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JETMF Global Crossing Airlines Group Inc (QB)

0.5376
0.00 (0.00%)
19 Jul 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type
Global Crossing Airlines Group Inc (QB) USOTC:JETMF OTCMarkets Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.5376 0.5376 0.5376 0.00 01:00:00

Report of Foreign Issuer (6-k)

25/08/2014 7:37pm

Edgar (US Regulatory)


 
 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
Form 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of August 2014
Commission File Number 001-33439
 
JET METAL CORP.
(Translation of registrant’s name into English)
 
Suite 1240, 1140 West Pender St., Vancouver, B.C.  Canada  V6E 4G1
(Address of principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
 
Form 20-F  þ
Form 40-F  ¨
 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):          _____
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):          _____
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  Yes  ¨          No  þ
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  82-______________
 
EXHIBIT INDEX
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
JET METAL CORP.
   
By:
 
     
/s/ Sheila Paine
     
Sheila Paine
Date:  August 25, 2014
   
Corporate Secretary

 
 
 
 




 
 
















JET METAL CORP.

(FORMERLY CROSSHAIR ENERGY CORPORATION)

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED APRIL 30, 2014

(Expressed in Canadian Dollars)


 
 

 

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Shareholders and Directors of
Jet Metal Corp.
(formerly Crosshair Energy Corporation)


We have audited the accompanying consolidated financial statements of Jet Metal Corp. (formerly Crosshair Energy Corporation), which comprise the consolidated statements of financial position as of April 30, 2014 and 2013, and the related consolidated statements of operations and comprehensive loss, cash flows and changes in equity, for the years ended April 30, 2014 and 2013 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 consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, 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.

Auditors’ 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 and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we comply with ethical requirements and plan and perform the audit 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 auditors’ 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 in our audits is sufficient and appropriate to provide a basis for our audit opinion.
 
 
 
1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, B.C., Canada V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172

 
 

 



Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Jet Metal Corp. (formerly Crosshair Energy Corporation) as at April 30, 2014 and 2013 and its financial performance and its cash flows for the years ended April 30, 2014 and 2013 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which indicate that Jet Metal Corp. (formerly Crosshair Energy Corporation) has suffered recurring losses from operations and has a net capital deficiency.  These matters, along with the other matters set forth in Note 1, indicate the existence of material uncertainties that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


“DAVIDSON & COMPANY LLP”

Vancouver, Canada
Chartered Accountants
   
August 22, 2014
 



 
 

 

JET METAL CORP.
 
(FORMERLY CROSSHAIR ENERGY CORPORATION)
 
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
AS AT
   (Expressed in Canadian Dollars)
 
 
   
APRIL 30, 2014
   
APRIL 30, 2013
 
             
ASSETS
           
             
Current assets
           
Cash and cash equivalents
  $ 78,541     $ 596,450  
Marketable securities (Note 4)
    55,159       85,737  
Receivables
    4,161       20,830  
Prepaid expenses
    34,470       83,968  
      172,331       786,985  
                 
Reclamation bonds (Note 6)
    28,269       64,452  
                 
Equipment (Note 5)
    91,016       113,770  
                 
Exploration and evaluation assets (Note 6)
    2,509,791       5,670,409  
                 
    $ 2,801,407     $ 6,635,616  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
Current liabilities
               
Payables and accrued liabilities
  $ 256,201     $ 324,898  
Due to related parties (Note 11)
    632,749       367,834  
      888,950       692,732  
                 
Future reclamation provisions (Note 7)
    19,267       37,161  
      908,217       729,893  
Equity
               
Capital stock (Note 9)
    87,411,032       87,411,032  
Reserves
    21,475,351       21,520,601  
Deficit
    (106,993,193 )     (103,025,910 )
      1,893,190       5,905,723  
                 
    $ 2,801,407     $ 6,635,616  

Nature of operations and going concern (Note 1)
Subsequent events (Note 16)

Approved on August 22, 2014 on behalf of the Board of Directors:

"Jay Sujir”
Director
“Stewart Wallis”
Director
Jay Sujir
 
Stewart Wallis
 


The accompanying notes are an integral part of these consolidated financial statements.

 
1

 


JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED APRIL 30,
(Expressed in Canadian Dollars)

   
2014
   
2013
 
             
EXPENSES
           
Audit and accounting
  $ 22,775     $ 124,087  
Consulting
    -       308,570  
Depreciation (Note 5)
    22,754       26,338  
     Director fees
    -       39,467  
     Exploration and evaluation (Note 6)
    34,225       2,835,066  
Impairment of exploration and evaluation assets (Note 6)
    3,160,618       6,043,241  
Insurance
    33,036       51,415  
Interest (Note 7)
    1,427       10,402  
Investor relations
    11,122       180,786  
Legal
    8,989       35,950  
Management fees
    142,533       411,368  
Office and administration
    87,331       167,188  
Project development costs
    -       66,471  
Rent
    40,632       123,066  
Share-based compensation (recovery) (Note 9)
    (45,250 )     626,364  
Transfer agent and filing fees
    124,896       109,625  
Travel
    252       48,547  
Wages and salaries
    252,999       705,024  
      (3,898,339 )     (11,912,975 )
                 
                 
Finance income
    314       22,158  
Gain on foreign exchange
    1,097       465  
Impairment of reclamation bonds (Note 6)
    (41,852 )     -  
Loss on asset disposition
    -       (39,416 )
Other income - flow through premium (Note 8)
    -       428,712  
Unrealized loss on marketable securities (Note 4)
    (28,503 )     (173,005 )
      (68,944 )     238,914  
Loss and comprehensive loss for the year
  $ (3,967,283 )   $ (11,674,061 )
                 
Basic and diluted loss per common share
  $ (0.60 )   $ (1.77 )
                 
Weighted average number of common shares outstanding
    6,578,035       6,578,218  




The accompanying notes are an integral part of these consolidated financial statements.
 


 
2

 


JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30,
(Expressed in Canadian Dollars)

   
2014
   
2013
 
             
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net loss for the year
  $ (3,967,283 )   $ (11,674,061 )
Items not affecting cash:
               
           Change in future reclamation estimates
    (2,053 )     -  
           Depreciation
    22,754       26,338  
           Impairment of exploration and evaluation assets
    3,160,618       6,043,241  
           Impairment of reclamation bonds
    41,852       -  
           Interest
    1,427       10,402  
           Loss on asset disposition
    -       39,416  
           Other income – flow through premium
    -       (428,712 )
           Share-based compensation (recovery)
    (45,250 )     626,364  
           Unrealized gain on foreign exchange
    (5,669 )     -  
           Unrealized loss on marketable securities
    28,503       173,005  
Non-cash working capital item changes:
               
Receivables
    16,669       80,431  
Prepaid expenses
    49,498       15,292  
Payables and accrued liabilities
    (68,697 )     65,947  
           Due to related parties
    264,915       188,185  
Net cash used in operating activities
    (502,716 )     (4,834,152 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Acquisition of exploration and evaluation assets
    -       (224,816 )
Acquisition of equipment
    -       (45,554 )
Proceeds from sale of equipment
    -       8,648  
Proceeds from sale of marketable securities
    2,075       -  
Reclamation costs incurred
    (17,268 )     -  
Refund of reclamation bonds
    -       292,507  
Net cash provided by (used in) investing activities
    (15,193 )     30,785  
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Share issue costs
    -       (46,481 )
                 
Net change in cash and cash equivalents during the year
    (517,909 )     (4,849,848 )
                 
Cash and cash equivalents, beginning of year
    596,450       5,446,298  
Cash and cash equivalents, end of year
  $ 78,541     $ 596,450  
Cash and cash equivalents
               
Cash
  $ 55,541     $ 556,070  
Liquid short term investments
    23,000       40,380  
    $ 78,541     $ 596,450  
Cash (paid) received for
               
Interest
  $ -     $ -  
Taxes
  $ -     $ -  

Supplemental disclosures with respect to cash flows (Note 10)


The accompanying notes are an integral part of these consolidated financial statements.

 
3

 


JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in Canadian Dollars)


   
Capital Stock
                   
   
Number of Shares(1)
   
Amount
   
Reserves
   
Deficit
   
Total
 
                               
Balance, April 30, 2012
    6,578,218     $ 87,457,513     $ 20,894,237     $ (91,351,849 )   $ 16,999,901  
Share issuance costs
    -       (46,481 )     -       -       (46,481 )
Share-based compensation
    -       -       626,364       -       626,364  
Loss for the year
    -       -       -       (11,674,061 )     (11,674,061 )
                                         
Balance, April 30, 2013
    6,578,218       87,411,032       21,520,601       (103,025,910 )     5,905,723  
Common shares cancelled due to fractional rounding
    (183 )     -       -       -       -  
Share-based compensation (recovery)
    -       -       (45,250 )     -       (45,250 )
Loss for the year
    -       -       -       (3,967,283 )     (3,967,283 )
                                         
Balance, April 30, 2014
    6,578,035     $ 87,411,032     $ 21,475,351     $ (106,993,193 )   $ 1,893,190  

 
(1)  During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held (Note 9). All references to share and per share amounts have been retroactively restated to reflect this share consolidation.







The accompanying notes are an integral part of these consolidated financial statements.



 
4

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




 
1.   NATURE OF OPERATIONS AND GOING CONCERN
 
Jet Metal Corp. (formerly Crosshair Energy Corporation) (the "Company" or “Jet Metal”) is an exploration stage company whose common shares trade on the TSX Venture Exchange and the OTC Markets Group’s OTCQB Marketplace.  The Company voluntarily delisted its common shares from the NYSE MKT and its common shares were transferred to and began trading July 1, 2013 on the OTC Markets Group’s OTCQB Marketplace.  Subsequently, the Company voluntarily delisted its common shares from the Toronto Stock Exchange and its common shares were transferred to and began trading January 20, 2014 on the TSX Venture Exchange.

During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held (Note 9). All references to share and per share amounts have been retroactively restated to reflect this share consolidation.

The Company is in the business of acquiring, exploring and evaluating mineral resource properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed.  The Company is incorporated under the laws of British Columbia. All of the Company’s resource properties are currently located in North America. The address of the Company’s registered office is #1240 – 1140 West Pender Street, Vancouver, British Columbia, Canada V6E 4G1.

The Company is in the process of exploring and evaluating its exploration and evaluation assets and has not yet determined whether the properties contain ore reserves that are economically recoverable.  The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.

These consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.

These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate.  These adjustments could be material.

As at April 30, 2014, the Company had a working capital deficit of $716,619 (2013 – working capital of $94,253) and a deficit of $106,993,193 (2013 – $103,025,910).  At present the Company has no producing properties and consequently has no current operating income or cash flows. Without additional financing, the Company will not be able to fund both its exploration programs and ongoing operations for the next 12 months. The Company intends to finance its future requirements through a combination of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. These material uncertainties raise substantial doubt on the Company’s ability to continue as a going concern.

2.   BASIS OF PRESENTATION

a)   Significant accounting judgements and estimates

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of assets, liabilities, shareholders’ equity, and the disclosure of contingent assets and liabilities, as at the date of the financial statements, and expenses for the years reported.

 
5

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





2.   BASIS OF PRESENTATION (continued)

a)   Significant accounting judgements and estimates (continued)

Critical Judgements

The preparation of these consolidated financial statements requires management to make judgements regarding the going concern of the Company, as previously discussed in Note 1, as well as the determination of functional currency. The functional currency is the currency of the primary economic environment in which an entity operates, and has been determined for each entity within the Company. The functional currency for the Company and its subsidiaries has been determined to be the Canadian dollar.

Key Sources of Estimation Uncertainty

Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates and such differences could be significant.

Significant estimates made by management affecting the consolidated financial statements include:

Share-based Payments

Estimating fair value for granted stock options and compensatory warrants requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option or warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them.

Deferred Tax Assets & Liabilities

The estimation of income taxes includes evaluating the recoverability of deferred tax assets and liabilities based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets and liabilities will not be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development and commercialization of mineral reserves. To the extent that management’s assessment of the Company’s ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets or liabilities, and deferred income tax provisions or recoveries could be affected.

Recoverability of Exploration & Evaluation Assets

The Company is in the process of exploring and evaluating its exploration and evaluation assets and has not yet determined whether the properties contain mineral reserves that are economically recoverable.  The recoverability of  the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to complete the development of those mineral reserves and upon future production or proceeds from the disposition thereof.

Useful Life of Equipment

Equipment is depreciated over its estimated useful life. Estimated useful lives are determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset, the potential for technological obsolescence, and regulations.

 
6

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)



2.   BASIS OF PRESENTATION (continued)

a)   Significant accounting judgements and estimates (continued)

Key Sources of Estimation Uncertainty (continued)

Future Reclamation Provision

The Company assesses its provision for reclamation related to its exploration and evaluation activities at each reporting period or when new material information becomes available. Accounting for reclamation obligations requires management to make estimates of the future costs that will be incurred to complete the reclamation to comply with existing laws and regulations. Actual future costs that will be incurred may differ from those amounts estimated as a result of changes to environmental laws and regulations, timing of future cash flows, changes to future costs, technical advances, and other factors. In addition, the actual work required may prove to be more extensive than estimated because of unexpected geological or other technical factors. The measurement of the present value of the future obligation is dependent on selection of suitable discount rate and the estimate of future cash outflows. Changes to either of these estimates may materially affect the present value calculation of the obligation.

 
b)   Approval of the consolidated financial statements

The consolidated financial statements of the Company for the year ended April 30, 2014 were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on August 22, 2014.

 
c)   Basis of presentation

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries, and have been prepared on a historical cost basis, except for certain financial instruments classified as fair value through profit or loss, and available-for-sale, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for certain cash flow information.

 
d)   Statement of compliance

These consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Boards (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

 
e)   Basis of consolidation

These consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries, Target Exploration and Mining Corp. (“Target”), Crosshair Energy USA, Inc. (“Crosshair USA”), Gemini Metals Corp. (“Gemini”) as well as The Bootheel Project LLC (“BHP LLC”) in which the Company has a 81% interest. A wholly owned subsidiary is an entity in which the Company has control, directly or indirectly, where control is defined as the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. All intercompany transactions and balances have been eliminated on consolidation.

