Cementir Holding
Annual Report 2015

Plain-text annual report

Consolidated Financial Statements of CONSTANTINE METAL RESOURCES LTD. (Expressed in Canadian Dollars) For the years ended October 31, 2015 and 2014 S u i t e 3 20 - 8 0 0 W e s t P e n d e r S t . , V a n c o u ve r , B . C . C an a d a V 6 C 2 V 6 P h o n e ( 6 0 4 ) 6 2 9- 2 3 4 8 F a x ( 6 0 4 ) 6 0 8 - 3 8 7 8 INDEPENDENT AUDITORS’ REPORT To the Shareholders of Constantine Metal Resources Ltd., We have audited the accompanying consolidated financial statements of Constantine Metal Resources Ltd. (“the Company”), which comprise the consolidated statements of financial position as at October 31, 2015 and 2014 and the consolidated statements of loss and comprehensive loss, cash flows and changes in equity for the years then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these 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. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Constantine Metal Resources Ltd. as at October 31, 2015 and 2014 and its financial performance and its cash flows for the years then ended 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 financial statements which indicates that the Company has limited working capital, no current sources of revenue and is dependent upon its ability to secure new sources of financing. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, Canada February 9, 2016 Consolidated Statements of Financial Position As at October 31, 2015 and 2014 (Expressed in Canadian dollars) Assets Current assets: Cash Amounts receivable Exploration costs recoverable from joint venture partner (Note 5a) Available-for-sale investments (Note 4) Advances and prepaid expenses Deposits Exploration and evaluation properties (Note 5) Performance bonds Equipment Liabilities Current liabilities: Trade payables and accrued liabilities Deferred recovery of exploration costs (Note 5a) Amount due to joint venture partner Amounts due to related parties (Note 7) Equity Share capital (Note 6) Stock options reserve (Note 6b) Warrants reserve Available-for-sale investments reserve (Note 4) Deficit Nature of Operations and Going Concern (Note 1) Commitments (Note 12) Event Subsequent to the End of the Reporting Period (Note 13) On Behalf of the Board of Directors: “J. Garfield MacVeigh” ___________________________ Director See accompanying notes to consolidated financial statements. 2015 2014 $ 396,069 39,965 238,334 31,074 21,030 726,472 $ 587,481 11,819 - 100,990 31,864 732,154 19,887 13,176,501 32,688 2,968 27,835 14,419,903 28,178 8,429 $ 13,958,516 $ 15,216,499 $ 282,643 - - 3,199 285,842 $ 198,569 34,976 23,802 3,966 261,313 20,326,015 1,535,432 432,941 (95,953) (8,525,761) 20,250,228 1,409,174 432,941 (26,037) (7,111,120) 13,672,674 14,955,186 $ 13,958,516 $ 15,216,499 “G. Ross McDonald” ___________________________ Director 2 Consolidated Statements of Loss and Comprehensive Loss For the years ended October 31, 2015 and 2014 (Expressed in Canadian dollars) Expenses: Amortization Consulting General and administrative Insurance Legal Professional fees – audit Salaries, wages and benefits Rent (net) Share-based payments (Note 6b) Shareholder communications Travel Loss from operations Other Items: Gain on foreign exchange Write-off of exploration and evaluation properties (Note 5c) Recovery of exploration properties previously written off Loss on sale of available-for-sale investments (Note 4) Net loss for the year Other comprehensive income (loss) Change in available-for-sale investments (Note 4) Comprehensive loss for the year Basic and diluted loss per share 2015 2014 $ 5,461 39,137 200,410 38,222 5,107 21,360 36,037 70,364 126,258 6,487 9,684 (558,527) $ 10,447 17,776 156,205 33,581 9,874 18,000 128,994 57,675 187,487 29,352 8,499 (657,890) 2,104 (858,218) - - 53,534 (457,256) 12,500 (38,250) (1,414,641) (1,087,362) (69,916) 111,611 $ (1,484,557) $ (0.01) $ $ (975,751) (0.01) Weighted average number of common shares outstanding 116,666,384 116,201,597 See accompanying notes to consolidated financial statements. 