |
|
|
- |
1 |
Depreciation and amortization (note 6) |
|
|
32 |
40 |
Mineral property write-offs |
|
|
65 |
176 |
Write-down on reclamation bonds |
|
|
- |
3 |
Other |
|
|
- |
1 |
Impairment of available-for-sale securities (note 5) |
|
|
15 |
24 |
Recoveries on option payments received |
|
|
(1,881) |
(180) |
Share-based payments (note 9) |
|
|
61 |
20 |
|
|
|
(674) |
(314) |
Change in non-cash operating working capital |
|
|
|
|
Increase in trade and other receivables |
|
|
(19) |
(8) |
Decrease in trade and other payables |
|
|
(167) |
(37) |
|
|
|
(860) |
(359) |
Cash flows from investing activities |
|
|
|
|
Additions to mineral property interests |
|
|
(10) |
(7) |
Proceeds from sale of property and equipment |
|
|
2 |
- |
Reclamation bonds |
|
|
- |
10 |
Option payments received |
|
|
1,625 |
- |
|
|
|
1,617 |
3 |
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
|
757 |
(356) |
|
|
|
|
|
Cash and cash equivalents - beginning of period (note 4) |
|
|
1,044 |
1,265 |
|
|
|
|
|
Cash and cash equivalents - end of period (note 4) |
|
|
1,801 |
909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed
interim consolidated financial statements.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
CanAlaska Uranium Ltd. (the “Company”
or “CanAlaska”) and its subsidiaries for the past 9 years have been principally engaged in the exploration of uranium
properties. The Company will attempt to bring the properties to production, structure joint ventures with others, option or lease
properties to third parties or sell the properties outright. The Company has not determined whether these properties contain ore
reserves that are economically recoverable and the Company is considered to be in the exploration stage. From time to time, the
Company evaluates new properties and directs exploration on these properties based on the Board of Director’s evaluation
of financial and market considerations at the time. On December 30, 2013, the Company’s shares commenced trading on the TSX
Venture Exchange under the symbol “CVV” and ceased trading on the Toronto Stock Exchange. The Company’s shares
are also quoted on the OTCQB in the United States under the symbol “CVVUF” and the Frankfurt Stock Exchange under the
symbol “DH7N”. The Company’s registered office is located at 625 Howe Street, Suite 1020, Vancouver, British
Columbia, V6C 2T6, Canada.
These condensed interim consolidated financial
statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue
in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the
normal course of business. These condensed interim consolidated financial statements do not include any adjustments to the carrying
values of assets and liabilities and the reported expenses and statement of financial position classification that would be necessary
should the Company be unable to continue as a going concern. These adjustments could be material.
The recoverability of the amounts shown for
mineral properties and related deferred costs is dependent upon the existence of economically recoverable mineral reserves, the
ability of the Company to obtain the necessary financing to complete the development, and upon future profitable production or
proceeds from disposition of the mineral properties. Due to increasingly difficult market conditions facing junior uranium exploration
companies there is no assurance that the Company will be successful in raising additional financing. The amounts shown as mineral
property costs represent acquisition costs incurred to date, net of recoveries.
At October 31, 2014, the Company
had cash and cash equivalents of $1.8 million (April 30, 2014: $1.0 million) (note 4) and working capital of $2.0 million (April
30, 2014: $1.1 million). The Company has a deficit of $80.5 million at October 31, 2014. Management believes that the cash on hand
is sufficient to meet corporate, administrative and selected exploration activities for at least the next twelve months. Management
is working to option, joint venture or sell its individual exploration projects. The above factors cast substantial doubt regarding
the Company’s ability to continue as a going concern.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
3 | | Basis of Consolidation and Presentation |
a) Statement of Compliance
These condensed interim consolidated financial
statements of the Company, including comparatives, have been prepared in accordance with International Financial Reporting Standards
34 Interim Financial Reporting (“IAS 34”) using the accounting policies consistent with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Boards (“IASB”). These condensed
interim consolidated financial statements have been prepared on the basis of and using accounting policies, methods of computation
and presentation consistent with those applied in the Company’s April 30, 2014 consolidated annual financial statements.
These condensed interim consolidated financial
statements were authorized for issuance by the Board of Directors of the Company on December 16, 2013.
b) Basis consolidation and
preparation
These condensed interim consolidated financial
statements are presented in Canadian dollars. The consolidated financial statements are prepared on the historical cost basis except
for certain financial instruments that are measured on the fair value basis.
These condensed interim consolidated financial statements include
the accounts of CanAlaska and its wholly-owned subsidiaries including:
- CanAlaska Resources Ltd. U.S.A., a Nevada company
- CanAlaska West McArthur Uranium Ltd., a B.C. company
- Golden Fern Resources Limited, a New Zealand company
- Poplar Uranium Limited., a B.C. company
Subsidiaries are entities over which
the Company has the power, directly or indirectly, to govern the financial and operating policies of the entity so as to obtain
benefits from its activities. In assessing control, potential voting rights that are presently exercisable or convertible, are
taken into account in the assessment of whether control exists. Subsidiaries are fully consolidated from the date on which control
is transferred to the Company. They are deconsolidated from the date on which control ceases. All inter-company transactions, balances,
income and expenses have been eliminated on consolidation.
These condensed interim consolidated
financial statements also include the Company's share of the jointly held assets, its jointly incurred liabilities, its share of
the revenues and expenses of CanAlaska Korean Uranium Limited Partnership (“CKULP” or the “Partnership”
or the “CKU Partnership”) and CanAlaska Korean Uranium Limited.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
4 | | Cash and Cash Equivalents |
|
|
|
October 31, 2014
$000’s |
April 30, 2014 $000’s |
CKU Partnership funds |
|
|
102 |
176 |
Option-in advances |
|
|
73 |
93 |
Cash in bank and other short term deposits |
|
|
1,626 |
775 |
Total |
|
|
1,801 |
1,044 |
CKU Partnership funds are held by
the Company for expenditure on the properties held by the CKULP.
Option-in advances are advance cash
funding by joint venture partners on various exploration properties.
Cash and cash equivalents of the
Company are comprised of bank balances and short-term investments, which are convertible to cash, with an original maturity of
90 days or less as follows:
|
|
October 31, 2014
$000’s |
April 30, 2014
$000’s |
Cash |
|
451 |
319 |
Cash equivalents |
|
1,350 |
725 |
Total |
|
1,801 |
1,044 |
5 | | Available-for-Sale Securities |
|
|
October 31, 2014 |
April 30, 2014 |
|
|
Cost
$000’s |
Market Value
$000’s |
Cost
$000’s
|
Market Value $000’s |
Pacific North West Capital Corp. |
|
8 |
8 |
17 |
17 |
Mega Uranium Ltd. |
|
3 |
6 |
3 |
11 |
Makena Resources Inc. |
|
196 |
61 |
155 |
80 |
Copper Reef Mining Corp. |
|
20 |
10 |
20 |
10 |
MPVC Inc. |
|
450 |
225 |
225 |
259 |
Other available-for-sale securities |
|
11 |
26 |
18 |
37 |
Total |
|
688 |
336 |
438 |
414 |
The Company reviews the carrying
values of its available-for-sale securities, and after considering where the decreases on fair value were significant or prolonged,
the Company recognized an impairment on available-for-sale securities of $9,169 for the three months ended October 31, 2013 and
$15,243 for the six months ended October 31, 2013 (three months ended October 31, 2013: $16,377 six months ended October 31, 2013:
$24,353).
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
|
Automotive
$000’s
|
Leasehold improvements
$000’s |
Mining equipment
$000’s |
Office equipment
$000’s
|
Total
$000’s |
Cost |
|
|
|
|
|
At May 1, 2013 |
25 |
270 |
1,022 |
456 |
1,773 |
Disposals |
- |
- |
- |
(1) |
(1) |
At April 30, 2014 |
25 |
270 |
1,022 |
455 |
1,772 |
Disposals |
- |
- |
- |
(5) |
(5) |
At October 31, 2014 |
25 |
270 |
1,022 |
450 |
1,767 |
Accumulated Depreciation and Amortization |
|
|
|
|
|
At May 1, 2013 |
(17) |
(125) |
(880) |
(376) |
(1,398) |
Depreciation and amortization |
(3) |
(20) |
(42) |
(15) |
(80) |
Disposals |
- |
- |
- |
- |
- |
At April 30, 2014 |
(20) |
(145) |
(922) |
(391) |
(1,478) |
Depreciation and amortization |
(1) |
(10) |
(15) |
(6) |
(32) |
Disposals |
- |
- |
- |
4 |
4 |
At October 31, 2014 |
(21) |
(155) |
(937) |
(293) |
(1,506) |
|
|
|
|
|
|
Carrying Value |
|
|
|
|
|
At April 30, 2014 |
5 |
125 |
100 |
64 |
294 |
At October 31, 2014 |
4 |
115 |
85 |
57 |
261 |
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
7 | | Mineral Property Interests |
The Company holds approximately 703,000 hectares
of mining claims in the Athabasca Basin located across the provinces of Saskatchewan and Manitoba in Canada. The holdings are comprised
of 20 projects which are in various stages of exploration and discovery.
The Company also holds mining claims
in Alaska and British Columbia.
Details of acquisition costs and
mineral property impairments for the twelve and six months ended April 30, 2014 and October 31, 2014 are as follows:
Project ($000’s) |
May 1, 2013 |
Additions/
write-offs/ recoveries |
April 31, 2014 |
Additions/
write-offs/
recoveries |
October 31, 2014 |
Athabasca Basin |
|
|
|
|
|
Cree East (a) |
- |
- |
- |
- |
- |
West McArthur (b) |
65 |
- |
65 |
- |
65 |
Fond du Lac |
120 |
- |
120 |
- |
120 |
Grease River (c) |
133 |
(57) |
76 |
(28) |
48 |
Key Lake |
24 |
- |
24 |
- |
24 |
NW Manitoba (d) |
16 |
(8) |
8 |
(8) |
- |
Poplar (e) |
166 |
(35) |
131 |
(11) |
120 |
Helmer (f) |
107 |
- |
107 |
5 |
112 |
Lake Athabasca (g) |
118 |
(20) |
98 |
(7) |
91 |
Hodgson |
109 |
(102) |
7 |
- |
7 |
Collins Bay (h) |
- |
- |
- |
- |
- |
McTavish |
74 |
- |
74 |
- |
74 |
Carswell (i) |
136 |
(136) |
- |
2 |
2 |
Ruttan (j) |
15 |
- |
15 |
(10) |
5 |
Patterson (k) |
4 |
(2) |
2 |
(2) |
- |
Cable Bay (l) |
- |
- |
- |
2 |
2 |
Other (m) |
53 |
- |
53 |
(8) |
45 |
New Zealand |
|
|
|
|
|
Reefton, NZ (n) |
24 |
(24) |
- |
- |
- |
Other |
|
|
|
|
|
Other Projects, Various (o) |
74 |
(41) |
33 |
- |
33 |
Total |
1,238 |
(425) |
813 |
(65) |
748 |
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
7 | | Mineral Property Interests (continued) |
|
Total |
Summary of option payments remaining due in
the
years ending April 30 |
|
|
Cash
$000’s |
Spend1
$000’s |
Shares |
2015 |
|
|
|
- |
- |
- |
2016 |
|
|
|
- |
600 |
30,000 |
2017 |
|
|
|
- |
1,800 |
- |
Thereafter |
|
|
|
- |
3,000 |
80,000 |
1 Represents
cumulative spend required not the spend per fiscal year to maintain certain interest in the Company’s properties. The cumulative
spend is at the Company’s discretion under an option. It may not be the Company’s intention to pay the option, in which
case the expenditure will not be incurred.
|
|
|
|
Total2 |
Summary of option payments receivable in the years ending April 302 |
Cash
$000’s |
Spend1
$000’s |
Shares |
2015 |
|
|
|
25 |
3,475 |
3,500,000 |
2016 |
|
|
|
25 |
3,925 |
750,000 |
2017 |
|
|
|
- |
4,625 |
- |
Thereafter |
|
|
|
- |
13,025 |
7,500,000 |
1 Represents
cumulative spend required not the spend per fiscal year to maintain certain interest in the Company’s properties.
