ROSCAN MINERALS CORPORATION 365 Bay Street, Suite 400

Transcription

ROSCAN MINERALS CORPORATION
365 Bay Street, Suite 400
Toronto, Ontario M5H 2V1
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual and special meeting of shareholders (the “Meeting”) of
Roscan Minerals Corporation (the “Company”) will be held at 365 Bay Street, Suite 400, Toronto, Ontario
M5H 2V1, on Tuesday, April 29, 2014, at 4:00 p.m. (Eastern time) for the purpose of:
(a)
receiving the Company's audited financial statements for the financial year ended October
31, 2013, and the report of the auditor thereon;
(b)
electing directors;
(c)
confirming and appointing the auditor and authorizing the directors to fix its remuneration;
(d)
confirming and approving the Company’s stock option plan; and
(e)
transacting such further and other business as may be properly brought before the meeting or
any adjournment thereof.
A shareholder wishing to be represented by proxy at the meeting or any adjournment thereof must
deposit his duly executed form of proxy with the Company’s transfer agent and registrar, TMX Equity
Transfer Services, Suite 300, 200 University Avenue, Toronto, Ontario M5H 4H1 not later than 4:00 p.m.
(Eastern time) on April 25, 2014 or, if the meeting is adjourned, not later than 48 hours, excluding
Saturdays and holidays, preceding the time of such adjourned meeting.
Shareholders who are unable to attend the meeting in person, are requested to date, complete, sign and
return the enclosed form of proxy so that as large a representation as possible may be had at the
meeting.
NOTICE-AND-ACCESS
Notice is also hereby given that the Company has decided to use the notice-and-access method of delivery
of meeting materials for the Meeting. The notice-and-access method of delivery of meeting materials
allows the Company to deliver the meeting materials over the internet in accordance with the notice-andaccess rules adopted by the Ontario Securities Commission under National Instrument 54-101
Communication with Beneficial Owners of Securities of a Reporting Issuer. Under the notice-and-access
system, shareholders still receive a proxy or voting instruction form (as applicable) enabling them to vote
at the Meeting. However, instead of a paper copy of the Circular, the annual financial statements and
related management’s discussion and analysis and other meeting materials (collectively the “Meeting
Materials”), shareholders receive a notification (the “Notice-and-Access Notification”) with information
on how they may access such materials electronically. The use of this alternative means of delivery is
more environmentally friendly as it will help reduce paper use and will also reduce the cost of printing
and mailing materials to shareholders. Shareholders are reminded to view the Meeting Materials
prior to voting.
Websites Where Meeting Materials Are Posted:
Meeting Materials can be viewed online under the Company’s profile at www.sedar.com or on at
http://noticeinsite.equityfinancialtrust.com/RoscanASM2014/.
How to Obtain Paper Copies of the Meeting Materials
Registered holders or non-registered holders may request paper copies of the Meeting Materials be sent to
them by postal delivery at no cost to them. Requests may be made up to one year from the date the
Meeting Materials are posted on the Company’s website. In order to receive a paper copy of the Meeting
Materials or if you have questions concerning Notice-and-Access, please call the Company’s transfer
agent toll free at 1-866-393-4891. Requests should be received by 4:00 p.m. (Eastern time) on April
24, 2014 in order to receive the Meeting Materials in advance of the Meeting.
DATED this 17th day of March, 2014.
BY ORDER OF THE BOARD
“Chris Irwin” (Signed)
President, CEO and Secretary
365 Bay Street, Suite 400
Toronto, Ontario M5H 2V1
MANAGEMENT INFORMATION CIRCULAR
Solicitation of Proxies
THIS MANAGEMENT INFORMATION CIRCULAR (“CIRCULAR”) IS FURNISHED IN
CONNECTION WITH THE SOLICITATION BY MANAGEMENT OF ROSCAN MINERALS
CORPORATION (THE “COMPANY”) of proxies to be used at the annual and special meeting of
Shareholders of the Company (the “Meeting”) to be held at 365 Bay Street, Suite 400, Toronto, Ontario
M5H 2V1, on Tuesday, April 29, 2014, at 4:00 p.m.(Eastern Time) and at any adjournment thereof for the
purposes set forth in the enclosed Notice of Meeting. Except where otherwise indicated, the information
contained herein is stated as of March 17, 2014. Although it is expected that the solicitation of the proxies
will be primarily by mail, proxies may also be solicited personally or by telephone or other similar means
of communication by the directors and/or officers of the Company at nominal cost. The cost of
solicitation will be borne by the Company.
The Company has decided to use the notice-and-access method of delivery of the Meeting materials for
registered shareholders and Beneficial Shareholders (as defined below). The notice-and-access method of
delivery of Meeting materials allows the Company to deliver the Meeting materials over the internet in
accordance with the notice-and-access rules adopted by the Ontario Securities Commission under
National Instrument 54-101-Communication with Beneficial Owners of Securities of a Reporting Issuer.
Registered shareholders will receive a form of proxy and beneficial owners will receive a voting
instruction form, enabling them to vote at the Meeting. However, instead of a paper copy of the Meeting
materials, generally shareholders receive only this notice with information on how they may access such
materials electronically. The use of this alternative means of delivery is more environmentally friendly as
it will help reduce paper use and will also reduce the cost of printing and mailing materials to
shareholders. Shareholders are reminded to view the Meeting materials prior to voting. Materials can be
viewed
online
under
the
Company’s
profile
at
www.sedar.com
or
at
http://noticeinsite.equityfinancialtrust.com/RoscanASM2014/. The Company will not be adopting
stratification procedures in relation to the use of notice-and-access provisions.
Registered holders or Beneficial Shareholders (either those who object to their identity being known to
the issuers of securities which they own or those who do not object to their identity being made known to
the issuers of the securities they own) may always request paper copies of the Meeting materials be sent
to them by postal delivery at no cost to them. Requests may be made up to one year from the date the
Meeting materials are posted on the Company’s website. In order to receive a paper copy of the Meeting
materials or if you have questions concerning notice-and-access, please call the Company’s transfer agent
toll free at 1-866-393-4891. Requests should be received by April 24, 2014 in order to receive the
Meeting materials in advance of the Meeting date.
Appointment and Completion of Proxies
The purpose of a proxy is to designate persons who will vote the proxy on a shareholder’s behalf in
accordance with the instructions given by the shareholder in the proxy. The persons named in the
enclosed form of proxy represent management of the Company. A SHAREHOLDER DESIRING TO
APPOINT SOME OTHER PERSON, WHO NEED NOT BE A SHAREHOLDER OF THE
COMPANY, TO REPRESENT HIM AT THE MEETING MAY DO SO by filling in the name of
such person in the blank space provided in the proxy or by completing another proper form of proxy. A
shareholder wishing to be represented by proxy at the Meeting or any adjournment thereof must deposit
their duly executed form of proxy with the Company’s registrar and transfer agent not later than 4:00 p.m.
(Toronto time) April 25, 2014 or, if the meeting is adjourned, not later than 48 hours, excluding nonbusiness days and holidays, preceding the time of such adjourned meeting, at which the proxy is to be
used. Such Shareholder should notify the nominee of the appointment, obtain the nominee’s consent to
act as proxyholder and provide instructions on how the shareholder’s shares are to be voted. The nominee
should bring personal identification with them to the Meeting. A proxy should be executed by the
Shareholder or his or her attorney duly authorized in writing or, if the shareholder is a corporation, by an
officer or attorney thereof duly authorized.
Registered Shareholders
Registered Shareholders may wish to vote by proxy whether or not they are able to attend the Meeting in
person. Registered Shareholders electing to submit a proxy may do so by:
(a) completing, dating and signing the form of proxy and returning it to the Company’s transfer
agent, TMX Equity Transfer Services (“Equity”), by mail or hand at 200 University Avenue,
Suite 300, Toronto, Ontario, Canada M5H 4H1; or by fax at (416) 416-595-9593; or
(b) using the internet through the website of the Company’s transfer agent at
www.voteproxyonline.com. Registered Shareholders must follow the instructions that appear on
the screen and refer to the proxy form for the holder’s account number and the proxy access
number;
in all cases ensuring that the proxy is received at least 48 hours (excluding Saturdays, Sundays and
holidays) before the Meeting or the adjournment thereof at which the proxy is to be used. Proxies
received after that time may not be accepted by the Chairman of the Meeting in the Chairman’s
discretion, and the Chairman is under no obligation to accept late proxies.
Beneficial Shareholders
The information set forth in this section is of significant importance as many shareholders do not hold
shares in their own name.
Only shareholders whose names appear on the records of the Company as the registered holders of shares
or duly appointed proxyholders are permitted to vote at the Meeting. Most shareholders of the Company
are non-registered shareholders (“Beneficial Shareholders”) because the shares they own are not
registered in their names but instead registered in the name of a nominee such as a brokerage firm through
which they purchased the shares; bank, trust company, trustee or administrator of self-administered
RRSPs, RRIFs, RESPs and similar plans; or clearing agency such as The Canadian Depository for
Securities Limited (an “Intermediary”). If you purchased your shares through a broker, you are likely a
Beneficial Shareholder.
In accordance with securities regulatory policy, the Company has distributed copies of the Meeting
materials, being the notice of meeting, this Circular and the form of proxy. Intermediaries are required to
forward the Meeting materials to Beneficial Shareholders who request copies and to seek their voting
instructions in advance of the Meeting. Shares held by Intermediaries can only be voted in accordance
with the instructions of the Beneficial Shareholder. The Intermediaries often have their own form of
proxy, mailing procedures and provide their own return instructions. If you wish to vote by proxy, you
should carefully follow the instructions from the Intermediary in order that your shares are voted at the
Meeting.
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If you, as a Beneficial Shareholder, wish to vote at the Meeting in person, you should appoint yourself as
proxyholder by writing your name in the space provided on the request for voting instructions or proxy
provided by the Intermediary and you should return the form to the Intermediary in the envelope
provided. Do not complete the voting section of the form as your vote will be taken at the Meeting.
There are two kinds of Beneficial Shareholders – those who object to their identity being made known to
the issuers of securities which they own (called “OBOs” for Objecting Beneficial Owners) and those who
do not (called “NOBOs” for Non-Objecting Beneficial Owners).
Non-Objecting Beneficial Owners
The Company is relying on the provisions of NI 54-101 that permit it to deliver proxy-related materials
directly to its NOBOs. As a result, NOBOs can expect to receive a voting instruction form (“VIF”) from
Equity. The VIF is to be completed and returned to Equity as set out in the instructions provided on the
VIF. Equity will tabulate the results of the VIFs received from NOBOs and will provide appropriate
instructions at the Meeting with respect to the shares represented by the VIFs they receive. These
securityholder materials are being sent to both registered and non-registered owners of the shares. If you
are a non-registered owner, and the Company or its agent has sent these materials directly to you, your
name and address, and information about your holdings of securities, were obtained in accordance with
applicable securities regulatory requirements from the intermediary holding securities on your behalf.
By choosing to send these materials to you directly, the Company (and not the intermediary holding
securities on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii)
carrying out your voting instructions. Please return your VIF as specified in the request for voting
instructions sent to you.
Objecting Beneficial Owners
Beneficial Shareholders who are OBOs should follow the instructions of their intermediary carefully to
ensure that their shares are voted at the Meeting. The form of proxy supplied to you by your broker will
be similar to the proxy provided to Registered Shareholders by the Company. However, its purpose is
limited to instructing the intermediary on how to vote your shares on your behalf. Most brokers delegate
responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc.
(“Broadridge”) in the United States and in Canada. Broadridge mails a VIF in lieu of the proxy provided
by the Company. The VIF will name the same persons as the Company’s proxy to represent your shares
at the Meeting. You have the right to appoint a person (who need not be a shareholder, and who can be
yourself), other than any of the persons designated in the VIF, to represent your shares at the Meeting. To
exercise this right, insert the name of the desired representative, who may be you, in the blank space
provided in the VIF. The completed VIF must then be returned to Broadridge by mail or facsimile, or
provided to Broadridge by phone or over the internet, in accordance with Broadridge’s instructions.
Broadridge then tabulates the results of all instructions received and provides appropriate instructions
respecting the voting of shares to be represented at the Meeting and the appointment of any shareholder’s
representative. If you receive a VIF from Broadridge, it must be completed and returned to Broadridge, in
accordance with Broadridge’s instructions, well in advance of the Meeting in order to have your shares
voted or to have an alternate representative duly appointed to attend and vote your shares at the Meeting.