 
7

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





2.   BASIS OF PRESENTATION (continued)

e)   Basis of consolidation (continued)

Details of the Company’s subsidiaries are as follows:

Name
Place of incorporation
Interest %
Principal activity
Target Exploration and Mining Corp.
British Columbia, Canada
100% ownership by the Company
Exploration and evaluation of mineral properties
Crosshair Energy USA, Inc.
Nevada, United States
100% ownership by Target
Exploration and evaluation of mineral properties
Bootheel Project LLC
Colorado, United States
81% ownership by Crosshair USA
Exploration and evaluation of mineral properties
Gemini Metals Corp.
British Columbia, Canada
100% ownership by the Company
In-active subsidiary

 
3.   SIGNIFICANT ACCOUNTING POLICIES
 
Cash and Cash Equivalents

Cash and cash equivalents include cash, demand deposits and highly liquid interest bearing investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
 
Financial Instruments
 
All financial instruments are initially recognized at fair value on the statement of financial position. The Company has classified each financial instrument into one of the following categories: (1) financial assets or liabilities at fair value through profit or loss (“FVTPL”), (2) loans and receivables, (3) financial assets available-for-sale, (4) financial assets held-to maturity, and (5) other financial liabilities. Subsequent measurement of financial instruments is based on their classification.

Financial assets and liabilities at FVTPL are subsequently measured at fair value with changes in those fair values recognized in net earnings. Financial assets “available-for-sale” are subsequently measured at fair value with changes in fair value recognized in other comprehensive income (loss), net of tax.

Financial assets “held-to-maturity”, “loans and receivables”, and “other financial liabilities” are subsequently measured at amortized cost using the effective interest method. The Company’s financial assets and liabilities are recorded and measured as follows:

Asset or Liability
Category
Measurement
Cash and cash equivalents
FVTPL
Fair value
Marketable securities
FVTPL
Fair value
Receivables
Loans and receivables
Amortized cost
Reclamation bonds
Held to maturity
Amortized cost
Payables and accrued liabilities
Other liabilities
Amortized cost
Due to related parties
Other liabilities
Amortized cost

The Company determines the fair value of financial instruments according to the following hierarchy based on the amount of observable inputs used to value the instrument.

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

 
8

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





 
3.     SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 
 
Financial Instruments (continued)
 
 
 
Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace.
 
Level 3 – Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.

Cash and cash equivalents and marketable securities have been measured at fair value using Level 1 inputs.

Exploration and Evaluation Assets

Costs incurred before the Company has obtained the legal rights to explore an area are expensed. Costs to acquire exploration and evaluation assets are capitalized as incurred. Costs related to the exploration and evaluation of exploration and evaluation assets are expensed as incurred. The Company considers mineral rights to be assets and accordingly, the Company capitalizes certain costs related to the acquisition of mineral rights. The Company considers each exploration and evaluation asset to be a separate cash generating unit.
 
Any option payments received by the Company from third parties or tax credits refunded to the Company are credited to the capitalized cost of the exploration and evaluation asset or shown as an expense recovery depending on the nature of the activity generating the refund. If payments received exceed the capitalized cost of the exploration and evaluation asset, the excess is recognized as income in the year received. The amounts shown for exploration and evaluation assets do not necessarily represent present or future values. Their recoverability is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development, and future profitable production or proceeds from the disposition thereof.
 
Future Reclamation Provisions

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of reclamation of mineral interests (exploration and evaluation assets). The net present value of future rehabilitation cost estimates is capitalized to the related assets along with a corresponding increase in the reclamation provision in the period incurred. Discount rates using a pre-tax rate that reflects the time value of money are used to calculate the net present value.
 
The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to the related assets with a corresponding entry to the reclamation provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates.
 
Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period.

Equipment
 
Equipment is carried at cost, less accumulated depreciation and accumulated impairment losses.
 
The cost of an item of equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Depreciation is provided at rates calculated to write off the cost of equipment, less its estimated residual value, using the declining balance method at the following rates per annum:
 
Exploration equipment
 20%

 
9

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




 
3.   SIGNIFICANT ACCOUNTING POLICIES (continued)
 
Impairment

At each financial position reporting date the carrying amounts of the Company’s long-lived assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use, which is the present value of future cash flows expected to be derived from the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the profit or loss for the period.

For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Flow-Through Shares

Canadian income tax legislation permits an enterprise to issue securities referred to as flow-through shares, whereby the investor can claim the tax deductions arising from the renunciation of the related resource expenditures. The Company accounts for flow-through shares whereby the premium, if any, paid for the flow-through shares in excess of the market value of the shares without flow-through features at the time of issue is initially recorded to other liability and then included in income at the same time the qualifying expenditures are made.

Loss Per Share

Basic loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding during the period.
 
For diluted per share computations, assumptions are made regarding potential common shares outstanding during the period.  The weighted average number of common shares is increased to include the number of additional common shares that would be outstanding if, at the beginning of the period, or at time of issuance, if later, all options and warrants are exercised.  Proceeds from exercise are used to purchase the Company’s common shares at their average market price during the period, thereby reducing the weighted average number of common shares outstanding.  If these computations prove to be anti-dilutive, diluted loss per share is the same as basic loss per share.

Share-Based Payments

The Company grants stock options to buy common shares of the Company to directors, officers, employees and service providers. The Company recognizes share-based compensation expense based on the estimated fair value of the options. A fair value measurement is made for each vesting instalment within each option grant and is determined using the Black-Scholes option-pricing model. The fair value of the options is recognized over the vesting period of the options granted as both share-based compensation expense and reserves. This includes a forfeiture estimate, which is revised for actual forfeitures in subsequent periods. The reserves account is subsequently reduced if the options are exercised and the amount initially recorded is then credited to capital stock.

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at the fair value of the share-based payment.  Otherwise, share-based payments are measured at the fair value of the goods or services received.

 
10

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





 
3.   SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

Income tax on profit or loss for the year comprises of current and deferred tax. Current tax is the expected tax paid or payable on the taxable income for the year, using tax rates enacted or substantively enacted at the statement of financial position date, and any adjustment to tax paid or payable in respect of previous years.

Deferred tax is recorded by providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the period that includes the date of the enactment or substantive enactment of the change. Deferred tax assets and liabilities are presented separately except where there is a right of set-off within fiscal jurisdictions.

Foreign Currency Translation

The functional currency of the Company and its subsidiaries is the Canadian dollar. The reporting currency of the Company is the Canadian dollar. Transactions denominated in foreign currency are translated into Canadian dollars at the rate of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies have been translated into Canadian dollars at the rate of exchange in effect at the statement of financial position date, while non-monetary assets and liabilities are translated at historical rates. Revenue and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. Any gains or losses resulting from translation have been included in the statement of operations and comprehensive loss.

New Accounting Pronouncements Adopted

The following accounting standards were adopted as of May 1, 2013 and did not have a material impact on the consolidated financial statements of the Company.

Amendments to IFRS 7, Financial Instruments:  Disclosures (“IFRS 7”) introduces enhanced disclosure around the transfer of financial assets and associated risks.

In May 2011, the IASB issued IFRS 10, Consolidated Financial Statements (“IFRS 10”), which builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of a parent company. IFRS 10 also provides additional guidance to assist in the determination of control where this is difficult to assess.

In May 2011, the IASB issued IFRS 11, Joint Arrangements (“IFRS 11”), which enhances accounting for joint arrangements, particularly by focusing on the rights and obligations of the arrangement, rather than the arrangement’s legal form. IFRS 11 also addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities and prohibits proportionate consolidation.
 
 
In May 2011, the IASB issued IFRS 12, Disclosure of Interests in Other Entities (“IFRS 12”), which is a comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off-balance sheet vehicles.
 
In May 2011, the IASB issued IFRS 13, Fair Value Measurement (“IFRS 13”), which defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 does not determine when an asset, a liability or an entity’s own equity instrument is measured at fair value. Rather, the measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value (with limited exceptions).

 
11

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)


 

3.      SIGNIFICANT ACCOUNTING POLICIES (continued)

New Accounting Pronouncements Adopted (continued)

In June 2011, the IASB amended IAS 1, Presentation of Financial Statements (“IAS 1”), to change the disclosure of items presented in other comprehensive income into two groups, based on whether those items may be recycled to profit or loss in the future.

Amendments to IAS 27, Separate Financial Statements (“IAS 27”), and IAS 28, Investments in Associates and Joint Ventures (“IAS 28”) have been made. IAS 27 addresses accounting for subsidiaries, jointly controlled entities and associates in non-consolidated financial statements. IAS 28 has been amended to include joint ventures in its scope and to address the changes in IFRS 10-13.

New Accounting Pronouncements

The following accounting pronouncements have been made, but are not yet effective for the Company as at April 30, 2014.  The Company is currently evaluating the impact of these amended standards on its consolidated financial statements.

In November 2009 and October 2010, the IASB issued IFRS 9, Financial Instruments (“IFRS 9”), which represents the completion of the first part of a three-part project to replace IAS 39, Financial Instruments: Recognition and Measurement, with a new standard. Per the new standard, an entity choosing to measure a liability at fair value will present the portion of the change in its fair value due to changes in the entity’s own credit risk in the other comprehensive income or loss section of the entity’s statement of comprehensive loss, rather than within profit or loss. Additionally, IFRS 9 includes revised guidance related to the derecognition of financial instruments. IFRS 9 applies to financial statements for annual periods beginning on or after January 1, 2018, with early adoption permitted.

Amendments to IAS 32, Financial Instruments:  Presentation, are effective for annual periods beginning on or after January 1, 2014.  This provides for amendments relating to offsetting financial assets and financial liabilities.

Comparative Figures

Certain comparative figures have been reclassified in accordance with the current year’s presentation.

 
12

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





4.   MARKETABLE SECURITIES
 
   
Canadian Zinc Corp.
(CZN)
   
Australian American Mining Corp. (AIW.A)
   
Expedition Mining Inc. (EXU.V)
   
Total
 
 
                         
Cost
                       
                         
Balance at April 30, 2012 and 2013
  $ 2,695,052     $ 97,024     $ 1,000,000     $ 3,792,076  
Dispositions
    (236,716 )     -       -       (236,716 )
Balance at April 30, 2014
    2,458,336       97,024       1,000,000       3,555,360  
                                 
Adjustments to Fair Value
                               
                                 
Balance at April 30, 2012
    (2,633,288 )     (77,824 )     (822,222 )     (3,533,334 )
Adjustment for the year
    (44,117 )     (6,666 )     (122,222 )     (173,005 )
Balance at April 30, 2013
    (2,677,405 )     (84,490 )     (944,444 )     (3,706,339 )
Adjustment for the year
    240,895       (12,534 )     (22,223 )     206,138  
Balance at April 30, 2014
    (2,436,510 )     (97,024 )     (966,667 )     (3,500,201 )
                                 
Fair Value
                               
                                 
At April 30, 2013
  $ 17,647     $ 12,534     $ 55,556     $ 85,737  
At April 30, 2014
  $ 21,826     $ -     $ 33,333     $ 55,159  

During the year ended April 30, 2014, the Company exchanged 321,940 common shares of Messina Minerals Inc. for 54,565 common shares of Canadian Zinc Corporation as a result of the acquisition of Messina Minerals Inc. by Canadian Zinc Corporation.  Prior to this exchange, the Company sold 31,000 common shares of Messina Minerals Inc. for net proceeds of $2,075.