2 Represents
optionees' commitments to maintain certain interest in the Company's properties.
a) Cree East, Saskatchewan – Korean
Consortium
Cree East consists of approximately 58,000
hectares of mineral claims in the Athabasca. In December 2007, the Company formed the CKU Partnership with the Korean Consortium
("Consortium") to develop Cree East. Under the terms of agreements, the Korean Consortium invested $19.0 million towards
the earn-in of a 50% ownership interest in the CKU Partnership over a four year period (April 30, 2014: 50%). The Company acts
as the operator for the exploration project and earns a management fee of 10% of the exploration expenditures incurred. The total
expenditures on the property for the six months ended October 31, 2014 and 2013 was approximately $133,000 and $42,000 respectively.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
7 | | Mineral Property Interests (continued) |
b) West McArthur, Saskatchewan - Mitsubishi
West McArthur consists of approximately 36,000
hectares of mineral claims in the Athabasca. In April 2007, the Company optioned the claims to Mitsubishi Development Pty Ltd.
(“Mitsubishi”) whereby Mitsubishi could exercise an option to earn a 50% interest in the property by funding expenditures
of $10.0 million and by making a $1.0 million payment upon completion of the $10.0 million funding requirement. In February 2010,
Mitsubishi exercised their option with a payment to the Company of $1.0 million and an unincorporated 50/50 joint venture was formed
between the parties to pursue further exploration and development of the property. The Company acts as project operator and earns
a fee (between 5% and 10%) based on the expenditures incurred. The total expenditures on the property for the six months ended
October 31, 2014 and 2013 was approximately $36,000 and $17,000 respectively.
c) Grease River, Saskatchewan
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Grease River claims of approximately $28,000 as it did not renew
its permits on these claims.
d) NW Manitoba, Manitoba
In September 2013, the Company entered
into an option agreement with Northern Uranium Corp ("Northern") previously MPVC Inc. for an interest in the NW Manitoba
project. The project covers 143,603 hectares along the Saskatchewan/Manitoba border. Northern may earn an 80% interest in the project
by carrying out a three stage $11.6 million exploration program, make a cash payment of $35,000 (paid), issue 12 million common
shares and issue 6 million common share purchase warrants.
e) Poplar, Saskatchewan
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Poplar claims of approximately $11,000 as it did not renew its
permits on these claims.
f) Helmer, Saskatchewan
In August and September 2014, the
Company acquired 11 claim blocks totalling 4,862 hectares located near the southern shore of Lake Athabasca, 12 kilometres west
of Fond Du Lac on the central northern edge of the Athabasca basin for $5,005.
g) Lake Athabasca, Saskatchewan
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Lake Athabasca claims of approximately $7,000 as it did not renew
its permits on these claims.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
7 | | Athabasca Mineral Property Interests (continued) |
h) Collins Bay, Saskatchewan
In June 2013, the Collins Bay Extension
option agreement dated July 4, 2009 and subsequently amended on March 29, 2011 with Bayswater Uranium Corporation ("Bayswater")
was amended whereby the option period was extended from six years to eight years. In consideration for the extension, the Company
accelerated its staged common share issuances and issued 10,000 common share on July 12, 2013 (note 8). As a result, in July 2013,
the Company issued an aggregate of 20,000 common shares under the amended option agreement for the Collins Bay Extension project.
i) Carswell, Saskatchewan
In August 2014, the Company acquired
8 claim blocks totalling 1,723 hectares located in the western portion of the Athabasca basin, within the roughly circular Carswell
geologic structure at Cluff Lake for $2,400.
j) Ruttan, Saskatchewan
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Ruttan claims of approximately $10,000 as it did not renew its
permits on this property.
k) Patterson – Saskatchewan
In January 2013, the Company acquired
three block of claims, totalling 6,687 hectares located in the Patterson Lake area of the western Athabasca basin. In August 2013,
the Company optioned the claims to Makena Resources Inc ("Makena"). Makena may earn a 50% interest in the property by
making cash payments totalling $100,000 by June 1, 2015, issuing 2,500,000 common share by June 1, 2015 and incurring exploration
expenditures totalling $1.4 million by September 30, 2016.
On June 30, 2014, the option agreement
with Makena Resources Inc. for the Patterson project was amended whereby in exchange for a six month extension on the work program,
Makena agreed to return the Patterson Lake North project and the Patterson Lake East project to the Company.
l) Cable Bay, Saskatchewan
In July 2014, the Company acquired
four claim blocks totalling 2,411 hectares located partly on land and partly over Cree Lake for $2,004. The property straddles
the edge of the Athabasca basin, along the Cable Bay Shear Zone.
m) Other - Moon, Saskatchewan
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Moon claims of approximately $8,000 as it did not renew its permits
on these claims.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
7 | | Athabasca Mineral Property Interests (continued) |
n) Reefton – New Zealand
In March 2014, the Company entered
into a purchase agreement to sell the exploration permit for the Reefton project to Stevenson Mining Ltd. ("Stevenson")
for aggregate purchase consideration of $20,000. The Company recognized a loss on disposal of the Reefton project of approximately
$4,000.
On May 20, 3014, Golden Fern Resources
Limited, the Company's wholly owned subsidiary in New Zealand, began liquidation proceedings which was completed on August 29,
2014. The New Zealand subsidiary was liquidated after the sale of the Reefton project to Stevenson. There were no significant assets
or liabilities remaining in the entity.
o) Other Projects
Kasmere, Manitoba
In March 2014, the Company entered
into a binding agreement to sell its interest in its Kasmere South project in northwestern Manitoba to private company East Resources
Ltd. for an aggregate cash payment totalling $1.8 million. The Company retains a 2.5% net smelter royalty on any future production.
On March 28, 2014, the Company received a non-refundable cash payment of $200,000 from East Resources Ltd. Subsequent to year end,
the Company also received the remaining cash instalments of $100,000 and $1.5 million on May 30, 2014 and June 26, 2014 respectively.
The Company has authorized capital
consisting of an unlimited amount of common shares without par value.
Share Issuances
In July 2013, the Company issued
10,000 common shares under the option agreement for the Collins Bay Extension project (see note 7(h)).
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
9 | | Stock Options and Warrants |
The Company has a stock option plan
that permits the granting of stock options to directors, officers, key employees and consultants. Terms and pricing of options
are determined by management at the date of grant. A total of 4,400,000 common shares of the Company may be allotted and reserved
for issuance under the stock option plan.
|
|
Number of options
000’s |
Weighted average
exercise price $ |
Outstanding - May 1, 2013 |
|
3,598 |
0.55 |
Granted |
|
1,592 |
0.12 |
Expired |
|
(753) |
0.69 |
Forfeited |
|
(586) |
0.34 |
Outstanding – April 30, 2014 |
|
3,851 |
0.20 |
Granted |
|
574 |
0.18 |
Expired |
|
(170) |
0.25 |
Forfeited |
|
(249) |
0.25 |
Outstanding – October 31, 2014 |
|
4,006 |
0.19 |
As at October 31, 2014, the following stock
options were outstanding:
|
Number of options outstanding 000’s |
Number of options exercisable 000’s |
Exercise
price |
Expiry date
(Fiscal Year) |
|
748 |
748 |
$0.25 |
2015 |
|
574 |
574 |
$0.18 |
2017 |
|
1,092 |
1,092 |
$0.25 |
2018 |
|
1,592 |
1,592 |
$0.12 |
2019 |
Total |
4,006 |
4,006 |
|
|
|
|
|
|
|
|
For the three months ended October
31, 2014, total share-based compensation expense was $nil (October 31, 2013: $19,834). For the six months ended October 31, 2014,
total share-based compensation expense was $61,469 (October 31, 2013: $19,834).
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
9 | | Stock Options and Warrants (continued) |
Warrants
|
|
Number of warrants
000’s |
Weighted average
exercise price $ |
Outstanding - May 1, 2013 |
|
72 |
0.55 |
Expired |
|
(72) |
0.55 |
Outstanding – April 30, 2014 |
|
- |
- |
Outstanding – October 31, 2014 |
|
- |
- |
Option and warrant pricing models
require the input of highly subjective assumptions including the expected volatility. Changes in the assumptions can materially
affect the fair value estimate, and therefore, the existing models do not necessarily provide a reliable measure of the fair value
of the Company’s stock options and warrants. The Company’s expected volatility is based on the historical volatility
of the Company’s share price on the Toronto Stock Exchange or the TSX Venture Exchange. The following assumptions were used
in the Black-Scholes option pricing model to calculate the compensation expense for the six months ended October 31, 2014:
|
|
|
Options |
Weighted average fair value |
|
|
$0.11 |
Forfeiture rate |
|
|
15.4% |
Risk-free interest rate |
|
|
1.10% |
Expected life |
|
|
2.0 years |
Expected volatility |
|
|
128.5% |
Expected dividend |
|
|
0% |
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
10 | | Related Party Transactions |
Related parties include the Board of Directors and Officers of the
Company and enterprises which are controlled by these individuals.
