FANCAMP EXPLORATION LTD.

 

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

GENERAL

 

 

 

The following discussion of performance, financial condition and future prospects should be read in

 

conjunction with the financial statements of the Company and notes thereto for the years ended April 30,

 

2018 and 2017. The Company’s reporting currency is Canadian dollars. The date of this Management

 

Discussion and Analysis is August 28, 2018. Additional information on the Company is available on

 

 

SEDAR at www.sedar.com and the Company’s web site at www.fancampexplorationltd.ca.

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

 

 

This report may contain, without limitation, statements concerning possible or assumed future operations,

 

performance or results preceded by, followed by or that include words such as “believes”, “expects”,

 

“potential”, “anticipates”, “estimates”, “intends”, “plans”, and words of similar connotation, which would

 

constitute forward-looking statements. Forward-looking statements are not guarantees. The reader

 

should not place undue reliance on forward-looking statements and information because they involve risks

 

and uncertainties that may cause actual operations, performance or results to be materially different from

 

those indicated in these forward-looking statements. The Company is under no obligation to update any

 

forward-looking statements contained herein should material facts change due to new information, future

 

events or other factors. These cautionary statements expressly qualify all forward-looking statements in

 

this MD&A.

 

 

THE COMPANY

 

 

 

Fancamp Exploration Ltd. is a Canadian junior mineral exploration company focused on adding value

 

through prospecting, geophysics and drilling on its exceptional inventory of resource properties in Quebec,

 

New Brunswick and Ontario. The commodities include gold, base metals, chromium, titanium, iron and

 

silica.

 

The Company is a reporting issuer in British Columbia, Alberta, Ontario and Quebec and its common

 

shares are listed for trading on the TSX Venture Exchange under the symbol FNC.

 

 

Key Company Highlights

 

 

 

 Following the recent federal funding grant of $3.9 M, consortium member, COREM, has

 

 

 

 

committed to providing substantial in-kind contribution, including demonstration plant hosting.

 

Magpie has also secured a $600,000 grant from the Ministere de l’Energie et des Ressources

 

 

 

naturelles (MERN). The building is ready for the pilot testing to commence. The Magpie Mines

 

 

 

Inc., controlled by Fancamp, is an essential unit of the company with the potential to produce

 

dividends.

 

 

 Recent Ontario government decision to build road access to the Ring of Fire District in Northern

 

 

 

 

Ontario with aboriginal approval, a significant step in the eventual exploitation of the 50% owned

 

(50% KWG Resources Inc. and its partners Bold Ventures Inc.) high grade Black Horse chromite

 

deposit.

 

 

 

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 The Company holds important positions in the Fermont iron ore sector, particularly royalty and

 

 

 

equity interests in Champion Iron Limited, together with its 100% owned Lamelee South property.

 

 

 Recent acquisitions, through staking, a number of high grade silica deposits in southern Quebec

 

 

 

of current interest to a number of major operators.

 

 

 Current grassroots exploration activities and staking in New Brunswick (Cu and VMS), Gaspé (Zn)

 

 

 

and Abitibi (Au).

 

 

The Magpie Mines Inc.

 

 

 

 

The Company, a subsidiary of Fancamp Exploration Ltd., has been awarded $3.9 million in funding from

 

the Sustainable Development Technology Canada (SDTC) and $600,000 in funding from MERN, part of

 

the process of financing a pilot plant necessary for the commercialization of its proprietary Magpie

 

 

Process, a low cost and low emission method of separating high purity TiO2 from titaniferous iron ores.

 

 

 

The project entails designing, procuring, and operating a demonstration plant based on the Magpie

 

Process and will be located in Quebec City. Magpie has formed a consortium that will provide necessary

 

support in the project development. Consortium members include (i) Impact Global Solutions (IGS) to

 

support in managing technology development to commercialization, (ii) COREM to support in designing,

 

building, and operating the demo plant, and (iii) two Quebec-based mining companies, Mine Arnaud and

 

Arianne Phosphate, for technical support and to provide feeds in the form of tailings, ilmenite concentrate,

 

and/or slags for demo testing. The interest of a number of industrial users is considerable and of course

 

essential to the ultimate success of such a plant.