3 Consolidated Statements of Cash Flows For the years ended October 31, 2015 and 2014 (Expressed in Canadian dollars) Cash provided by (used in): Operations: Net loss for the year Items not affecting cash: Amortization Share-based payments (Note 6b) Write-off of exploration and evaluation properties (Note 5b(v)) Loss on available-for-sale investments (Note 4) Recovery of exploration properties amount previously written off Changes in non-cash working capital accounts: Amounts receivable Deposits Amount due to joint venture partner Trade payables and accrued liabilities Recovery of exploration costs (Note 5a) Reclamation bonds Amounts due to related parties (Note 7) Advances and prepaid expenses Investing activities: Exploration and evalution properties (Note 5) Recovery of exploration and evalution property expenditures (Note 5a) Proceeds from sale of available-for-sale investments (Note 4) Increase (decrease) in cash Cash, beginning of year Cash, end of year Supplemental Disclosure of Non-Cash Investing and Financing Activities: Accounts payable related to exploration and evaluation properties Value of shares issued for success fee on Palmer option agreement (Notes 5a and 6a) Interest received Value of shares issued for mineral properties (Note 6a) See accompanying notes to consolidated financial statements. 2015 2014 $ (1,414,641) $ (1,087,362) 5,461 126,258 858,218 - - (28,146) 7,948 (23,802) (4,962) (273,310) (4,510) (767) 10,834 (741,419) 10,447 187,487 457,256 38,250 (12,500) 349 6,720 (5,683) (4,750) 143,830 (28,178) (14,741) 2,126 (306,749) (6,588,919) 7,138,926 - (7,389,637) 8,028,060 74,250 550,007 712,673 $ $ (191,412) 587,481 396,069 265,659 69,067 - 6,720 $ $ 405,924 181,557 587,481 176,623 - - 23,691 4 Consolidated Statements of Changes in Equity For the years ended October 31, 2015 and 2014 (Expressed in Canadian dollars) Share Capital Reserves Number of Shares Capital Stock Stock Options Warrants Available- for-Sale Investments Deficit Total Equity 116,008,665 $ 20,226,538 $ 1,221,687 $ 432,941 $ (137,648) $ (6,023,758) $ 15,719,760 - - - - - - - - 187,487 - - - - (1,087,362) (1,087,362) 111,611 - - - 111,611 187,487 296,000 116,304,665 - $ 23,690 20,250,228 - - 1,409,174 $ - - 432,941 $ - $ - (26,037) - $ - (7,111,120) (1,414,641) $ 23,690 14,955,186 (1,414,641) - - - - - 126,258 541,336 75,787 - - - - (69,916) - - - - - (69,916) 126,258 75,787 Balance, October 31, 2013 Net loss for the year Unrealized gain (loss)on available-for-sale investments (Note 4) Share-based payments Shares issued for exploration and evaluation properties (Note 6a) Balance, October 31, 2014 Net loss for the year Unrealized gain (loss)on available-for-sale investments (Note 4) Share-based payments (Note 6b) Shares issued for exploration and evaluation properties (Note 6a) Balance, October 31, 2015 116,846,001 $ 20,326,015 $ 1,535,432 $ 432,941 $ (95,953) $ (8,525,761) 13,672,674 See accompanying notes to consolidated financial statements. 5 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 1. Nature of Operations and Going Concern The Company is in the business of acquiring interests in resource properties that are considered to be sites of potential economic mineralization, and then subsequently developing such assets with a view to enhancing their value and to bringing on a major mining partner for development of the assets. The Company may sell property for an enhanced value or seek a major mining partner to advance one of its projects on a joint venture basis. Currently the Company is principally engaged in the exploration of mineral properties which cannot be considered economic until a commercial feasibility study has been completed. The Company has no sources of operating revenue and, except for cash flow generated from exploration management fees, property option fees and sale of available-for-sale investments, is dependent upon equity financing to maintain current operations and to ultimately develop a mineral property interest or interests which can be profitably sold or further developed and placed into successful commercial production. The Company has not generated any revenue since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. As at October 31, 2015, the Company has incurred losses since inception and has an accumulated operating deficit of $8,525,761. The continuation and long-term viability of the Company remains dependent upon its ability to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. To continue operations the Company will have to raise additional funds and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. These financial statements reflect no adjustments which may become necessary in the event that the Company is unable to continue as a going concern. These conditions indicate the existence of material uncertainties that cast significant doubt that the Company will be able to continue on a going concern basis. The head office and principal address of the Company is #320 – 800 West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6. 