 
13

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





5.   EQUIPMENT

   
Exploration
Equipment
 
       
Cost
     
       
Balance at April 30, 2012
  $ 379,293  
Additions
    45,554  
Dispositions
    (126,261 )
Balance at April 30, 2013 and 2014
  $ 298,586  
         
Accumulated Depreciation
       
         
Balance at April 30, 2012
  $ 236,675  
Depreciation
    26,338  
Dispositions
    (78,197 )
Balance at April 30, 2013
    184,816  
Depreciation
    22,754  
Balance at April 30, 2014
  $ 207,570  
         
Net Book Value
       
         
At April 30, 2013
  $ 113,770  
At April 30, 2014
  $ 91,016  

6.   EXPLORATION AND EVALUATION ASSETS

The following table illustrates acquisition costs:

   
Central Mineral Belt (“CMB”)
                         
   
Moran Lake, Otter / Portage Lake
   
Silver Spruce
   
Bootheel Project
   
Golden Promise
   
Juniper Ridge
   
Total
 
                                     
Balance at April 30, 2012
  $ 3,010,348     $ 2,515,422     $ 3,726,441     $ 1,410,842     $ 929,052     $ 11,592,105  
Acquisition costs
    200,000       -       1,283       20,000       3,533       224,816  
Change in estimates of future reclamation provisions
    (49,730 )     (5,631 )     -       (29,714 )     (18,196 )     (103,271 )
Impairment
    -       -       (3,727,724 )     (1,401,128 )     (914,389 )     (6,043,241 )
Balance at April 30, 2013
    3,160,618       2,509,791       -       -       -       5,670,409  
Impairment
    (3,160,618 )     -       -       -       -       (3,160,618 )
Balance at April 30, 2014
  $ -     $ 2,509,791     $ -     $ -     $ -     $ 2,509,791  


 
14

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




 

6.   EXPLORATION AND EVALUATION ASSETS (continued)

The following table illustrates the exploration and evaluation expenditures incurred during the year ended April 30, 2014:

   
CMB
   
Bootheel Project
   
Juniper Ridge
   
Other
   
Total
 
                               
Administration (recovery)
  $ 560     $ 34,673     $ (392 )   $ -     $ 34,841  
Permitting
    -       -       -       376       376  
Reclamation costs
    -       10,921       -       -       10,921  
Recovery – JV Partner
    -       (11,913 )     -       -       (11,913 )
    $ 560     $ 33,681     $ (392 )   $ 376     $ 34,225  

The following table illustrates the exploration and evaluation expenditures incurred during the year ended April 30, 2013:

   
Central Mineral Belt (“CMB”)
                         
   
Moran Lake, Otter / Portage Lake
   
Silver Spruce
   
Bootheel Project
   
Golden Promise
   
Juniper Ridge
   
Total
 
                                     
Administration
  $ 10,434     $ -     $ 45,981     $ -     $ 44,902     $ 101,317  
Drilling & trenching
    731,850       -       13,433       -       328,080       1,073,363  
Geology
    1,456,437       -       35,816       24,524       339,683       1,856,460  
Geophysics
    11,591       -       -       -       44,918       56,509  
Hydrology
    -       -       271       -       -       271  
Metallurgy
    -       -       -       -       15,892       15,892  
Permitting
    -       -       -       -       37,395       37,395  
Reclamation costs
    -       -       -       22,741       -       22,741  
Recovery – JV Partner
    -       -       (28,882 )     -       -       (28,882 )
JCEAP(1) grant received
    (150,000 )     (150,000 )     -       -       -       (300,000 )
    $ 2,060,312     $ (150,000 )   $ 66,619     $ 47,265     $ 810,870     $ 2,835,066  

(1) Junior Company Exploration Assistance Program

Central Mineral Belt (“CMB”)
 
Moran Lake Property
 
Pursuant to an agreement dated October 14, 2004, the Company acquired an option to earn a 90% interest, subject to a 2% net smelter royalty (“NSR”) and a 10% carried interest to the vendor, in the Moran Lake Property, a uranium prospect located in Central Labrador, Newfoundland and Labrador, Canada.  The agreement was amended on March 1, 2005 to include additional claims adjacent to the Moran Lake Property, known as Moran Heights.
 
The Company previously issued 40,000 common shares, made cash payments totaling $575,000 and spent more than the required minimum $3,000,000 on project expenditures.  In connection with the option agreement to earn its 90% interest in the Moran Lake Property, the Company was involved in a dispute with the original vendor of the Moran Lake Property, Mr. Murphy, regarding the timing of advance royalty payments. On December 5, 2011, the Company settled the litigation. Under the terms of the settlement, the Company made a cash payment of $600,000 and issued 119,361 common shares. All litigation was discontinued and Mr. Murphy acknowledged that the Company’s 90% interest in the CMB Uranium/Vanadium Project vested and any requirement for a bankable feasibility study was irrevocably waived. The Company was required to make advance royalty payments of $200,000 per year commencing in November 2012.  Accordingly, the Company paid an advance royalty payment of $200,000 in November 2012.  Had the Company brought the Moran Lake Property into production, the advance royalty payments would have been deducted against any NSR owed to the original vendor of the property.



 
15

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




6.   EXPLORATION AND EVALUATION ASSETS (continued)

 
Central Mineral Belt (“CMB”) (continued)
 
Moran Lake Property (continued)
 
On November 1, 2013, the Company exercised its right to abandon those mineral claims that form the Moran Lake Property and terminated the related agreement to discharge the Company from any further obligations with respect to the Moran Lake Property.  As a result, the Company recorded an impairment of $2,484,868 to operations during the year ended April 30, 2014.
 
Otter/Portage Lake Property
 
Pursuant to an agreement dated December 2, 2005, the Company acquired a 100% interest, subject to a 1.5% NSR, in the Otter and Portage Lake Properties located in the Central Mineral Belt of Labrador.
 
During the year ended April 30, 2014, the Company abandoned these properties and recorded an impairment of $675,750 to operations in relation to the Otter and Portage Lake Properties.
 
Silver Spruce Property Amalgamation
 
 
In July 2008, the Company entered into an agreement with Expedition Mining Inc. ("Expedition"), formally known as Universal Uranium Ltd., and acquired all of Expedition's interest (60%) in its joint venture project with Silver Spruce Resources Inc. in Labrador. Currently the Company has a 100% interest in the property subject to a 2% net smelter royalty payable to Silver Spruce and a 2% net smelter royalty payable to Expedition Mining Inc. on 60% of any production from the Silver Spruce Property.
 
Bootheel Project

On March 31, 2009, the Company acquired an interest in the Bootheel and Buckpoint Properties in Wyoming, USA through the acquisition of Target. Under a series of agreements between UR-Energy USA Inc. (“URE”), several of its subsidiaries, Target and Crosshair USA, a wholly owned subsidiary of Target, the Company could earn a 75% interest in BHP LLC, subject to certain royalties, by completing expenditures totalling US $3,000,000 on or before June 7, 2011. The Company made these expenditures, and additional expenditures, which increased its holdings to 81%. The Company, through Target, has earned a 81% interest in BHP LLC, representing a 81% interest in the underlying Bootheel and Buckpoint Properties.
 
 
Under agreements dated February 5, 2008 between MJ Ranches Inc. and Crosshair USA as manager, BHP LLC leased MJ Ranches Inc.’s 75% ownership of certain minerals on fee land that adjoins the Bootheel Property.  The initial term of the agreement was for five years with provision for two renewals.  Payment for the initial five year term was US $252,651 paid in advance, increased for inflation for the renewal periods.  The acquired mineral rights were subject to a sliding scale royalty tied to the sales price of uranium. The “Uranium Lease and Surface and Damage Agreement” and “Surface Impact Agreement” expired in February 2013.  On June 7, 2013, the Company announced that BHP LLC has been unable to reach an agreement with MJ Ranches Inc. on terms which more accurately reflect current market conditions.  Certain portions of the mineral resources included in the Technical Report issued by the Company, dated October 27, 2012, are located on those lands which were subject to the mineral lease with MJ Ranches Inc.  Accordingly, during the year ended April 30, 2013, the Company recorded an impairment of $3,727,724 to operations.


 
16

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




6.   EXPLORATION AND EVALUATION ASSETS (continued)

 
Golden Promise
 
Golden Promise Property
 
 
On April 29, 2009, the Company acquired a 60% interest in the Golden Promise Gold Project in Central Newfoundland, Canada with an option to acquire an additional interest from Paragon Minerals Corp. (“Paragon”).

The Company was to provide Paragon with a $2,000,000 carried interest in initial exploration expenditures to be completed prior to May 2013. The Company could extend the timeframe to complete the initial exploration program by 12 months upon issuing 6,250 common shares to Paragon.

Upon the successful completion of the initial $2,000,000 exploration program, the Company could elect to earn an additional 10% interest (to 70%) in Golden Promise by providing Paragon with an additional $1,000,000 carried interest in additional exploration expenditures within 24 months.   The Company could extend the timeframe to complete the additional exploration program by 12 months upon issuing 2,500 common shares to Paragon.  In the event that the Company did not complete the additional expenditure program within the required timeframe, the Company could purchase the remaining 10% interest by paying Paragon the difference between actually incurred exploration expenditures and $1,000,000 or just retain the 60% interest.

 
On May 31, 2013, the Company and Paragon terminated the Golden Promise Option and Joint Venture Agreement and as a result, the Company recorded an impairment of $1,401,128 to operations during the year ended April 30, 2013.
 
Southern Golden Promise (Victoria Lake)
 
The Company had earned a 62.02% interest in mineral claims located in the Botwood Basin area of Central Newfoundland known as Southern Golden Promise in consideration for issuing a total of 10,000 common shares and incurring a minimum of $1,750,000 exploration expenditures within specified deadlines.
 
During the year ended April 30, 2014, the Company abandoned the Southern Golden Promise property.
 
Juniper Ridge Uranium Property

On October 29, 2010, the Company signed a definitive agreement with Strathmore Resources Ltd., a wholly owned subsidiary of Strathmore Minerals Corp. (“Strathmore”), to acquire the Juniper Ridge Uranium Property.  In order to acquire this property, the Company was required to make cash payments totalling US$4,450,000 (US$450,000 has been paid), and issue shares with a total value of US$2,750,000 (US$250,000 in shares has been issued).

Title to the Juniper Ridge Property had been transferred to the Company by Strathmore upon making the initial payments of US$700,000 of which US$250,000 was paid by issuance of 55,251 common shares of the Company. On November 30, 2012, the Company announced that it terminated this agreement and as a result, $914,389 of the capitalized costs were written off to operations during the year ended April 30, 2013. The Company transferred the title to the Juniper Ridge Property back to Strathmore in February 2013.

 
Reclamation Bonds
 
As at April 30, 2014, the Company had outstanding reclamation bonds for the Bootheel Property and Juniper Ridge Property of US$25,800 (2013 - US$25,800) and $Nil (2013 - US$36,600), respectively, registered with the Wyoming Department of Environmental Quality and State Office of Lands and Investment.
 
During the year ended April 30, 2014, the Company recorded an impairment of reclamation bonds in the amount of $41,852 due to collectability concerns in relation to properties that have been abandoned.

 
17

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




 
7.   FUTURE RECLAMATION PROVISIONS
 
   
April 30, 2014
   
April 30, 2013
 
             
Beginning balance
  $ 37,161     $ 130,030  
Change in estimates1
    (2,053 )     (103,271 )
Interest
    1,427       10,402  
Reclamation expenses incurred
    (17,268 )     -  
Ending balance
  $ 19,267     $ 37,161  

1 The Company revised its prior estimates based on new information regarding potential future reclamation costs, and the estimated dates of abandonment of the interests in exploration and evaluation assets.

As at April 30, 2014, the Company has legal obligations associated with the Moran Lake property for cleanup costs. These costs are anticipated to be incurred through 2015.
 
The total undiscounted amount of estimated cash flows required to settle the obligations is approximately $20,000, which was adjusted for inflation at the rate of 2%, discounted at 8% and projected out to 2015.
 
8.   OTHER LIABILITY
 
   
April 30, 2014
   
April 30, 2013
 
             
Beginning balance
  $ -     $ 428,712  
Settlement of flow-through share liability on expenditures made
    -       (428,712 )
Ending balance
  $ -     $ -  

 
The Company periodically issues flow-through shares with any resulting flow-through premium recorded as other liability. The liability is subsequently reduced when the required exploration expenditures are made, and accordingly, a recovery of flow-through premium is recorded as other income.
 
9.   CAPITAL STOCK AND RESERVES

Share and warrant issuances
 
There were no share or warrant issuances during the years ended April 30, 2014 or 2013.
 
During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held. All references to share and per share amounts have been retroactively restated to reflect this share consolidation.

 
18

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)




 

9.   CAPITAL STOCK AND RESERVES (continued)

 
Warrants
 
The following is a summary of warrant activities during the years ended April 30, 2014 and 2013:

   
Number of Warrants
   
Weighted Average Exercise Price
 
             
Outstanding, April 30, 2012
    2,242,246     $ 8.71  
Expired
    (1,325,000 )   $ 10.04  
Outstanding, April 30, 2013
    917,246     $ 6.79  
Expired
    (917,246 )   $ 6.79  
Outstanding, April 30, 2014
    -       -  

As at April 30, 2014, there were no warrants outstanding.

Stock options
 
The Company’s Stock Option Plan is a 10% rolling plan that allows a maximum 10% of the issued shares to be reserved for issuance under the plan. Options granted under the plan may not have a term exceeding 10 years and vesting provisions are at the discretion of the Board of Directors.

The following is a summary of stock option activities during years ended April 30, 2014 and 2013:

   
Number of Stock Options
   
Weighted Average Exercise Price
 
             
Outstanding, April 30, 2012
    660,012     $ 11.03  
Forfeited
    (35,000 )   $ 7.39  
Expired
    (25,049 )   $ 30.42  
Outstanding, April 30, 2013
    599,963     $ 10.43  
Forfeited
    (187,250 )   $ 6.75  
Expired
    (70,500 )   $ 12.55  
Outstanding, April 30, 2014
    342,213     $ 12.01  

At April 30, 2014, the following stock options were outstanding to directors, officers and employees:

Outstanding
 
Exercisable
 
Exercise Price
 
Remaining Life (Years)
 
Expiry Date
                 
56,625
 
56,625
 
$10.80
 
0.08
 
May 28, 2014(1)
28,088
 
28,088
 
$8.80
 
0.59
 
November 30, 2014
1,250
 
1,250
 
$8.00
 
0.64
 
December 21, 2014
11,250
 
11,250
 
$8.40
 
0.69
 
January 6, 2015
191,000
 
191,000
 
$14.40
 
1.64
 
December 21, 2015
10,000
 
10,000
 
$19.50
 
1.69
 
January 7, 2016
4,750
 
4,750
 
$11.20
 
1.92
 
April 1, 2016
39,250
 
39,250
 
$3.80
 
2.99
 
April 24, 2017
342,213
 
342,213
           

(1) Expired subsequent to the year ended April 30, 2014 (Note 16).