Voting of Proxies
Shares represented by properly executed proxies in favour of persons designated in the printed
portion of the enclosed form of proxy WILL BE VOTED FOR EACH OF THE MATTERS TO BE
VOTED ON BY SHAREHOLDERS AS DESCRIBED IN THIS CIRCULAR OR WITHHELD FROM
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VOTING OR VOTED AGAINST IF SO INDICATED ON THE FORM OF PROXY. The enclosed
form of proxy confers discretionary authority upon the persons named therein with respect to
amendments or variations to matters identified in the notice of meeting, or other matters which
may properly come before the Meeting. At the time of printing this circular the management of the
Company knows of no such amendments, variations or other matters to come before the Meeting.
Voting at the Meeting will be by a show of hands, each registered shareholder and each
proxyholder (representing a registered or unregistered shareholder) having one vote, unless a poll
is required or requested, whereupon each such shareholder and proxyholder is entitled to one vote
for each common share of the Company (a “Common Share”) held or represented, respectively.
Each shareholder may instruct their proxyholder how to vote their Common Shares by completing
the blanks on the proxy. All Common Shares represented at the Meeting by properly executed
proxies will be voted or withheld from voting when a poll is required or requested and, where a
choice with respect to any matter to be acted upon has been specified in the form of proxy, the
Common Shares represented by the proxy will be voted in accordance with such specification. In
the absence of any such specification as to voting on the proxy, the management designees, if named as
proxyholder, will vote in favour of the matters set out therein.
The enclosed proxy confers discretionary authority upon the management designees, or other person
named as proxyholder, with respect to amendments to or variations of matters identified in the notice of
meeting and any other matters which may properly come before the Meeting. As of the date hereof, the
Company is not aware of any amendments to, variations of or other matters which may come before the
Meeting. If other matters come before the Meeting, then the management designees intend to vote in
accordance with the judgment of the Company.
Revocation of Proxies
Any Registered Shareholder who has returned a proxy may revoke it at any time before it has been
exercised. A proxy may be revoked by a Registered Shareholder personally attending at the Meeting and
voting their shares. A shareholder may also revoke their proxy in respect of any matter upon which a vote
has not already been cast by depositing an instrument in writing, including a proxy bearing a later date
executed by the Registered Shareholder or by their authorized attorney in writing, or, if the shareholder is
a company, under its corporate seal by an officer or attorney thereof duly authorized, either at the office
of the Company’s registrar and transfer agent at the foregoing address or the head office of the Company
at 365 Bay Street, Suite 400, Toronto, Ontario M5H 2V1 at any time up to and including the last business
day preceding the date of the Meeting, or any adjournment thereof at which the proxy is to be used, or by
depositing the instrument in writing with the Chairman of such meeting on the day of the Meeting, or
adjournment thereof, or in any other manner permitted by law. Only Registered Shareholders have the
right to revoke a proxy. Beneficial Shareholders who wish to change their vote must, at least seven days
before the Meeting, arrange for their respective nominees to revoke the proxy on their behalf.
Notice to Shareholders in the United States
The solicitation of proxies involves securities of an issuer located in Canada and is being effected in
accordance with the corporate laws of the Province of Ontario, Canada and securities laws of the
provinces of Canada. The proxy solicitation rules under the United States Securities Exchange Act of
1934, as amended, are not applicable to the Company or this solicitation, and this solicitation has been
prepared in accordance with the disclosure requirements of the securities laws of the provinces of Canada.
Shareholders should be aware that disclosure requirements under the securities laws of the provinces of
Canada differ from the disclosure requirements under United States securities laws.
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The enforcement by shareholders of civil liabilities under United States federal securities laws may
be affected adversely by the fact that the Company is incorporated under the Business Corporations
Act (Ontario) (“OBCA”), certain of its directors and its executive officers are residents of Canada
and elsewhere outside the United States and a substantial portion of its assets and the assets of such
persons are located outside the United States. Shareholders may not be able to sue a foreign
company or its officers or directors in a foreign court for violations of United States federal
securities laws. It may be difficult to compel a foreign company and its officers and directors to
subject themselves to a judgment by a United States court.
Quorum
All of the shareholders or two shareholders, whichever is the lesser, present in person or
represented by proxy, will constitute a quorum at the Meeting or any adjournment or
postponement thereof. The Company’s list of shareholders as of the Record Date (as
defined below) has been used to deliver to shareholders the notice of meeting and this
Circular as well as to determine who is eligible to vote at the meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Description of Share Capital
The Company is authorized to issue an unlimited number of Common Shares. Each Common Share
entitles the holder of record thereof to one vote per Common Share at all meetings of the Shareholders.
As at the close of business on March 17, 2014 there were 33,766,075 Common Shares outstanding.
Ownership of Securities of the Company
As at March 17, 2017, to the knowledge of the directors and officers of the Company, no person or
corporation beneficially owns, directly or indirectly, or exercises control or direction over, voting
securities of the Company carrying more than 10% of the voting rights attached to any class of voting
securities of the Company. The directors and officers of the Company collectively own or control,
directly or indirectly, in the aggregate, 5,196,500 Common Shares, representing approximately 15.4% of
the outstanding Common Shares as at March 17, 2014.
RECORD DATE
The directors of the Company have fixed March 17, 2014 as the record date (the “Record Date”) for the
determination of the Shareholders entitled to receive notice of the Meeting. Shareholders of record at the
close of business on the Record Date will be entitled to vote at the Meeting.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE DIRECTORS
There was no indebtedness of any director or officer or employee, former directors, executive officers or
employees to, or guaranteed or supported by, the Company or any subsidiary thereof either pursuant to an
employee stock purchase program or any other programs of the Company or a subsidiary or otherwise
during the financial year of the Company ended October 31, 2013.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except as set out under the heading “Particulars of Matters to be Acted upon at the Meeting” below, no
person who has been a director or an officer of the Company at any time since the beginning of its last
completed financial year or any associate of any such director or officer has any material interest, direct
or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at
the meeting, except as disclosed in this Circular.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Except as set out under the heading “Particulars of Matters to be Acted upon at the Meeting” below, no
director, executive officer or beneficial holder of more than 10% of the issued and outstanding Common
Shares, or any director, executive officer of such beneficial holder, or any associate or affiliate of the
foregoing have had or has any material interest, direct or indirect, in any transaction since the beginning
of the Company’s last financial year or any completed or currently proposed transaction that has
materially or would materially affect the Company or its subsidiaries.
PARTICULARS OF MATTERS TO BE ACTED UPON
To the knowledge of the board of directors (the “Board”) of the Company, the matters to be brought
before the Meeting are those matters set forth in the accompanying Notice of Meeting.
1.
RECEIPT OF FINANCIAL STATEMENTS
The audited financial statements of the Company for the fiscal year ended October 31, 2013 and the
report of the auditor thereon which accompany this Management Information Circular, will be submitted
to the Meeting. Receipt at the Meeting of the auditor’s report and the Company’s audited financial
statement for its last completed fiscal period will not constitute approval or disapproval of any matters
referred to therein.
2.
ELECTION OF DIRECTORS
The Company’s articles of continuance provide that the Board consist of a minimum of three (3) and a
maximum of ten (10) directors. The Board currently consists of six (6) directors and the Company is asking
shareholders to elect a board of directors comprised of six (6) directors to be elected annually. The following
table states the names of the persons nominated by management for election as directors, any offices with the
Company currently held by them, their principal occupations or employment during the past five years if
such nominee is not presently an elected director, the period or periods of service as directors of the
Company and the approximate number of voting securities of the Company beneficially owned, directly or
indirectly, or over which control or direction is exercised as of the date hereof. The term of office of each
director will be from the date of the meeting at which he is elected until the next annual meeting, or until his
successor is elected or appointed.
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Name, province or state and
country of residence and
position, if any, held in the
company
Gordon Cudmore
London, Ontario
Director
Christopher Irwin
Toronto, Ontario
President, CEO, Secretary &
Director
David V. Mosher(2)(3)
Oakville, Ontario
Director
Michael Newbury(2)(3)
Toronto, Ontario
Director
Donald Whalen(2)
Unionville, Ontario
Director
Mark McMurdie
Newmarket, Ontario
Chief Financial Officer &
Director
Notes:
(1)
(2)
(3)
Served as director of the
Company since
Number of
common shares of
the Company
beneficially owned,
directly or
indirectly, or
controlled or
directed at
present(1)
November 30, 2000
87,000
Partner, Irwin Lowy LLP, a
company providing legal services
April 26, 2007
913,500
Self-Employed Consultant
April 29, 2009
1,900,000
President and Chief Executive
Officer of Greenock Resources Inc.
April 29, 2008
110,000
Self-Employed Consultant
April 29, 2009
1,026,000
Director of Finance for Kwik Kopy
Printing Canada Corp. and H&S
Massage Spa Canada Corp.
April 25, 2013
1,160,000
Principal occupation during the
past five years
Lawyer, Cudmore Law Office
The information as to voting securities beneficially owned, controlled or directed, not being within the knowledge of the Company, has been furnished by the
respective nominees individually.
Member of the Audit Committee.
Member of the Compensation Committee.
Proxies received in favour of management will be voted for the election of the above-named
nominees, unless the shareholder has specified in the proxy that his or her Common Shares are to
be withheld from voting in respect thereof. Management has no reason to believe that any of the
nominees will be unable to serve as a director but, if a nominee is for any reason unavailable to serve as a
director, proxies in favour of management will be voted in favour of the remaining nominees and may be
voted for a substitute nominee unless the shareholder has specified in the proxy that his or her shares are to be
withheld from voting in respect of the election of directors.
Cease Trade Orders, Bankruptcies and Penalties and Sanctions
Other than set out below, to the knowledge of the Company, no proposed management nominee for
election as a director of the Company is, as at the date of this Circular, or was within 10 years before the
date of this Circular, a director or chief executive officer or chief financial officer of any company
(including the Company) that: (a) was the subject of an order (as defined in Form 51-102F5 under
National Instrument 51-102 – Continuous Disclosure Obligations) that was issued while the director or
executive officer was acting in the capacity as director, chief executive officer or chief financial officer;
or (b) was subject to an order that was issued after the director or executive officer ceased to be a director,
chief executive officer or chief financial officer, and which resulted from an event that occurred while
that person was acting in the capacity as a director, chief executive officer or chief financial officer. For
the purposes of this paragraph, “order” means a cease trade order, an order similar to a cease trade order
or an order that denied the relevant Company access to any exemption under securities legislation, in each
case that was in effect for a period of more than 30 consecutive days.
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Mr. Irwin was formerly a Director and Secretary of Straight Forward Marketing Corporation, which was
subject to: (i) a management cease trade order resulting from a failure to file financial statements (the cease
trade was ordered on October 2004 and remained in effect until February 2005); (ii) a management cease
trade order resulting from a failure to file financial statements. The cease trade was ordered on November 2,
2005 and has not been rescinded as of the date hereof. In addition, Mr. Irwin is a Director, President and
Secretary of Brighter Minds Media Inc., which is subject to a cease trade order resulting from a failure to file
financial statements dated May 8, 2009 and May 20, 2009.
Messrs. Mosher and Whalen were formerly directors and/or officers of High River Gold Mines Ltd., which
was subject to a management cease trade order resulting from a failure to file financial statements. The cease
trade was ordered on December 3, 2008, and subsequently rescinded on December 23, 2008.
Mr. Newbury was subject to cease trade orders issued against the management of Strike Minerals Inc. on
October 1, 2013 and November 29, 2013, respectively, as a result of that company’s failure to file audited
annual financial statements and related management’s discussion and analysis for the year ended April 30,
2013 and interim financial statements for the periods ending July 31, 2013 and October 31, 2013. Mr.
Newbury is no longer a director or officer of Strike Minerals Inc.
To the knowledge of the Company, no proposed director of the Company: (a) is, or within 10 years before
the date hereof has been a director or executive officer of a corporation that while that person was acting
in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee
appointed to hold its assets; or (b) has within the 10 years before the date hereof, become bankrupt, made
a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted
any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or
trustee appointed to hold the assets of the proposed director.
Other than set out below, no proposed director of the Company has been subject to any: (a) penalties or
sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities
regulatory authority or has entered into a settlement agreement with a Canadian securities regulatory
authority; or (b) other penalties or sanctions imposed by a court or regulatory body that would be likely to
be considered important to a reasonable securityholder in deciding whether to vote for the proposed
director.
In February, 2006, Mr. Newbury entered into a settlement agreement with the Ontario Securities Commission
(the “OSC”) in connection with the trading of shares of OntZinc Corporation. The settlement agreement was
approved by an order of the OSC. The settlement agreement provided, among other things, that Mr.
Newbury: pay $7,850 to the OSC for the benefit of third parties; pay $5,000 to the OSC toward the cost of the
OSC investigation; for a period of 12 months from the date of the settlement agreement, cease trading in any
securities of any company to which Mr. Newbury acts as a geological consultant unless he receives prior
written confirmation from the in-house counsellor of such company; and that he comply with Ontario
securities laws.