2. Basis of Preparation a) Statement of Compliance The accompanying financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The accounting policies, methods of computation and presentation applied in these financial statements are consistent with those of the previous financial year. b) Approval of Consolidated Financial Statements These consolidated financial statements of the Company for the years ended October 31, 2015 and 2014 were approved and authorized for issue by the Board of Directors on February 9, 2016. These consolidated financial statements include the accounts of the Company and its 100% controlled entity, Constantine North Inc. (an Alaska corporation). Inter-company balances and transactions, including unrealized income and expenses arising from inter- company transactions, are eliminated on consolidation. 6 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 2. Basis of Preparation (continued) c) Adoption of New Standards At the date of authorization of these consolidated financial statements, the IASB and IFRS Interpretations Committee (“IFRIC”) have issued the following new and revised standards and interpretations. During the year ended October 31, 2015, the following standards were adopted but have had no material impact on the consolidated financial statements of the Company: i) ii) iii) iv) v) vi) vii) IFRS 7 (Amendment): This standard is amended to enhance disclosure requirements related to offsetting of financial assets and financial liabilities. IFRS 10: New standard to establish principles for the presentation and preparation of consolidated financial statements. IFRS 11: New standard to account for the rights and obligations in accordance with a joint agreement IFRS 12: New standard for the disclosure of interest in other entities not within the scope of IFRS 13: New standard on the measurement and disclosure of fair value. IAS 27 (Amendment): As a result of the issue of IFRS 10, IFRS 11 and IFRS 12. IAS 27 deals solely with separate financial statements. IAS 28 (Amendment): New standard issued that supersedes IAS 28 (2003) to prescribe the application of the equity method to investments in associates and joint ventures. d) New standards and interpretations not yet adopted Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements. The Company has not early adopted these standards and is currently assessing the impact these standards will have on its financial statements. i) ii) IFRS 9: New standard that replaced IAS 39 for classification and measurement of financial assets, effective for annual periods beginning on or after January 1, 2018; IAS 32 (Amendment): Standard amended to clarify requirements for offsetting financial assets and financial liabilities, effective for annual periods beginning on or after January 2014. 3. Significant Accounting Policies a) Judgments and estimates The preparation of these consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, revenues and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances and which form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and further periods if the revision affects both current and future periods. 7 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 3. Significant Accounting Policies (continued) Significant areas requiring the use of estimates relate to the determination of impairment of exploration and evaluation properties, determination of mineral reserves, and provision for closure and reclamation. b) Foreign currency translation The functional and reporting currency of the Company and its subsidiary is the Canadian dollar. Transactions in currencies other than the functional currency are recorded at the rate of exchange prevailing on the dates of transactions. Monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at each reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign currency translation differences are recognized in profit or loss, except for differences on the retranslation of available-for-sale instruments, which are recognized in other comprehensive loss. c) Exploration and Evaluation Properties Costs directly related to the exploration and evaluation of resource properties are capitalized once the legal rights to explore the resource properties are acquired or obtained. When the technical and commercial viability of a mineral resource have been demonstrated and a development decision has been made, the capitalized costs of the related property are transferred to mining assets and depreciated using the units of production method on commencement of commercial production. If it is determined that capitalized acquisition, exploration and evaluation costs are not recoverable, or the property is abandoned or management has determined an impairment in value, the property is written down to its recoverable amount. Resource properties are reviewed for impairment at each reporting date. From time to time, the Company acquires or disposes of properties pursuant to the terms of option agreements. Options are exercisable entirely at the discretion of the optionee and, accordingly, are recorded as mineral property costs or recoveries when the payments are made or received. After costs are recovered, the balance of the payments received are recorded as a gain on option or disposition of mineral property. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements. d) Impairment of Non-current Assets The Company’s tangible and intangible assets are reviewed for an indication of impairment at the end of each reporting period. If an indication of impairment exists, the Company makes an estimate of the asset’s recoverable amount. Individual assets are grouped for impairment assessment purposes at the lowest level at which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. The recoverable amount of an asset group is the higher of its fair value less costs to sell and its value in use. Where the carrying amount of an asset group exceeds its recoverable amount, the asset group is considered impaired and is written down to its recoverable amount. Impairment losses are recognized in profit or loss to the extent the carrying amount exceeds the recoverable amount. In assessing value in use, the estimated future cash flows are adjusted for the risks specific to the asset group and are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. 8 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 3. Significant Accounting Policies (continued) An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized. e) Provision for Closure and Reclamation The Company recognizes liabilities for legal or constructive obligations associated with the retirement of resource properties and equipment. The net present value of future rehabilitation costs is capitalized to the related asset along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect 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 rehabilitation provision. The increase in the provision due to the passage of time is recognized as interest expense. f) Income Taxes The Company uses the balance sheet method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred income tax assets also result from unused loss carry-forwards, resource related pools and other deductions. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. g) Share-based Payments The Company has a stock option plan that is described in Note 6c. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The amount recognized as an expense is adjusted to reflect the number of awards expected to vest. The offset to the recorded cost is to stock options reserve. Consideration received on the exercise of stock options is recorded as share capital and the related stock options reserve is transferred to share capital. Charges for options that are forfeited before vesting are reversed from stock options reserve. 9 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 3. Significant Accounting Policies (continued) h) Loss per Share Basic loss per share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding in the year. For all years presented, the loss available to common shareholders equals the reported loss. Diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. In the Company’s case, diluted loss per share is the same as basic loss per share, as the effects of including all outstanding options and warrants would be anti-dilutive. i) Advances from Joint Venture Partner When acting as operator of a particular project, the Company typically receives funds in advance of performing exploration work. The Company records such advances as a deferred liability until such time as the applicable costs are incurred, at which point these advances are offset against the costs. j) Financial Instruments and Comprehensive Income i) Financial Assets The Company classifies its financial assets in the following categories: held-to-maturity, fair value through profit or loss (“FVTPL”), loans and receivables, and available-for-sale (“AFS”). The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at recognition. Held-to-maturity Held-to-maturity financial assets are recognized on a trade-date basis and are initially measured at fair value using the effective interest rate method. The Company has no assets classified as held-to-maturity. Financial assets at fair value through profit or loss (“FVTPL”) Financial assets at FVTPL are initially recognized at fair value with changes in fair value recorded through profit or loss. Cash is included in this category of financial assets. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non-current assets based on their maturity date. Loans and receivables are carried at amortized cost less any impairment. Loans and receivables comprise amounts receivable. Available-for-sale financial assets AFS financial assets are non-derivatives that are either designated as available-for-sale or not classified in any of the other financial asset categories. Changes in the fair value of AFS financial assets are recognized as other comprehensive income and classified as a component of equity. AFS assets include investments in marketable securities. 10 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 3. Significant Accounting Policies (continued) Management assesses the carrying value of AFS financial assets at least annually and any impairment charges are also recognized in profit or loss. When financial assets classified as AFS are sold, the accumulated fair value adjustments recognized in other comprehensive income are included in profit or loss. ii) Financial Liabilities The Company classifies its financial liabilities in the following categories: Borrowings and other financial liabilities Borrowings and other financial liabilities are non-derivatives and are recognized initially at fair value, net of transaction costs incurred, and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in the statement of loss and comprehensive loss over the period to maturity using the effective interest method. Borrowings and other financial liabilities are classified as current or non-current based on their maturity date. Financial liabilities include trade payables and accrued liabilities, amounts due to joint venture partner and amounts due to related parties. iii) Fair Value Hierarchy Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs in making the measurements. The levels of the fair value hierarchy are defined as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 – Inputs for the asset or liability that are not based on observable market data. k) Share Capital The Company records proceeds from share issuances, net of issue costs. Common shares issued for consideration other than cash are valued based on their market value at the date the agreement to issue shares was concluded. l) Valuation of Equity Units Issued in Private Placements Proceeds received on the issuance of units, consisting of common shares and warrants, are allocated first to common shares based on the market trading price of the common shares at the time the units are priced, and any excess is allocated to warrants. 11 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 4. Available-for-Sale Investments The following table is a summary of the Company’s available-for-sale investments as at October 31, 2015 and 2014: October 31, 2015 October 31, 2014 Number of Shares Cost Fair Value Number of Shares Cost Fair Value Dunnedin Ventures Inc. 776,844 $ 91,527 $ 31,074 776,844 $ 91,527 $ 100,990 For the year ended October 31, 2015, the Company recorded an unrealized loss of $69,916 (2014-$111,611 gain) on its available-for-sale investments. As at October 31, 2015, the balance of the Company’s available- for-sale investment reserve is $(95,953) (October 31, 2014-($26,037)). In September 2014, the Company sold 750,000 shares of Dunnedin Ventures Inc. for net proceeds of $74,250. The Company recorded a gain on disposal of available-for-sale investments of $38,250. On July 31, 2014, the Company received 250,000 shares of Dunnedin Ventures Inc. as part of the consideration paid for the sale of the Trapper property in 2013, which was written off at the time of sale. The 250,000 shares were valued at $12,500, which has been recorded as a recovery of exploration properties amount previously written off. 12 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 5. Exploration and Evaluation Properties The following tables are a summary of the Company’s exploration and evaluation property interests: Balance October 31 2013 Fiscal 2014 Expenditures Balance Oct 31 2014 Fiscal Balance 2015 Expenditures October 31 2015 Palmer Property, Alaska, USA Acquisition costs $ 878,712 $ - $ 878,712 $ - $ 878,712 Less: Recovery of acquisition costs (389,644) (267,197) (656,841) (213,589) (870,430) Advance royalty payments Assaying and testing Field transportation Geophysics Drilling Property maintenance Geology and field support Environmental Technical consulting Travel Cost recoveries Haines Block Acquisition costs Field transportation Geophysics Drilling Geology and field support Environmental Travel Cost recoveries Total Alaska Properties (continued on next page) 337,123 238,288 2,975,501 434,550 5,214,338 465,113 2,079,431 - 1,160,974 