 
19

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





9.    CAPITAL STOCK AND RESERVES (continued)

Share-based compensation

The Company recognizes compensation expense for all stock options granted using the fair value based method of accounting.  For the year ended April 30, 2014, the Company recognized a recovery of share-based compensation expense of $45,250 (April 30, 2013 – expense of $626,364) for options forfeited or vesting during the year, respectively.  No stock options were granted during the years ended April 30, 2014 and 2013.

10.   SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS
 
There were no significant non-cash transactions affecting cash flows from investing or financing activities during the years ended April 30, 2014 and 2013.

11.   RELATED PARTY TRANSACTIONS
 
Related parties and related party transactions impacting the consolidated financial statements are summarized below and include transactions with the following individuals or entities:

Key management personnel

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors, corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, and Vice Presidents.

Remuneration attributed to key management personnel for the years ended April 30, 2014 and 2013 can be summarized as follows:

   
April 30, 2014
   
April 30, 2013
 
             
Share-based compensation
  $ 27,463     $ 405,876  
Short-term benefits(1)
    207,723       933,802  
    $ 235,186     $ 1,339,678  
 
(1)  
include base salaries and directors’ fees, pursuant to contractual employment or consultancy arrangements, management and consulting fees

The Company had a consulting agreement with the former Executive Chairman of the Company that provided for a lump sum payment of $150,000 on termination or $450,000 in the event of a change of control of the Company.  This agreement was terminated by the former Executive Chairman of the Company as of December 31, 2013.

Other related parties

King & Bay West Management Corp. (“King & Bay West”): King & Bay West is an entity owned by the former Executive Chairman of the Company, who remains an insider of the Company, and provides administrative, management, geological, regulatory, tax, corporate development and investor relations services to the Company.

Transactions entered into with related parties other than key management personnel during the years ended April 30, 2014 and 2013 include the following:

   
April 30, 2014
   
April 30, 2013
 
             
King & Bay West
  $ 303,832     $ 1,234,170  


 
20

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)


 

 
11.   RELATED PARTY TRANSACTIONS (continued)
 
Other related parties (continued)

Amounts due to related parties as at April 30, 2014 included the following:

·  
King & Bay West, controlled by the former Executive Chairman and insider of the Company - $540,874 (April 30, 2013 - $319,312)
 
·  
MJM Consulting Corp., controlled by the former Executive Chairman and insider of the Company - $91,875 (April 30, 2013 - $48,522)
 
The amounts due to related parties are non-interest bearing.

12.   INCOME TAXES

The following is a reconciliation of income taxes attributable to operations computed at the statutory tax rates to income tax recovery.

   
April 30, 2014
   
April 30, 2013
 
             
Loss for the year
  $ (3,967,283 )   $ (11,674,061 )
                 
Expected income tax recoverable at statutory rate
    (1,002,000 )     (2,919,000 )
Permanent differences
    (8,000 )     82,000  
Share issuance costs
    -       (12,000 )
Impact on change in statutory rates and different subsidiary tax rates and other
    (555,000 )     (513,000 )
Impact on flow-through shares
    -       649,000  
Change in unrecognized deductible temporary differences
    1,565,000       2,713,000  
Total income tax recovery
  $ -     $ -  

The significant components of the Company’s unrecognized temporary differences and tax losses are as follows:

   
April 30, 2014
   
Expiry Date Range
   
April 30, 2013
 
                   
Temporary Differences
                 
                   
Exploration and evaluation assets
  $ 44,272,000    
No expiry date
    $ 41,191,000  
Investment tax credit
    1,151,000       2029-2034       1,168,000  
Equipment
    513,000    
No expiry date
      544,000  
Canadian eligible capital (CEC)
    1,000    
No expiry date
      1,000  
Share issue costs
    396,000       2035-2038       774,000  
Future reclamation provision
    19,000    
No expiry date
      37,000  
Marketable securities
    3,500,000    
No expiry date
      3,706,000  
Non-capital losses available for future period – Canada
    22,576,000       2015-2034       21,476,000  
Non-capital losses available for future period – United States
    1,559,000       2029-2034       1,130,000  

Tax attributes are subject to review and potential adjustment by tax authorities.


 
21

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)


 
13.   SEGMENTED INFORMATION
 
The Company operates in one reportable operating segment, being the acquisition, exploration and evaluation of mineral properties in North America.

   
April 30, 2014
   
April 30, 2013
 
             
Equipment
           
             
    United States
  $ 2,502     $ 3,128  
    Canada
    88,514       110,642  
    $ 91,016     $ 113,770  
                 
Reclamation bonds
               
                 
    United States
  $ 28,269     $ 62,702  
    Canada
    -       1,750  
    $ 28,269     $ 64,452  
Exploration and evaluation assets
               
                 
Canada
  $ 2,509,791     $ 5,670,409  

14.   CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and evaluation of its exploration and evaluation assets, acquire additional mineral property interests and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes its components of equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets.  To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets.

In order to maximize ongoing development efforts, the Company does not pay out dividends.  Management reviews its capital management approach on an ongoing basis and believes that this approach is reasonable given the relative size of the Company.

The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company’s approach to capital management during the year.

15.   RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The fair value of the Company’s receivables, payables and accrued liabilities, and due to related parties approximate carrying value, due to their short-term nature.  The Company’s cash and cash equivalents and marketable securities are measured at fair value under the fair value hierarchy based on level one quoted prices in active markets for identical assets or liabilities.  The Company’s other financial instruments, being reclamation bonds, are measured at amortized cost.


 
22

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





15.   RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk and price risk.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

The Company is subject to credit risk on its cash and cash equivalents and receivables. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company has no investments in asset-backed commercial paper. The Company’s receivables consist mainly of Goods and Services Tax receivable due from the Government of Canada.  The Company does not believe it is exposed to significant credit risk

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.

The Company manages liquidity risk through its capital management as outlined in Note 14. The Company will require additional equity financing to meet its administrative overhead costs and further exploration activities on its exploration and evaluation assets in fiscal 2015.

Market Risk 

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, commodity and equity prices, and foreign exchange rates.

(a) Interest rate risk
 
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
 
The risk that the Company will realize a loss as a result of a decline in the fair value of any short-term investments included in cash and cash equivalents is minimal because these investments generally have a fixed yield rate.
 
(b) Price risk
 
The Company is exposed to price risk with respect to commodity prices, particularly uranium, and equity prices, since the Company possesses investments in publicly traded securities.  The Company closely monitors those prices to determine the appropriate course of action to be taken by the Company. However, there can be no assurance that the Company can exit these positions if required, resulting in proceeds approximating the carrying value of these securities.
 
(c) Currency risk
 
The Company’s expenditures are predominantly in Canadian dollars, and any future equity raised is expected to be predominantly in Canadian dollars.  As at April 30, 2014, the Company has accounts payable denominated in US dollars of US$57,654, cash of US$1,321 and reclamation bonds of US$25,800.  A 10% change in the Canadian dollar versus the US dollar would give rise to a gain/loss of approximately $3,346.
 

 
23

 
JET METAL CORP.
(FORMERLY CROSSHAIR ENERGY CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2014
(Expressed in Canadian Dollars)





16.    SUBSEQUENT EVENTS

The following reportable events occurred subsequent to year ended April 30, 2014:

·  
On May 5, 2014, 1,000 stock options with an exercise price of $3.80 were forfeited (Note 9).

·  
On May 28, 2014, 56,625 stock options with an exercise price of $10.80 expired (Note 9).

·  
On June 7, 2014, 2,500 stock options with an exercise price of $8.40 and 7,500 stock options with an exercise price of $14.40 were forfeited (Note 9).

·  
On June 9, 2014, the Company received a loan in the amount of $60,000 from King & Bay West, a related party.  The loan is non-interest bearing, unsecured and has no fixed terms of repayment.

·  
The Company sold 54,565 common shares of Canadian Zinc Corporation for net proceeds of $21,544 (Note 4).

·  
The Company sold 2,222,222 common shares of Expedition Mining Inc. for net proceeds of $31,167 (Note 4).




 
24

 

 
 
 




 
 



 
 

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis 
For the year ended April 30, 2014
Date Prepared: August 22, 2014


GENERAL

This Management Discussion & Analysis (“MD&A”) is intended to supplement and complement the consolidated financial statements and accompanying notes of Jet Metal Corp. (formerly Crosshair Energy Corporation) (the “Company” or “Jet Metal”). The information provided herein should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended April 30, 2014.

All dollar figures presented are expressed in Canadian dollars unless otherwise noted.  Financial statements and summary information derived therefrom are prepared in accordance with International Financial Reporting Standards (“IFRS”).

Management is responsible for the preparation and integrity of the financial statements and MD&A, including the maintenance of appropriate information systems, procedures and internal controls and to ensure that information used internally or disclosed externally, including the financial statements and MD&A, is complete and reliable.  The Company’s Board of Directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders.  The Board’s audit committee meets with management quarterly to review the financial statements including the MD&A and to discuss other financial, operating and internal control matters.

The reader is encouraged to review the Company’s statutory filings on www.sedar.com and to review general information including reports and maps on the Company's website at www.jetmetalcorp.com.

FORWARD LOOKING STATEMENTS

Certain of the statements made herein may constitute “forward-looking statements” or contain “forward-looking information” within the meaning of applicable Canadian and United States securities laws.  In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the potential for additional mineralization at the Company’s properties, the timelines to complete the Company’s exploration programs, timing for permit applications, timing for new resource estimates, impacts on historic sites, the estimation of mineral resource estimates, timing to complete technical reports, forecasts for exploration expenditures, estimates of future administrative costs, and statements about the Company’s future development of its properties. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to foreign currency fluctuations; risks inherent in mineral exploration and development including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and reserves and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; the potential for unexpected costs and expenses and commodity price fluctuations including the price of uranium; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk Factors Relating to the Company’s Business in the Company’s Annual Report on Form 20-F and in each MD&A.

 
1

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis 
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Forward-looking information and forward-looking statements are, in addition, based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of commodities; that the Company can access financing, appropriate equipment and sufficient labour availability and that the political environment will continue to support the development and operation of mining projects.  Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements.  Accordingly, readers are advised not to place undue reliance on forward-looking statements. The Company does not intend to update forward-looking statements or information, except as may be required by applicable law.

NATIONAL INSTRUMENT 43-101 COMPLIANCE

C. Stewart Wallis, P.Geo., a director of the Company and a Qualified Person as defined by National Instrument 43-101 (“NI 43-101”), has reviewed and approved the technical information contained in this MD&A. Further information on the Company’s mineral properties can be found in the following NI 43-101 Technical Report which is available on SEDAR at www.sedar.com and the Company’s website:

·  
CMB Uranium Project: The Technical Report titled “Technical Report on the CMBNW Property, Labrador Canada” dated June 22, 2009.

DESCRIPTION OF BUSINESS AND OVERVIEW
 
The Company is a mineral exploration company engaged in acquiring, exploring and developing mineral properties. The Company is currently focused on maintaining its uranium properties in North America, as well as investigating other mineral opportunities.  The Company does not have any producing mineral properties at this time.

The Company’s common shares trade on the TSX Venture Exchange (the “TSX-V”) under the symbol “JET” and on the OTC Markets Group’s OTCQB Marketplace (the “OTCQB”) under the symbol “JETMF”.  The common shares of the Company were voluntarily delisted from the NYSE MKT Stock Exchange prior to market opening on July 1, 2013.  On the same day, the Company’s common shares were listed and began trading on the OTC Markets Group’s OTCQB Marketplace.  The listing of the Company’s common shares in Canada was transitioned from the TSX to the TSX-V on January 20, 2014.

In September 2013, the Company changed its name from Crosshair Energy Corporation to Jet Metal Corp. and completed a consolidation of its common shares on the basis of one post-consolidated share for every ten pre-consolidated shares.  All references to share and per share amounts have been restated to reflect this share consolidation.

The Company currently maintains exploration and evaluation properties in the province of Newfoundland and Labrador, Canada and the state of Wyoming, USA:
 
Ø  
Central Mineral Belt (“CMB”) Uranium Project in Labrador
 
Ø  
Bootheel Uranium (“Bootheel”) Project with UR-Energy USA, Inc. in Wyoming

Central Mineral Belt (“CMB”) Project

The CMB Project currently consists of a total of 916 claims, located in central Labrador.  Of these 916 claims, 451 of them are subject to a 2% Net Smelter Return Royalty (“NSR”) payable to Silver Spruce Resources Inc. The most prospective area within these 916 claims is the Two Time Prospect (detailed below), which contains an Indicated Mineral Resource estimate of 2.33 M pounds of U3O8 (1.82 M tonnes grading 0.058% U3O8) and an Inferred Mineral Resource estimate of 3.73 M pounds of U3O8 (3.16 M tonnes grading 0.053% U3O8) and is open for expansion.
 

 
2

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



 
Two Time Prospect

Exploration activities on the Two Time Prospect during the 2011 and 2012 field seasons focused on investigating the down dip extension of the resource previously reported, as well as a number of coincident airborne radiometric geophysical and rock geochemical anomalies outside the Two Time Prospect. A total of 21 drill holes, totaling 4,206 metres were completed, the results of which confirmed uranium mineralization at the Two Time Prospect to extend to depths of over 500 metres. Drilling on the Firestone Prospect intersected a three and a half metre interval that returned 0.084% U3O8. Contained within this interval was a 0.5 metre interval that returned 0.519% U3O8. The only hole drilled on the Big Bear Prospect returned seven metres of 0.031% U3O8. Drilling at the three eastern-most prospects of South Brook, Running Man and Big Bear, was preliminary, with the program cut short due to inclement weather.

Specific results from the drilling on the Two Time Prospect are illustrated in the table below. Drill hole CMB-12-49 successfully intersected mineralization at the expected depth over a thicker interval, indicating the deposit is continuous to the south along strike and along dip. This hole represents a minimum 50m step out to the south from previous holes into the deposit. Four shallow holes drilled north of the Two Time Prospect to evaluate radon anomalies did not intersect uranium mineralization.

Hole ID
From
(m)
To
(m)
Interval
(m)
U3O8%
CMB-12-49
319.5
324.0
4.5
0.032
 and
345.4
346.4
1.0
0.032
 and
492.5
521.0
28.5
0.031
including
494.0
498.0
4.0
0.051
and
513.5
516.5
3.0
0.074


During the year ended April 30, 2014, the Company incurred acquisition costs of $Nil (2013 - $200,000) and exploration and evaluation expenses of $560 (2013 - $1,910,312) related to the CMB Project.  During the year ended April 30, 2014, the Company incurred only administrative costs as the Company abandoned various claims on the CMB Project.  During the year ended April 30, 2013, the Company executed an exploration program on the CMB Project, incurring administrative costs of $10,434, drilling and trenching costs of $731,850, geology costs of $1,456,437 and geophysics costs of $11,591.  These costs were offset by government grants received in the amount of $300,000 during the year ended April 30, 2013.

Due to the challenging economic environment, the Company does not plan to spend any additional funds on the remaining CMB Project claims until market conditions improve.

Bootheel Uranium Project

The Bootheel properties are currently owned by the Bootheel Project LLC and consist of 81 Federal Mining claims and one State lease.  The Company now has an 81% interest in The Bootheel Project LLC, subject to certain royalties. Under the terms of an agreement dated June 7, 2007, as amended December 21, 2007, and February 28, 2008, between UR-Energy USA Inc. (“URE”), several of its subsidiaries, Target Exploration and Mining Corp (“Target”), a wholly owned subsidiary of the Company, and Crosshair Energy USA, Inc. (“Crosshair USA”), a wholly owned subsidiary of Target, the Company was able to earn an initial 75% interest in the Bootheel Project LLC, by completing expenditures totalling US$3 million and issuing 12,500 common shares on or before June 7, 2011.  All the common shares have been issued and as of July 31, 2009, the Company exceeded US$3 million in expenditures on the property, thereby earning its initial 75% interest. As URE declined to participate in the fiscal
 

 
3

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014


 
 
2012 exploration program, its participating interest was diluted from 25% to approximately 19%, and the Company’s participating interest increased from 75% to approximately 81%.

Under agreements dated February 5, 2008 between MJ Ranches Inc. and Crosshair USA as manager, the Bootheel Project LLC leased MJ Ranches Inc.’s 75% ownership of certain minerals on fee land that adjoined the Bootheel Property.  The initial term of the agreement was for five years with provision for two renewals.  Payment for the initial five year term was US$252,651 paid in advance, increased for inflation for the renewal periods.  The acquired mineral rights were subject to a sliding scale royalty tied to the sales price of uranium. The “Uranium Lease and Surface and Damage Agreement” and “Surface Impact Agreement” expired in February 2013.  On June 7, 2013, the Company announced that the Bootheel Project LLC was unable to reach an agreement with MJ Ranches Inc. on terms which more accurately reflected current market conditions.  Certain portions of the mineral resources included in the Technical Report issued by the Company, dated October 27, 2012, are located on those lands which were subject to the mineral lease with MJ Ranches Inc.  Accordingly, during the year ended April 30, 2013, the Company recorded an impairment of all of the capitalized costs of the Bootheel Uranium Project to operations.

Project Summary

The property has been previously explored for uranium by a number of companies in the 1970’s and again in the mid-1990’s by Cameco Corporation (“Cameco”).

The Bootheel Project LLC acquired a database from Power Resources Inc. that includes reports, gamma logs, drill logs and other data which primarily cover the Federal mining claims but also include some historic data from the surrounding fee land.

The calendar year 2008 drilling program, designed to further test the mineralized Sundance Formation, consisted of 93 vertical holes averaging 540 ft. in depth and totalling 50,163 ft.  Of these holes, 12 were spot cored through the Sundance Formation resulting in 708.5 ft. of core.  Drilling commenced in June 2008 and was completed on September 20, 2008. Results collected to date indicate that the majority of the uranium mineralization on the Bootheel Property is hosted by the Sundance Formation. Laboratory testing in calendar year 2008 demonstrated the potential for uranium mining by in-situ recovery (“ISR”). ISR techniques are more environmentally friendly and less capital intensive than conventional mining methods. Currently, there are three ISR projects in production and several other ISR projects in the permitting or development phase, in Wyoming.

In addition to the calendar year 2008 drilling program, the historic holes were relocated and limited ground radiometric and water sampling surveys were carried out.  On February 5, 2009, Target reported that preliminary bottle roll tests had confirmed historical metallurgical test work indicating uranium recoveries of 87% or better using sodium bicarbonate as a lixiviant.

The data acquired from Cameco were compiled by the Company’s geological team and were combined with the results from over 50,000 feet of drilling completed by Target at Bootheel during calendar year 2008. This compilation formed the basis for the Company’s 2011 drilling program which saw the completion of 76 bore holes, totaling 35,760 feet (10,900 metres). A synthesis of all of these data enabled the Company to generate an Indicated Mineral Resource estimate of 1.12 million pounds of U3O8 (1.570M tons @0.036%) and an Inferred Mineral Resource of 1.05 million pounds of U3O8 (1.315M tons @ 0.040%) for the 81 Federal lode claims and single Wyoming State lease that currently comprise the Bootheel Property. See the following table for additional detail.

 
4

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014




Formation/Classification
Section
Tons
Grade U3O8%
Lbs
Sundance:
       
Indicated
Section 6
943,000
0.040
751,000
Indicated
Section 36
627,000
0.029
369,000
Inferred
Section 36
1,007,000
0.031
624,000
         
Wind River:
       
Inferred
Section 6
182,000
0.074
267,000
Inferred
Section 12
20,000
0.063
25,000
Inferred
Section 32
106,000
0.063
134,000
         
Total Indicated
 
1,570,000
0.036
1,120,000
Total Inferred
 
1,315,000
0.040
1,050,000

The above Mineral Resource was estimated by C. Stewart Wallis, P. Geo, a Qualified Person as defined by NI 43-101, with an effective date of July 8, 2013. The Classifications of the Mineral Resources follow the CIM guidelines dated November 2010.  Wind River resources were estimated using the polygonal method at an estimated cut-off grade of 0.02% eU3O8 over a minimum thickness of 4 feet and a minimum grade x thickness (GT) product of 0.15 ft% and a long term uranium price of $70 per pound. The Sundance resources were estimated using the contour method at an estimated cut-off grade of 0.015% eU3O8 over a minimum thickness of 4 feet and a minimum grade x thickness (GT) product of 0.15 ft% and a long term uranium price of $70 per pound. A tonnage factor of 16 ft3/ton was used for the Sundance Formation, and 15 ft3/ton was used for the Wind River Formation. There are no known legal, environmental or other risks that could materially affect the development of the mineral resources. The numbers in the table have been rounded.

While the above stated mineral resource estimates are encouraging, the continuing downward pressure on the uranium price, in addition to the overall poor state of the junior resource market, has led the Bootheel Project LLC to focus on reducing its expenditures to a minimum, while maintaining the integrity of its data and land package. As a result, the Company released mineral claims that do not currently have any mineral resources identified on them or any significant prospectivity to contain such resources. This action reduced the total land package from 274 mineral claims and 2 state leases to 81 mineral claims and 1 state lease and allows the Bootheel Project LLC to keep the most prospective ground in good standing for the next 12 months. A reversal in the state of uranium price specifically, as well as the junior resource market in general, may afford the Bootheel Project LLC the opportunity to more fully assess its options in the future.

During the year ended April 30, 2014, the Company incurred acquisition costs of $Nil (2013 - $1,283) related to the Bootheel Uranium Project.  During the year ended April 30, 2014, the Company focused on maintaining the claims in good standing and incurred reduced costs of $33,681, including administrative costs of $34,673 for insurance, permitting and equipment storage, and reclamation costs of $10,921 for land re-seeding and filling of drill holes.  These exploration and evaluation expenses were offset by recoveries of $11,913 in relation to URE’s portion of exploration and evaluation expenditures incurred on the Bootheel Uranium Project.  During the year ended April 30, 2013, the Company incurred administrative costs of $45,981, drilling and trenching costs of $13,433, geology costs of $35,816 and hydrology costs of $271.  These costs were offset by recoveries of $28,882 in relation to URE’s portion of exploration and evaluation expenditures incurred on the Bootheel Uranium Project.


 
5

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Southern Golden Promise (Victoria Lake) Project

The Victoria Lake Project consisted of 70 claims covering 1,750 hectares.  The Company completed several phases of exploration including prospecting, mapping, till and rock sampling as well as trenching on targets defined by the other works.

Work completed on the Victoria Lake Project to date confirmed the exploration prospectivity of the area; however, due to the current poor state of the junior resource market, the Company, in consultation with its joint venture partner, Paragon Minerals Corporation, decided to cease expenditures on the project and to return the claims to the original vendor. The vendor was notified and acknowledged receipt of this decision on April 30, 2014.  The Company previously recorded an impairment against its exploration and evaluation assets in relation to the Golden Promise and Southern Golden Promise properties during the year ended April 30, 2013.

STOCK EXCHANGE LISTINGS

On June 7, 2013, the Company announced plans to voluntarily delist its common shares from NYSE MKT. Management believed that under the Company’s financial circumstances, it was not practicable to maintain a plan of compliance that would satisfy NYSE MKT’s continued listing requirements. As a result, the Board of Directors of the Company determined it to be in the best interest of the Company to delist voluntarily from NYSE MKT. The Company formally notified NYSE MKT on June 7, 2013 of its intention to file a Form 25 with the Securities and Exchange Commission (“SEC”) on June 18, 2013. Following the filing of Form 25, the delisting took effect on July 1, 2013, with the simultaneous transfer of the Company’s common stock to the OTCQB. Associated with the move to OTCQB, the Company opted to subscribe to the Exchange’s Real-Time Level 2 Quote Display Service so that investors and market participants will be able to view real-time stock quotes for the Company at www.otcmarkets.com.

As the Company reported in its news release dated July 26, 2013, it did not meet the continued listing requirement of the Toronto Stock Exchange (“TSX”) with respect to its market capitalization. On November 22, 2013, the Company announced that it planned to voluntarily delist its common shares from the TSX and transition to the TSX Venture Exchange in a manner that would provide uninterrupted trading for the Company’s securities. By moving forward to voluntarily delist from the TSX, the Company was able to exercise complete control over the process, ensuring uninterrupted trading of its securities. The transition from the TSX to the TSX Venture Exchange took effect on January 20, 2014.

OUTLOOK

In the next 12 months, the Company intends to continue its program of cost minimization in order to weather the continuing poor macroeconomic environment and is also seeking additional financing to improve its working capital. Through its management services agreement with King & Bay West Management Corp., the Company continues to look for business opportunities and potential asset acquisitions.

SELECTED ANNUAL INFORMATION

The following financial data are selected information for the Company for the three most recently completed financial years:

 
April 30, 2014
April 30, 2013
April 30, 2012
Revenue
$
-
$
-
$
-
Loss and comprehensive loss
 
(3,967,283)
 
(11,674,061)
 
(11,977,829)
Loss per share (basic and diluted)
 
(0.60)
 
(1.77)
 
(2.38)
Total assets
 
2,801,407
 
6,635,616
 
17,997,243


 
6

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014


 
 
Net Loss

Net loss decreased significantly during the year ended April 30, 2014 compared to the two previous fiscal years as the Company attempted to maintain its level of expenditures at low levels to conserve cash during the current year.  Property related expenses consisted primarily of claims maintenance, reclamation and insurance.  The largest item contributing to the net loss for the year ended April 30, 2014 was an impairment loss for exploration and evaluation assets in the amount of $3,160,618.

Net loss for the year ended April 30, 2013 in the amount of $11,674,061 includes an impairment loss for exploration and evaluation assets in the amount of $6,043,241 in relation to various abandoned properties.  Prior to abandoning the properties at the end of the year, the Company had completed exploration programs on the CMB Uranium Project and the Juniper Ridge Property which commenced during fiscal 2012, attributing to a higher net loss compared to the year ended April 30, 2014.

Net loss for the year ended April 30, 2012 in the amount of $11,977,829 is reflective of the Company’s exploration programs on the CMB Uranium Project, the Bootheel Project and the Juniper Ridge Property.  As exploration work increased, overall general and administrative costs also increased during the year ended April 30, 2012.

Total Assets

From April 30, 2012 to April 30, 2014, the Company’s total assets have decreased significantly.  During the year ended April 30, 2013, total assets decreased primarily due to decreased cash on hand used in operations, decreased fair value of marketable securities held and exploration and evaluation asset impairments.  During the year ended April 30, 2014, total assets further decreased primarily due to decreased cash on hand used in operations and exploration and evaluation asset impairments.