3.
APPOINTMENT OF AUDITOR
Clancy & Company, LLP has been the auditor of the Company since May 28, 2004. Shareholders will be
asked to consider and, if thought advisable, to pass an ordinary resolution to re-appoint the firm of Clancy
& Company, LLP, to serve as auditor of the Company until the next annual meeting of shareholders and
to authorize the directors of the Company to fix their remuneration as such.
Unless the shareholder directs that his or her Common Shares are to be withheld from voting in
connection with the appointment of auditor, the persons named in the enclosed form of proxy
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intend to vote FOR the re-appointment of Clancy & Company, LLP, Chartered Accountants, as the
auditor of the Company until the next annual meeting of shareholders and to authorize the
directors to fix their remuneration.
4.
SPECIAL BUSINESS – CONFIRMATION OF STOCK OPTION PLAN
The Company has a “rolling” stock option plan (the “Stock Option Plan”) whereby a maximum of 10%
of the issued and outstanding Common Shares, from time to time, may be reserved for issuance pursuant
to the exercise of options. The Stock Option Plan was most recently confirmed by shareholders at the
annual and special meeting held on April 25, 2013.
There are currently 33,766,075 Common Shares issued and outstanding, therefore the current number of
shares issuable pursuant to the Stock Option Plan is 3,376,607 Common Shares, representing 10% of the
issued and outstanding Common Shares as at the date hereof.
The purpose of the Stock Option Plan is to encourage Common Share ownership in the Company by
directors, senior officers, employees and consultants of the Company and its affiliates and other
designated persons. Options may be granted under the Stock Option Plan only to directors, senior
officers, employees and consultants of the Company and its subsidiaries and other designated persons as
designated from time to time by the Board. The number of Common Shares which may be reserved for
issuance under the Stock Option Plan is limited to 10% of the issued and outstanding Common Shares as
at the date of the grant of options. The term of any options granted under the Stock Option Plan will be
fixed by the board of directors at the time such options are granted, provided that options will not be
permitted to exceed a term of ten years.
The maximum number of Common Shares which may be reserved for issuance to any one individual
during any 12 month period under the Stock Option Plan is 5% of the Common Shares. In addition, the
maximum number of Common Shares which may be reserved for issuance to any consultant of the
Company during any 12 month period under the Stock Option Plan is 2% of the Common Shares. The
maximum number of Common Shares which may be reserved for issuance to employees conducting
investor relations activities during any 12 month period under the Stock Option Plan is 2% of the
aggregate number of Common Shares.
Any Common Shares subject to an option which for any reason is cancelled or terminated prior to
exercise will be available for a subsequent grant under the Stock Option Plan. The option price of any
Common Shares cannot be less than the closing price of the Common Shares on the day immediately
preceding the day upon which the option is granted, less any discount permitted by the policies of the
TSX Venture Exchange (the “TSXV”). The options are non-assignable and non-transferable. Options
granted under the Stock Option Plan can only be exercised by the optionee as long as the optionee
remains an eligible optionee pursuant to the Stock Option Plan or within a reasonable period (set by the
Board in each case) after ceasing to be an eligible optionee, or, if the optionee dies, within one year from
the date of the optionee’s death. On the occurrence of a takeover bid, issuer bid or going private
transaction, the Board will have the right to accelerate the date on which any option becomes exercisable.
The Stock Option Plan contains provisions for adjustment in the number of Common Shares issuable
thereunder in the event of a subdivision, consolidation, reclassification or change of the Common Shares,
a merger or other relevant changes in the Company's capitalization.
Subject to shareholder approval in certain circumstances, the Board may from time to time amend or
revise the terms of the Stock Option Plan or may terminate the Stock Option Plan at any time. The Stock
Option Plan does not contain any provision for financial assistance by the Company in respect of options
granted under the Stock Option Plan.
-9-
The Stock Option Plan is subject to receipt of annual TSXV acceptance of its filing. Reference should be
made to the full text of the Stock Option Plan which will be made available at the offices of Irwin Lowy
LLP, 365 Bay Street, Suite 400, Toronto, Ontario, M5H 2V1, until the business day immediately preceding
the date of the Meeting.
Shareholders will be asked to consider and, if deemed advisable, approve and pass the following
resolution:
“BE IT RESOLVED THAT:
the Company’s stock option plan as described in the management information circular of the
Company dated March 17, 2014, be and it is hereby confirmed and approved.”
1.
In accordance with the policies of the TSXV, the Stock Option Plan must be approved by the majority of
votes cast at the Meeting on the resolution. It is the intention of the persons named in the enclosed
form of proxy, in the absence of instructions to the contrary, to vote the proxy in favor of the
ordinary resolution approving the Stock Option Plan.
STATEMENT OF EXECUTIVE COMPENSATION
Named Executive Officers
For the purposes of this Circular, a Named Executive Officer (“NEO”) of the Company means each of the
following individuals:
(a)
a chief executive officer (“CEO”) of the Company;
(b)
a chief financial officer (“CFO”) of the Company;
(c)
each of the Company’s three most highly compensated executive officers, or the three most
highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at
the end of the most recently completed financial year whose total compensation was,
individually, more than $150,000, as determined in accordance with subsection 1.3(6) of
Form 51-102F6, for that financial year; and
(d)
each individual who would be an NEO under paragraph (c) above but for the fact that the
individual was neither an executive officer of the Company, nor acting in a similar capacity,
at the end of that financial year.
The Company currently has the following two NEOs: Chris Irwin, President, CEO and Secretary and
Mark McMurdie, Chief Financial Officer.
Compensation Discussion and Analysis
When determining the compensation of the NEOs, the Board considers the limited resources of the
Company and the objectives of: (i) recruiting and retaining the executives critical to the success of the
Company and the enhancement of shareholder value; (ii) providing fair and competitive compensation;
(iii) balancing the interests of management and shareholders of the Company; and (iv) rewarding
performance, both on an individual basis and with respect to the business in general. In order to achieve
these objectives, the compensation paid to the NEOs consists of the following two components:
(a)
base fee or salary; and
- 10 -
(b)
long-term incentive in the form of stock options.
Base Fee or Salary
The base fee or salary of each particular NEO is determined by an assessment by the Board of such
executive’s performance, a consideration of competitive compensation levels in companies similar to the
Company and a review of the performance of the Company as a whole and the role such executive officer
played in such corporate performance. Mr. Irwin, President, CEO and Secretary of the Company, devotes
most of his time to his legal practice, as a result the compensation committee has determined payment of
his legal fees is sufficient remuneration. A management fee is paid to a company controlled by an
associate of Mr. McMurdie, Chief Financial Officer of the Company, based on the time Mr. McMurdie
devotes to certain reporting requirements of the Company.
Long-Term Incentive
The Company provides a long-term incentive by granting options to executive officers under the Stock
Option Plan. The objective of granting options is to encourage executives to acquire an ownership interest
in the Company over a period of time, which acts as a financial incentive for such executive to consider
the long-term interests of the Company and its shareholders.
Option Based Awards
The Board reviews the performance of the Company’s management and advisors from time to time, and
recommends option-based awards and other compensation awards or adjustments. These decisions take
into consideration corporate and individual performance and industry standards. Previous grants of
option-based awards are also taken into consideration in making this determination. The experience of the
Board members who are also involved as management of, or Board members or advisors to, other
companies also informs decisions concerning compensation.
Option based awards are issued under the Stock Option Plan, the terms of which are set out under
“Special Business – Amendment and confirmation of Stock Option Plan”.
Summary Compensation Table
Non-Equity incentive
plan compensation
($)
NEO
Name and Principal
Position
Chris Irwin
President, CEO and
Secretary
Mark McMurdie
Chief Financial Officer
Year
2013
2012
2011
2013
2012
2011
Salary
($)
Sharebased
awards
($)
Optionbased
awards
($)
Annual
incentive
plans
Longterm
incentive
plans(1)
Pension
Value
($)
All other
compensa
-tion
($)
Total
compensation
($)
Nil
Nil
Nil
$36,000(3)
$36,000(3)
$36,000(3)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$20,790(2)
$16,215(2)
$28,520(2)
Nil
Nil
Nil
$20,790
$16,215
$28,520
$36,000
$36,000
$36,000
Notes:
(1)
“LTIP” or “long term incentive plan” means any plan that provides compensation intended to motivate performance to occur over a period greater than one
fiscal year, but does not include option or share-based awards.
(2)
Paid to Irwin Lowy LLP, a limited liability partnership of which Mr. Irwin is a partner.
(3)
Paid to Rustle Woods Capital Inc., a company controlled by an associate of Mark McMurdie.
- 11 -
Incentive Plan Awards
Outstanding Option-Based and Share-Based Awards
The following table sets out for each NEO, the incentive stock options (option-based awards) and sharebased awards outstanding as at October 31, 2013. These incentive stock options either vested at the time
of grant or were fully vested during the year ended October 31, 2013.
Option-based Awards
Name
Chris Irwin
President, CEO &
Secretary
Mark McMurdie
Chief Financial Officer
Note:
(1)
Number of
securities
underlying
unexercised
options
(#)
Nil
Option
exercise
price
($)
N/A
Nil
N/A
Share-based Awards
Option expiration
date
($)
N/A
Value of
unexercised
in-the-money
options(1)
($)
Nil
Number of
shares or units
of shares that
have not vested
(#)
Nil
Market or payout
value of sharebased awards that
have not vested
($)
Nil
N/A
Nil
Nil
Nil
Calculated using the closing price of the Common Shares on the TSXV on October 31, 2013 of $0.02 and subtracting the exercise price of in-the-money
stock options. These stock options have not been, and may never be, exercised and actual gains, if any, on exercise will depend on the value of the
Common Shares on the date of exercise.
Value Vested or Earned During the Year
No incentive plan awards vested during the fiscal year ended October 31, 2013.
Employment Contracts
The Company and Rustle Woods Capital Inc. (“Rustle”), a company controlled by an associate of Mr.
McMurdie, entered into a consulting agreement effective January 26, 2005, pursuant to which Rustle will
provide the services of Mr. McMurdie as Chief Financial Officer to the Company for a fee of $3,000 per
month. The Company may terminate this agreement at any time for reasons of criminal conviction, death,
disability, incapacity, bankruptcy, insolvency, gross negligence, gross dereliction of duty or gross
misconduct, and upon thirty days written notice and upon payment of a termination fee of $3,000 in any
other event.
Pension and Retirement Plans
The Company does not have any pension or retirement plans that provide for payment or benefits at,
following, or in connection with retirement or provide for retirement or deferred compensation plans.
Termination and Change of Control Benefits
The Company has not provided compensation, monetary or otherwise, during the preceding fiscal year, to
any person who now acts or has previously acted as a NEO, in connection with or related to the
retirement, termination or resignation of such person and the Company has provided no compensation to
such persons as a result of a change of control of the Company, its subsidiaries or affiliates. The Company
is not party to any compensation plan or arrangement with NEOs resulting from the resignation,
retirement or the termination of employment of such person.
- 12 -
Director Compensation
The non-executive directors did not receive any compensation for the fiscal year ended October 31, 2013.
Option-Based and Share-Based Awards to Directors
The following table sets out for each non-executive director the incentive stock options (option-based
awards) and share-based awards outstanding as of October 31, 2013. These incentive stock options vested
at the time of grant.
Option-based Awards
Share-based Awards
Number of
shares or
units of
shares that
have not
vested
(#)
Market or
payout value of
share-based
awards that
have not vested
($)
Nil
Nil
Nil
June 5, 2014
Nil
Nil
Nil
June 5, 2014
Nil
Nil
Nil
Number of
securities
underlying
unexercised
options
(#)
Option
exercise
price
($)
Option expiration
date
($)
Value of
unexercised
in-the-money
options(1)
David V. Mosher
100,000
0.15
June 5, 2014
Michael Newbury
50,000
0.15
Donald Whalen
100,000
0.15
Name
Note:
(1)
Calculated using the closing price of the Common Shares on the TSXV on October 31, 2013 of $0.02 and subtracting the exercise price of in-the-money
stock options. These stock options have not been, and may never be, exercised and actual gains, if any, on exercise will depend on the value of the
Common Shares on the date of exercise.
Value Vested or Earned During the Year
No incentive plan awards vested during the fiscal year ended October 31, 2013.
Long-term Incentive Plan (LTIP) Awards
The Company currently has no Long-term Incentive Plans, other than stock options granted from time to time
by the Board under the provisions of the Stock Option Plan.