The remuneration of directors and key management of the Company
for the three and six months ended October 31, 2014 and 2013 were as follows. Certain compensation is paid to Schimann Consultants,
a company controlled by a director and VP of Exploration.
|
Three months ended October 31 |
Six months ended October 31 |
($000’s) |
2014
$ |
2013
$ |
2014
$ |
2013
$ |
Employment benefits |
71 |
55 |
189 |
110 |
Schimann Consultants |
39 |
20 |
118 |
38 |
Directors fees |
- |
- |
100 |
- |
Share-based compensation |
- |
18 |
54 |
18 |
The directors and key management were awarded the following share
options under the employee share option plan during the six months ended October 31, 2014:
Date of grant |
Number of options |
Exercise price |
Expiry |
June 30, 2014 |
503,750 |
$0.18 |
June 30, 2016 |
The Company has the following commitments
in respect of operating leases for office space, land, or computer equipment:
Fiscal Year Ending
|
|
|
|
|
Total
$000’s |
2015 |
|
|
|
|
76 |
2016 |
|
|
|
|
133 |
Thereafter |
|
|
|
|
7 |
Total |
|
|
|
|
216 |
The Company has outstanding and
future commitments under mineral properties option agreements to pay cash and/or issue common shares of the Company (note 7).
The Company has sub leased its Vancouver
office space to reduce its operating costs. However, the Company is committed for the full office lease amount.
CanAlaska Uranium Ltd.
Notes to the Condensed Interim Consolidated Financial Statements
For the six month period ended October 31, 2014
(Unaudited)
(Expressed in Canadian dollars except where indicated)
The Company considers its capital
to consist of common shares, stock options and warrants. The Company’s objectives when managing capital are to safeguard
the Company’s ability to continue as a going concern in order to pursue the exploration of its mineral properties and to
maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.
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 and, acquire or dispose of assets.
In order to maximize ongoing exploration
efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash
in highly liquid short-term interest bearing investments with short term maturities, selected with regards to the expected timing
of expenditures from continuing operations.
13 | | Geographic Segmented Information |
The Company operates in one business
segment, the exploration of mineral property interests. The following summarizes the Company's operations based on the geographic
areas in which it operates:
October 31, 2014 ($000’s) |
|
Canada |
|
U.S.A. |
|
New Zealand |
|
Total |
Non-current Assets |
|
1,192 |
|
6 |
|
- |
|
1,198 |
Total Assets |
|
3,400 |
|
6 |
|
- |
|
3,406 |
Total Liabilities |
|
215 |
|
- |
|
- |
|
215 |
Income (Loss) for the Period |
|
1,047 |
|
(3) |
|
(10) |
|
1,034 |
April 30, 2014 ($000’s) |
|
Canada |
|
U.S.A. |
|
New Zealand |
|
Total |
Non-current Assets |
|
1,290 |
|
6 |
|
- |
|
1,296 |
Total Assets |
|
2,771 |
|
6 |
|
29 |
|
2,806 |
Total Liabilities |
|
380 |
|
- |
|
2 |
|
382 |
Loss for the Year |
|
(669) |
|
(2) |
|
(37) |
|
(708) |
On December15, 2014, the Company
received notification from Northern Uranium of the expenditure threshold for the 50% earned interest in the NW Manitoba property.
![](image_005.jpg) |
CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 1 of 20
|
|
|
![](image_002.jpg)
CanAlaska Uranium Ltd.
CVV - TSX CVVUF - OTCBB DH7N – Frankfurt
Management Discussion and Analysis
For the Second Quarter and Six Months Ended
October 31, 2014
Dated December 23, 2014
For further information on the Company reference
should be made to the Company’s public filings which are available on SEDAR. Information is also available at the Company’s
website www.canalaska.com. In addition, reference should be made to the risk factors section of the most recently filed
Annual Information Form (“AIF”) or the Company’s audited consolidated financial statements for the year ended
April 30, 2014. The following information is prepared in accordance with International Financial Reporting Standards (IFRS) as
issued by the IASB and denominated in Canadian dollars, unless otherwise noted. This MD&A should be read in conjunction with
the Company’s unaudited condensed interim consolidated financial statements for the six months ended October 31, 2014.
Table of Contents:
1. |
OVERVIEW OF THE COMPANY AND STRATEGY |
2 |
2. |
MILESTONES AND PROJECT UPDATES |
4 |
3. |
FINANCIAL POSITION |
12 |
4. |
Expenditures Review |
13 |
5. |
CASHFLOW REVIEW |
14 |
6. |
Other matters |
15 |
7. |
Quarterly Financial information |
20 |
This MD&A contains forward-looking information.
Refer to Section 6 “Forward-Looking Statements” and “Risks Factors” for a discussion of the risks, uncertainties
and assumptions relating to such information.
![](image_005.jpg) |
CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 2 of 20
|
|
|
1. | | OVERVIEW OF THE COMPANY |
| ü | Over 20 projects covering 703,000 hectares focused on Uranium (section
1.1) |
| ü | Cash resources of $1.8 million (as at October 31, 2014) |
| ü | 22,068,136 common shares issued and outstanding (December 23, 2014) |
The Company has responded to the drop in market
activity and values since the Fukushima nuclear incident by actively marketing its expertise and uranium exploration projects to
industry and end users for project financings or sales. There has been a slow resurgence in interest, and at the end of the second
quarter of our 2015 fiscal year, some renewed interest from North American and Chinese industry groups in response to the Canada-China
nuclear accord. Management has continued with evaluating its priorities, taken steps to streamline non-discretionary expenditures,
continued it efforts to raise funds and continues to explore all opportunities to sell and/or joint venture its properties. The
recoverability of the amounts shown for mineral properties and related deferred costs is dependent upon the existence of economically
recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the development, and upon
future profitable production or proceeds from disposition of the mineral properties. Due to the difficult market conditions facing
junior uranium exploration companies there is no assurance that the Company will be successful in raising additional financing.
From time to time, the Company will evaluate new properties and direct activities to these based on the Board of Director’s
evaluation of financial and market considerations at the time.
1.1 Profile and Strategy
The Company is an exploration stage company
engaged in the acquisition and exploration of mineral properties, principally in Canada. The Company aims to acquire and advance
its projects to a stage where they can be exploited at a profit or it can arrange joint ventures, whereby other companies provide
funding for development and exploitation. The Company’s principal focus for the past nine years has been the exploration
for high-grade uranium deposits in the Athabasca Basin area of Saskatchewan. There are four projects on which the Company has expended
most of its recent efforts. Three of these projects, West McArthur, Cree East and Fond Du Lac are 50% joint ventures, and the fourth,
NW Manitoba, is currently under option to Northern Uranium Corp. ("Northern Uranium") (previously MPVC Inc.). Going forward
it is expected that the Company will focus its effort on two of the project, West McArthur and Cree East. The Company is actively
marketing the remainder of its projects for option, joint venture or sale.
Table 1: Canadian Strategic Property Summary |
|
|
Property / Project Name |
Notes |
Hectares |
LTD Expenditures |
West McArthur |
Ventured with Mitsubishi |
36,000 |
$19,679,000 |
Cree East |
Ventured with Korean Consortium |
58,000 |
$19,283,000 |
NW Manitoba |
Option with Northern Uranium Corp. |
144,000 |
$7,407,000 |
Fond Du Lac |
Option with Fond Du Lac Denesuline |
10,000 |
$4,547,000 |
TOTAL |
|
|
$50,916,000 |
In the Athabasca Basin, the Company’s
most advanced projects are those which the Company has under joint venture with Japanese and Korean entities. The Company has a
strong in-house exploration team along with outside consultants which it can access and has established strategic exploration funding
relationships with MC Resources Canada, a wholly owned subsidiary of Japan’s Mitsubishi Corporation Ltd. (“Mitsubishi”)
on the West McArthur project. On the Cree East project, the Company is the Operator of a 50% Joint Venture with a Korean Consortium
comprised of Hanwha Corp., Korea Resources Corp. (“KORES”), Korea Electric Power Corporation (“KEPCO”),
and SK Networks Co. Ltd.
Throughout the region, the Company controls
an exploration portfolio of 20 projects totalling over 2,716 square miles (703,000 hectares) and has a land position that rivals
the combined holdings of established uranium producing giants Cameco Corporation and Areva The largest of these projects is the
NW Manitoba Project, located just east of the Saskatchewan-Manitoba provincial border. In 2012, the Company re-started exploration
at the NW Manitoba project, after waiting since 2007 for the Manitoba government approvals related to community consultation. In
early 2012, the Company completed an operating MOU with the local community and geophysics work and target definition started in
March 2012. At the current time, the Company has optioned the project to Northern Uranium. Northern Uranium may earn an 80% interest
in the project by carrying out a three stage $11.6 million exploration program (see section 2.2.3).
![](image_005.jpg) |
CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 3 of 20
|
|
|
In addition, CanAlaska is the operator
of a Joint Venture with the Fond Du Lac Denesuline community over an area which covers the historic Fond Du Lac uranium deposit,
and where the Company has extended the target area to the east, with a new drill intercept of 40.4 metres grading 0.32% uranium.
The Company’s exploration activities
are managed through CanAlaska offices maintained in Vancouver, BC (Head Office) and La Ronge, Saskatchewan (Field support and Equipment
Warehouse).
The Company believes that the fundamentals
of the nuclear power industry and the economic superiority of uranium over other energy fuels will ensure the long-term future
of global uranium markets and prices. Since 2004, CanAlaska has expended over $78 million on exploration and research towards the
advancement of uranium discovery on our current project areas. The information gained from this work has provided the Company with
significant evidence about the nature and location of mineral rich hydrothermal systems in areas of the Athabasca where previous
information was lacking. The increase in understanding of the geology of the target areas, and the integration of modern geophysical
methods with data processing to get more precise target definition at depth gives management the confidence to continue exploration
for large scale uranium deposits on our projects.
As of December 19, 2014, the Company had 22,068,136
shares outstanding with a total market capitalization of $3.4 million. The Company’s shares trade on the TSX Venture Exchange
(“CVV”) and are quoted on the OTCQB in the United States (“CVVUF”) and the Frankfurt Stock Exchange (“DH7N”).
On December 30, 2013, the Company's shares commenced trading on the TSX Venture Exchange and ceased trading on the Toronto Stock
Exchange. On September 2, 2014, the Company's shares were approved for trading in the United States on the OTCQB Marketplace.
The financial statements and the Management
Discussion and Analysis have been prepared under IFRS applicable to a going concern, which contemplates the realization of assets
and settlement of liabilities in the normal course of business. For the six months ended October 31, 2014, the Company reported
income of $1.6 million and as at that date had cash and cash equivalents of $1.8 million, net working capital balance of $2.0 million
and an accumulated deficit of $80.5 million. The Company is continuing to pursue a number of financing alternatives including selling
and/or joint venturing some of its properties.