REVIEW OF CONSOLIDATED FINANCIAL RESULTS

Results of operations for the year ended April 30, 2014 compared to the year ended April 30, 2013:

For the year ended April 30, 2014, the Company reported a net loss of $3,967,283 or $0.60 per common share, compared to a net loss of $11,674,061 or $1.77 per common share for the year ended April 30, 2013.

Expenses

Total expenses for the year ended April 30, 2014 were $3,898,339, representing a decrease of $8,014,636 compared to the prior year as a direct result of decreased overall Company activity during the current year.  All administrative expenses for the year ended April 30, 2014 decreased compared to the prior year with the exception of transfer agent and filing fees and are discussed below.

Audit and accounting fees of $22,775 (2013 - $124,087) decreased for the year ended April 30, 2014 compared to the prior year due to the Company incurring additional fees in the prior period in relation to Sarbanes-Oxley (“SOX”) compliance and additional tax filings.

Consulting expense of $Nil (2013 - $308,570), management fees of $142,533 (2013 - $411,368) and wages and salaries of $252,999 (2013 - $705,024) total $395,532 for the current year (2013 - $1,424,962) which represents a total decrease of $1,029,430 compared to the prior year as a result of decreased Company activities and personnel providing services to the Company.  During the year ended April 30, 2014, a consulting agreement between the Company and the former Chief Executive Officer and a consulting agreement between the Company and the former Executive Chairman were both terminated.
 
 

 
7

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



 
Director fees of $Nil (2013 - $39,467) decreased by $39,467 compared to the prior year as a result of the Company cancelling its director compensation program in light of financial conditions faced by the Company during the prior year.

During the year ended April 30, 2014, the Company spent a total of $34,225 (2013 - $2,835,066) on exploration and evaluation expenditures, including $560 (2013 - $1,910,312) on exploration of the CMB Project, $33,681 (2013 - $66,619) on the Bootheel Project, $Nil (2013 - $47,265) on the Golden Promise Project, recovered $392 (2013 - $810,870 expense) on the Juniper Ridge Project and $376 on other projects (2013 - $Nil).  Exploration and evaluation expenses for the year ended April 30, 2014 primarily related to minimal administrative costs and recoveries to maintain claims and insurance policies on the Bootheel Project.  In addition, the Company incurred reclamation costs to reclaim the land on which the Bootheel Project sits.  The current year decrease in exploration and evaluation expense of $2,800,841 in exploration and evaluation expenditures compared to the prior year is due to the Company no longer pursuing the CMB, Golden Promise and Juniper Ridge projects as well as decreased activities on the Bootheel Project.  Details of exploration and evaluation activities are further discussed in “Description of Business and Overview”.

During the year ended April 30, 2014, the Company recorded an impairment of exploration and evaluation assets in the amount of $3,160,618 which relates to the CMB Project.  During the year ended April 30, 2013, the Company recorded an impairment of exploration and evaluation assets in the amount of $6,043,241 relating to the Bootheel, Golden Promise and Juniper Ridge projects.

Insurance expense decreased from $51,415 for the year ended April 30, 2013 to $33,036 for the year ended April 30, 2014 as a result of the Company adjusting its insurance policy to reflect corporate changes such as property abandonments and the Company’s stock exchange listings as previously discussed.

Interest expense incurred during the year ended April 30, 2014 in the amount of $1,427 (2013 - $10,402) relates to non-cash accretion of the Company’s future reclamation provisions.  The decrease in interest expense of $8,975 is a result of the balance of future reclamation provisions decreasing during the year ended April 30, 2014.  Refer to “Statement of Financial Position Information” for further discussion of future reclamation provisions.

Investor relations expense of $11,122 (2013 - $180,786), legal costs of $8,989 (2013 - $35,950), office and administrative expenses of $87,331 (2013 - $167,188), project development costs of $Nil (2013 - $66,471), rent of $40,632 (2013 - $123,066) and travel expenses of $252 (2013 - $48,547) all decreased compared to the prior year as a direct result of decreased overall Company activities, including fewer marketing initiatives, no new project development and closure of the Company’s office in Colorado during the current year.

During the year ended April 30, 2014, the Company recorded a recovery of $45,250 related to share-based compensation as a result of forfeitures of unvested stock options during the year. During the year ended April 30, 2013, the Company recorded share-based compensation of $626,364 according to vesting schedules of certain grants issued in 2011 and 2012. This expense (recovery) had no effect on the Company’s cash flows.

Transfer agent and filing fees increased to $124,896 for the year ended April 30, 2014 compared to $109,625 for the prior year as a result of the Company voluntarily delisting its common shares from the NYSE MKT, transitioning from the TSX to the TSX Venture Exchange, changing its name and consolidating its common shares on a 10 for 1 basis during the current year.

Other Income (Expenses)

Other expenses amounted to $68,944 for the year ended April 30, 2014 compared to other income of $238,914 for the year ended April 30, 2013.


 
8

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



During the year ended April 30, 2014, the Company recorded finance income of $314 compared to $22,158 in the prior year which relates to interest earned on excess cash on hand.  The decrease in finance income is attributable to the Company’s decreasing cash and cash equivalents balance.  The Company also realized a gain on foreign exchange of $1,097 during the current year compared to a gain of $465 during the prior year.

The Company recorded an impairment loss in the amount of $41,852 due to collectability concerns in relation to reclamation bonds for properties that have been abandoned.  No such impairment loss was recorded during the prior year.

During the year ended April 30, 2014 the Company recorded an unrealized loss on marketable securities of $28,503 (2013 - $173,005) in relation to fair value adjustments for marketable securities the Company holds.

During the year ended April 30, 2013, the Company recorded a flow through premium in the amount of $428,712 in relation to flow through shares issued in prior years and attributable to the qualified exploration expenditures incurred.  The Company also recorded a loss on asset disposition of $39,416 during the year ended April 30, 2013.  No such transactions occurred during the year ended April 30, 2014.

Working Capital

As of April 30, 2014, the Company had a working capital deficit of $716,619 compared to a working capital surplus of $94,253 as at April 30, 2013. The decrease of $810,872 was mainly due to increased amounts due to related parties and decreased cash and cash equivalents, fair value of marketable securities, amounts receivable and prepaid expenses.

Details of the Company’s plans with respect to its working capital deficiency are further discussed in “Outlook” and “Liquidity and Capital Resources”.

SUMMARY OF QUARTERLY RESULTS

The following table summarizes the Company’s financial operations for the last eight quarters.  For more detailed information, please refer to the consolidated financial statements.

Description
Q4
April 30, 2014
($)
Q3
January 31, 2014
($)
Q2
October 31, 2013
($)
 Q1
July 31, 2013
($)
 
Total assets
Exploration and evaluation assets
Working capital (deficit)
Shareholders’ equity
Net loss
Loss per share
Exploration and evaluation expenditures (recovery)
 
2,801,407
2,509,791
(716,619)
1,893,190
(110,365)
(0.02)
(13,639)
 
2,923,397
2,509,791
(633,068)
2,006,326
(159,468)
(0.02)
18,596
 
2,958,270
2,509,791
(482,034)
2,159,102
(3,404,522)
(0.52)
20,392
 
6,266,264
5,670,409
(255,927)
5,550,722
(292,928)
(0.04)
8,876


 
9

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014




Description
 Q4
April 30, 2013
($)
Q3
January 31, 2013
($)
Q2
October 31, 2012
($)
Q1
July 31, 2012
($)
 
Total assets
Exploration and evaluation assets
Working capital
Shareholders’ equity
Net loss
Loss per share
Exploration and evaluation expenditures
(recovery)
 
6,635,616
5,670,409
94,253
5,905,723
(5,267,909)
(0.80)
(213,831)
 
12,287,176
 10,884,336
141,159
 11,149,315
(828,327)
         (0.13)
  36,174
 
12,796,468
 10,683,053
   574,584
 11,868,381
(3,225,473)
         (0.49)
   1,471,277
 
16,819,811
 11,612,105
      2,985,367
 14,876,725
(2,352,352)
            (0.36)
   1,541,446

Historical quarterly results of operations and net loss per share data do not necessarily reflect any recurring expenditure patterns or predictable trends.

The net loss reported for the quarter ended July 31, 2012 is attributed predominantly by the overall ramping up of exploration and evaluation activities subsequent to equity financing and the progressive increase in general and administrative expenses that were incurred as the Company continued to expand its corporate activities and personnel to support both the operations and public company obligations.

The increase in net loss reported for the quarters ended October 31, 2012, April 30, 2013 and October 31, 2013 are explained by impairment losses recorded with respect to the Company’s exploration and evaluation assets.

The significant decrease in net loss realized in the quarters ended July 31, 2013, January 31, 2014 and April 30, 2014 is a direct result of decreased overall Company activities as the Company attempted to maintain a low level of expenditures due to challenging market conditions.

FOURTH QUARTER

Results of operations for the three month period ended April 30, 2014 compared to the three month period ended April 30, 2013:

For the three month period ended April 30, 2014, the Company reported a net loss of $110,365 or $0.02 per common share, compared to a net loss of $5,267,909 or $0.80 per common share for the three month period ended April 30, 2013.

Expenses

Total expenses for the three month period ended April 30, 2014 were $46,697 compared to total expenses of $5,225,084 for the three month period ended April 30, 2013 which includes an impairment of exploration and evaluation assets of $5,110,656.  Excluding the impact of the impairment of exploration and evaluation assets, total expenses decreased by $67,731 during the three month period ended April 30, 2014 compared to the same period of the prior year as a direct result of decreased overall Company activity during the current period.

Audit and accounting fees of $4,000 (2013 - $31,591) decreased for the three month period ended April 30, 2014 compared to the same period of the prior year due to the Company incurring additional fees in the prior period in relation to engaging the Company’s auditors to perform quarterly reviews of the consolidated interim financial statements.


 
10

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Consulting expense of $Nil (2013 - $13,822), management fees of $Nil (2013 - $100,994) and wages and salaries of $24,629 (2013 - $107,897) total $24,629 for the current period (2013 - $222,713) which represents a total decrease of $198,084 compared to the same period of the prior year as a result of decreased Company activities and personnel providing services to the Company.  During the year ended April 30, 2014, a consulting agreement between the Company and the former Chief Executive Officer and a consulting agreement between the Company and the former Executive Chairman were both terminated.

During the three month period ended April 30, 2014, the Company recorded director fees of $Nil (2013 – recovery of $58,140) as a result of the Company cancelling its director compensation program in light of financial conditions faced by the Company.  Previously accrued but unpaid director fees were reversed as of April 30, 2013 which explains the recovery of director fees for the three month period ended April 30, 2013.

During the three month period ended April 30, 2014, the Company recorded a recovery of exploration and evaluation expenses in the amount of $13,639 as a result of reclassifying amounts paid for reclamation on the Bootheel Project as a decrease to future reclamation provisions.  During the three month period ended April 30, 2013, the Company recorded a recovery of exploration and evaluation expenses in the amount of $213,831 as a result of receiving Junior Company Exploration Assistance Program grants.

Interest expense incurred during the three month period ended April 30, 2014 in the amount of $356 (2013 - $2,600) relates to non-cash accretion of the Company’s future reclamation provisions.  The decrease in interest expense of $2,244 is a result of the balance of future reclamation provisions decreasing during the three month period ended April 30, 2014.  Refer to “Statement of Financial Position Information” for further discussion on the balance of future reclamation provisions.

Insurance of $7,350 (2013 - $11,250), investor relations expense of $858 (2013 - $7,663), office and administrative expenses of $7,872 (2013 - $9,417), rent of $2,120 (2013 - $24,556), transfer agent and filing fees of $9,992 (2013 - $15,161) and travel expenses of $Nil (2013 - $5,726) all decreased compared to the same period of the prior year as a direct result of decreased Company activities.

The Company did not incur any project development costs during the three month period ended April 30, 2014 as the Company attempted to reduce costs and conserve cash during the current period.  Project development costs in the amount of $25,417 incurred during the same period of the prior year related to due diligence performed by the Company for prospective uranium properties in Argentina.  The Company decided not to pursue the properties subsequent to the three month period ended April 30, 2013.

During the three month period ended April 30, 2014, the Company recorded a recovery of share-based compensation expense of $2,771 (2013 – expense of $24,317) as a result of forfeitures of unvested stock options and according to vesting schedules of certain stock option grants in 2011 and 2012. This item had no effect on the Company’s cash flows.

Other Income (Expenses)

During the three month period April 30, 2014, the Company recorded finance income of $275 compared to $923 in the same period of the prior year which relates to interest earned on excess cash on hand.  The decrease in finance income is attributable to the Company’s decreasing cash and cash equivalents balance.  The Company also realized a gain on foreign exchange of $309 during the current period compared to a gain of $7,186 during the prior period.

As of April 30, 2014, the Company recorded an impairment loss in the amount of $41,852 due to collectability concerns in relation to reclamation bonds for properties that have been abandoned.  No such impairment loss was recorded during the prior period.
 
 

 
11

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



During the three month period ended April 30, 2014 the Company recorded an unrealized loss on marketable securities of $22,400 (2013 - $51,399) in relation to fair value adjustments for marketable securities the Company holds.

LIQUIDITY AND CAPITAL RESOURCES

As of April 30, 2014, the Company had cash and cash equivalents of $78,541 (2013 - $596,450) and a working capital deficit of $716,619 (2013 – working capital surplus of $94,253).  The increase in working capital deficit is primarily attributable to cash used in operating activities, as discussed in further detail below.