Stock Appreciation Rights and Restricted Shares
No stock appreciation rights or restricted shares of the Company were granted by the Company to the
NEOs of the Company during the fiscal year ended October 31, 2013.
Compensation of Directors
Directors of the Company are not entitled to any fees for attending meetings of the Board, committees of the
Board and shareholders of the Company. The directors are reimbursed for any out-of-pocket travel expenses
incurred in order to attend meetings and also participate in the Company’s stock option plan.
During the most recently completed financial year Irwin Lowy LLP, a limited liability partnership which Mr.
Irwin is a partner, was paid $20,790 in legal fees.
- 13 -
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets forth information in respect of the Company’s equity compensation plans under
which equity securities of the Company are authorized for issuance, aggregated in accordance with all
equity plans previously approved by the Company’s Shareholders and all equity plans not approved by
the Company’s Shareholders.
Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights
(#)
Weighted-average Exercise
Price of Outstanding
Options, Warrants and
Rights
($)
Number of Securities remaining
available for Future Issuance
under Equity Compensation
Plans
(#)
Equity compensation plans
approved by securityholders
250,000
$0.15
3,126,607(1)
Equity compensation plans
not approved by
securityholders
Total
Nil
Nil
Nil
250,000
$0.15
3,126,607
Plan Category
Note:
(1)
The Stock Option Plan is a “rolling” stock option plan whereby the maximum number of Common Shares that may be reserved for issuance pursuant to the
Stock Option Plan will not exceed 10% of the issued shares of the Company at the time of the stock option grant. As at the date hereof, 3,376,607 Common
Shares may be reserved for issuance pursuant to the Stock Option Plan.
AUDIT COMMITTEE INFORMATION REQUIRED
IN THE INFORMATION CIRCULAR OF A VENTURE ISSUER
Multilateral Instrument 52-110 (“MI 52-110”) requires that certain information regarding the Audit
Committee of an issuer be included in the management information circular sent to shareholders in
connection with the issuer’s annual meeting.
Audit Committee Charter
The full text of the charter of the Company’s Audit Committee is attached hereto as Appendix “A”.
Composition of the Audit Committee
The Audit Committee members are Donald Whalen (Chair), David Mosher and Michael Newbury, each
of whom is a director, financially literate and independent in accordance with sections 1.4 and 1.5 of MI
52-110.
Relevant Education and Experience
The relevant education and/or experience of each member of the Audit Committee is as follows:
Donald Whalen: Mr. Whalen is a graduate of the University of Toronto (B.Comm, 1964). Since 1991, he
was a director of, and since 1994, Executive Chairman, until 2008, of High River Gold Mines Ltd., a
former TSX–listed gold mining company. Mr. Whalen is past Co-Chair of the Canada Russia Business
Council and is past Chairman of the Canada Eurasia Russia Business Association (CERBA -Toronto
Chapter). In addition, Mr. Whalen serves or has served on various public company boards.
David Mosher: Mr. Mosher holds a Bachelor of Science degree in Geology from Acadia University,
Nova Scotia. Mr. Mosher is currently a self-employed consultant. Mr. Mosher was President, Chief
Executive Officer and a Director of High River Gold Mines Ltd. from June 1992 to November 2008. Mr.
Mosher, has over 35 years’ experience as a mining executive and geologist with direct experience in
- 14 -
Australia, Canada, the United States, Russia, Asia and Africa. Over the past fifteen years, Mr. Mosher has
been active in the restructuring and refinancing of a number of junior resource companies, both private
and public.
Michael Newbury: Mr. Newbury is a professional engineer and a graduate of Queen’s University (B.Sc.,
1969) and McGill University (M.Sc., 1971). Mr. Newbury has 40 years’ experience in the financial and
natural resource sectors and acts as a director and officer of several public companies.
Audit Committee Oversight
Since the commencement of the Company’s most recently completed financial year, there has not been a
recommendation of the Audit Committee to nominate or compensate an external auditor which was not
adopted by the Board.
Pre-Approval Policies and Procedures
The Audit Committee has adopted specific policies and procedures for the engagement of non-audit
services as described in section 7 of the Charter.
Audit Fees
The following table provides detail in respect of audit, audit related, tax and other fees payable by the
Company to the external auditors for professional services:
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
Year ended October 31, 2013
$16,200
Nil
$1,500
Nil
Year ended October 31, 2012
$16,785
Nil
$1,500
Nil
Audit Fees – aggregate fees billed for professional services rendered by the auditor for the audit of the
Company’s annual financial statements as well as services provided in connection with statutory and
regulatory filings.
Audit-Related Fees – aggregate fees billed for professional services rendered by the auditor and were
comprised primarily of the review of quarterly financial statements and related documents.
Tax Fees – aggregate fees billed for tax compliance, tax advice and tax planning professional services.
These services included reviewing tax returns and assisting in responses to government tax authorities.
All Other Fees – aggregate fees billed for professional services which included accounting advice and
advice related to relocating employees.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Company’s Board and senior management consider good corporate governance to be central to the
effective and efficient operation of the Company. The Board has confirmed the strategic objective of the
Company is seeking out and exploring mineral bearing deposits with the intention of developing and
mining the deposit or proving the feasibility of mining the deposit for others.
National Instrument 58-101 (Disclosure of Corporate Governance Practices) (“NI58-101”) requires the
Company to disclose its corporate governance practices by providing in the Circular the disclosure
- 15 -
required by Form 58-101F2. NI58-201 establishes corporate governance guidelines which apply to all
public companies. The Company has reviewed its own corporate governance practices in light of these
guidelines. In certain cases, the Company’s practices comply with the guidelines, however, the Board
considers that some of the guidelines are not suitable for the Company at its current stage of development
and therefore these guidelines have not been adopted. The Company will continue to review and
implement corporate governance guidelines as the business of the Company progresses and becomes more
active in operations.
Board of Directors
The Company is asking shareholders to elect a board of directors comprised of six (6) directors. Form 58101F1 suggests that the board of directors of every listed company should be constituted with a majority
of individuals who qualify as "independent" directors under Multilateral Instrument 52-110 (“MI 52110)”, which provides that a director is independent if he or she has no direct or indirect “material
relationship” with the company. “Material relationship” is defined as a relationship which could, in the
view of the Company’s Board, be reasonably expected to interfere with the exercise of a director’s
independent judgment. Of the proposed nominees: Chris Irwin, President, CEO and Secretary; and Mark
McMurdie, Chief Financial Officer, are each an "inside" or a management director and accordingly are
considered not “independent". Each of the remaining four (4) proposed directors are considered by the
Board to be "independent", within the meaning of MI 52-110. In assessing Form 58-101F1 and making the
foregoing determinations, the circumstances of each director have been examined in relation to a number
of factors.
Directorships
The following table sets forth the directors of the Company who currently hold directorships with other
reporting issuers:
Name of Director
Chris Irwin
David Mosher
Michael Newbury
Donald Whalen
Reporting Issuer
Airesurf Networks Holdings Inc., Auriga Gold Corp., Blue Vista Technologies Inc., Brighter
Minds Media Inc., Portage Minerals Inc., Deveron Resources Ltd., Mag Copper Limited, Hornby
Bay Minerals Exploration Ltd., Kerr Mines Inc.
Pancontinental Uranium Corporation, Pelangio Exploration Inc.
Noble Mineral Resources Inc., Greenock Resources Inc.,
Pancontinental Uranium Corporation, VMS Ventures Inc., SouthTech Capital Corporation,
BacTech Environmental Corporation
Orientation and Continuing Education
The Board does not have a formal orientation or education program for its members. The Board’s
continuing education is typically derived from correspondence with the Company’s legal counsel to
remain up to date with developments in relevant corporate and securities’ law matters. Additionally,
historically board members have been nominated who are familiar with the Company and the nature of its
business.
Ethical Business Conduct
The Board has not adopted guidelines or attempted to quantify or stipulate steps to encourage and
promote a culture of ethical business conduct; but does promote ethical business conduct through the
nomination of Board members it considers ethical, through avoiding or minimizing conflicts of interest,
and by having a majority of its Board members independent of corporate matters.
- 16 -
Nomination of Directors
The recruitment of new directors has generally resulted from recommendations made by directors and
shareholders. The assessment of the contributions of individual directors has principally been the
responsibility of the Board. Prior to standing for election, new nominees to the Board of directors are
reviewed by the entire Board.
Other Board Committees
The Board have established an Audit Committee and a Compensation Committee.
Assessments
Currently the Board has not implemented a formal process for assessing directors.
ADDITIONAL INFORMATION
Additional information relating to the Company is available on SEDAR at www.sedar.com.
Securityholders may contact the Company in order to request copies of the Company’s consolidated
financial statements at the offices of Irwin Lowy LLP, 365 Bay Street, Suite 400, Toronto, Ontario, Tel:
(416) 361-2516. Financial information about the Company may be found in the Company’s consolidated
financial statements and Management’s Discussion and Analysis for its most recently completed financial
year.
APPROVAL AND CERTIFICATE
The contents and the sending of this Circular have been approved by the Board. The foregoing contains
no untrue statement of a material fact and does not omit to state a material fact that is required to be stated
or that is necessary to make a statement not misleading in the light of the circumstances in which it was
made.
Dated at Toronto, Ontario, this 17th day of March, 2014.
“Chris Irwin” (Signed)
Chris Irwin
President, CEO & Secretary
- 17 -
APPENDIX “A”
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Name
There shall be a committee of the board of directors (the “Board”) of Roscan Minerals Corporation
(the “Company”) known as the Audit Committee (the “Committee”).
Purpose
The Committee has been established to assist the Board in fulfilling its oversight responsibilities and
fiduciary obligations. The primary functions and areas of responsibility of the Committee are to:

review, report and provide recommendations to the Board on the annual and interim
consolidated financial statements and related Management’s Discussion and Analysis
(“MD&A”);

identify and monitor the management of the principal risks that could impact the financial
reporting of the Company;

make recommendations to the Board regarding the appointment, terms of engagement
and compensation of the external auditor;

monitor the integrity of the Company’s financial reporting process and system of internal
controls regarding financial reporting and accounting compliance;

oversee the work of the external auditors engaged for the purpose of preparing or issuing
an auditor’s report or performing other audit, review or attest services for the Company;

resolve disagreements between management and the external auditor regarding financial
reporting;

receive the report of the external auditors, who must report directly to the Committee; and

provide an avenue of communication among the Company’s external auditors,
management, and the Board.
Composition and Qualifications
All Committee members shall meet all applicable requirements prescribed under the Business
Corporations Act (Ontario), as well as any requirements or guidelines prescribed from time to time under
applicable securities legislation, including National Instrument 52-110 as amended, restated or
superseded. The Committee shall be comprised of not less than three directors as determined from time
to time by the Board. A majority of the members shall be independent directors who are free from any
direct or indirect relationship that would, in the view of the Board, reasonably interfere with the exercise
of the member’s independent judgment. While it is not necessary for members to have a comprehensive
knowledge of generally accepted accounting principles and standards, all members of the Committee
shall be “financially literate” so as to be able to read and understand a set of financial statements that
present a breadth and level of complexity of accounting issues that are generally comparable to the issues
raised by the Company’s financial statements. A director who is not financially literate may be appointed
to the Committee by the Board provided that such director becomes financially literate within a
reasonable period following his or her appointment, and provided that the Board has determined that
such appointment will not materially adversely affect the ability of the Committee to act independently.
Committee members shall be appointed by the Board. The Board shall designate the Chair of the
Committee. If a Chair is not designated or present at any meeting, the members of the Committee may
designate a Chair by majority vote. The Chair shall have responsibility for ensuring that the Committee
fulfills its mandate and duties effectively.
Each member of the Committee shall continue to be a member until a successor is appointed, unless the
member resigns, is removed or ceases to be a director. The Board may fill a vacancy at any time.
Meetings
The Committee shall meet at least four times annually, or more frequently as circumstances dictate, and
at least once in each fiscal quarter. A notification for each of the meetings shall be disseminated to
Committee members two days prior to each meeting. A majority of the members of the Committee shall
constitute a quorum for meetings.
An agenda shall be prepared by the Chair of the Committee as far in advance of each meeting as
reasonably practicable. Minutes of all meetings of the Committee shall be prepared as soon as possible
following the meeting and submitted for approval at or prior to the next following meeting.
The Committee should meet privately at least once per year with management of the Company, the
Company’s external auditors, and as a committee to discuss any matters that the Committee or any of
these groups believe should be discussed.
Specific Responsibilities and Duties
Specific responsibilities and duties of the Committee shall include, without limitation, the following:
General Review Procedures
1.
Review and reassess the adequacy of this Charter at least annually and submit any
proposed amendments to the Board for approval.