 

 

SIGNIFICANT MARKETABLE SECURITIES

 

 

Argex Titanium Inc.

 

 

 

 

The Company currently holds 1,110,000 shares of Argex Titanium Inc. (“Argex”). The Company also holds

 

a 2% NSR, rising to 4% two years after production, on Argex’s Lac La Blache property, with an advance

 

royalty of $100,000 to be paid annually, and currently in arrears.

 

See Note 4 “Marketable Securities” and Note 7 “Exploration and Evaluation Assets” attached to the financial

 

statements for the years ended April 30, 2018 and 2017.

 

 

Champion Iron Ltd.

 

 

 

 

The Company currently holds 7,768,333 shares of Champion Iron Ltd. and a 1.5% non-recourse NSR on its

 

Fermont Iron Holdings. Subsequent to year end, the Company sold 2,500,000 shares at $1.12 per share.

 

See Note 4 “Marketable Securities” and Note 7 “Exploration and Evaluation Assets” attached to the financial

 

statements for the years ended April 30, 2018 and 2017.

 

 

KWG Resources Inc.

 

 

 

 

The Company currently holds 4,564,000 shares of KWG Resources Ltd (“KWG”).

 

See Note 4 “Marketable Securities” and Note 7 “Exploration and Evaluation Assets” attached to the financial

 

statements for the years ended April 30, 2018 and 2017.

 

 

St-Georges Platinum and Base Metals Ltd.

 

 

 

 

The Company currently holds 450,000 shares of St-Georges Platinum and Base Metals Ltd.

 

See Note 4 “Marketable Securities” and Note 7 “Exploration and Evaluation Assets” attached to the financial

 

statements for the years ended April 30, 2018 and 2017.

 

 

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HPQ Silicon Resources Inc. (formerly Uragold Bay Resources Ltd.).

 

 

 

 

The Company currently holds 8 million warrants. Uragold Bay Resources Ltd. has changed its name to

 

HPQ Silicon Resources Inc. on a 1:1 basis, a recognition of its ownership of a proprietary fusion method of

 

recovering silicium metal from quartz at significant cost savings.

 

See Note 4 “Marketable Securities” and Note 7 “Exploration and Evaluation Assets” attached to the financial

 

statements for the years ended April 30, 2018 and 2017.

 

 

SIGNIFICANT MINERAL PROPERTIES

 

 

Baude Lake, Quebec

 

 

 

 

Recent prospecting on this 100% owned property revealed significant rare earth elements in an allanite rich

 

pegmatite/coarse grained red granite. Grab samples have returned up to a total of 9.53% light rare earth

 

oxides with associated Yttrium oxide values of 0.25%. Mapping and prospecting are ongoing.

 

 

Becaguimec Lake, New Brunswick

 

 

 

 

An airborne MAG-TDEM survey has just been completed on this magmatic sulphide-VMS property, targets

 

will be prospected.

 

 

Brunswick North, New Brunswick

 

 

 

 

The Company recently entered into an option agreement to acquire a 100% interest in a 969.4-hectare

 

property located southwest of Bathurst. Recent discoveries on this property indicate potential for gold as

 

well as VMS mineralization with assays from float samples ranging up to 7.69 g/t Au and high grade massive

 

sulphide boulders grading up to 3.8 g/t Au, 158 g/t Ag, 17.3% Pb and 8.5% Zn. The Company has a $20,000

 

New Brunswick government exploration grant and prospecting and IP survey presently underway. (See news

 

release of February 20, 2018 for further information.)

 

 

Clinton Property, Quebec

 

 

 

 

The Company has earned a 100% interest in 117 claim units of this prospective gold, copper and zinc

 

property, located some 65 km ESE of Stoke. The Company currently holds a total of 63 claim units. Three

 

holes were drilled on the V zone that intercepted five mineralized zones.

 

Various option possibilities are being explored.

 

See Note 7 “Exploration and Evaluation Assets” attached to the financial statements for the years ended April

 

30, 2018 and 2017.

 

 

Cunningham Property, Quebec

 

 

 

 

In July 2018, the Company entered into an agreement to acquire a 100% interest in 20 claim units in the

 

Dryden area of northwestern Ontario. The area is in a Cu/Zn environment with numerous showings

 

associated with acid volcanics. The Company is considering option possibilities. (See news release of July

 

11, 2018 for further information.)

 

 

Dorothy Property, Ontario

 

 

 

 

In July 2018, the Company entered into an agreement to acquire a 100% interest in 70 claim units in the

 

Dryden area of northwestern Ontario. These claims cover a series of anomalous gold, silver and copper

 

lake bottom geochemical anomalies. The Company is considering option possibilities. (See news release of

 

July 11, 2018 for further information.)

 

 

Gaspé Bay Group (incl. Robidoux and Ste. Marguerite) Properties, Quebec

 

 

 

 

Extensive epizonal gold bearing quartz vein systems are to be found along the Grand Pabos Fault system

 

and its associated structures in western Gaspé. The Company owns a number of large properties

 

covering this system, the easternmost referred to as Robidoux and the western sector covered by the Ste.

 

Marguerite property. The former was the site of a 600 tonne bulk sample results from which have been

 

 

- 4 -

 

 

reported and a further 350 tonne sample was extracted in late 2015 and awaits processing. The Ste.

 

Marguerite property is the site of a large number of gold showings associated with quartz veins and Grand

 

Pabos related shear zones. Some of these showings can be traced along strike for up to 1500 metres.

 

Bedrock is deeply weathered, and gold placers have been identified in creeks crossing these structures,

 

indicating the presence of free gold. Currently, treatment options are being considered for the smaller bulk

 

sample.

 

 

Lamelee Property, Quebec

 

 

 

 

The Lamelee Iron Ore Deposit has been returned to Fancamp 100%, and the 43 million shares issued for

 

the purchase returned to the Lamelee Iron Ore Ltd. treasury. This important asset is well positioned to be

 

development ready pending recovery of iron world markets. On August 3, 2017, the Company filed a NI

 

43-101 technical report outlining an Indicated Resource of 74.7 million tonnes grading 31.6% T-Fe (total

 

iron) and an Inferred Resource of 229.2 million tonnes grading 30.4% T-Fe, using a conservative cut-off

 

grade of 15% T-Fe. (See news release dated August 3, 2017 for further information.)

 

See Note 7 “Exploration and Evaluation Assets” attached to the financial statements for the years ended April

 

30, 2018 and 2017.

 

 

Mallard Heenan Properties, Ontario

 

 

 

 

The Company has recently entered into agreements to acquire 25 gold and VMS claim units in the Swayze

 

greenstone belt, southwest of Timmins. Recent geophysical surveys covering parts of this property have

 

revealed multiple untested targets. A VTEM Time Domain EM and Magnetic survey over strategic parts of

 

the property has been completed. The Company is considering option possibilities. (See news releases of

 

January 17, 2018 and February 20, 2018 for further information.)

 

See Note 7 “Exploration and Evaluation Assets” attached to the financial statements for the years ended April

 

30, 2018 and 2017.

 

 

McFaulds Fancamp Property (Koper Lake), Ontario

 

 

 

 

KWG/Bold have now earned their 50% interest in the Black Horse Chromite deposit in the Ring of Fire.

 

The possibilities for the eventual development of a world class ferrochrome industry could be significant.

 

See Note 7 “Exploration and Evaluation Assets” attached to the financial statements for the years ended April

 

30, 2018 and 2017.

 

 

Stoke Mountain Property, Quebec

 

 

 

 

The Company has earned a 100% interest in 44 claim units of this prospective gold, copper and zinc

 

property, located some 56 miles southwest of the Company’s Beauce gold property. The property totals 150

 

claim units. Previous drilling intersected 7.29% Cu/6.40m some 135 metres down plunge of the Phelps

 

Dodge intersection, 56 metres below surface, of 6.34% Cu/5.10m. Downhole IP and a surface gravimetric

 

survey have defined further targets associated with this copper zone, which remain to be drill tested. This

 

gravity modelling also indicated the presence of a similar and as yet untested target some 900m long, 700m

 

to the northwest of the known copper zone. In addition, IP surveys and soil geochemical surveys conducted

 

in the fall 2013 have also outlined a previously unknown anomalous gold target which also remains to be drill

 

tested.

 

The Company is currently working on option possibilities.

 

See Note 7 “Exploration and Evaluation Assets” attached to the financial statements for the years ended April

 

30, 2018 and 2017.

 

 

Other Properties

 

 

 

 

See Note 7 “Exploration and Evaluation Assets” attached to the financial statements for the years ended

 

April 30, 2018 and 2017 for further information on the Company’s other mineral property holdings.

 

 

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SELECTED ANNUAL INFORMATION

 

 

 

2018 2017 2016

 

Revenue - 100,000 100,000

 

Operating expenses 2,136,742 782,856 828,851

 

Net Loss (2,186,795) (1,654,887) (4,334,706)

 

Net Loss Per Share - Basic and Diluted (0.01) (0.01) (0.03)

 

Working Capital 12,074,401 1,581,055 2,908,217

 

Total Assets 26,639,691 25,775,622 20,739,452

 

Exploration and Evaluation Assets 12,930,389 12,725,968 14,022,963

 

Total liabilities 4,163,040 3,486,037 3,114,826

 

Years Ended April 30

 

 

RESULTS OF OPERATIONS

 

 

 

The Company reported a net loss of $2,186,795 for the year ended April 30, 2018, compared to a net loss

 

of $1,654,888 for April 30, 2017. The net losses in 2018 and 2017 were offset by the gains recorded on

 

the disposal of marketable securities (2018 - $494,426, 2017 - $458,870). Overall operating expenses are

 

higher in 2018 due to the recording of stock-based compensation on options granted to directors and

 

officers and incurring a tax liability from re-assessments for years 2011, 2012 and 2013.

 

A former director and officer of the Company has filed a lawsuit claiming damages for wrongful dismissal

 

and defamation against the Company and Peter H. Smith. The Company believes these accusations to be

 

baseless and is confident that it will not be found liable. $37,334 in legal fees have been incurred to date.

 

 

Year Ended Year Ended

 

April 30, 2018 April 30, 2017

 

 

Revenue

 

 

 

Mineral Properties Royalties $ - $ 100,000

 

- 100,000

 

 

Expenses

 

 

 

Accounting and Audit 160,900 169,555

 

Bad Debt Expense (Note 5) 200,000 -

 

Commissions 1,906 1,858

 

Directors Fees (Note 9) 84,000 84,000

 

Field Administration 118,380 113,095

 

Insurance 40,870 43,164

 

Interest Expenses and Bank Charges 1,173 1,523

 

Legal Fees 37,334 50,509

 

Management and Consulting 139,588 178,420

 

Mineral Property Sundry Expenses 18,110 11,545

 

Office Rent, Supplies and Services 96,443 99,319

 

Share Transfer, Listing and Filing Fees 30,932 21,745

 

Stock Based Compensation (Note 8) 1,060,399 -

 

ITC and Penalties 137,746 -

 

Travel and Accomodations 8,961 8,123

 

 

Total Expenses 2,136,742 782,856

 

 

 

 

(2,136,742) (682,856)

 

 

 

(391,856) (2,285,871)

 

Impairment on Marketable securities (221,103) -

 

494,426 458,870

 

 

Net (Loss) Before Taxes (2,255,275) (2,509,857)

 

 

 

68,480 854,970

 

 

(2,186,795) (1,654,887)

 

 

 

1,126,462 6,176,126

 

- -

 

 

(1,060,333) 4,521,239

 

 

 

(2,182,151) (1,648,876)

 

(4,644) (6,011)

 

 

$ (2,186,795) $ (1,654,887)

 

 

 

Impairment of Exploration and Evaluation Assets (Note 7)

 

 

Net (Loss) Before the Following:

 

Net Loss Attributable to:

 

 

 

Net Gain on Available For Sale Financial Assets

 

Income Tax Effect

 

Deferred Tax Recovery (Note 12)

 

 

Net (Loss) for the Year

 

 

 

Gain from Disposal of Marketable Securities (Note 4)

 

Equity Shareholders of the Parent

 

Non-controlling Interests

 

 

Comprehensive (Loss) Income for the Year

 

 

 

- 6 -

 

 

SUMMARY OF QUARTERLY RESULTS

 

 

 

Selected financial information for the quarter ended April 30, 2018 and the preceding 7 quarters:

 

 

IFRS IFRS IFRS IFRS

 

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

 

July 31, 2017 October 31, 2017 January 31, 2018 April 30, 2017

 

Three Months Ended

 

 

 

Mineral Property Royalty Revenue $0 $100,000 $0 $0

 

Net Loss $(31,603) $23,674 $(1,512,539) $(734,807)

 

Loss per Share $0.00 $0.00 $0.00 $(0.01)

 

Fully Diluted Loss Per Share $0.00 $0.00 $0.00 $(0.01)

 

 

IFRS IFRS IFRS IFRS

 

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

 

July 31, 2016 October 31, 2016 January 31, 2017 April 30, 2017

 

Three Months Ended

 

 

 

Mineral Property Royalty Revenue $0 $100,000 $0 $0

 

Net Loss $(67,687) $19,094 $(113,189) $(1,493,105)

 

Loss per Share $0.00 $0.00 $0.00 $(0.01)

 

Fully Diluted Loss Per Share $0.00 $0.00 $0.00 $(0.01)

 

 

FINANCING

 

 

 

In June 2016, the Company issued 2,892,393 common shares, at a deemed price of $0.05 per share, to

 

settle a total of $144,620 of debt owed to certain insiders of the Company.

 

On January 12, 2018 the Company issued a total of 50,000 common shares at a price of $0.10 per

 

common shares, for the exercise of stock options.

 

On January 30, 2018 the Company issued a total of 1,000,000 common shares at a deemed price of

 

$0.14 per share, pursuant to the option agreement to acquire a 100% interest in the Mallard Heenan

 

property.

 

In February 2018 the Company entered into a short-term loan agreement to borrow $150,000.00 for a

 

period of 108 days, with an interest rate of $13.525%.

 

In February 2018 the Company issued 100,000 common shares at a deemed price of $ 0.12 per

 

shares, pursuant to an option agreement to acquire a 100% interest in additional claims to the Mallard

 

Heenan property.

 

In February 2018 the Company issued 250,000 common shares at a deemed price of $0.12 per share

 

pursuant to a purchase agreement to acquire the Brunswick North property.

 

In July 2018 the Company issued 250,000 common shares at a deemed price of $0.085 per share

 

pursuant to a purchase agreement to acquire the Dorothy property.

 

In July 2018 the Company issued 100,000 common shares at a deemed price of $0.085 per share

 

pursuant to a purchase agreement to acquire the Cunningham property.

 

See Note 8 – “Share Capital” attached to the financial statements for the years ended April 30, 2018 and

 

2017 for further information on the Company’s financing activities.

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

 

 

The Company is an exploration stage company in the business of mineral exploration. It is in the

 

process of exploring its mineral properties interests and has not yet determined whether these properties

 

contain ore reserves that are economically recoverable. With no producing properties, the Company has

 

 

- 7 -

 

 

no current operating income or cash flow. All of the Company’s short and medium-term operating and

 

exploration cash flow is derived through external financing, joint venture option and royalty payments.

 

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient capital to meet

 

liabilities when due after taking into account the Company’s holdings of cash that might be raised from

 

equity financings. As at April 30, 2018, the Company had a cash balance of $50,012 (2017 - $44,834),

 

marketable securities of $12,976,530 (2017-$1,742,648), sales taxes refundable of $40,268 (2017 –

 

$29,221), accrued mining duty receivable of $111,714 (2017 - $132,526), accrued exploration tax credits

 

receivable of $158,346 (2017 - $133,869), accounts payable and accrued liabilities of $555,985 (2017 -

 

$371,410), and due to directors of $597,130 (2017 - $369,840). All of the Company’s accounts payable

 

and accrued liabilities have contractual maturities of less than 60 days and are subject to normal trade

 

terms. The Company believes that these sources will be sufficient to cover the expected short and longterm

 

cash requirements.

 

The Company had working capital of $12,074,401 as at April 30, 2018 (2017 working capital- $1,581,055).

 

 

TRANSACTIONS WITH RELATED PARTIES

 

 

 

See Note 9 – “Related Party Transactions and Balances” attached to the financial statements for the years

 

ended April 30, 2018 and 2017.

 

 

OFF BALANCE SHEET ARRANGEMENTS

 

 

 

The Company has no off-balance sheet arrangements.

 

 

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE

 

 

 

Additional disclosure concerning the Company’s general and administrative expenses and exploration and

 

evaluation expenses is provided in the Company’s Statements of Operations and Comprehensive Loss

 

and Equity sections in its financial statements for the years ended April 30, 2018 and 2017.

 

 

DISCLOSURE OF OUTSTANDING SHARE DATA

 

 

 

Fancamp Exploration Ltd. is listed on the TSX Venture Exchange under the symbol “FNC”.

 

The Company is authorized to issue an unlimited number of common shares and on August 28, 2018

 

there were 153,551,629 common shares issued and outstanding.

 

As at April 30, 2018, the Company has 153,201,629 common shares outstanding and 15,125,000 stock

 

options outstanding.

 

See Note 8 – “Share Capital” attached to the financial statements for the years ended April 30, 2018 and

 

2017.

 

 

RISKS AND UNCERTAINTIES

 

 

 

Fancamp is an exploration stage enterprise in the business of mineral exploration. It is in the process of

 

exploring its mineral properties interests and has not yet determined whether these properties contain ore

 

reserves that are economically recoverable.

 

The Company emphasizes that attention should be drawn to matters and conditions that indicate the

 

existence of a material uncertainty that may cast significant doubt about the Company's ability to continue

 

as a going concern. Other uncertainties include the fact that the Company is currently at the exploration

 

stage for its interests in mineral properties, the economic viability of which have not been assessed. The

 

Company has not yet determined whether these properties contain reserves that are economically

 

recoverable. The recoverability of the amounts shown for resources properties is dependent upon the

 

existence of economically recoverable reserves, securing and maintaining title and beneficial interest in

 

the property, and upon future profitable production or proceeds from disposition of the mineral properties.

 

The Company’s ability to maintain its existence is dependent upon the continuing support of its creditors

 

and its success in obtaining new equity financing for its ongoing operations. Financing options available to

 

the Company include public equity financings, sales of marketable securities, loans and tax credit refunds.

 

 

- 8 -

 

 

Realization values may be substantially different from carrying values, as shown in these financial

 

statements, should the Company be unable to continue as a going concern. These financial statements

 

have been prepared under the assumptions of a going-concern, which assumes that the Company will be

 

able to realize its assets and discharge its liabilities in the normal course of business.

 

 

ENVIRONMENTAL CONTINGENCY

 

 

 

The Company’s exploration and development activities are subject to various government laws and

 

regulations relating to the protection of the environment. These environmental regulations are continually

 

changing and generally becoming more restrictive. At April 30, 2018, the Company does not believe that

 

there are any significant environmental obligations requiring expenditures in the foreseeable future.

 

 

CHANGES IN ACCOUNTING POLICIES AND NEW ACCOUNTING DEVELOPMENTS

 

 

 

Standards issued but not yet effective up to the date of issuance of the Company’s financial statements

 

are listed below. This listing is of standards and interpretations issued, which the Company reasonably

 

expects to be applicable at a future date. The Company intends to adopt those standards when they

 

become effective. The Company does not expect the impact of such changes on the financial

 

statements to be material.

 

IFRS 9 Financial Instruments: Classification and Measurement

 

IFRS 15 Revenue from Contracts with Customers

 

IFRS 16 Leases

 

 

Basis of Measurement

 

 

 

The financial statements have been prepared on the historical cost basis except for certain financial

 

instruments which are measured at fair value.

 

 

Functional and Presentation Currency

 

 

 

The financial statements are presented in Canadian dollars, which is the Company’s functional currency.

 

 

Significant Accounting Judgments and Estimates

 

 

 

The preparation of consolidated financial statements in conformity with IFRS requires management to

 

make judgment, estimates and assumptions that affect the reported amount of assets and liabilities and

 

disclosure of commitments and contingencies at the date of the consolidated financial statements and the

 

reported amount of expenses during the period. The estimates and associated assumptions are based on

 

historical experience and various other factors that are believed to be reasonable under the

 

circumstances, the results of which form the basis of making the judgments about carrying values of

 

assets and liabilities that are not readily apparent from other sources. Actual results may differ from

 

these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

 

estimates are recognized in the period of the revision and in any future periods affected. The areas

 

involving a higher degree of judgment or complexity, or areas where assumptions and estimates are

 

significant to the consolidated financial statements are as follows:

 

Critical Accounting Judgments

 

 

• Going Concern

 

• Exploration and Evaluation Expenditures

 

• Title to Mineral Property Interests

 

• Asset Acquisition

 

• Impairment of Available-for-Sale Financial Assets

 

 

 

Critical Estimates

 

 

• Impairment of Long-lived Assets

 

• Purchase Price Allocation

 

• Current and Deferred Taxes

 

 

 

- 9 -

 

 

For more details of significant accounting judgements and estimates, see Note 2 “Basis of presentation”

 

attached to the financial statements for the years ended April 30, 2018 and 2017.

 

 

CONTROLS AND PROCEDURES

 

 

 

The Chief Executive Officer and the Chief Financial Officer of the Company are responsible for designing

 

a system of internal controls over financial reporting, or causing them to be designed under their

 

supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the

 

preparation of financial statements for external reporting purposes in accordance with Canadian generally

 

accepted accounting principles. We have designed and implemented a system of internal controls over

 

financial reporting which we believe is effective for a company of our size. During the review of the design

 

of the Company’s control system over financial reporting it was noted that due to the limited number of

 

staff, there is an inherent weakness in the system of internal controls due to our inability to achieve

 

appropriate segregation of duties. The limited number of staff may also result in identifying weaknesses

 

with respect to accounting for complex and non-routine transactions due to a lack of technical resources,

 

and a lack of controls governing our computer systems and applications within the Company. While

 

management of the Company has put in place certain procedures to mitigate the risk of a material

 

misstatement in the Company’s financial reporting, it is not possible to provide absolute assurance that

 

this risk can be eliminated.

 

 

INVESTOR RELATIONS

 

 

 

The Company does not have any investor relation contracts.

 

 

BOARD OF DIRECTORS

 

 

 

At the Company’s annual meeting held on October 27, 2017, Peter H. Smith, Debra Chapman, Fouad

 

Kamaleddine, Mel De Quadros, Paul Ankcorn, Ashwath Mehra and Mark Billings were elected to serve as

 

directors for the forthcoming year.

 

 

ADVISORY BOARD

 

 

 

The Company has an Advisory Board which includes John Harvey P.Eng., Mackenzie Watson P.Eng., Ali

 

Al Hazeem and Michael Sayer.

 

 

For further information see the Company’s website: www.fancampexplorationltd.ca