At present the Company has no producing properties and consequently has no current operating income or cash flows. The Company intends to finance its future requirements through a combination of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. These uncertainties may cause significant doubt on the Company’s ability to continue as a going concern.  See “Risk Factors”.

The Company’s cash and cash equivalents are held in a Schedule 1 Canadian financial institution and its affiliated brokerage house in highly liquid accounts and interest bearing investments.  No amounts have been or are invested in asset-backed commercial paper.

To date, the Company’s operations, exploration and evaluation activities have been almost entirely financed from equity financings. The Company will continue to identify financing opportunities in order to provide additional financial flexibility and to continue the development of its property portfolio, meet land claim expenditure requirements and other commitments. While the Company has been successful raising the necessary funds in the past, there can be no assurance it can do so in the future.

Operating Activities

Cash used in operating activities for the year ended April 30, 2014 amounted to $502,716, which consisted of the net loss for the year of $3,967,283 and adjusted for changes in future reclamation estimates on the Bootheel Project of $2,053, depreciation of equipment of $22,754, impairment of exploration and evaluation assets of $3,160,618, impairment of reclamation bonds of $41,852, interest expense of $1,427, share-based compensation recovery of $45,250, an unrealized gain on foreign exchange of $5,669 and an unrealized loss on marketable securities of $28,503.  Net loss for the year was further adjusted to determine cash used in operating activities for changes in non-cash working capital items, including a decrease in receivables in the amount of $16,669 for Goods and Services Tax refunds received, a decrease in prepaid expenses of $49,498 as the Company’s prepaid stock exchange listing fees decreased, a decrease of payables and accrued liabilities of $68,697 due to settling outstanding amounts and an increase in amounts due to related parties of $264,915 attributable to services provided by King & Bay West Management Corp.

Cash used in operating activities for the year ended April 30, 2013 amounted to $4,834,152, which consisted of the net loss for the year of $11,674,061 and adjusted for depreciation of equipment of $26,338, impairment of exploration and evaluation assets of $6,043,241, interest expense of $10,402, loss on disposal of equipment of $39,416, a flow-through share premium of $428,712, share-based compensation of $626,364, and an unrealized loss on marketable securities of $173,005.  Net loss for the year was further adjusted to determine cash used in operating activities for changes in non-cash working capital items, including a decrease in receivables in the amount of $80,431 for Goods and Services Tax refunds received, a decrease in prepaid expenses of $15,292 for security deposits returned to the Company, an increase of payables and accrued liabilities of $65,947 and an increase in amounts due to related parties of $188,185.


 
12

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Investing Activities

Cash used in investing activities for the year ended April 30, 2014 amounted to $15,193 and related to reclamation costs incurred on the Bootheel Project in the amount of $17,268 which was partially offset by net proceeds received in the amount of $2,075 from the sale of marketable securities.

Cash provided by investing activities for the year ended April 30, 2013 amounted to $30,785 and consisted of refunds of reclamation bonds previous paid of $292,507 and proceeds from the sale of equipment of $8,648 which were offset by the acquisition of exploration and evaluation assets and equipment of $224,816 and $45,554, respectively.

Financing Activities

There were no financing activities during the year ended April 30, 2014.

During the year ended April 30, 2013, the Company incurred share issue costs in the amount of $46,481 with respect to financing completed in the previous year.

STATEMENT OF FINANCIAL POSITION INFORMATION

   
As at
April 30, 2014
   
As at
April 30, 2013
 
             
Cash and cash equivalents
  $ 78,541     $ 596,450  
Marketable securities
    55,159       85,737  
Receivables
    4,161       20,830  
Prepaid expenses
    34,470       83,968  
Reclamation bonds
    28,269       64,452  
Equipment
    91,016       113,770  
Exploration and evaluation assets
    2,509,791       5,670,409  
Total Assets
  $ 2,801,407     $ 6,635,616  
                 
Payables and accrued liabilities
  $ 256,201     $ 324,898  
Due to related parties
    632,749       367,834  
Future reclamation provisions
    19,267       37,161  
Capital stock
    87,411,032       87,411,032  
Reserves
    21,475,351       21,520,601  
Deficit
    (106,993,193 )     (103,025,910 )
Total Liabilities and Equity
  $ 2,801,407     $ 6,635,616  

Assets

Cash decreased by $517,909 during the year ended April 30, 2014 primarily due to the Company’s operating activities, as described in detail in “Liquidity and Capital Resources”.

During the year ended April 30, 2014, marketable securities decreased by $30,578 which is explained by an unrealized loss recorded in the amount of $28,503 for fair value adjustments at year end and the sale of 31,000 common shares of Messina Minerals Inc. for net proceeds of $2,075.


 
13

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Receivables decreased by $16,669 during the year ended April 30, 2014 as a result of the Company receiving Goods and Services Tax refunds from the government of Canada.  As expenditures decreased during the year ended April 30, 2014, the amount of Goods and Services tax paid by the Company also decreased, resulting in reduced Goods and Services Tax refunds claimed.

As at April 30, 2014, prepaid expenses decreased by $49,498 compared to the prior year due to the Company incurring decreased annual stock exchange listing fees subsequent to voluntarily transitioning from the NYSE MKT to the OTCQB and from the TSX to the TSX Venture Exchange, as discussed in “Stock Exchange Listings”.

During the year ended April 30, 2014, reclamation bonds decreased by $36,183 as a result of the Company recording an impairment loss of $41,852 due to collectability concerns in relation to reclamation bonds for properties that have been abandoned.  The impairment loss was offset by an unrealized foreign exchange gain of $5,669 as the remaining reclamation bonds are denominated in US dollars and registered with the Wyoming Department of Environmental Quality and State Office of Lands and Investment.

Equipment decreased by $22,754 during the year ended April 30, 2014 due to depreciation expense for the year.  There were no additions to or disposals of equipment during the current year.

As at April 30, 2014, exploration and evaluation assets decreased by $3,160,618 compared to the prior year as a result of the Company recording an impairment loss of $3,160,618 in relation to the CMB Project.  There were no additions to exploration and evaluation assets during the current year.

Liabilities

During the year ended April 30, 2014, payables and accrued liabilities decreased by $68,697 due to settling outstanding amounts due to various third parties.

Amounts due to related parties increased by $264,915 during the year ended April 30, 2014 as a result of monthly services provided by King & Bay West Management Corp. and MJM Consulting Corp.  The consulting agreement between the Company and MJM Consulting Corp. was terminated as of December 31, 2013.  For further details with respect to related party balances and transactions, refer to “Related Party Transactions”.

As at April 30, 2014, future reclamation provisions decreased by $17,894 compared to the prior year which is explained by the Company completing reclamation work on the Bootheel Project by incurring costs to reseed vegetation of $17,268.  In addition, the Company recorded accretion expense of $1,427 and changes in estimates of future reclamation of $2,053 during the year ended April 30, 2014.

Equity

There was no change in capital stock during the year ended April 30, 2014.  There were no common shares issued or cancelled during the current year.

During the year ended April 30, 2014, reserves decreased by $45,250 as a result of the Company recording a recovery of share-based compensation in the amount of $45,250 to account for forfeitures of unvested stock options during the year.

Deficit increased by the net loss for the year ended April 30, 2014 in the amount of $3,967,283.


 
14

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



CAPITAL STOCK

The Company’s authorized capital consists of unlimited number of common shares without par value, and has securities outstanding as follows:

   
As At
Security Description
 
April 30, 2014
 
Date of Report
Common shares – issued and outstanding
 
6,578,035
 
6,578,035
Director, employee and contractor options – vested
 
342,213
 
284,588
Director, employee and contractor options – granted but not yet vested
 
-
 
-
Warrants to purchase shares
 
-
 
-
Underwriters warrants – rights to purchase warrants
 
-
 
-
Common shares – fully diluted
 
6,920,248
 
6,862,623

Share and warrant issuances

There were no share or warrant issuances during the years ended April 30, 2014 or 2013.
 
During the year ended April 30, 2014, the Company consolidated its common shares on the basis of one post-consolidated share for every ten pre-consolidated common shares held.  All references to share and per share amounts have been restated to reflect this share consolidation.
 
RELATED PARTY TRANSACTIONS
 
Related parties and related party transactions impacting the accompanying consolidated financial statements are summarized below and include transactions with the following individuals or entities:
 
Key management personnel
 
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors, corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, and Vice Presidents.
 
Remuneration attributed to key management personnel for the years ended April 30, 2014 and 2013 are summarized as follows:
 
   
April 30, 2014
   
April 30, 2013
 
             
Share-based compensation
  $ 27,463     $ 405,876  
Short-term benefits(1)
    207,723       933,802  
    $ 235,186     $ 1,339,678  
 
(1)  
include base salaries and directors’ fees, pursuant to contractual employment or consultancy arrangements, management and consulting fees

 
15

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



 
Other related parties

MJM Consulting Corp. is an entity that is owned by the former Executive Chairman, Mr. Mark J. Morabito.  The Company had a consulting agreement with Mr. Morabito and MJM Consulting Corp. whereby MJM Consulting Corp. provided management services to the Company.  This agreement was terminated by Mr. Morabito as of December 31, 2013.  The management fee was consistent with what a company of similar size and asset base would pay for such services.

King & Bay West Management Corp. (“King & Bay West”) is an entity that is owned by Mr. Mark J. Morabito, the former Executive Chairman, and employs or retains certain directors, officers and consultants of the Company.  King & Bay West provides administrative, management, geological, regulatory, tax, corporate development and investor relations services to the Company. These services are provided to the Company on an as-needed basis and are billed based on the cost or value of the services provided to the Company.  The fees are consistent with what King & Bay West charges its clients for similar services. The amount set out in the table below represents amounts paid or accrued to King & Bay West for the services of King & Bay West personnel and for overhead and third party costs incurred by King & Bay West on behalf of the Company.

Transactions entered into with related parties other than key management personnel during the years ended April 30, 2014 and 2013 include the following:

   
April 30, 2014
 
April 30, 2013
         
King & Bay West
$
303,832
$
1,234,170

Amounts due to related parties as at April 30, 2014 included the following:
 
·  
King & Bay West, controlled by Mr. Morabito - $540,874 (April 30, 2013 - $319,312)
 
·  
MJM Consulting Corp., controlled by Mr. Morabito - $91,875 (April 30, 2013 - $48,522)
 
The amounts due to related parties are non-interest bearing.
 
Transactions with related parties were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed by the related parties.
 
GOING CONCERN
 
The Company is in the process of exploring and developing its exploration and evaluation properties and has not yet determined whether the properties contain ore reserves that are economically recoverable.  The recoverability of the amounts shown for exploration and evaluation properties and related deferred exploration costs are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
 
The consolidated financial statements of the Company have been prepared using IFRS on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.


 
16

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



As at April 30, 2014, the Company had a working capital deficit of $716,619 (2013 – working capital surplus of $94,253) and a deficit of $106,993,193 (2013 - $103,025,910). At present the Company has no producing properties and consequently has no current operating income or cash flows. The Company intends to finance its future requirements through a combination of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such financings or obtain them on favorable terms. Without additional financing, there is substantial doubt that the Company will be able to fund both its exploration programs and ongoing operations for the next 12 months. These uncertainties may cause significant doubt on the Company’s ability to continue as a going concern.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of assets, liabilities, shareholders’ equity, and the disclosure of contingent assets and liabilities, as at the date of the consolidated financial statements, and expenses for the years reported.  Actual results could differ from those estimates.

Critical Judgements

The preparation of the consolidated financial statements requires management to make judgements regarding the going concern of the Company, as previously discussed, as well as the determination of functional currency. The functional currency is the currency of the primary economic environment in which an entity operates, and has been determined for each entity within the Company. The functional currency for the Company and its subsidiaries has been determined to be the Canadian dollar.

Key Sources of Estimation Uncertainty

Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting years. Actual results could differ from those estimates and such differences could be significant.

Significant estimates made by management affecting the consolidated financial statements include:

Share-based Payments

Estimating fair value for granted stock options and compensatory warrants requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option or warrant, volatility, dividend yield, and rate of forfeitures and making assumptions about them.

Deferred Tax Assets & Liabilities

The estimation of income taxes includes evaluating the recoverability of deferred tax assets and liabilities based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets and liabilities will not be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development and commercialization of mineral reserves. To the extent that management’s assessment of the Company’s ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets or liabilities, and deferred income tax provisions or recoveries could be affected.

 
17

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Recoverability of Exploration & Evaluation Assets

The Company is in the process of exploring and evaluating its exploration and evaluation assets and has not yet determined whether the properties contain mineral reserves that are economically recoverable.  The recoverability of  the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to complete the development of those mineral reserves and upon future production or proceeds from the disposition thereof.

Useful Life of Equipment

Equipment is depreciated over its estimated useful life. Estimated useful lives are determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset, the potential for technological obsolescence, and regulations.

Future Reclamation Provision

The Company assesses its provision for reclamation related to its exploration and evaluation activities at each reporting period or when new material information becomes available. Accounting for reclamation obligations requires management to make estimates of the future costs that will be incurred to complete the reclamation to comply with existing laws and regulations. Actual future costs that will be incurred may differ from those amounts estimated as a result of changes to environmental laws and regulations, timing of future cash flows, changes to future costs, technical advances, and other factors. In addition, the actual work required may prove to be more extensive than estimated because of unexpected geological or other technical factors. The measurement of the present value of the future obligation is dependent on selection of suitable discount rate and the estimate of future cash outflows. Changes to either of these estimates may materially affect the present value calculation of the obligation.

ACCOUNTING POLICIES

The accounting policies followed by the Company are set out in Note 3 to the accompanying audited consolidated financial statements for the year ended April 30, 2014.

New Accounting Pronouncements Adopted

The following accounting standards were adopted as of May 1, 2013 and did not have a material impact on the consolidated financial statements of the Company.

Amendments to IFRS 7, Financial Instruments:  Disclosures (“IFRS 7”) introduces enhanced disclosure around the transfer of financial assets and associated risks.

In May 2011, the IASB issued IFRS 10, Consolidated Financial Statements (“IFRS 10”), which builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of a parent company. IFRS 10 also provides additional guidance to assist in the determination of control where this is difficult to assess.

In May 2011, the IASB issued IFRS 11, Joint Arrangements (“IFRS 11”), which enhances accounting for joint arrangements, particularly by focusing on the rights and obligations of the arrangement, rather than the arrangement’s legal form. IFRS 11 also addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities and prohibits proportionate consolidation.
 

 
18

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



In May 2011, the IASB issued IFRS 12, Disclosure of Interests in Other Entities (“IFRS 12”), which is a comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off-balance sheet vehicles.
 
In May 2011, the IASB issued IFRS 13, Fair Value Measurement (“IFRS 13”), which defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 does not determine when an asset, a liability or an entity’s own equity instrument is measured at fair value. Rather, the measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value (with limited exceptions).
 
In June 2011, the IASB amended IAS 1, Presentation of Financial Statements (“IAS 1”), to change the disclosure of items presented in other comprehensive income into two groups, based on whether those items may be recycled to profit or loss in the future.

Amendments to IAS 27, Separate Financial Statements (“IAS 27”), and IAS 28, Investments in Associates and Joint Ventures (“IAS 28”) have been made. IAS 27 addresses accounting for subsidiaries, jointly controlled entities and associates in non-consolidated financial statements. IAS 28 has been amended to include joint ventures in its scope and to address the changes in IFRS 10-13.

New Accounting Pronouncements

The following accounting pronouncements have been made, but are not yet effective for the Company as at April 30, 2014.  The Company is currently evaluating the impact of these amended standards on its consolidated financial statements.

In November 2009 and October 2010, the IASB issued IFRS 9, Financial Instruments (“IFRS 9”), which represents the completion of the first part of a three-part project to replace IAS 39, Financial Instruments: Recognition and Measurement, with a new standard. Per the new standard, an entity choosing to measure a liability at fair value will present the portion of the change in its fair value due to changes in the entity’s own credit risk in the other comprehensive income or loss section of the entity’s statement of comprehensive loss, rather than within profit or loss. Additionally, IFRS 9 includes revised guidance related to the derecognition of financial instruments. IFRS 9 applies to financial statements for annual periods beginning on or after January 1, 2018, with early adoption permitted.

Amendments to IAS 32, Financial Instruments:  Presentation, are effective for annual periods beginning on or after January 1, 2014.  This provides for amendments relating to offsetting financial assets and financial liabilities.

RISK FACTORS

The exploration of mineral deposits involves significant risks and uncertainties, which even a combination of careful evaluation, experience and knowledge may not eliminate. Certain of the more prominent risk factors that may materially affect the Company’s future performance, in addition to those referred to above, are listed hereunder.


 
19

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



The successful start of mining development and operations into a commercially viable mine cannot be assured.

There are numerous activities that need to be completed in order to successfully commence development and production, including, without limitation: completing of a formal feasibility study; optimizing the mine plan; recruiting and training personnel; having available funds to finance construction and development activities; avoiding potential increases in costs; negotiating contracts for the supply of power, shipping and for the sale of commodities; updating, renewing and obtaining, as required, all necessary permits, including, without limitation, environmental permits; and handling any other infrastructure issues. There is no certainty that the Company will be able to successfully complete these activities, since most of these activities require significant lead times, and the Company will be required to manage and advance these activities concurrently in order to begin production. A failure or delay in the completion of any one of these activities may delay production, possibly indefinitely, and will have a material adverse effect on the Company’s business, prospects, financial position, results of operations and cash flows.

As such, there can be no assurance that the Company will be able to complete development of its projects at all, on time or in accordance with any budgets due to, among other things, the delivery and installation of plant and equipment and cost overruns, or that the current personnel, systems, procedures and controls will be adequate to support operations. Failure to successfully complete these events as expected would have a material adverse effect on the Company’s business, prospects, financial position, results of operations and cash flows.

There is no assurance that the Company will ever achieve production or that the Company will ever be profitable if production is achieved.

The Company may experience difficulty attracting and retaining qualified management and technical personnel to meet its needs for growth.

The Company is dependent on the services of key executives and other highly skilled and experienced executives and personnel focused on managing the Company's interests and the advancement of projects and on identifying new opportunities for growth and funding. Due to the Company’s relatively small size, the loss of these persons or its inability to attract and retain additional highly skilled employees required for the development of the Company’s activities may have a material adverse effect on its business or future operations.

Titles and other rights to the Company’s projects cannot be guaranteed and may be subject to prior unregistered agreements, transfers or claims and other defects.

The Company cannot guarantee that title to its projects will not be challenged. The Company may not have, or may not be able to obtain, all necessary surface rights to develop its projects. Title insurance generally is not available for mineral properties, and its ability to ensure that we have obtained secure claim to individual mineral properties or mining concessions may be severely constrained. The Company’s projects may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects.  The Company has not conducted surveys of all of the claims in which it holds direct or indirect interests. A successful challenge to the precise area and location of these claims could result in the Company being unable to operate on all or part of its projects as permitted or being unable to enforce our rights with respect to all or part of the Company’s projects.


 
20

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



The Company needs to enter into contracts with external service and utility providers.

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. In order to develop a mine, the Company will need to negotiate and conclude various agreements with external service and utility providers for shipping and power access, and these are important determinants that affect capital and operating costs. The inability to conclude any such agreements could have a material adverse effect on the Company’s financial position, results of operations and cash flows and render the development of a mine unviable.

The Company's activities are subject to environmental laws and regulations that may increase the Company's costs of doing business and restrict the Company’s operations.

All of the Company’s exploration, potential development and production activities are subject to regulation by governmental agencies under various environmental laws, including with respect to air emissions, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Compliance with environmental laws and regulations may require significant capital outlays on behalf of the Company and may cause material changes or delays in our intended activities. There can be no assurance that future changes in environmental regulations will not adversely affect the Company’s business, and it is possible that future changes in these laws or regulations could have a significant adverse impact on some portion of its business, causing it to re-evaluate those activities at that time. Failure to comply with applicable environmental laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulator or judicial authorities, causing operations to cease or to be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.

The Company has a history of losses and expects to incur losses for the foreseeable future.

The Company has incurred losses since its inception and expects to incur losses for the foreseeable future. The Company expects to continue to incur losses unless and until such time as a project enters into commercial production and generates sufficient revenues to fund continuing operations. The development of the Company’s projects will require the commitment of substantial financial resources. The amount and timing of expenditures will depend on a number of factors, including the progress of ongoing exploration, evaluation and development, the results of consultant analysis and recommendations, the rate at which operating losses are incurred, the execution of any agreements with strategic partners and our acquisition of additional properties. Some of these factors are beyond the Company’s control. There can be no assurance that the Company will ever achieve profitability.

The Company’s securities are subject to price volatility.

In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations that have not been necessarily related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that fluctuations in the Company’s share price will not occur. It may be anticipated that any quoted market for our common shares will be subject to market trends generally, notwithstanding any potential success in creating revenues, cash flows or earnings. The value of the Company’s common shares will be affected by such volatility.


 
21

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



FINANCIAL INSTRUMENTS

The Company’s financial assets and liabilities are recorded and measured as follows:

Asset or Liability
Category
Measurement
Cash and cash equivalents
FVTPL
Fair value
Marketable securities
FVTPL
Fair value
Receivables
Loans and receivables
Amortized cost
Reclamation bonds
Held to maturity
Amortized cost
Payables and accrued liabilities
Other liabilities
Amortized cost
Due to related parties
Other liabilities
Amortized cost

The fair value of the Company’s receivables, payables and accrued liabilities, and due to related parties approximate carrying value, due to their short-term nature.  The Company’s cash and cash equivalents and marketable securities are measured at fair value under the fair value hierarchy based on level one quoted prices in active markets for identical assets or liabilities.  The Company’s other financial instruments, being reclamation bonds, are measured at amortized cost.

The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk and price risk.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

The Company is subject to credit risk on its cash and cash equivalents, and receivables. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. The Company has no investments in asset-backed commercial paper. The Company’s receivables consist mainly of Goods and Services Tax receivable due from the Government of Canada.  The Company does not believe it is exposed to significant credit risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.

The Company manages liquidity risk through its capital management as outlined in the notes to the accompanying consolidated financial statements. The Company will require additional equity financing to meet its administrative overhead costs and further exploration activities on its exploration and evaluation assets in fiscal 2015.

Market Risk 

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, commodity and equity prices, and foreign exchange rates.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The risk that the Company will realize a loss as a result of a decline in the fair value of any short-term investments included in cash and cash equivalents is minimal because these investments generally have a fixed yield rate.
 

 
22

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014


 
(b) Price risk

The Company is exposed to price risk with respect to commodity prices, particularly uranium, and equity prices, since the Company possesses investments in publicly traded securities.  The Company closely monitors those prices to determine the appropriate course of action to be taken by the Company. However, there can be no assurance that the Company can exit these positions if required, resulting in proceeds approximating the carrying value of these securities.

(c) Currency risk

The Company’s expenditures are predominantly in Canadian dollars, and any future equity raised is expected to be predominantly in Canadian dollars.  As at April 30, 2014, the Company has accounts payable denominated in US dollars of US$57,654, cash of US$1,321 and reclamation bonds of US$25,800.  A 10% change in the Canadian dollar versus the US dollar would give rise to a gain/loss of approximately $3,346.

OFF BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off balance sheet financing arrangements.

DISCLOSURE CONTROLS AND PROCEDURES

At the end of the period covered by this report, an evaluation of the effectiveness of the design and operations of our “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) of the United States Securities Exchange Act of 1934 (the “Exchanged Act”)) was carried out by our principal executive officer and principal financial officer. Based upon that evaluation, our principal executive officer and principal financial officer have concluded as of the end of the period covered by this report that the design and operation of our disclosure controls and procedures are effective at the reasonable assurance level to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

Notwithstanding the foregoing, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that our disclosure controls and procedures will detect or uncover every situation involving the failure of persons within our company and our subsidiaries to disclose material information otherwise required to be set forth in our periodic reports.  Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objective of ensuring that information required to be disclosed in the reports that we file or submit under the Exchange Act is communicated to management to allow timely decisions regarding required disclosure.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.


 
23

 


Jet Metal Corp.
(Formerly Crosshair Energy Corporation)
Management Discussion & Analysis
For the year ended April 30, 2014
Date Prepared: August 22, 2014



Management conducted an evaluation of the effectiveness of company level internal controls over financial reporting on a risk based approach using elements of the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There were no changes in the Company’s internal controls over financial reporting during the year ended April 30, 2014 that have affected, or which are reasonably likely to materially affect, its internal control over financial reporting.

Management’s internal control report was not subject to attestation by the Corporation’s independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Corporation to provide only management’s report.

SUBSEQUENT EVENTS

The following reportable events occurred subsequent to the year ended April 30, 2014:

·  
On May 5, 2014, 1,000 stock options with an exercise price of $3.80 were forfeited.

·  
On May 28, 2014, 56,625 stock options with an exercise price of $10.80 expired.

·  
On June 7, 2014, 2,500 stock options with an exercise price of $8.40 and 7,500 stock options with an exercise price of $14.40 were forfeited.

·  
On June 9, 2014, the Company received a loan in the amount of $60,000 from King & Bay West, a related party.  The loan is non-interest bearing, unsecured and has no fixed terms of repayment.

·  
The Company sold 54,565 common shares of Canadian Zinc Corporation for net proceeds of $21,544.

·  
The Company sold 2,222,222 common shares of Expedition Mining Inc. for net proceeds of $31,167.

ADDITIONAL INFORMATION

Additional information relating to the Company, including the Company’s Annual Report on Form 20-F, is on SEDAR at www.sedar.com.

APPROVAL

The Board of Directors of the Company has approved the disclosures contained in this MD&A.

 
24

 





 
 



Form 52-109FV1
Certification of Annual Filings
Venture Issuer Basic Certificate

I, Jim Crawford, Chief Executive Officer of Jet Metal Corp., certify the following:
 
1.
Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Jet Metal Corp. (the “issuer”) for the financial year ended April 30, 2014.
 
2.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
 
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

Date: August 25, 2014


“Jim Crawford”
_______________________
Jim Crawford
Chief Executive Officer
 
NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i)
controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii)
a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.  Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

 
 
 




 
 



Form 52-109FV1
Certification of Annual Filings
Venture Issuer Basic Certificate

I, Kate-Lynn Genzel, Chief Financial Officer of Jet Metal Corp., certify the following:
 
1.
Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Jet Metal Corp. (the “issuer”) for the financial year ended April 30, 2014.
 
2.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
 
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

Date: August 25, 2014


“Kate-Lynn Genzel”
_______________________
Kate-Lynn Genzel
Chief Financial Officer
 
NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i)
controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii)
a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.  Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

 
 
 


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