2.
Review the Company’s annual audited financial statements, related MD&A, and other
documents prior to filing or distribution of such documents or issuing a press release in
respect of the financial statements and MD&A. Review should include discussion with
management and external auditors of significant issues regarding accounting principles,
practices, and significant management estimates and judgments.
3.
Annually, in consultation with management and external auditors, consider the integrity
of the Company’s financial reporting processes and controls. Discuss significant
financial risk exposures and the steps management has taken to monitor, control and
report such exposures. Review significant findings prepared by the external auditors and
the internal auditing department together with management’s responses.
4.
Review the effectiveness of the overall process for identifying the principal risks
affecting financial reporting and provide the Committee’s views to the Board of
Directors.
A-2
5.
Review with financial management the Company’s quarterly financial results, related
MD&A and other documents prior to the filing or distribution of such documents or
issuing a press release in respect of the financial statements and MD&A. Discuss any
significant changes to the Company’s accounting principles. The Chair of the Committee
may represent the entire Committee for purposes of this review.
External Auditors
6.
The external auditors are ultimately accountable to the Committee, as representatives of
the shareholders. The external auditors must report directly to the Committee, who shall
review the independence and performance of the auditors and annually recommend to the
Board the appointment of the external auditors or approve any discharge of auditors when
circumstances warrant. The Committee shall approve the compensation of the external
auditors.
7.
The Committee must approve all non-audit services to be provided to the Company or its
subsidiary entities, unless such non-audit and services are reasonably expected to
constitute not more than five (5) percent of the total fees paid by the Company to the
external auditor during the particular fiscal year.
8.
On an annual basis, the Committee should review and discuss with the external auditors
all significant relationships they have with the Company that could impair the auditors’
independence.
9.
Review the external auditors’ audit plan and discuss and approve the audit scope,
staffing, locations, reliance upon management, and general audit approach.
10.
Prior to releasing the year-end earnings, discuss the results of the audit with the external
auditors. Discuss any matters that are required to be communicated to audit committees
in accordance with the standards established by the Canadian Institute of Chartered
Accountants.
11.
Consider the external auditors’ judgments about the quality and appropriateness of the
Company’s accounting principles as applied in the Company’s financial reporting.
Legal Compliance
12.
On at least an annual basis, review with the Company’s counsel any legal matters that could
have a significant impact on the organization’s financial statements, the Company’s
compliance with applicable laws and regulations and inquiries received from regulators or
governmental agencies.
Other Miscellaneous Responsibilities
13.
Annually assess the effectiveness of the Committee against its Mandate and report the
results of the assessment to the Board.
14.
Prepare and disclose a summary of the Mandate to shareholders.
15.
Perform any other activities consistent with this Mandate, the Company’s by-laws and
governing law, as the Committee or the Board deems necessary or appropriate.
A-3
Authority
The Committee shall have the authority to:
1. delegate approval-granting authority to pre-approve non-audit services by the external auditor to
one or more of its members;
2. engage independent counsel and other advisors as it determines necessary to carry out its duties;
3. set and pay the compensation for any advisors employed by the Committee;
4. communicate directly with the external auditors;
Reporting
The Committee shall report its deliberations and discussions regularly to the Board and shall submit to the
Board the minutes of its meetings.
Resources
The Committee shall have full and unrestricted access to all of the Company’s books, records, facilities
and personnel as well as the Company’s external auditors and shall have the authority, in its sole
discretion, to conduct any investigation appropriate to fulfilling its responsibilities. The Committee shall
further have the authority to retain, at the Company’s expense, such special legal, accounting or other
consultants or experts as it deems necessary in the performance of its duties and to request any officer or
employee of the Company or the Company’s external counsel or auditors to attend a meeting of the
Committee.
Limitation on the Oversight Role of the Committee
Nothing in this Charter is intended, or may be construed, to impose on any member of the Committee a
standard of care or diligence that is in any way more onerous or extensive than the standard to which all
members of the Board are subject.
Each member of the Committee shall be entitled, to the fullest extent permitted by law, to rely on the
integrity of those persons and organizations within and outside the Company from whom he or she
receives information, and the accuracy of the information provided to the Company by such persons or
organizations.
While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the
Committee to plan or conduct audits or to determine that the Company’s financial statements and
disclosures are complete and accurate and in accordance with generally accepted accounting principles
and applicable rules and regulations, each of which is the responsibility of management and the
Company’s external auditors.
A-4
Procedures for Receipt of Complaints and Submissions
Relating to Accounting Matters
1.
The Company shall inform employees on the Company’s intranet, if there is one, or via a
newsletter or e-mail that is disseminated to all employees at least annually, of the officer (the
“Complaints Officer”) designated from time to time by the Committee to whom complaints and
submissions can be made regarding accounting, internal accounting controls or auditing matters
or issues of concern regarding questionable accounting or auditing matters.
2.
The Complaints Officer shall be informed that any complaints or submissions so received must be
kept confidential and that the identity of employees making complaints or submissions shall be
kept confidential and shall only be communicated to the Committee or the Chair of the
Committee.
3.
The Complaints Officer shall be informed that he or she must report to the Committee as
frequently as such Complaints Officer deems appropriate, but in any event no less frequently than
on a quarterly basis prior to the quarterly meeting of the Committee called to approve interim and
annual financial statements of the Company.
4.
Upon receipt of a report from the Complaints Officer, the Committee shall discuss the report and
take such steps as the Committee may deem appropriate.
5.
The Complaints Officer shall retain a record of a complaint or submission received for a period of
six years following resolution of the complaint or submission.
Procedures for Approval of Non-Audit Services
1.
The Company’s external auditors shall be prohibited from performing for the Company the
following categories of non-audit services:
(a)
bookkeeping or other services related to the Company’s accounting records or financial
statements;
(b)
financial information systems design and implementation;
(c)
appraisal or valuation services, fairness opinion or contributions-in-kind reports;
(d)
actuarial services;
(e)
internal audit outsourcing services;
(f)
management functions;
(g)
human resources;
(h)
broker or dealer, investment adviser or investment banking services;
(i)
legal services;
(j)
expert services unrelated to the audit; and
(k)
2.
any other service that the Canadian Public Accountability Board determines is
impermissible.
In the event that the Company wishes to retain the services of the Company’s external auditors
for tax compliance, tax advice or tax planning, the Chief Financial Officer of the Company shall
consult with the Chair of the Committee, who shall have the authority to approve or disapprove
on behalf of the Committee, such non-audit services. All other non-audit services shall be
approved or disapproved by the Committee as a whole.
The Chief Financial Officer of the Company shall maintain a record of non-audit services approved by the
Chair of the Committee or the Committee for each fiscal year and provide a report to the Committee no
less frequently than on a quarterly basis.
B-2
CONSOLIDATED FINANCIAL STATEMENTS
(An exploration stage company)
For the Year Ended October 31, 2013
CONSOLIDATED FINANCIAL STATEMENTS
Year Ended October 31, 2013
TABLE OF CONTENTS
Independent Auditor’s Report
1
Consolidated Statements of Financial Position
2
Consolidated Statements of Operations and Comprehensive Loss
3
Consolidated Statements of Changes in Equity
4
Consolidated Statements of Cash Flows
5
Notes to the Consolidated Financial Statements
6 – 18
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of
Roscan Minerals Corporation
We have audited the accompanying financial statements of Roscan Minerals Corporation,
which comprise the consolidated statements of financial position as at October 31, 2013
and 2012 and the consolidated statements of operations and comprehensive loss, changes
in equity and cash flows for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with International Financial Reporting Standards, and for such
internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements
based on our audits. We conducted our audits in accordance with Canadian generally
accepted auditing standards. Those standards require that we comply with ethical
requirements and plan and perform the audits to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on
the auditor’s judgment, including the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and
fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of Roscan Minerals Corporation as at October 31, 2013 and 2012 and
its financial performance and its cash flows for the years then ended in accordance with
International Financial Reporting Standards.
Emphasis of matter
Without qualifying our opinion, we draw attention to note 1 in the consolidated financial
statements which describes matters and conditions that indicate the existence of material
uncertainties that may cast significant doubt about the Company’s ability to continue as a
going concern.
Toronto, Canada
January 16, 2014
Chartered Accountants
Licenced Public Accountants
-1-
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)
As at October 31,
2013
2012
ASSETS
Current assets
Cash
Sales tax receivable
Prepaid expenses
$
33,991
2,013
833
$
5,364
3,831
867
$
36,837
$
10,062
$
21,782
21,782
$
85,183
10,000
95,183
LIABILITIES
Current liabilities
Accounts payable and
accrued liabilities (note 7)
Loan due to related party (note 7(c))
EQUITY
Share capital (note 5(b))
Contributed surplus (note 5(e))
Warrant reserve (note 5(b), 5(d))
Deficit
7,125,585
378,579
45,332
(7,534,441)
15,055
$
Nature of operations and going concern (note 1)
The accompanying notes are an integral part of these financial statements.
Approved on behalf of the Board:
“Donald Whalen”
Director
“Chris Irwin”
Director
-2-
36,837
6,983,173
337,964
40,615
(7,446,873)
(85,121)
$
10,062
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the year ended October 31,
2013
Expenses
Corporate and administrative (note 6)
Foreign exchange gain
2012
$ 87,604
(36)
87,568
$ 101,632
(7)
101,625
Net loss and comprehensive loss for the year
$ 87,568
$ 101,625
Basic and diluted loss per share (note 9)
$
$
Weighted average number of common shares
outstanding - basic and diluted
-3-
0.003
32,586,375
0.004
28,299,573
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital
Number
Amount
Contributed
Surplus
Warrant
Reserve
Deficit
Total
Balance, November 1, 2011
28,299,573
$ 6,983,173
$ 337,964
$ 40,615
$ (7,345,248)
Net loss for the year
Balance, October 31, 2012
28,299,573
6,983,173
337,964
40,615
(101,625)
(7,446,873)
(101,625)
(85,121)
40,615
45,332
(40,615)
(87,568)
-
(87,568)
199,995
(12,251)
-
Units issued by private placement (note 5(b))
Share issuance costs
Warrants expired (notes 5(d), 5(e))
5,466,500
-
33,766,073
-4-
154,663
(12,251)
$ 7,125,585
$ 378,579
$ 45,332
$ (7,534,441)
$ 16,504
$ 15,055
CONSOLIDATED STATEMENTS OF CASH FLOWS
2013
Operating activities
2012
$ (87,568)
$ (101,625)
1,818
34
(63,401)
(149,117)
(371)
55,220
(46,776)
(10,000)
187,744
177,744
10,000
10,000
Increase (decrease) in cash
28,627
(36,776)
Cash, beginning of the year
5,364
42,140
Changes in non-cash working capital items:
Sales tax receivable
Prepaid expenses
Accounts payable and accrued liabilities
Financing activities
Loan from (repayment to) related party (note 7(c))
Issuance of common shares and warrants, net of costs (note 5(b))
Cash, end of the year
$ 33,991
-5-
$
5,364
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended October 31, 2013
1.
Nature of operations and going concern
Roscan Minerals Corporation (the “Company”) is an exploration stage company involved in the
business of acquiring, exploring and developing mineral properties. The Company does not
have an interest in or hold a right to participate in any mineral properties or projects at this time.
The Company’s shares are listed on the NEX board of the TSX Venture Exchange. The
address of the Company’s registered office is 130 Adelaide St. West, Suite 1010, Toronto,
Ontario, M5H 3P5.
At October 31, 2013, the Company had working capital of $15,055 and has incurred losses of
$7,534,441 since inception. The Company has no regular source of cash flow and has not
produced revenues from its exploration activities. Further funds will be required for the
Company to continue to meet its obligations and participate in the acquisition and exploration of
mineral properties. The success and continuation of the Company as a going concern is
dependent upon the Company’s ability to arrange additional financing, which in part, depends
on prevailing market conditions, acquiring economically viable mineral properties and
exploration success. There can be no assurances that the Company will be able to raise
sufficient financing in the future or at favourable terms. However, management believes that
additional financing will be available to continue its planned activities.
These consolidated financial statements do no include any adjustments which might result from
the outcome of the above noted uncertainties.
2.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (”IFRS”) and International Accounting Standards (“IAS”) issued
by the International Accounting Standards Board (“IASB”) and Interpretations of the
International Financial Reporting Interpretations Committee (“IFRIC”).
3.
Significant accounting policies
(a) Basis of presentation and consolidation
These consolidated financials statements have been prepared on the basis of accounting
principles applicable to a going concern, which assume that the Company will be able to
realize its assets and discharge it’s liabilities in the normal course of operations. However,
due to uncertainties surrounding a number of factors, such as, but not limited to,
exploration results, commodity prices and financial markets, it is not possible to predict if
this assumption will prove to be accurate. These financial statements do not include
adjustments to the amounts and classification of assets and liabilities that might be
necessary should the Company be unable to continue as a going concern.
-6-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
These financial statements are presented in Canadian dollars, which is also the functional
currency of the Company.
These financial statements include the accounts of the Company and its inactive whollyowned subsidiary Roscan Minerals (BVI) Corp. All significant inter-company transactions
and balances have been eliminated upon consolidation.
These financial statements are prepared on the historical cost basis, except that the
following assets and liabilities are stated at their fair value; financial instruments are
classified as fair value through profit and loss and as available for sale.
The Company’s accounting policies are as set out below and have been applied
consistently to all years presented in these consolidated financial statements.
(b) Mineral properties
The Company defers mineral property exploration and evaluation expenditures until such
time a property moves beyond the exploration and evaluation stage, is sold, or is
determined to be impaired. Costs related to pre-exploration and evaluation activities are
expensed as incurred.
The Company records its interest in mineral properties at cost. All direct and indirect costs
relating to the acquisition and exploration of its properties are deferred on the basis of
specific claim blocks or areas of geological interest until the properties in which they relate
are placed into production, sold, or determined to be impaired.
When a mineral property is placed into production, deferred costs would be amortized on
the basis of units produced in relation to the property’s estimated proven and probable
reserves. When a property is sold before that property reaches the production stage, all
revenues from the sale will be credited against the deferred cost of the property. When a
property is sold after the property reaches the production stage, a gain or loss is calculated
based on the portion of that property sold. When a property, specific claim block or area of
geological interest, is disproved, sold, abandoned or determined to be impaired, the
related deferred acquisition and exploration costs are written-off in the consolidated
statement of operations and comprehensive income.
Amounts shown for mineral properties represent costs incurred to date, net of write-downs
and recoveries, and do no necessarily represent present or future values. The recovery of
amounts capitalized for mineral properties is dependent upon the existence of
economically recoverable mineral deposits, the ability of the Company to obtain necessary
financing to complete exploration and/or development of the properties, and upon future
profitable production or proceeds from the disposition of the properties.
The Company regularly reviews the capitalized value of each mineral property to
determine if events or changes in circumstances indicate the capitalized value may not be
recoverable or impaired and, if warranted, a write-down of the capitalized value will be
recorded.
-7-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Ownership in mineral properties involves certain risks due to the difficulties in determining
the validity of certain property claims, as well as potential for problems arising from
frequently ambiguous conveyancing history characteristics on many mineral interests.
(c)
Stock-based compensation
The Company accounts for stock-based compensation using the fair value based method.
Each tranche in an award is considered a separate award with its own vesting period and
grant date fair value. The fair value of each tranche of options issued to employees and
others providing similar services is determined by using the Black-Scholes option pricing
model. The fair value of each tranche of an award granted to non-employees is
determined by the fair value of the goods or services received. If the fair value of goods or
services received cannot be reliably measured, then the Black-Scholes option pricing
model is used.
The Company estimates a forfeiture rate on the grant date and the rate is adjusted to
reflect the actual number of options that actually vest.
The fair value of stock options is recognized as stock-based compensation expense over
each tranche’s vesting period with an offsetting credit charged to contributed surplus. The
applicable contributed surplus is transferred to share capital if and when, the stock options
are exercised. Any consideration paid on the exercise of stock options is credited to share
capital.
(d)
Foreign currency translation
Foreign currency transactions are initially recorded in each entity’s functional currency at
the transaction date exchange rate. Monetary assets and liabilities not denominated in the
functional currency of that entity are translated at the period end rates of exchange.
Foreign currency adjustments are recognized in the consolidated statement of operations
and comprehensive income.
Financial statements of entities for which the functional currency is not the Canadian
dollar, the functional currency of the Company, are translated as follows: assets and
liabilities are translated at the period end rates of exchange; and, earnings, expenses and
cash flows items are translated at the average exchange rates for the period. The
resulting translation gains or losses are recorded as foreign currency translation
adjustments in other comprehensive income.
The parent company has monetary items that are receivable from foreign operations. A
monetary item for which settlement is neither planned nor likely to occur in the foreseeable
future is, in substance, a part of the parent company’s net investment in that foreign
operation. Such exchange differences are recognized initially in other comprehensive
income and reclassified from equity to profit or loss on disposal of the net investment in
foreign operations.
(e)
Share issue costs
Share issue costs are recorded as a reduction of share capital.
-8-
(f)
Warrants
Warrants are valued using the residual method. Under this method proceeds are allocated
to the common shares based on the market closing price of the shares on the date of
issuance. The remaining proceeds are allocated to the fair value of warrants. When this
method is impractical or produces misleading results then the warrants are valued using
the Black-Scholes pricing model.
(g) Provisions
A provision is recognized in the consolidated statement of financial position when the
Company has a present legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to discharge the obligation.
If the effect is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money
and, where appropriate, the risks specific to the liability.
(h) Loss per share
Loss per share is computed by dividing the net loss by the weighted average number of
shares outstanding during the period. Diluted earnings per share is calculated based on
the assumed conversion, exercise or contingent issuance of “in the money” securities only
when such conversion, exercise or issuance would have a dilutive effect on earnings per
share, at the weighted average market price during the period.
(i)
Interest
The Company classifies interest received and interest paid as an operating cash flow
within the consolidated statement of cash flows.
(j)
Financial instruments
Financial assets classified as fair value through profit and loss (“FVTPL”) are measured at
fair value, with any resultant gain or loss recognized in the consolidated statement of
operations and comprehensive income. FVTPL assets consists of cash.
Financial instruments classified as being available-for sale are measured at fair value, with
any resultant gain or loss being recognized directly under other comprehensive income,
except for impairment losses and, in the case of monetary items such as securities
denominated in foreign currency, which are recorded in foreign exchange gains or losses.
When these investments are derecognized, the cumulative gain or loss previously
recognized in equity is recognized in the consolidated statement of operations and
comprehensive income. The Company does not currently have any available-for-sale
assets.
Financial assets classified as loans and receivables are measured at amortized cost using
the effective interest method.
Financial liabilities classified as other financial liabilities are measured at amortized cost
using the effective interest rate method. Other financial liabilities consist of accounts
payable and accrued liabilities.
-9-
Transaction costs associated with FVTPL financial assets are expensed as incurred, while
transaction costs associated with all other financial assets are included in the initial
carrying amount of the asset.
(k)
Income taxes
The Company provides for income taxes using the asset and liability method of tax
allocation. Under this method, future income tax assets and liabilities are determined
based on deductible or taxable temporary differences between the financial statement
values and the corresponding tax values and for the benefit of tax losses that are carried
forward to offset future years’ current taxes payable if they are likely to be realized. Future
tax assets and liabilities are measured using the tax rates expected to apply when the
asset is realized or the liability settled.
The Company establishes a valuation allowance against future income tax assets if, based
upon available information, it is more likely than not that some of or all of the future income
tax assets may not be realized.
(l)
Future changes in accounting standards not yet adopted
Certain new accounting standards and interpretations have been published that are not
mandatory for the October 31, 2013 reporting period. Many are not applicable or do not
have a significant impact to the Company and have been excluded from the table below.
The Company is in the process of assessing the impact of the following accounting
standards on the Company’s financial statements:
(i) IFRS 9 – Financial Instruments
IFRS 9 replaces the current standard, IAS 39 Financial Instruments: Recognition and
Measurement. The new standard replaces the current classification and measurement
criteria for financial assets and liabilities with only two classification categories: amortized
cost and fair value. This standard is effective for annual periods beginning on or after
January 1, 2015.
(ii) IFRS 10 – Consolidated Financial Statements
IFRS 10 establishes principles for the presentation and preparation of consolidated
financial statements when an entity controls one or more other entities. This standard (i)
requires a parent entity (an entity that controls one or more other entities) to present
consolidated financial statements; (ii) defines the principle of control, and establishes
control as the basis for consolidation; (iii) sets out how to apply the principle of control to
identify whether an investor controls an investee and therefore must consolidate the
investee; and (iv) sets out the accounting requirements for the preparation of consolidated
financial statements. IFRS 10 supersedes IAS 27 Consolidated and Separate Financial
Statements and SIC-12 Consolidation–Special Purpose Entities and is effective for annual
periods beginning on or after January 1, 2013, with early application permitted.
(iii) IFRS 11 – Joint Arrangements
IFRS 11 establishes the core principle that a party to a joint arrangement determines the
type of joint arrangement in which it is involved by assessing its rights and obligations and
accounts for those rights and obligations in accordance with that type of joint arrangement.
-10-
This standard is effective for annual periods beginning on or after January 1, 2013, with
early application permitted.
(iv) IFRS 12 – Disclosure of Involvement with Other Entities
IFRS 12 requires the disclosure of information that enables users of financial statements to
evaluate the nature of, and risks associated with, its interest in other entities and the
effects of those interests on it financial position, financial performance and cash flows.
This standard is effective for annual periods beginning on or after January 1, 2013, with
early application permitted.
(v) IFRS 13 – Fair Value Measurement
IFRS 13 defines fair value, set out in a single IFRS framework for measuring fair value and
requires disclosures about fair value measurements. IFRS 13 applies when another IFRS
requires or permits fair value measurements of disclosures about fair value measurements
(and measurements, such as fair value less costs to sell, based on fair value or
disclosures about those measurements), except for: share-based payment transactions
within the scope of IFRS 2 Share-based Payment; leasing transactions within the scope of
IAS 17 Leases; measurements that have some similarities to fair value but that are not fair
value, such as net realizable value in IAS 2 Inventories or value in use in IAS 36
Impairment of Assets. This standard is effective for annual periods beginning on or after
January 1, 2013, with early application permitted.
(vi) IAS 1 (Amendment)
Presentation of Financial Statements ("IAS I") amendment requires an entity to group
items presented in the Statement of Comprehensive Income on the basis of whether they
may be reclassified to earnings subsequent to initial recognitions. For those items
presented before taxes, the amendments to IAS I also require that the taxes related to the
two separate groups be presented separately. The amendments are effective for annual
periods beginning on or after January 1, 2013 with early application permitted.
(vii) IAS 28 - Investments in Associates and Joint Ventures
IAS 28 prescribes the accounting for investments in associates and sets out the
requirements for the application of the equity method when accounting for investments in
associates and joint ventures. IAS 28 applies to all entities that are investors with joint
control of, or significant influence over, an investee (associate or joint venture). This
standard is effective for annual periods beginning on or after January 1, 2013, with early
application permitted.
(viii) IAS 32 - Financial Instruments
Amendments to this standard provide specific guidance for when an entity can offset
financial assets and liabilities by clarifying when a legally enforceable right to do so exists,
and when an entity meets the criteria for the intent to settle on a net basis. This standard
is effective for annual periods beginning on or after January 1, 2014.
-11-
4.
Estimates and judgements
The preparation of financial statements, in conformity with IFRS, requires the Company's
management to make certain estimates and judgements that they consider reasonable and
realistic. These estimates and judgements are based on historical experience, future
expectations, economic conditions and other factors. By their nature, estimates and judgements
are subject to measurement uncertainty and actual results could vary from estimates.
Significant estimates and judgements relate to:
• ability to continue as a going concern; and
• measurement of warrant fair value.
5.
Share capital
(a) Authorized
An unlimited number of common shares
(b) Issued
Common share transactions were as follows:
(i) On December 31, 2012, the Company completed a non-brokered private placement of
3,666,500 units at a price of $0.03 per unit. Each unit consisted of one common share
and one common share purchase warrant. Each warrant entitled the holder to acquire
one additional common share at $0.05. These warrants expired on December 31,
2013.
(ii) On February 26, 2013, the Company completed a non-brokered private placement of
1,800,000 units at a price of $0.05 per unit. Each unit consisted of one common share
and one common share purchase warrant. Each warrant entitles the holder to acquire
one additional common share at $0.10, expiring February 26, 2014.
(c) Stock options
Under the terms of the Company’s stock option plan (“Plan”), the Company is authorized to
issue up to a maximum of 10% of the issued common shares with an exercise period that is
not to exceed ten years. The term, exercise price and vesting conditions of the options are
fixed by the Board of Directors at the time of grant.
All issued stock options were granted in accordance with the terms of the Plan and expire
five years from the date of grant.
-12-
Stock option transactions and the number of stock options outstanding are as follows:
Balance, October 31, 2011 and 2012
Expired
Number
Weighted Average
Exercise Price
800,000
0.15
(550,000)
0.15
250,000
0.15
The following table summarizes information on the outstanding options:
Expiry Date
Number
June 5, 2014
250,000
Exercise
Price
$
0.15
Exercisable
Weighted
Average
Remaining
Contractual
Life (years)
250,000
0.59
(d) Warrant reserve
The following tables summarizes information on the outstanding warrants:
Number
Balance, October 31, 2011 and 2012
2013:
Issued
Expired
1,400,000
Weighted Average
Exercise Price
$
0.15
5,466,500
(1,400,000)
0.07
0.15
5,466,500
0.07
The 1,400,000 warrants that expired in 2013, had a fair value of $40,615, which was
credited to contributed surplus.
Expiry Date
December 31, 2013
February 26, 2014
Weighted
Average
Remaining
Contractual
Life (years)
Number
Exercise
Price
3,666,500
1,800,000
0.05
0.10
0.16
0.32
18,332
27,000
5,466,500
0.07
0.21
45,332
-13-
Fair
Value
The fair value of the warrants granted in 2012 and 2013 were determined using the residual
method.
(e)
Contributed surplus
Balance, beginning of year
Expired warrants (note 5(d))
$ 337,964
$ 337,964
-
$ 378,579
$ 337,964
2013
2012
Corporate and administrative
Legal, audit and accounting (note 7(b))
Management fees (note 7(a))
Office
Premises
Regulatory fees
Shareholder relations and promotion
Transfer agent fees
7.
2012
40,615
Balance, end of year
6.
2013
$ 22,968
36,000
2,654
4,200
8,609
5,374
7,799
$
37,300
36,000
3,064
4,200
10,450
4,533
6,085
$ 87,604
$ 101,632
Related party transactions
The Company had the following related party transactions:
(a) Paid management fees of $36,000 (2012-$36,000) to a company controlled by an associate
of an officer (note 6).
(a) Paid legal costs of $8,449 (2012-$16,215) to a law firm in which a director of the Company
is a partner. These amounts are included in legal, audit and accounting (note 6).
(c) Repaid a $10,000 loan which was originally provided by a Company director in 2012. The
loan was non-interest bearing.
Included in accounts payable and accrued liabilities at October 31, 2013 was $2,732 (2012 $41,256) due to parties noted at (a) and (b) above.
These transactions were conducted in the normal course of operations and were measured at
the exchange amount, which is the amount of consideration established and agreed to by the
related parties.
-14-
8.
Future income tax assets
The Company does not record a provision for the recovery of income taxes due to the
uncertainty regarding their utilization and the difference between net loss for accounting and tax
purposes is insignificant.
The future income tax asset is comprised of and summarized as follows:
2013
Future income tax assets, at an assumed rate of 26.5% (2012 – 26.6%):
Exploration and development costs
$ 991,000
Non capital loss carry-forwards
487,000
Capital loss carry-forwards
142,000
1,620,000
Valuation allowance for future income tax assets
(1,620,000)
Future income tax asset, benefit recognized
$
-
2012
$
$
994,000
462,000
142,000
1,598,000
(1,598,000)
-
At October 31, 2013 the Company has available non-capital losses to reduce future years’
taxable income for Canadian tax purposes of approximately $1,837,000. These losses expire as
follows:
2014
$ 130,000
2015
364,000
2026
173,000
2027
156,000
2028
390,000
2029
198,000
2030
118,000
2031
105,000
2032
115,000
2033
88,000
$ 1,837,000
The Company has $3.8 million of Canadian and foreign exploration and development costs that
can be carried forward indefinitely and used to offset future taxable income. Additionally, the
Company has available $1.0 million of capital losses that can be carried forward indefinitely to
use against future taxable capital gains.
9.
Loss per share
For the purposes of calculating the basic and diluted loss per share the effect of the potentially
dilutive options and warrants were not included in the calculation as the result would be antidilutive.
-15-
10.
Segmented information
The Company operates in one reportable segment, which is the exploration and development of
mineral properties. At October 31, 2013, all assets and all items in the consolidated statement
of operations and comprehensive loss, are located in and relate to operations in Canada.
11.
Capital management
The Company’s objectives when managing capital are to safeguard its ability to continue as a
going concern; and, to have sufficient capital to be able to fund the exploration and development
of its mineral properties and acquisition of other mineral properties, for the benefit of its
shareholders.
As at October 31, 2013 the Company has working capital of $15,055 (2012 - working capital
deficit of $85,121).
The Company considers its capital structure to consist of share and working capital. In order to
maintain its capital structure, the Company is dependent on equity funding and, when
necessary, raises capital through the issuance of equity instruments, primarily comprised of
common shares, warrants and incentive stock options. The Board of Directors does not
establish quantitative return on capital criteria for management, but relies on management to
review its capital management methods and requirements on an ongoing basis and make
adjustments accordingly to sustain future development of the business.
There were no changes in the Company’s management of its capital during the year and is not
subject to any externally imposed capital requirements.
12.
Financial instruments and risk management
Fair value of financial instruments
The carrying value of cash, and accounts payable and accrued liabiities approximates fair value
due to the relatively short-term maturity of these financial instruments. Fair value represents the
amount that would be exchanged in an arms-length transaction between willing parties and is
best evidenced by a quoted market price, if one exists.
IFRS 7 establishes a fair value hierarchy that prioritizes the input to valuation techniques used
to measure fair value as follows:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
As at October 31, 2013 and 2012, cash was the Company's only financial instrument classified
within the fair value hierarchy and was classified as Level 1.
-16-
Risk Management
The primary goals of the company’s financial risk management procedures are to ensure that
the outcome of activities involving elements of risk are consistent with the Company’s objectives
and risk tolerance, while maintaining an appropriate risk/reward balance and protecting the
Company’s financial position, from events that have the potential to materially impair its financial
strength. These activities include the preservation of its capital by minimizing risk to the
Company’s cash.
The Company does not trade financial instruments for speculative purposes. The Company
does not have a risk management committee or written risk management policies.
The company’s financial instruments are exposed to the risks described below:
(i) Credit risk
Credit risk is the risk of financial loss to the Company if the party to the financial instrument fails
to discharge or meet their obligations. Financial instruments that potentially expose the
Company to this risk consist of cash and receivables. The Company’s risk is minimal since its
cash is on deposit with a Canadian chartered bank and its receivables consist of goods and
services tax refunds with the Canadian government.
(ii) Liquidity risk
Liquidity risk management requires maintaining sufficient cash, liquid investments or credit
facilities to meet the Company’s commitments, primarily related to the different phases of
exploration programs, as they come due. The Company manages liquidity risk through the
management of its capital structure as outlined in note 11. The Company has no income from
operations and relies on equity funding to support its exploration and corporate activities. There
can be no assurance that the Company will be successful in its fund raising activities.
Management believes that there are sources of financing available.
As at October 31, 2013, the Company had cash of $33,991 (2012 - $5,364) to settle current
liabilities of $21,782 (2012- $95,183). Though the Company has sufficient cash on had to settle
the obligations at October 31, 2013 further fund raising will be required (note 1).
(iii) Currency risk
The Company’s functional currency is the Canadian dollar. The Company may acquire or
participate in exploration activities that may expose the Company to foreign exchange risk
arising from various currencies. The Company's foreign exchange exposure consisted of a
nominal amount of U.S. denominated cash.
-17-
(iv) Interest rate risk
Excess cash is invested in financial instruments that provide safety and flexibility for early
redemption. In the past, term deposits generally consisted of variable or fixed rate guaranteed
investment certificates (GIC's), provided by a Canadian chartered bank have been utilized. The
Company's cash and term deposits, when applicable, are subject to interest rate cash flow
risk resulting from fluctuations in prime rates and GIC fixed interest rates upon renewal. Due
the absence of excess cash, management considers the interest rate risk on the present cash
position to be immaterial.
Other risks:
• Price risk
The ability of the Company to finance the acquisition, exploration and development of mineral
properties and the future profitability of the Company is strongly related to: the market price of
the primary minerals identified in its mineral properties; market price of the Company’s equities;
and, general commodity and investor sentiment. Mineral and equity prices fluctuate on a daily
basis and are affected by a number of factors beyond the Company’s control. A sustained,
significant decline in either the prices of the identified primary minerals, the Company’s issued
equities or investor sentiment could have a negative impact on the Company’s ability to raise
additional capital. Management monitors the commodity and stock markets to determine the
applicable financing strategy to be taken when needed.
• Political risk
The Company may acquire or participate in mineral exploration properties in foreign countries
that may expose the Company to risks and different considerations not normally associated with
companies or exploration activities in North America. The Company’s ability to retain mineral
properties, raise and deploy capital may be adversely affected by changes in governing
regimes, policies, laws and regulations, all of which are beyond the Company’s control.
-18-
MANAGEMENT’S DISCUSSION AND ANALYSIS
(for the twelve month period ended October 31, 2013)
February 18, 2014
INTRODUCTION
This management’s discussion and analysis (“MD&A”) has been prepared by RosCan Minerals Corporation’s
(“RosCan” or the “Company”) management and provides an analysis of the Company’s financial performance for
the fiscal year ended October 31, 2013, and present a view of the future. The MDA should be read in conjunction
with RosCan’s: audited annual consolidated financial statements and related notes for the year ended October 31,
2013: and audited annual consolidated financial statements and related notes for the year ended October 31, 2012
and related MD&A, dated February 26, 2013. Additional information related to the Company is filed electronically
on the System for Electronic Document Analysis and Retrieval (SEDAR) and is available online at www.sedar.com.
Basis of presentation
RosCan’s audited consolidated financial statements are been prepared in accordance with International Financial
Reporting Standards (“IFRS”). All amounts in the MD&A and in the Company’s consolidated financial statements
are presented in Canadian dollars, unless otherwise noted. These consolidated financial statements include the
accounts of its inactive wholly-owned subsidiary RosCan Minerals (BVI) Corp.
NOTE: in this MD&A, references to years, such as F2013, refer to the fiscal years ending October 31.
CAUTIONARY STATEMENTS
This MD&A contains forward-looking statements relating to, but not limited to, RosCan’s assumptions, estimates,
expectations and statements that describe the Company’s future plans, intentions, beliefs, objectives or goals, that
are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results
to differ materially from those expressed or anticipated by such forward-looking statements. Factors that could
cause such differences, without limiting the generality of the foregoing, include:
 inability to acquire, access or retain properties/projects;
 timing of commencement of exploration activities;
 cost and supply of materials, labour and equipment:
 environmental approvals and regulations;
 adverse exploration and mining conditions;
 unexpected or unsatisfactory geological conditions or exploration results;
 failure or delays in obtaining or retaining necessary permits or approvals;
 changes in government and mining policies and regulations;
 delays in producing or filing technical reports;
 changes in conditions of equity and mineral commodity markets;
 currency and commodity price fluctuations;
 capital requirements and ability to obtain funding; and,
 changes in future business strategies.
The “Risks and Uncertainties” section of this MD&A further describes the factors that could cause results or
events to differ from expectations.
Although we believe that the assumptions, estimates and expectations reflected in our forward-looking statements
are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or
achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. RosCan
disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new
information, future events or other such factors which affect this information, except as required by law.
Management’s Discussion & Analysis
OVERVIEW
RosCan is an exploration stage company involved in the business of acquiring, exploring and developing mineral
properties. Currently, the Company does not have an interest in or hold a right to participate in any mineral
properties or projects. The Company continues to evaluate potential resource opportunities with the expectation
to acquire a project in the near future.
RosCan is currently listed on the NEX board of the TSX Venture Exchange (TSX-V) as a mining issuer, under the
trading symbol ROS.H. On October 5, 2012, RosCan’s listing was transferred to the NEX Board due to its failure
to meet minimum TSX-V Tier 2 listing requirements.
To replenish its working capital, RosCan raised $199,995 through two private placements, one for $109,995,
which closed on December 31, 2012 and the other for $90,000, which closed on February 26, 2013.
SELECTED ANNUAL INFORMATION
Year ended, October 31,
2013
2012
Results of Operations
Revenue
Corporate and administrative expenses
Foreign exchange
Write down of mineral properties
Net loss
Net loss per share - basic and diluted
$
(87,604)
36
(87,568)
(0.003)
2013
Financial Position
Cash
Working capital
Total assets
$
33,991
15,055
36,837
$
(101,632)
7
(101,625)
(0.004)
2011
$
As at October 31,
2012
$
5,364
(85,121)
10,062
703
(99,960)
(6,659)
(467,231)
(573,147)
(0.021)
2011
$
42,140
16,504
46,467
The decrease in the net loss for F2013, as compared to the net loss for F2012, was attributable to lower
corporate and administrative expenses due to a decrease in legal, audit and accounting fees, as a result of reduced
corporate activity and the absence of audit and accounting costs related to the Company’s prior year transition to
IFRS.