The Company's ability to continue as a going
concern is dependent upon its ability to obtain additional funding from debt, equity or through other arrangements. Management
believes that the cash on hand is sufficient to meet corporate, administrative and selected exploration activities for at least
the next twelve months. Management may either need to dilute its ownership in its properties or secure additional financing to
continue to advance the development of its exploration projects. Management has taken steps to streamline non-discretionary expenditures
and financial overheads and is working to option, joint venture or sell its individual exploration projects. The above factors
cast doubt regarding the Company’s ability to continue as a going concern.
1.2 Strategic and Operating Intent
·
Targeted marketing of uranium projects for financing
·
Restriction of uranium exploration activity until financial markets
recover in this sector
·
Strong commitment to option, project joint venture or sale of individual
exploration projects
·
Evaluate alternate commodities and projects suitable for market financing,
or acquisition and sale
·
Company believes that it has the projects, strategic partners, people
and knowledge base, corporate treasury and fund raising ability to maintain a position in the uranium exploration sector, but,
due to increasingly difficult market conditions facing junior mining and junior uranium exploration companies, management has taken
steps to streamline non-discretionary expenditures and financial overheads
·
The Company has tax loss carry-forwards of approximately $9 million
and cumulative Canadian exploration expenses of approximately $18 million
·
Our Korean partners have contributed all of their $19.0 million funding
commitment towards the Cree East project, but have requested a slow-down in expenditures, or introduction of an incoming partner
·
At the West McArthur project, exploration is being carried out under
a 50/50 joint venture with MC Resources Canada (“MCRC”), a wholly owned subsidiary of Mitsubishi Corporation, and CanAlaska
which maybe deferred in 2013/2014 to await better market conditions
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
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2. | | MILESTONES AND PROJECT UPDATES |
2.1 | | Overview– May 1, 2014 to December
23, 2014 |
| · | Northern Uranium earns 50% interest
in NW Manitoba (December 2014) |
| · | Common shares trade in the United
States on the OTCQB (September 2014) |
| · | Carpenter project - staked four claim
blocks (July 2014) |
| · | Kasmere south uranium project sale
completed (June 2014) |
| · | Cree East project target extended
(June 2014) |
In December 2014, the Company received notification
from Northern Uranium of the expenditure threshold for the 50% earned interest in the NW Manitoba property, as well as continued
work on the project.
In September 2014, the Company announced that
its common shares have been approved for trading in the United States on the OTCQB Marketplace under the symbol, CVVUF.
In July 2014, the Company staked the Cable
Bay project (previously Carpenter project) which consists of four block of claims with a total area of 2,411 hectares. The project
is partly on land and partly over Cree Lake. The Cable Bayr project straddles the edge of the Athabasca basin, along a major Basin
structure, the Cable Bay Shear Zone which hosts uranium mineralization in Nuinsco Resources Corp's Diabase Peninsula project. The
Nuinsco Resources Corp's claims are adjacent immediately to the northeast. The depth to unconformity is less than 90 metres.
In June 2014, the sale of the Kasmere
South uranium project in Northern Manitoba to East Resource was completed for a total cash payment of $1.8 million and a 2.5% net
smelter royalty was completed.
In June 2014, the Company announced
that the winter geophysics program at the Cree East project has defined a 1.8 kilometre long graphitic basement EM conductor adjacent
to Zone B quartz ridge uplift and its surrounding large hydrothermal alteration halo.
Overview
The Company currently has 20 projects within
the Athabasca basin area and has carried out exploration programs on 3 of these in the past year. In the first six months of fiscal
2015, the Company spent approximately $168,000 ($253,000 net of $85,000 from reimbursements from partners) on exploration costs
in the Athabasca Basin area. The two largest exploration projects were at West McArthur and at Cree East.
Exploration spending in the first two quarter
of 2015 is up from the same comparative quarters of 2014, as the Company had a summer geophysics work program at Cree East. In
the second quarter, the Company historically spent the summer months interpreting data and preparing for its winter programs.
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CanAlaska Uranium Ltd. – MD&A October 31,
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The following table summarizes the Company’s
expenditures for the six months ended October 31, 2014.
Table 2: ($000's)
Total Exploration |
Cree East |
West McArthur |
Fond du Lac |
NW Manitoba |
Other Athabasca Basin Projects |
Other and Generative Projects |
Total |
Camp Cost & Operations |
- |
- |
- |
- |
- |
- |
- |
Drilling |
- |
- |
- |
- |
- |
- |
- |
General & Admin |
40 |
34 |
- |
4 |
17 |
56 |
151 |
Geochemistry |
64 |
- |
- |
- |
- |
- |
64 |
Geology |
- |
- |
- |
- |
- |
- |
- |
Geophysics |
4 |
- |
- |
- |
- |
- |
4 |
Other |
25 |
2 |
- |
1 |
6 |
- |
34 |
Gross Expenditures |
133 |
36 |
- |
5 |
23 |
56 |
253 |
Reimbursement |
(66) |
(19) |
- |
- |
- |
- |
(85) |
Net Expenditures |
67 |
17 |
- |
5 |
23 |
56 |
168 |
The following section contains a comparative
breakdown of project expenditures for the Company’s significant projects. Reimbursements represents the amounts received
from our joint venture partners and option partners to be applied against the expenditures for the project.
2.2.1 | | West McArthur Project, Saskatchewan – Mitsubishi |
The West McArthur project in the Athabasca
Basin, Saskatchewan, was optioned in April 2007 to Mitsubishi Development Pty Ltd., a subsidiary of Mitsubishi Corporation of Japan.
Under the option agreement, Mitsubishi could exercise an option to earn a 50% interest in the property by investing $11.0 million.
In February 2010, Mitsubishi exercised their option with a payment to the Company and an unincorporated 50/50 joint venture was
formed between the parties to pursue further exploration and development of the property. As at July 30, 2014, the Company holds
a 50% interest in the West McArthur project. Mitsubishi holds the remaining 50% interest in the property. The Company acts as project
operator under the supervision and guidance of Dr. Karl Schimann, P. Geo. and Mr. Peter Dasler, P. Geo. and earns a fee between
5% and 10%, based on expenditures incurred. Included within Other expenses are management fees charged to and reimbursed by Mitsubishi
for CanAlaska acting as the project operator.
Table 3: ($000's) |
Quarterly |
|
West McArthur Project |
Q313 |
Q413 |
Q114 |
Q214 |
Q314 |
Q414 |
Q115 |
Q215 |
LTD |
Camp Cost & Operations |
- |
(8) |
- |
- |
- |
- |
- |
- |
2,976 |
Drilling |
- |
- |
- |
- |
- |
- |
- |
- |
6,745 |
General & Admin |
12 |
8 |
6 |
8 |
10 |
11 |
8 |
26 |
2,166 |
Geochemistry |
- |
- |
- |
- |
- |
- |
- |
- |
339 |
Geology |
1 |
- |
- |
- |
- |
- |
- |
- |
1,000 |
Geophysics |
4 |
- |
- |
- |
- |
- |
- |
- |
5,775 |
Other |
6 |
- |
1 |
2 |
- |
- |
1 |
1 |
678 |
Gross Expenditures |
23 |
- |
7 |
10 |
10 |
11 |
9 |
27 |
19,679 |
Reimbursement |
(12) |
- |
(4) |
(5) |
(5) |
(6) |
(5) |
(14) |
(14,246) |
Net Expenditures |
11 |
- |
3 |
5 |
5 |
5 |
4 |
13 |
5,433 |
The West McArthur project is located between
6 and 30 kilometres west of the producing McArthur River uranium mine operated by Cameco Corp, and covers approximately 36,000
hectares. On the property there is evidence of hydrothermal alteration extending well into the sandstone, matching the typical
alteration model of Athabasca unconformity style uranium deposits. There is evidence of uranium mineralization from drill testing
in multiple areas, either as enrichment at the unconformity or in basement stringers. The most compelling features for further
exploration are the uranium values in sandstone higher in the stratigraphy, the hematized and broken rock in the sandstone, and
the pattern of basement offsets and geophysical conductivity.
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The project is accessible during the winter
drill season by seasonal winter ice roads and winter trails and during the summer exploration season by air and water. There is
no physical plant or permanent infrastructure on the property and no source of power. There are multiple extensive lakes which
can provide a source of water for the project.
The mineral rights for West McArthur were acquired
between October 2004 and February 2009 from the Ministry of Energy and Resources in the province of Saskatchewan, Canada. The claim
numbers are as follows, S-107561, S-107562, S-107563, S-107565, S-107773, S-108010, S-108011, S-108012, S-111412 S-111413, S-111511
and S-111512. The mineral rights to West McArthur are valid and in good standing with the earliest claim requiring renewal in October
2029 with no further exploration expenditures required. An annual assessment report is required to be filed by the Company with
the Ministry of Energy and Resources to disclose the exploration activities on this claim. There is no fee for filing the annual
assessment report.
In April 2012, the Company announced a preliminary
summary of drilling at its West McArthur project. Seven diamond drill holes were completed in February and March 2012, to test
a series of individual zones where the resistivity lows were coincident with the EM conductors within the Grid 5 area. Total meterage
drilled in the season was 6,422 metres, including one abandoned drill hole. The winter 2012 drill programme has demonstrated on
Grid 5 the presence of requisite geological environment for unconformity uranium deposits. Significant faulting and fracturing
are present in a number of drill holes, with individual radioactive spikes or elevated radioactivity in zones of hydrothermal alteration.
In June 2012, the Company reported the results
of drill core geochemistry on the West McArthur property. Drill holes WMA028 and WMA034 produced very positive results for uranium.
Both intersected parts of a highly-altered graphitic pelite unit and are thought to be within 50 metres of the targeted conductor,
which was identified from the down-hole geophysical surveys. The targets generated at the eastern end of Grid 5 matched and extended
a historical conductor, which was drill-tested by Uranerz in 1989. Neither of the two historical drill holes intersected their
targeted basement conductor, but, significantly, contained dravite clay and pyrite along with narrow, steep, clay rich fault gouges/breccia
in the top 350-400 metres of the sandstone column. In one historical hole, the upper 400 metres of sandstone showed anomalous uranium
and trace elements. Drill holes WMA028 and WMA034 are located in this area. Both show deep alteration into the basement rocks,
indicating and confirming a substantial hydrothermal alteration system.
The potential of this project is for unconformity
style uranium mineralization of both the Simple (Low REE, basement hosted) and the Complex (High REE, Sandstone hosted) types of
uranium. Previous exploration was hampered by the depths to the basement, however, recent advances with airborne geophysical survey
technology has enabled penetration to those depths. Multiple exploration programs since 2005 have identified targets with strong
geophysical feature, similar to those near existing uranium mines. Limited drill testing in several of these areas have shown the
basement offsets, hydrothermal clay alteration, and elevated uranium geochemistry consistent with the Athabasca unconformity deposit
model. The project has four target areas which are being evaluated for further drill testing.
The property has undergone a series of exploration
programs, including extensive geophysics and drilling of over 35 drill holes since 2005. Approximately $19.7 million has been spent
by the joint venture.
The next drill programs are dependent on financing.
The project does not have a drill program planned for 2014. Active full season programs of 6-9 drill holes are generally budgeted
at $3 to $4 million, including drill geophysics, camp and logistics. The project currently has a maintenance budget of approximately
$100,000 for 2014 which will be funded 50% by CanAlaska and 50% by Mitsubishi.
As at October 31, 2014, the total exploration
costs incurred for the West McArthur project was $19.7 million. Further exploration expenditures for this project has been deferred
in 2013/2014 to await better capital market conditions in order to raise exploration funds. The West McArthur property is without
known reserves and any proposed program is exploratory in nature.
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CanAlaska Uranium Ltd. – MD&A October 31,
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2.2.2 | | Cree East Project, Saskatchewan – Korean Consortium |
The Cree East project is located in the south-eastern
portion of the Athabasca Basin, 35 kilometres west of the formerly producing Key Lake mine and 5 to 22 kilometres north of the
south rim of the Athabasca Basin. The project is comprised of 17 contiguous mineral claims totalling approximately 58,000 hectares.
In December 2007 a Korean Consortium (Hanwha Corp., Korea Electric Power Corp., Korea Resources Corp. and SK Networks Co. Ltd.),
agreed to spend $19.0 million on the properties to earn into a 50% interest in the Cree East project.
As
of October 31, 2014, the Korean Consortium has contributed its $19.0 million towards exploration of the project and holds a 50%
ownership interest in both CanAlaska Korea Uranium Ltd. and the Canada-Korea Uranium Limited Partnership. The remaining 50% interest
is held by CanAlaska. The following table summarizes the Korean
Consortium expenditures and advances by quarter and life to date (“LTD”) on the project. The table does not include
a $1.0 million payment made directly to CanAlaska in 2007 ($0.6 million) and 2010 ($0.4 million) for intellectual property associated
with the project. As at October 31, 2014, the Company is holding approximately $102,000 of joint venture funds.
Table 4: ($000's) |
Quarterly |
|
Cree East Project |
Q313 |
Q413 |
Q114 |
Q214 |
Q314 |
Q414 |
Q115 |
Q215 |
LTD |
Camp Cost & Operations |
- |
- |
- |
1 |
(13) |
- |
(6) |
7 |
3.333 |
Drilling |
- |
- |
- |
27 |
- |
- |
- |
- |
6,740 |
General & Admin |
14 |
18 |
- |
13 |
5 |
9 |
15 |
25 |
542 |
Geochemistry |
- |
- |
- |
- |
- |
- |
11 |
52 |
600 |
Geology |
2 |
20 |
- |
1 |
- |
- |
- |
- |
1,583 |
Geophysics |
1 |
- |
- |
- |
- |
151 |
4 |
- |
3,414 |
Management Fees |
3 |
6 |
1 |
4 |
- |
17 |
6 |
8 |
1,588 |
Other |
5 |
3 |
- |
- |
- |
7 |
10 |
1 |
1,482 |
Net Expenditures |
25 |
47 |
1 |
46 |
(8) |
184 |
40 |
93 |
19,283 |
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The project is accessible during the winter
drill season by seasonal winter ice roads and winter trails and during the summer exploration season by air and water. There is
no physical plant or permanent infrastructure on the property and no source of power. There are multiple extensive lakes which
can provide a source of water for the project.
The mineral rights for Cree East were acquired
between November 2004 and June 2010 from the Ministry of Energy and Resources in the province of Saskatchewan, Canada. The claim
numbers are as follows, S-107757, S-107774, S-107775, S-107776, S-107777, S-107778, S-107779, S-107780, S-108357, S-108358, S-108382,
S-108383, S-108384, S-108385, S-108386, S-108387 and S-111809. The mineral rights to Cree East are valid and in good standing with
the earliest claim requiring renewal in September 2025 with no further exploration expenditures required. An annual assessment
report is required to be filed by the Company with the Ministry of Energy and Resources to disclose the exploration activities
on this claim. There is no fee for filing the annual assessment report.
The project area covers Athabasca group conglomerates
and sandstones. Sandstone unconformity overlies basement at depths in the order of 200 to 300 metres in the south. Structural breaks
which trend across the across the property further drop the basement to estimated depths of 800 to 900 metres across the northern
edge of the property The basement is composed of the Lower Proterozoic, (Trans Hudson) Mudjatik domain, granitoids and associated
minor supercrustals (psammites, pelites and metavolcanics) A significant portion of the property is considered to be underlain
by rocks of the highly prospective Wollaston Domain.
In May 2012, the Company reported receipt of
uranium assay results and trace element geochemistry for the winter drill program on the Cree East project. The results confirm
the anomalous multi-element enrichments in the large alteration zone identified at Zone B and additional gold and uranium mineralization
in drill hole CRE080, which intersected mineralized iron formation at Zone J.
The property has undergone extensive exploration
since 2005 with $19.3 million expended on surveys, extensive geophysical testing and over 70 drill holes testing targets.
The potential of this project is for unconformity
style uranium mineralization of both the Simple (Low REE, basement hosted) and the Complex (High REE, Sandstone hosted) types of
uranium. The area has numerous conductors and faults which act as both the conduit and the trap for potential uranium mineralization.
A number of structures and conductive targets have been identified from the Company's exploration efforts. The next substantial
work programs on the property will consist mainly of drill testing the current targets. Active full season programs of 15-18 drill
holes are generally budgeted at $3 to $4 million, including drill geophysics, camp and logistics. There is a program of geophysics
to be performed by an external third party for winter field season 2014, budgeted at $350,000 which will be funded by the joint
venture funds held. A $3 million summer drill program has been approved, subject to financing.
Under the Cree East agreement, CanAlaska is
entitled to charge an operator fee of 10% to recoup its indirect costs associated with the project, which the Company recognizes
as management fees. CanAlaska acts as project operator under the supervision and guidance of Dr. Karl Schimann, P. Geo. and Mr.
Peter Dasler, P. Geo.
As at October 31, 2014, the total exploration
costs incurred for the Cree East project was $19.3 million. In March 2014 the Joint Venture carried out geophysical surveys over
the Zone B target area. This surveying was in preparation for a proposed summer drill program. The summer drill program is dependant
upon financing by CanAlaska or others. The Korean Consortium and CanAlaska are actively marketing the Cree East project for option
or joint venture to allow for the continuation of the drill exploration. Work permits are in place for summer 2014 drilling. The
Cree East property is without known reserves and any proposed program is exploratory in nature.
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![](image_004.jpg)
2.2.3 NW Manitoba, Manitoba
This property consists of approximately 144,000
hectares and lies between 90 and 170 kilometres northeast along the Wollaston trend of basement formations hosting uranium deposits,
which include Rabbit Lake, Collins Bay and Eagle Point Uranium mines. In May 2012, the Company reported strong geophysical responses
matching geology and uranium mineralized boulders from the recent surveys within the target areas at its NW Manitoba uranium project.
The project was re-started in March 2012 following a four and a half year permitting delay due to consultations between the government
of Manitoba and the local community. The Company has now concluded an operating MOU with the local community and recommenced ground
survey work. The ground resistivity gravity geophysical surveys carried out in March 2012 localized anomalous features typical
of sulphide-bearing mineralization, and zones of clay alteration within areas of shallow overburden. There is a striking correspondence
between the location of gravity anomalies and the low resistivity zones from the survey. These targets are similar in style to
the Andrew Lake uranium project in Nunavut, which has similar resistivity and gravity geophysical responses related to uranium
mineralization hosted in regional fault structures.
In September 2013, the Company entered
into an option agreement Northern Uranium Corp. (previously MPVC Inc.) for an interest in the NW Manitoba project. Northern Uranium
may earn an 80% interest in the project by carrying out a three stage $11.6 million exploration program, make a cash payment of
$35,000, issue 12 million common shares and issue 6 million common share purchase warrants.
On February 28, 2014, the option
agreement with Northern Uranium for the NW Manitoba project was amended to extend the date of certain provisions of the agreement
from February 28, 2014 to March 14, 2014. In consideration for amending the option agreement, Northern Uranium paid a further non-refundable
cash deposit in the amount of $50,000 on March 14, 2014.
In April 2014, the Company announced
that Northern Uranium had received highly anomalous radon results of a recently completed, land-based survey over the Maguire Lake
area. Northern Uranium reports that its geologic team is most encouraged by the distribution of radon, resistivity, magnetic and
gravity anomalies which are prime drill targets for uranium mineralization.
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In December 2014, the Company received notification
from Northern Uranium of the expenditure threshold for the 50% earned interest in the NW Manitoba property, as well as continued
work on the project.
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Grease River claims of approximately $28,000 as it did not renew
its permits on these claims.
During the six months ended October
31, 2014, the Company recognized an impairment on certain of its Poplar claims of approximately $11,000 as it did not renew its
permits on these claims.
In August and September 2014, the Company acquired
11 block of claims, totalling 4,862 hectares located near the southern shore of Lake Athabasca, 12 kilometres west of Fond Du Lac
on central northern edge of the Athabasca basin for $5,005.
During the six months ended October 31, 2014,
the Company recognized an impairment on certain of its Lake Athabasca claims of approximately $7,000 as it did not renew its permits
on these claims.
In August 2014, the Company acquired 8 block
of claims, totalling 1,723 hectares located in the western portion of the Athabasca basin, within the roughly circular Carswell
geologic structure at Cluff Lake for $2,400.
During the six months ended October 31, 2014,
the Company recognized an impairment on certain of its Ruttan claims of approximately $10,000 as it did not renew its permits on
these claims.
In January 2013, the Company acquired three
block of claims, totalling 6,687 hectares located in the Patterson Lake area of the western Athabasca basin. In August 2013, the
Company optioned the claims to Makena Resources Inc ("Makena"). Makena may earn a 50% interest in the property by making
cash payments totalling $100,000 by June 1, 2015, issuing 2,500,000 common share by June 1, 2015 and incurring exploration expenditures
totalling $1.4 million by September 30, 2016.
On June 30, 2014, the option agreement
with Makena Resources Inc. for the Patterson project was amended whereby in exchange for a six month extension on the work program,
Makena agreed to return the Patterson Lake North project and the Patterson Lake East project to the Company.
2.2.11 | | Cable Bay (previously Carpenter) |
In July 2014, the Company acquired four block
of claims, totalling 2,411 hectares located partly on land and partly over Cree Lake for $2,004. The property straddles the edge
of the Athabasca basin, along the Cable Bay Shear Zone.
During the six months ended October 31, 2014,
the Company recognized an impairment on certain of its Moon claims of approximately $8,000 as it did not renew its permits on these
claims.