206,396 46,351 86,792 383,474 325,080 1,175,359 4,150,860 78,214 3,745,517 57,452 1,517,087 331,198 512,764 8,959,855 522,565 3,596,518 331,198 52,952 59,286 812,870 237,573 3,338,002 88,569 1,555,167 415,013 436,426 384,366 4,963,730 750,337 12,297,857 611,134 5,151,685 746,211 - 1,160,974 - 1,160,974 58,806 265,202 126,006 391,208 (2,589,306) (7,444,617) (10,033,923) (6,992,040) (17,025,963) 11,011,476 (615,038) 10,396,438 (520,191) 9,876,247 $ - $ 32,893 $ 32,893 $ 63,114 $ 96,007 - - - - - - - - - - - - - - - - - - - - - 161,139 34,356 240,136 92,738 22,986 5,781 161,139 34,356 240,136 92,738 22,986 5,781 (565,148) (565,148) $ - $ 11,011,476 $ $ 32,893 (582,145) $ $ 32,893 10,429,331 $ $ 55,102 (465,089) $ $ 87,995 9,964,242 13 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 5. Exploration and Evaluation Properties (continued) Balance October 31 2013 Fiscal Balance Fiscal Balance 2014 Expenditures October 31 2014 2015 Expenditures October 31 2015 $ 481,578 1,967 107,655 1,127,740 22,298 149,446 65,780 179,529 340,262 - - 1,096 - 1,058 2,741 - 483,545 107,655 1,127,740 23,394 149,446 66,838 182,270 340,262 1,627 - - 284 - 288 1,660 - 485,172 107,655 1,127,740 23,678 149,446 67,126 183,930 340,262 2,474,288 6,862 2,481,150 3,859 2,485,009 114,681 23,367 243,471 56,893 946 7,485 81,447 33,107 561,397 29,505 23,283 151,640 11,943 160,669 424,808 84,466 15,601 5,000 - - - - - 226 - 5,226 38,549 17,546 244,973 10,571 - 83,976 6,504 14,967 119,681 23,367 243,471 56,893 946 7,485 81,673 33,107 566,623 68,054 40,829 396,613 22,514 160,669 508,784 90,970 30,568 5,000 1,353 - - - 573 - 6,215 13,141 48,720 - - - - 10,232 - - 124,681 24,720 243,471 56,893 946 8,058 81,673 39,322 579,764 116,774 40,829 396,613 22,514 160,669 519,016 90,970 30,568 (776,014) 125,901 (457,508) (1,233,522) (40,422) 85,479 3,054 62,006 (1,230,468) 147,485 $ 3,161,586 $ (28,334) $ 3,133,252 $ 79,006 $ 3,212,258 Ontario Properties: Munro-Croesus Property, ON, Canada Acquisition costs Assaying and testing Drilling Field transportation Geophysics Travel Geology and field support Technical consulting Four Corners Property, ON, Canada Acquisition costs Assaying and testing Drilling Geophysics Field Transportation Travel Technical consulting Geology and field support Golden Mile Property, ON, Canada Acquisition costs Assaying and testing Drilling Field transportation Geophysics Geology and field support Technical consulting Travel Cost recoveries (continued on next page) 14 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 5. Exploration and Evaluation Properties (continued) Ontario Properties (Balance forward) $ 3,161,586 $ (28,334) $ 3,133,252 $ 79,006 $ 3,212,258 Balance October 31 Fiscal 2014 Balance October 31 Fiscal 2015 Balance October 31 2013 Expenditures 2014 Expenditures 2015 Phoenix Gold Property, ON, Canada Acquisition costs Assaying and testing Field transportation Geology and field support Geophysics Technical consulting Travel Write-off exploration and evaluation property Sub-total of Ontario Properties Trapper Gold Property, B.C., Canada Acquisition costs Assaying and testing Field transportation Geology and field support Technical consulting Travel Cost recoveries Yukon, Canada Acquisition costs Assaying and testing Field transportation Geology Geochemisty Technical consulting Other Cost recoveries Writedown of exploration and evaluation properties 124,125 15,688 6,238 32,964 216,846 41,255 20,140 - 457,256 3,618,842 94,281 3,224 6,055 12,684 24,784 6,079 - - - - - - - (457,256) (457,256) (485,590) 124,125 15,688 6,238 32,964 216,846 41,255 20,140 (457,256) - - - - - - - - - - 124,125 15,688 6,238 32,964 216,846 41,255 20,140 (457,256) - 3,133,252 79,006 3,212,258 7,500 101,781 - - - - - 3,224 6,055 12,684 24,784 6,079 (147,107) (7,500) (154,607) - - - 52,401 197,379 476,911 184,588 290,093 61,608 578,278 (25,000) (953,420) 862,838 - - - 165 - - (5,683) - - (5,518) 52,401 197,379 476,911 184,753 290,093 61,608 572,595 (25,000) - - - - - - - - - - - - - - 899 - 101,781 3,224 6,055 12,684 24,784 6,079 (154,607) - 52,401 197,379 476,911 184,753 290,093 61,608 573,494 (25,000) (953,420) 857,320 (858,218) (857,319) (1,811,638) 1 Total Other Properties $ 4,481,680 $ (491,108) $ 3,990,572 $ (778,313) $ 3,212,259 Total Alaska and Other Properties $ 15,493,156 $ (1,073,253) $ 14,419,903 $ (1,243,402) $ 13,176,501 15 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 5. Exploration and Evaluation Properties (continued) a) Palmer Project, Alaska USA The Palmer property is comprised of 340 federal mining claims subject to a 99 year mining lease, dated December 19, 1997, and 63 state mining claims located near Haines, