KORE MINING LTD. KORE MINING LTD.
ANNUAL INFORMATION FORM
For the Financial Year Ended December 31, 2021
April 27, 2022
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ........................................... 1
CORPORATE STRUCTURE ............................................................................................................................ 5
Name, Address and Incorporation ...................................................................................................................... 5
Intercorporate Relationships ............................................................................................................................... 6
GENERAL DEVELOPMENT OF THE BUSINESS ........................................................................................ 7
Overview ............................................................................................................................................................ 7
Three Year History of the Company .................................................................................................................. 7
DESCRIPTION OF THE BUSINESS ............................................................................................................. 10
Summary .......................................................................................................................................................... 10
Principal Products ............................................................................................................................................. 10
Specialized Skills and Knowledge ................................................................................................................... 10
Competitive Conditions .................................................................................................................................... 10
Business Cycles ................................................................................................................................................ 10
Environmental Protection ................................................................................................................................. 10
Employees ........................................................................................................................................................ 11
Economic Dependence ..................................................................................................................................... 11
RISK FACTORS .............................................................................................................................................. 12
MINERAL PROJECT DISCLOSURE ............................................................................................................. 18
Imperial Gold Project ....................................................................................................................................... 18
Long Valley Gold Project ................................................................................................................................. 36
DIVIDENDS .................................................................................................................................................... 66
DESCRIPTION OF CAPITAL STRUCTURE ................................................................................................ 66
MARKET FOR SECURITIES ......................................................................................................................... 66
Trading Price and Volume ................................................................................................................................ 66
Prior Sales ......................................................................................................................................................... 67
DIRECTORS AND OFFICERS ....................................................................................................................... 67
Name, Occupation and Security Holdings ........................................................................................................ 67
Director and Executive Officer Biographies .................................................................................................... 69
Cease Trade Orders, Bankruptcies, Penalties or Sanctions .............................................................................. 70
Conflicts of Interest .......................................................................................................................................... 71
AUDIT COMMITTEE ..................................................................................................................................... 72
LEGAL PROCEEDINGS AND REGULATORY ACTIONS ......................................................................... 73
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ............................... 73
TRANSFER AGENT AND REGISTRAR ...................................................................................................... 73
MATERIAL CONTRACTS ............................................................................................................................. 73
INTERESTS OF EXPERTS ............................................................................................................................. 74
ADDITIONAL INFORMATION .................................................................................................................... 74
SCHEDULE "A" - AUDIT COMMITTEE CHARTER ............................................................................... A-1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual information form ("AIF") of KORE Mining Ltd. ("KORE" or the "Company") contains forward-looking statements relating to the future operations of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects", "intends", "indicates" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the future plans and objectives of the Company are forward-looking statements. Forward-looking statements in this AIF include, but are not limited to, the strategy, timing and implementation of permit regional exploration drilling in the 28-kilometer Mesquite-Imperial-Picacho District ("Regional Exploration Drilling") and permit drilling to advance the existing Imperial gold deposit ("Imperial Zone") toward feasibility and mine permitting at the Imperial Project; the timing of submitting Environmental Assessment report(s) for one or more areas of the Imperial Project; potential actions, behavior or position of the BLM; the underexplored and prospective nature of the Imperial Regional Exploration Drilling area; the timing, implementation and results of exploration drilling for the Long Valley Project; the opportunities of expansion at the Long Valley Project; the ability to work cooperatively with stakeholders, including all levels of government; the mitigation of the planned drilling program's impacts on cultural and biological factors being minimal; statements with respect to: the results of the PEAs (as defined below), next steps and timing regarding follow-up programs at the Imperial and Long Valley Projects (as defined below), financings and the intended use of proceeds resulting therefrom, results and developments in the Company's operations in future periods, planned exploration activities, the adequacy of the Company's financial resources, future operating and capital costs, closure costs, the projected NPV (as defined below), IRR (as defined below), timelines, permit timelines, and the ability to obtain the requisite permits, economics and associated returns of the Imperial and Long Valley Project, the technical viability of the Imperial and Long Valley Projects, the market and future price of and demand for gold, the environmental impact of the Imperial and Long Valley Projects, the ongoing ability to work cooperatively with stakeholders, including the local levels of government and other events or conditions that may occur in the future. Such forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business. Management believes that these assumptions are reasonable. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information.
Such factors include, among others: the outcome of the Bureau of Land Management ("BLM")'s review processes for permitting, including the final outcome(s) of BLM's mineral claim validity examination(s) and administrative review process(es) with respect to the Imperial Zone, including a change to the findings from the mineral claim validity examination conducted in 2002 for the mill sites at the Imperial Zone, resulting in the Company having to move its future Imperial Zone project support facilities to areas that are not within the Indian Pass mineral withdrawal area; the possibility that BLM may require and/or conduct further mineral claim validity examinations with respect to the Imperial project, and the outcome and final determination of such examination could, among other things, invalidate one or more mining claims; the possibility that BLM or other governmental authority review of the Regional Exploration Drilling program, delays or changes the Company's plan for Regional Exploration Drilling permitting, which could result, among other things, in delays, additional project requirements, additional costs and uncertainty of meeting anticipated program milestones; the actual cultural and biological impacts of the Company's exploration and development programs; risks related to exploration and development activities at the Company's projects, and factors relating to whether or not mineralization extraction will be commercially viable; risks relating to the ongoing COVID-19 pandemic; risks related to mining operations and the hazards and risks normally encountered in the exploration, development and production of minerals; uncertainties regarding regulatory matters, including obtaining permits and complying with laws and regulations governing exploration, development, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, site safety and other matters, and the potential for existing laws and regulations to be amended or more stringently implemented by the relevant authorities; uncertainties regarding estimating mineral resources, which estimates may require revision (either up or down) based on actual production experience; risks relating to fluctuating metals prices and the ability to operate the Company's projects at a profit in the event of declining metals prices and the need to reassess feasibility of a particular project that estimated mineral resources will be recovered or that they will be recovered at the rates estimated; risks related to title to the Company's properties, including the risk that the Company's title may be challenged or impugned by third parties; the ability of the Company to access necessary resources, including equipment and labour, on a timely basis and at reasonable cost; competition within the mining industry for the discovery and acquisition of properties
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from other mining companies, many of which have greater financial, technical and other resources than the Company, for, among other things, the acquisition of mineral claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees and other personnel; access to suitable infrastructure, such as roads, energy and water supplies in the vicinity of the Company's properties; and risks related to the stage of the Company's development, including risks relating to limited financial resources, limited availability of additional financing and potential dilution to existing shareholders; reliance on its management and key personnel; inability to obtain adequate or any insurance; exposure to litigation or similar claims; currently unprofitable operations; risks regarding the ability of the Company and its management to manage growth; and potential conflicts of interest.
The foregoing list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and the Company's actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this AIF.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this AIF and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward- looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
INTRODUCTION
Currency
Unless otherwise indicated, all references to "$" in this AIF are to Canadian dollars and all references to "US$" or "USD$" in this AIF are to U.S. dollars.
The following table reflects the low and high rates of exchange for one United States dollar, expressed in Canadian dollars, during the periods noted, the rates of exchange at the end of such periods and the average rates of exchange during such periods, based on the Bank of Canada daily exchange rates.
Years Ended December 31 | |||
2021 | 2020 | 2019 | |
Low for the period | $1.2040 | $1.2697 | $1.2988 |
High for the period | $1.2942 | $1.4510 | $1.3600 |
Rate at the end of the period | $1.2678 | $1.2730 | $1.2988 |
Average | $1.2535 | $1.3405 | $1.3269 |
On April 27, 2022, the Bank of Canada daily exchange rate was US$1.00 equaled $1.2828.
Non-IFRS Measures
Items marked with a * or noted as "Non-IFRS Measure" in this AIF are alternative performance measures. Alternative performance measures are furnished to provide additional information. These non-IFRS performance measures are included in this AIF because the Company believes these statistics are key performance measures that provide investors, analysts and other stakeholders with additional information to understand the costs associated with the Company's projects. These performance measures do not have a standard meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.
"Cash Costs" and "Cash Costs (LOM)" are a non-IFRS measure reported by KORE on an ounces of gold sold basis. Cash costs include mining, processing, refining, general and administration costs and royalties but excludedepreciation, reclamation, income taxes, capital and exploration costs for the life of the mine ("LOM"), defined below as eight years.
"All-In-Sustaining-Costs" ("AISC") is a non-IFRS measure reported by KORE on a per ounce of gold sold basis that includes all cash costs noted above (mining, processing refining, general and administration and royalties), as well as sustaining capital and closure costs, but excludes depreciation, capital costs and income taxes.
Scientific and Technical Information
Unless otherwise indicated, scientific and technical information in this AIF has been reviewed and approved by Marc Leduc, P.Eng., the Chief Operating Officer of KORE who is a "Qualified Person" as defined in National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").
In this AIF, the terms Mineral Resources and Inferred Mineral Resources have the meanings ascribed to those terms by the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"), as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council, as amended.
Cautionary Statement Regarding Estimates of Mineral Resources
Information regarding Mineral Resource estimates in this AIF has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States Securities and Exchange Commission ("SEC") Industry Guide 7. In October 2018, the SEC approved final rules requiring comprehensive and detailed disclosure requirements for issuers with material mining operations. The provisions in Industry Guide 7 and Item 102 of Regulation S-K, have been replaced with a new subpart 1300 of Regulation S-K under the United States Securities Act and is mandatory for SEC registrants. The changes adopted are intended to align the SEC's disclosure requirements more closely with global standards as embodied by the Committee for Mineral Reserves International Reporting Standards (CRIRSCO), including Canada's NI 43-101 and CIM Definition Standards. Under the new SEC rules, SEC registrants will be permitted to disclose "Mineral Resources" even though they reflect a lower level of certainty than Mineral Reserves. Additionally, under the new rules, Mineral Resources must be classified as "measured", "indicated", or "inferred", terms which are defined in and required to be disclosed by NI 43-101 for Canadian issuers and are not recognized under Industry Guide 7. Accordingly, the Mineral Resource estimates and related information may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal laws and the rules and regulations thereunder, including SEC Industry Guide 7.
A "Mineral Resource" is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
An "Inferred Mineral Resource" is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
An "Indicated Mineral Resource" is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors (as defined below) in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.
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KORE Mining Ltd. published this content on 29 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2022 02:54:09 UTC.