In March 2014, the Company entered
into a purchase agreement to sell the exploration permit for the Reefton project to Stevenson Mining Ltd. ("Stevenson")
for aggregate purchase consideration of $20,000. The Company recognized a loss on disposal of the Reefton project of approximately
$4,000.
On May 20, 3014, Golden Fern Resources
Limited, the Company's wholly owned subsidiary in New Zealand, began liquidation proceedings which was completed on August 29,
2014. The New Zealand subsidiary was liquidated after the sale of the Reefton project to Stevenson. There were no significant assets
or liabilities remaining in the entity.
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In March 2014, the Company entered
into a binding agreement to sell its interest in its Kasmere South project in northwestern Manitoba to private company East Resources
Ltd. for an aggregate cash payment totalling $1.8 million. The Company retains a 2.5% net smelter royalty on any future production.
On March 28, 2014, the Company received a non-refundable cash payment of $200,000 from East Resources Ltd. Subsequent to year end,
the Company also received the remaining cash instalments of $100,000 and $1.5 million on May 30, 2014 and June 26, 2014 respectively.
The Company uses its technical staff between
field seasons to evaluate other mineral projects for acquisition, either by staking or by option, with the purpose of sale to third
parties. For a full description of the geology and setting of the current projects and of the Company’s other projects, reference
should be made to the “Projects” section, and accompanying news releases of work on the Company’s website at
www.canalaska.com.
Table 5:
Other projects update |
Status |
Recent work undertaken |
Big Creek |
Seeking Venture Partner |
No significant work undertaken |
Cable Bay |
Seeking Venture Partner |
No significant work undertaken |
Collins Bay Extension |
Option with Bayswater Uranium |
No significant work undertaken |
Grease River |
Seeking Venture Partner |
No significant work undertaken |
Hanson |
Seeking Venture Partner |
No significant work undertaken |
Helmer |
Seeking Venture Partner |
No significant work undertaken |
Hodgson |
Seeking Venture Partner |
No significant work undertaken |
Kasmere South |
Sale to East Resources |
|
Kasmere |
Under application |
Exploration permits pending |
Key |
Seeking Venture Partner |
No significant work undertaken |
Lake Athabasca |
Seeking Venture Partner |
No significant work undertaken |
McTavish |
Seeking Venture Partner |
No significant work undertaken |
Moon |
Seeking Venture Partner |
No significant work undertaken |
Patterson |
Option with Makena Resources Inc. |
Airborne surveys have been contracted |
Poplar |
Seeking Venture Partner |
No significant work undertaken |
Waterbury |
Seeking Venture Partner |
No significant work undertaken |
Rainbow Hill AK |
Seeking Venture partner |
No significant work undertaken |
Zeballos |
Seeking Venture Partner |
Consolidating ownership |
Glitter Lake |
Disposed, NSR retained |
|
The Company is restricting its exploration
activities on these Other projects until financial markets recover. The Company intends to continue its efforts to seek a venture
partner either through a joint venture or sales of its other projects.
n the first quarter of fiscal 2015, the Company
recognized an impairment on its Grease River, Poplar and Ruttan claims of approximately $50,000 as it did not renew certain of
its permit on these properties. In the second quarter of fiscal 2015, the Company recognized an impairment on its Lake Athabasca
and Moon claims of approximately $15,000 as it did not renew certain of its permit on these properties.
CanAlaska maintains 20 other projects
in the Athabasca basin; one project in Alaska and 3 projects in British Columbia. These other projects have value to the Company
but are not being actively explored, other than reviews and reporting. A number of these projects are being marketed for sale or
joint venture, and the company hopes to realize increased value in the future.
All of the samples from the CanAlaska exploration
programs have been submitted to one of two qualified Canadian Laboratories for analysis. Samples submitted to Saskatchewan Research
Laboratories were analyzed for multi-element geochemistry and including uranium by tri-acid digestion and ICP. Samples submitted
for assay for trace element geochemistry to Acme Laboratories in Vancouver BC, were analyzed by aqua regia digestion and ICP analysis.
The samples were collected by CanAlaska field geologists under the supervision of Dr. Karl Schimann, and were shipped in secure
containment to the laboratories noted above.
Our exploration activities requires permitting
in the Province of Saskatchewan. For our projects in Saskatchewan, the Company applies for surface exploration permits from the
Ministry of Environment, a letter of advice from the Heritage Resources Branch of the Ministry of Tourism, Parks, Culture and Sport,
and a Right to Use Water from the Saskatchewan Water Authority. For our exploration projects in the Province of Manitoba, the Company
applies for a Prospecting License, a Work Permit from the Manitoba Department of Conservation, and a notification to the Director
of Mines for airborne surveys. In addition, all exploration activities have to conform to the Fisheries Act in terms of protection
of fish habitat.
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 12 of 20
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|
|
3. | | FINANCIAL POSITION
and CAPITAL resources |
3.1 | | Cash and Working Capital |
Table 6: ($000’s)
Cash and Working Capital |
|
|
|
Oct-14 |
Apr-14 |
Cash and cash equivalents |
|
|
|
|
1,801 |
1,044 |
Trade and other receivables |
|
|
|
|
71 |
52 |
Available-for-sale securities |
|
|
|
|
336 |
414 |
Trade and other payables |
|
|
|
|
(215) |
(382) |
Working capital |
|
|
|
|
1,993 |
1,128 |
For analysis and discussion of the movement
in cash and cash equivalents reference should be made to Section 5 of this MD&A. Included within cash and cash equivalents
are $0.1 million in funds from the CKU Partnership which are dedicated to the Cree East project. Reference should be made
to note 4 of the condensed interim consolidated financial statements for further details.
As at October 31, 2014, included within trade
and other receivables is approximately $7,000 in Goods and Services Tax ("GST") refunds. The decrease in available-for-sale
securities is primarily a result of a combination of the receipt of 2,250,000 shares from Northern Uranium Corp. (previously MPVC
Inc.) for our NW Manitoba project and 750,000 shares from Makena for our Patterson Lake project in Q115 along with a decrease in
the market value of the Company's portfolio of available-for-sale securities at period end. The decrease in trade and other payables
is consistent with the corporate activities compared with the fourth quarter of 2014. In Q414, the Company was operating an extensive
geophysics program at our Cree East project.
3.2 | | Other Assets and Liabilities |
Table 7: ($000’s)
Other Assets and Liabilities |
|
|
Oct-14 |
Apr-14 |
Reclamation bonds |
|
|
|
189 |
189 |
Property and equipment |
|
|
|
261 |
294 |
Mineral property interests (Section 2.2) |
|
|
|
748 |
813 |
During the six months ended October 31, 2014,
the Company recognized an impairment on its Grease River, Poplar, Ruttan, Lake Athabasca and Moon projects for approximately $65,000
as it did not renew certain of its permits for these properties. Also during the period, the Company acquired the Cable Bay, Helmer
and Carswell properties by staking claims totalling 8,996 hectares for approximately $10,000.
During the six months ended October 31, 2014,
the Company received proceeds of approximately $2,000 for the sale of property and equipment.
Table 8: ($000’s)
Equity |
|
|
Oct-14 |
Apr-14 |
Common shares |
|
|
|
73,205 |
73,205 |
Equity reserve |
|
|
|
10,868 |
10,807 |
Investment revaluation reserve |
|
|
|
(352) |
(24) |
Deficit |
|
|
|
(80,530) |
(81,564) |
Total equity |
|
|
|
3,191 |
2,424 |
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 13 of 20
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Table 9: (000’s)
Equity Instruments |
|
|
Oct-14 |
Apr-14 |
Common shares outstanding |
|
|
|
22,068 |
22,068 |
Options outstanding |
|
|
|
|
|
Number |
|
|
|
4,006 |
3,851 |
Weighted average price |
|
|
|
$0.19 |
$0.20 |
Warrants outstanding |
|
|
|
|
|
Number |
|
|
|
- |
- |
Weighted average price |
|
|
|
- |
- |
Equity instruments
As of December 23, 2014, the Company
had the following securities outstanding. Common shares - 22,068,136; stock options – 4,075,500; and warrants – nil.
In July 2013, the Company issued 10,000 common
shares under the option agreement for the Collins Bay project.
Table 10: ($000’s) |
Quarterly |
|
Quarterly Loss & Comprehensive Loss Summary |
Q313 |
Q413 |
Q114 |
Q214 |
Q314 |
Q414 |
Q115 |
Q215 |
|
Exploration Cost |
|
|
|
|
|
|
|
|
|
|
Mineral property expenditures net of reimbursements |
92 |
30 |
29 |
87 |
15 |
140 |
54 |
114 |
|
|
Write-down on reclamation bonds |
- |
- |
3 |
- |
- |
- |
- |
- |
|
|
Mineral property write-offs |
- |
54 |
143 |
33 |
141 |
40 |
50 |
15 |
|
|
Recoveries on option payments received |
- |
- |
- |
(240) |
(25) |
(481) |
(1.881) |
- |
|
|
Equipment rental income |
- |
- |
- |
- |
(11) |
(1) |
(4) |
- |
|
|
|
92 |
84 |
175 |
(120) |
120 |
(302) |
(1,781) |
129 |
|
Other Expenses (Income) |
|
|
|
|
|
|
|
|
|
|
Consulting, labour and professional fees |
144 |
121 |
100 |
87 |
110 |
105 |
288 |
98 |
|
|
Depreciation |
27 |
26 |
20 |
20 |
20 |
20 |
16 |
16 |
|
|
(Gain) loss on disposal of properties and equipments |
(8) |
14 |
1 |
- |
- |
4 |
- |
- |
|
|
Foreign exchange (gain) loss |
(1) |
- |
- |
- |
(1) |
2 |
- |
- |
|
|
Insurance, licenses and filing fees |
10 |
24 |
19 |
29 |
37 |
13 |
10 |
38 |
|
|
Interest income |
(4) |
(4) |
(4) |
(2) |
(2) |
(2) |
(3) |
(5) |
|
|
Other corporate costs |
13 |
19 |
9 |
9 |
10 |
5 |
10 |
12 |
|
|
Investor relations and presentations |
7 |
15 |
1 |
2 |
9 |
10 |
6 |
56 |
|
|
Rent |
37 |
20 |
4 |
7 |
7 |
8 |
6 |
7 |
|
|
Stock-based payments |
- |
137 |
- |
20 |
105 |
- |
61 |
- |
|
|
Travel and accommodation |
2 |
4 |
2 |
2 |
1 |
4 |
1 |
2 |
|
|
Impairment and loss (gain) on disposal of available-for-sale
securities |
- |
83 |
8 |
16 |
12 |
38 |
6 |
9 |
|
|
Management fees |
(4) |
(6) |
(1) |
(5) |
- |
(24) |
(6) |
(10) |
|
|
|
223 |
453 |
159 |
185 |
308 |
183 |
395 |
223 |
|
Net (loss) earning for the period |
(315) |
(537) |
(334) |
(65) |
(428) |
119 |
1,386 |
(352) |
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
Items that may be subsequently reclassified to profit or loss: |
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on available- for-sale securities |
15 |
(45) |
23 |
(40) |
86 |
(46) |
130 |
198 |
|
Comprehensive (loss) earnings |
(330) |
(492) |
(357) |
(25) |
(514) |
165 |
1,256 |
(550) |
|
Basic and diluted (loss) earnings per share |
(0.01) |
(0.02) |
(0.02) |
(0.00) |
(0.02) |
0.01 |
0.06 |
(0.02) |
|
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 14 of 20
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In the six months ended October 31, 2014, the
Company spent approximately $253,000 on exploration costs and recovered $85,000 from our exploration partners for a net
mineral property expenditure of $168,000.