The net loss for F2012, compared to the net loss for F2011, decreased significantly due to the absence of mineral
property write downs.
The movement in total assets for F2013 and F2012 revolved around the Company’s cash balances. Total assets
increased in F2013, compared to F2012, as a result of the Company completing two private placements. Total
assets decreased in F2012, compared to F2011, due to the consumption of cash to fund operating expenses.
2
SUMMARY OF QUARTERLY RESULTS
Interest
revenue
Net loss
Net loss
per share
Fiscal 2013
Q4 October 31, 2013
Q3 July 31, 2013
Q2 April 30, 2013
Q1 January 31, 2013
$
-
$
(26,034)
(16,213)
(29,595)
(15,726)
$
(0.001)
(0.000)
(0.001)
(0.000)
Fiscal 2012
Q4 October 31, 2012
Q3 July 31, 2012
Q2 April 30, 2012
Q1 January 31, 2012
-
(37,430)
(17,567)
(29,639)
(16,989)
(0.001)
(0.001)
(0.001)
(0.001)
For F2013, RosCan’s activities were limited and revolved around conserving cash and evaluating potential resource
properties/projects. The primary factor causing significant quarterly variances in the net loss were corporate and
administrative costs, which were affected by: the accrual of F2013 audit costs, which affected legal, audit and
accounting costs in Q4; and, costs related to the Company’s annual shareholder meeting and annual continuous
disclosure fees, which impacted legal, audit and accounting costs, regulatory fees, shareholder relations and
promotion costs and transfer agent fees in Q2.
For F2012, RosCan’s activities were limited and revolved around conserving cash and evaluating potential resource
properties/projects. The primary factor causing significant quarterly variances in the net loss were corporate and
administrative costs, which were affected by: the accrual of F2012 audit costs, which affected legal, audit and
accounting costs in Q4; and, costs related to the Company’s annual shareholder meeting and annual continuous
disclosure fees, which impacted legal, audit and accounting costs, regulatory fees, shareholder relations and
promotion costs and transfer agent fees in Q2.
RESULTS OF OPERATIONS
For further information, please refer to the Consolidated Statements of Operations and Comprehensive Loss and Notes 6
and 7 in RosCan’s audited annual consolidated financial statements for the year ended October 31, 2013.
The net loss for F2013 was $87,568 versus a net loss of $101,625 for F2012, representing a decrease of $14,057.
As corporate activity is limited at this time, the current year net loss primarily consists of corporate and
administrative expenses (F2013 - $87,604 vs F2012 - $101,632).
For the year, corporate and administrative expenses represent basic operating overheads and typical costs
associated with being a public issuer and were primarily impacted by: annual shareholder meeting costs; legal and
audit costs; and, management fees (please refer to the Related Party section for further information). The decrease
in corporate and administrative expenses was primarily due to: lower legal, audit and accounting fees, resulting
from a decrease in legal fees, as corporate activity was reduced and a decrease in audit and accounting fees due to
the absence of costs related to the Company’s prior year transition to IFRS.; and, lower regulatory fees due to a
decrease in filing fees. The effect of the decrease was partially mitigated by higher transfer agent fees, attributable
to share issuance activity and increased annual shareholder meeting costs.
3
LIQUIDITY AND CAPITAL RESOURCES
Cash flows
For F2013, changes in non-cash working capital items were significantly impacted by a reduction in accounts
payable and accrued liabilities, as funds working capital was provided from two private placements. Financing
activities represent: net proceeds of $187,744 attributable to a $109,995 private placement of 3,666,500 units,
closed on December 31, 2012, and a $90,000 private placement of 1,800,000 units, closed on February 26, 2013;
and, the repayment of a $10,000 non-interest bearing loan, originally provided to the Company by a RosCan
director in 2012.
Working capital
As at October 31, 2013, RosCan had cash of $33,991 and a working capital surplus of $15,055.
RosCan does not have sufficient working capital to fund its F2014 corporate activity and will need to obtain
additional financing to fund: its operating expenditures; and, potential resource property/project acquisitions and
related exploration activities. There is a risk that the Company will be unable to raise sufficient funds, thus
jeopardizing the Company’s ability to continue as a going-concern.
The Company’s ability to continue is highly dependent on its working capital and its ability to obtain additional
funds in the capital/equity markets to, finance its activities, meet its obligations and pay its liabilities. It should be
noted that during this period of economic uncertainty and contracted capital/equity markets for junior mineral
exploration companies, the ability for the Company to access these markets for funding remains somewhat
constrained.
Given the nature of the Company’s operations, which consist of exploration, development, evaluation and
acquisition of mineral properties or mining projects, the Company believes that the most meaningful financial
information relates primarily to current liquidity and solvency.
SHARE CAPITAL
For further information on share capital, please refer to Note 5 in RosCan’s audited consolidated financial statements for the
year ended October 31, 2013.
As of the date of this MD&A, RosCan has the following securities outstanding:
Security
Common shares
Options
Warrants
Number
33,766,073
250,000
1,800,000
3,666,500 warrants expired subsequent to F2013.
RELATED PARTY TRANSACTIONS
RosCan and Rustle Woods Capital Inc., a company controlled by an associate of Mr. Mark McMurdie, the Chief
Financial Officer of the Company, entered into a consulting agreement effective January 26, 2005 for the provision
of Mr. McMurdie’s services. The agreement provides for monthly remuneration of $3,000, is automatically
renewed on a monthly basis and continues year to year. The agreement may be terminated by the Company upon
30 days written notice and a lump-sum payment of $3,000. Management fees paid for the services of Mr. McMurdie
for the current quarter were $9,000 (F2012 - $9,000) and for the year were $36,000 (F2012 - $36,000). These
amounts are included in corporate and administrative expenses.
4
Mr. Chris Irwin is a director of RosCan and acts as its President and Chief Executive Officer. Mr. Irwin is a partner
in Irwin Lowy LLP. (“Irwin”), a law firm that acts as the Company’s legal counsel. Legal costs incurred for the
services of Irwin for the current quarter were $2,660 (F2012 - $3,640) and for the year were $19,150 (F2012 $16,215). These amounts are included in corporate and administrative expenses under legal, audit and accounting,
with the exception of $10,700 (F2012 - $nil), which is included in share capital as share issuance costs.
During F2013, RosCan repaid a $10,000 non-interest bearing loan provided in F2012, by Company director, Mr.
Donald Whalen.
Included in accounts payable and accrued liabilities at October 31, 2013 is $2,732 (F2012 – $41,256) payable to Mr.
Irwin’s law firm.
FOURTH QUARTER
Results of operations
The net loss for the fourth quarter of F2013 was $26,034 versus a net loss of $37,430 for the comparable quarter
of F2012, representing a decrease of $11,396. As corporate activity is limited at this time, the current quarter net
loss primarily consists of corporate and administrative expenses (F2013 - $26,041 vs F2012 - $37,436).
For the current quarter, corporate and administrative expenses represent basic operating overheads and typical
costs associated with being a public issuer and were primarily impacted by the accrual of audit costs and
management fees (please refer to the Related Party section for further information). The decrease in corporate
and administrative expenses was primarily due to: lower legal, audit and accounting fees, resulting from a decrease
in legal fees, as corporate activity was reduced and a decrease in audit and accounting fees due to the absence of
costs related to the Company’s prior year transition to IFRS.
Three months ended
October 31
2013
2012
Corporate and administration
Legal, audit and accounting
$
Management fees
13,145
$
24,125
9,000
9,000
676
499
Premises
1,050
1,050
Regulatory fees
1,606
2,105
Shareholder relations and promotions
(160)
-
724
651
Office
Transfer agent fees
$
26,041
$
37,430
Cash flows
Cash flows used in operating activities were $14,523. Cash flows consumed by operations before changes in noncash working capital were $26,034. Changes in non-cash working capital items were significantly impacted by an
increase in accounts payable and accrued liabilities, which resulted from the accrual of the annual audit fee. There
was no investing of financing activities.
FUTURE ACCOUNTING CHANGES
For further information on future accounting changes, please refer to Note 3 of the audited consolidated financial
statements for the F2013. These new standards have been issued and are effective for annual periods beginning on
5
or after January 1, 2013. As of the date of this MD&A, the Company is evaluating the impact of these new
standards on its financial performance, position and financial statement disclosures.
FINANCIAL INSTRUMENTS
Disclosure on RosCan’s financial instruments and related risks may be found in Note 12 of RosCan’s audited consolidated
financial statements for the year ended October 31, 2013.
Fair value
The carrying values of the following financial instruments approximate fair value due to their short-term maturity:
cash; and, accounts payable and accrued liabilities. Management believes the Company is not exposed to any
significant credit or interest risks arising from these financial instruments.
RosCan does not have a risk management committee or written risk management policies. The Company has not
entered into any specialized financial agreements to minimize its credit or market risks. There are no off-balance
sheet arrangements.
Foreign exchange risk
RosCan operates in Canadian and international markets, giving rise to exposure to market risks from changes in
foreign exchange rates. The Company does not use derivatives to mitigate its exposure to foreign currency risk
and is therefore subject to gains or losses from fluctuations in the value of these currencies.
Currently, RosCan’s exposure is limited to its nominal United States dollar holdings.
RISKS AND UNCERTAINTIES
Additional disclosure on RosCan’s other business risks may be found in Note 12 of RosCan’s audited consolidated financial
statements for the year ended October 31, 2013.
RosCan is in the business of exploring for minerals and, if successful, ultimately mining them. The mining sector is
by its nature, cyclical, competitive and risky. Many of these risks are beyond the Company’s control. Investment in
the mining sector, in general, and the exploration sector, in particular, involves a great deal of risk and uncertainty
and the Company’s common shares should be considered as a highly speculative investment. Current and potential
investors should give special consideration to the risk factors involved.
Acquisition risk
RosCan uses its best judgment to acquire mineral properties or projects and, in pursuit of such opportunities, the
Company may fail to select appropriate acquisition candidates or negotiate acceptable agreements, including
agreements to finance the acquisition and development of the mineral properties or projects. The Company
cannot provide assurance that it can complete any acquisition that it pursues, on favourable terms, or that any
acquisition will ultimately benefit the Company.
Competition risk
RosCan must compete with a number of other companies that possess greater financial and technical resources.
Competition in the mining sector could adversely affect the Company’s ability to acquire mineral properties or
projects.
Conflicts of interest
Certain directors and officers of RosCan, in their personal capacities or as directors or officers of other
companies, are engaged or have interests in mineral exploration and development activities outside of the
Company. Accordingly, exploration opportunities or prospects which they become aware of may not necessarily
be made available to the Company.
6
Dependence on management
RosCan is very dependent upon the efforts and commitment of its directors and management to the extent that if
the services of the directors or management were to not be available or they fail to perform their obligations a
disruption in the Company’s operations may occur.
Environmental risk
The exploration and development activities conducted on RosCan’s mineral properties are subject to the
environmental laws and regulations of the country in which the activities take place. Environmental legislation is
evolving in a manner which will require stricter standards and enforcement, increased fines and penalties, more
stringent environmental assessments and a heightened degree of responsibility for companies and their officers,
directors and employees. Although the Company undertakes to comply with current environmental laws and
regulations, there is no assurance that future changes in environmental laws or regulations will not adversely affect
the Company’s operations.
Exploration risk
There is no assurance that the activities of RosCan will result in economic deposits being discovered and, in fact,
most companies are unsuccessful due to the low probability of discovering an economic deposit. Once
mineralization is discovered, it may take several years until production is possible during which time the economics
of a project may change. Substantial expenditures are required to establish reserves through drilling. RosCan’s
ability to establish a profitable mining operation is subject to a host of variables, such as technical and economic
factors and regulatory issues. Exploration activities involve risks which, even a combination of experience,
knowledge and prudence, may not be able to overcome. Exploration activities are subject to hazards which could
result in injury or death, property damage, adverse environmental conditions and legal liability.
Financing and liquidity risk
RosCan does not have any production revenue or a regular source of cash flow to fund its operating activities.
The Company’s ability to finance acquisitions, exploration, development and operating activities is highly dependent
upon its existing working capital and its ability to obtain additional capital in the financial markets. RosCan will
require significant capital to finance its overall objectives and there can be no assurance that the Company will be
able to raise the capital required and continue as a going concern. In addition, RosCan’s financial success is
dependent on the extent in which it can discover mineralization in economic quantities and the economic viability
of developing its properties.
Property title risk
Although RosCan takes reasonable measures to ensure proper title to its properties, there is no guarantee that
title to any of its properties will not be challenged, impugned or renounced.
7

ROSCAN MINERALS CORPORATION 365 Bay Street, Suite 400

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