For the six months ended October 31, 2013,
the Company recognized mineral property impairments on the Grease River, Poplar, Ruttan, Lake Athabasca and Moon projects for approximately
$65,000 as the Company did not renew certain of its permits for these projects.
In Q115, the Company completed the sale of
the Kasmere South project to East Resources Ltd. During Q115, the Company received proceeds of $1.6 million for the sale of the
property. The Company also received 2,250,000 shares from MPVC Inc. related to the option agreement of our NW Manitoba project
and 750,000 shares from Makena Resources related to the option agreement of our Patterson project.
Camp and other miscellaneous exploration equipment
owned by the Company is maintained at our La Ronge warehouse. Equipment rental income is comprised of income from charging exploration
projects for the rental of this equipment. In Q314, Q414 and Q115, the rental income is related to the rental of tents and camp
supplies to a 3rd party.
Consulting, labour, and professional fees are
higher than the same comparative prior period. The increase is primarily attributed to an increase in the salaries expense from
the employment for senior staff and management. In Q215, the Company also increased its use of professionals and consulting expenses
compared to Q214. In July 2014, the Company paid each director of the Company a $25,000 directors’ fee. The directors of
the Company suspended their cash compensation from January 1, 2013 to June 2014 in order to assist the Company in its plans to
control its operating costs.
In Q215, insurance, licenses and filing fees
were higher compared to Q214. The increase is primarily attributed to the filing fees related to the application for the Company's
common shares to trade on the OTCQB Marketplace. On September 2, 2014, the Company's common shares were approved for trading in
the United States on the OTCQB Marketplace under the symbol, CVVUF.
Investor relations expenses were higher in
Q215 compared to Q214. The increase is primarily attributed to the attendance to two industry investor trade shows, various investor
relations publications and consultant services in the quarter. During the three months ended October 31, 2013, the Company reduced
its discretionary expenditures and financial overheads in order to control its operating costs.
Rent expense was consistent with the same comparative
prior period, Q214. The Company sublet its office space in March 2013 in its effort to reduce it cash burn and operating costs
going forward. The Company is however committed to the full lease amount, not the net for the head lease on the Vancouver office
space.
Share-based payments decreased in Q215 compared
to Q214. The decrease was attributed to the decrease in the number of options granted relative to Q214. During Q215, the Company
did not grant stock options. The share-based payment expense in Q214 was attributable to the incremental fair value of the September
26, 2013 repricing of 1,502,500 previously granted stock options, from original exercise prices ranging from $0.42 to $1.00 per
share, to a revised exercise price of $0.25 per share.
Management fees were higher in Q215 compared
to Q214. This was primarily due to the increase in our exploration activities relative to last year. During same period last year,
the Company spent $149,000 on exploration, of which $64,000 were related to our joint venture projects where management fees were
generated. During Q215, the Company spent $253,000 on exploration, of which $169,000 were related to joint venture projects.
5. | | CASHFLOW and liquidity
REVIEW |
As of October 31, 2014, the Company had $1.8
million in cash and cash equivalents and working capital of $●2.0 million and as of April 30, 2014, the Company had $1.0
million in cash and cash equivalents and working capital of $1.1 million.
The Company’s operating activities resulted
in net cash outflows of $0.6 million and $0.4 million for the six months ended October 31, 2014 and 2013 respectively. Operating
activities and costs for the six months ended October 31, 2014 are higher than the six months ended October 31, 2013 as the Company
had a greater amount of exploration activities relative to the prior year. The Company is however continuing its efforts to minimize
it operating costs in order to conserve its cash reserves.
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 15 of 20
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During the six month period ended October 31,
2014 and 2013, the Company had no financing activities. 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 resulted in net cash inflows
of $1.6 million for the six months ended October 31, 2014 and net cash inflows of $3,000 for the six months ended October 31, 2013.
During the six months ended October 31, 2014, the Company received $1.6 million from East Resources for the sale of the Kasmere
South project and $25,000 from Makena for their option on the Patterson project. The Company also staked our Cable Bay, Helmer
and Carswell projects for approximately $10,000 during the period. During the six months ended October 31, 2013, the Company staked
the Hansen project in the area of the Pikoo kimberlite discovery in Saskatchewan for approximately $7,000 and also recovered approximately
$10,000 of reclamation bonds deposited with the Manitoba Mines Branch.
For a full version of the risks and critical
accounting estimates and policies reference should be made to the Company’s audited consolidated financial statements for
the year ended April 30, 2014, which are available on the Company’s website at www.canalaska.com and the risk factor section
of the most recently filed Form 20-F on EDGAR.
6.1 | | Related Party Transactions |
Related parties include the Board of Directors and Officers of the
Company and enterprises which are controlled by these individuals.
The remuneration of directors and key management
of the Company for the three and six months ended October 31, 2014 and 2013 were as follows. Certain compensation is paid to Schimann
Consultants, a company controlled by Dr. Karl Schimann, the VP of Exploration.
Table 11: Compensation to Related Parties |
Three months ended October 31 |
Six months ended October 31 |
($000’s) |
2014
$ |
2013
$ |
2014
$ |
2013
$ |
Employment benefits |
71 |
55 |
189 |
110 |
Schimann Consultants |
39 |
20 |
118 |
39 |
Directors fees |
- |
- |
100 |
- |
Share-based compensation |
- |
18 |
54 |
18 |
The directors and key management were awarded the following share
options under the employee share option plan during the six months ended October 31, 2014:
Table 12: Share Option Issuance |
Date of grant |
Number of options |
Exercise price |
Expiry |
June 30, 2014 |
573,750 |
$0.18 |
June 30, 2016 |
Due to increasingly difficult market conditions
facing junior uranium exploration companies management is currently in the process of evaluating its priorities and taking steps
to streamline non-discretionary expenditures. Should management be successful in its coming exploration programs it may either
need to dilute its ownership in its properties and/or secure additional financing to continue to advance the development of its
projects.
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 16 of 20
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6.3 | | Critical Accounting Estimates and Judgments |
6.3.1 | | Share-Based Payment Plan |
The Company operates an equity-settled, share-based
compensation plan, under which the entity receives services from employees and non-employees as consideration for equity instruments
(options) of the Company. The total amount to be expensed is determined by reference to the fair value of the options granted.
The fair value of share-based compensation
is determined using the Black-Scholes option-pricing model and management’s assumptions as disclosed in note 9. When a stock
option is exercised, the Company recognizes an increase in its share capital equivalent to the consideration paid by the option
holder and the fair value amount previously recognized in equity reserve. The fair value of any stock options granted to directors,
officers and employees of the Company is recorded as an expense over the vesting period of the options with a corresponding increase
in equity reserve.
6.3.2 | | Mineral Property Interest |
The recoverability of the amounts shown for
mineral properties and related deferred costs is dependent upon the existence of economically recoverable mineral reserves, the
ability of the Company to obtain the necessary financing to complete the development, and upon future profitable production or
proceeds from disposition of the mineral properties. Due to increasingly difficult market conditions facing junior uranium exploration
companies there is no assurance that the Company will be successful in raising additional financing. The amounts shown as mineral
property costs represent net acquisition costs incurred to date and do not necessarily represent current or future values of the
mineral properties.
The consolidated financial statements have
been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue in operation
for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course
of business. The financial statements do not include any adjustments to the carrying values of assets and liabilities and the reported
expenses and statement of financial position classification that would be necessary should the Company be unable to continue as
a going concern. These adjustments could be material. Refer to section 1.1.
6.4 | | Disclosure Controls and Internal Control over Financial
Reporting |
Disclosure controls and procedures ("DC&P")
are designed to provide reasonable assurance that all relevant information is gathered and reported to senior management, including
the Company's Chief Executive Officer and Chief Financial Officer, on a timely basis so that appropriate decisions can be made
regarding public disclosure. Internal control over financial reporting ("ICFR") is designed to provide reasonable assurance
that such financial information is reliable and complete. As at the end of the period covered by this management's discussion and
analysis, management of the Company, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated
the effectiveness of the Company's DC&P and ICFR as required by Canadian securities laws. Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer have concluded that, as of the end of the period covered by this management's
discussion and analysis, the DC&P 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 Chief Executive Officer and the Chief Financial Officer
have also concluded that, as of the end of the period covered by this management's discussion and analysis, the Company's ICFR
is effective and the ICFR 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 ICFR, the Company used the Internal Control –
Integrated Framework (1992) (COSO Framework) published by the Committee of Sponsoring Organizations of the Treadway Commission.
There are no material weaknesses in the Company's ICFR. During the six months ended October 31, 2014 there were no changes to the
Company's ICFR that materially affected, or are reasonably likely to materially affect, the Company's ICFR.
6.5 | | Forward Looking Statements |
Certain statements included in this “MD&A”
constitute forward-looking statements, including those identified by the expressions “anticipate”, “believe”,
“plan”, “estimate”, “expect”, “intend”, “may”, “should”
and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical
facts but reflect current expectations regarding future results or events. This MD&A contains forward-looking statements. These
forward-looking statements are based on current expectations and various estimates, factors and assumptions and involve known and
unknown risks, uncertainties and other factors.
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
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Information concerning the interpretation of
drill results also may be considered forward-looking statements; as such information constitutes a prediction of what mineralization
might be found to be present if and when a project is actually developed. The estimates, risks and uncertainties described in this
MD&A are not necessarily all of the important factors that could cause actual results to differ materially from those expressed
in the Company’s forward-looking statements. In addition, any forward-looking statements represent the Company’s estimates
only as of the date of this MD&A and should not be relied upon as representing the Company’s estimates as of any subsequent
date. The material factors and assumptions that were applied in making the forward-looking statements in this MD&A include:
(a) execution of the Company’s existing plans or exploration programs for each of its properties, either of which may change
due to changes in the views of the Company, or if new information arises which makes it prudent to change such plans or programs;
and (b) the accuracy of current interpretation of drill and other exploration results, since new information or new interpretation
of existing information may result in changes in the Company’s expectations. Readers should not place undue reliance on the
Company’s forward-looking statements, as the Company’s actual results, performance or achievements may differ materially
from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown
risks, uncertainties or other factors affect the Company’s business, or if the Company’s estimates or assumptions prove
inaccurate. Therefore, the Company cannot provide any assurance that forward-looking statements will materialize.
6.6 | | New Accounting Standards Adopted |
The following standards were adopted effective
May 1, 2014.
(i) IFRIC 21, Accounting for Levies imposed
by Governments, clarifies that the obligating event giving rise to a liability to pay a levy is the activity described in the
relevant legislation that triggers payment of the levy. IFRIC 21 is effective for the Company beginning on May 1, 2014. The adoption
of this standard had no effect on the Company's consolidated financial statements.
6.7 | | Future Accounting Pronouncements |
Unless otherwise noted, the following new or
revised standards will be effective for the Company in future periods.
(i) IFRS 9 Financial Instruments, was
issued in November 2009 and addresses classification and measurement of financial assets. It 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. Such instruments are either
recognized at fair value through profit or loss or at fair value through other comprehensive income. Where equity instruments are
measured at fair value through other comprehensive income, dividends are recognized in profit or loss to the extent that they do
not clearly represent 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 to IFRS 9 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 are generally recorded in other comprehensive income. In February 2014, the IASB tentatively determined that the revised
effective date for IFRS 9 would be January 1, 2018. The Company has not yet completed an assessment of the impact of adopting IFRS
9.
The Company is engaged in the exploration of
mineral properties, an inherently risky business. There is no assurance that funds spent on the exploration and development of
a mineral deposit will result in the discovery of an economic ore body. Most exploration projects do not result in the discovery
of commercially mineable ore deposits. In addition, reference should be made to the most recently filed AIF available on SEDAR
at www.sedar.com.
6.8.1 | | Cash Flows and Additional Funding Requirements |
The Company has limited financial resources,
no sources of operating cash flows and no assurances that sufficient funding, including adequate financing, will be available.
If the Company’s exploration programs are successful, additional funds will be required in order to complete the development
of its projects. The sources of funds currently available to the Company are the sale of marketable securities, the raising of
equity capital or the offering of an ownership interest in its projects to a third party. There is no assurance that the Company
will be successful in raising sufficient funds to conduct further exploration and development of its projects or to fulfill its
obligations under the terms of any option or joint venture agreements, in which case the Company may have to delay or indefinitely
postpone further exploration and development, or forfeit its interest in its projects or prospects. Without further financing and
exploration work on its properties the Company expects its current 712,728 ha of property to reduce to 662,555 ha by December 31
![](image_005.jpg) |
CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 18 of 20
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2014, and 627,123 ha by December 31, 2015.
The Company’s Fond Du Lac property reached its last anniversary on February 25, 2014, after February 2015 a new lease or
a special lease extension will be required by the Fond Du Lac community from Aboriginal and Northern Affairs Canada. The Cree East
and West McArthur projects, with current work filings are in good standing for a minimum 15 years from the current date. Refer
to section 1.1.
The profitability of the Company’s operations
will be dependent upon the market price of mineral commodities. Mineral prices fluctuate widely and are affected by numerous factors
beyond the control of the Company. The prices of mineral commodities have fluctuated widely in recent years. Current and future
price declines could cause commercial production to be impracticable. The Company’s future revenues and earnings also could
be affected by the prices of other commodities such as fuel and other consumable items, although to a lesser extent than by the
price of mineral commodities.
The mining industry is intensely competitive
in all of its phases, and the Company competes with many companies possessing greater financial resources and technical facilities
than itself with respect to the discovery and acquisition of interests in mineral properties, the recruitment and retention of
qualified employees and other persons to carry out its mineral exploration activities. The Company has a large land position in
the Athabasca Basin, and has carried out extensive exploration, but has not defined an economic deposit. Other exploration companies
have been successful with the discovery of deposits in the Athabasca, and these companies tend to attract investors away from CanAlaska.
CanAlaska relies on the ongoing support of its JV partners to fund their portion of exploration, however additional funding from
the current partners is uncertain. Competition in the mining industry could adversely affect the Company’s prospects for
mineral exploration in the future.
6.8.4 | | Foreign Political Risk |
The Company’s material property interests
are currently located in Canada. Some of the Company’s interests are exposed to various degrees of political, economic and
other risks and uncertainties. The Company’s operations and investments may be affected by local political and economic developments,
including expropriation, nationalization, invalidation of government orders, permits or agreements pertaining to property rights,
political unrest, labour disputes, limitations on repatriation of earnings, limitations on mineral exports, limitations on foreign
ownership, inability to obtain or delays in obtaining necessary mining permits, opposition to mining from local, environmental
or other non-governmental organizations, government participation, royalties, duties, rates of exchange, high rates of inflation,
price controls, exchange controls, currency fluctuations, taxation and changes in laws, regulations or policies as well as by laws
and policies of Canada affecting foreign trade, investment and taxation.
6.8.5 | | Government Laws, Regulation and Permitting |
Mining and exploration activities of the Company
are subject to both domestic and foreign laws and regulations governing prospecting, development, production, taxes, labour standards,
occupational health, mine safety, waste disposal, toxic substances, the environment and other matters. Although the Company believes
that all exploration activities are currently carried out in accordance with all applicable rules and regulations, no assurance
can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a
manner which could limit or curtail production or development. Amendments to current laws and regulations governing the operations
and activities of the Company or more stringent implementation thereof could have a substantial adverse impact on the Company.
The operations of the Company will require
licenses and permits from various governmental authorities to carry out exploration and development at its projects. In Canada,
the issuance of governmental licenses and permits are increasingly being influenced by land use consultations between the government
and local First Nations communities. There can be no assurance that the Company will be able to obtain the necessary licences and
permits on acceptable terms, in a timely manner or at all. Any failure to comply with permits and applicable laws and regulations,
even if inadvertent, could result in the interruption or closure of operations or material fines, penalties or other liabilities.
Acquisition of rights to the mineral properties
is a very detailed and time-consuming process. Title to, and the area of, mineral properties may be disputed. Although the Company
has investigated the title to all of the properties for which it holds concessions or other mineral leases or licenses or in respect
of which it has a right to earn an interest, the Company cannot give an assurance that title to such properties will not be challenged
or impugned.
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 19 of 20
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The Company has the right to earn an increased
economic interest in certain of its properties. To earn this increased interest, the Company is required to make certain exploration
expenditures and payments of cash and/or Company shares. If the Company fails to make these expenditures and payments, the Company
may lose its right to such properties and forfeit any funds expended up to such time.
6.8.7 | | Estimates of Mineral Resources |
The mineral resource estimates used by the
Company are estimates only and no assurance can be given that any particular level of recovery of minerals will in fact be realized
or that an identified resource will ever qualify as a commercially mineable (or viable) deposit which can be legally or commercially
exploited. In addition, the grade of mineralization ultimately mined may differ from that indicated by drilling results and such
differences could be material.
The success of the Company will be largely
dependent upon the performance of its key officers, consultants and employees. Locating mineral deposits depends on a number of
factors, not the least of which is the technical skill of the exploration personnel involved. The success of the Company is largely
dependent on the performance of its key individuals. Failure to retain key individuals or to attract or retain additional key individuals
with necessary skills could have a materially adverse impact upon the Company’s success. The Company on July 31, 2012, has
terminated all long term employment contracts with senior management and has completed the negotiation of reduced contracts with
the CEO, former CFO and VP Exploration. The VP Corporate Development position was terminated and the responsibilities have been
assumed by the CEO. Remaining technical staff are working on part time contracts. In January 2013, Mr. Chan, the Corporate Controller
took over the position of CFO replacing Mr. Ramachandran. In June 2013, the Company received the resignation of board member, Hubert
Marleau. On September 26, 2013, the Company accepted the resignation of board member, Michael Riley. Dr. Karl Schimann, VP Exploration,
was appointed to the board of directors on September 26, 2013 in Mr. Riley's place. On January 7, 2014, Kathleen Kennedy Townsend
was appointed to the Company's board of directors.
6.8.9 | | Volatility of Share Price |
Market prices for shares of early stage companies
are often volatile. Factors such as announcements of mineral discoveries, financial results, and other factors could have a significant
effect on the price of the Company’s shares and the amount of financing that can be raised by the Company.
6.8.10 | | Foreign Currency Exchange |
A small portion of the Company’s expenses
are now, and are expected to continue to be incurred in foreign currencies. The Company’s business will be subject to risks
typical of an international business including, but not limited to, differing tax structures, regulations and restrictions and
general foreign exchange rate volatility. Fluctuations in the exchange rate between the Canadian dollar and such other currencies
may have a material effect on the Company’s business, financial condition and results of operations and could result in downward
price pressure for the Company’s products or losses from currency exchange rate fluctuations. The Company does not actively
hedge against foreign currency fluctuations.
6.8.11 | | Conflict of Interest |
Some of the Company’s directors and officers
are directors and officers of other natural resource or mining-related companies. These associations may give rise from time to
time to conflicts of interest. As a result of such conflict, the Company may miss the opportunity to participate in certain transactions.
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CanAlaska Uranium Ltd. – MD&A October 31,
2014 |
Page 20 of 20
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7. | | QUARTERLY FINANCIAL
INFORMATION |
The following tables sets out a summary
of the Company’s results:
Table 13: ($000’s) |
Quarterly |
Loss & Comprehensive Loss Summary |
Q313 |
Q413 |
Q114 |
Q214 |
Q314 |
Q414 |
Q115 |
Q215 |
Revenue |
- |
- |
- |
- |
- |
- |
- |
- |
(Loss) earnings for the period |
(315) |
(537) |
(334) |
(65) |
(428) |
119 |
1,386 |
(352) |
(Loss) earnings per share |
(0.01) |
(0.02) |
(0.02) |
(0.00) |
(0.02) |
0.01 |
0.06 |
(0.02) |
Table 14: ($000’s) Financial Position summary |
As at |
Jan 31, 2013 |
Apr 30, 2013 |
Jul 31, 2013 |
Oct 31, 2013 |
Jan 31, 2014 |
Apr 30, 2014 |
Jul 31, 2014 |
Oct 31, 2014 |
Total Assets |
3,571 |
3,225 |
2,878 |
2,826 |
2,416 |
2,806 |
3,974 |
3,406 |
Total Liabilities |
186 |
195 |
204 |
158 |
157 |
382 |
233 |
215 |
Total Equity |
3,385 |
3,030 |
2,674 |
2,668 |
2,259 |
2,424 |
3,741 |
3,191 |
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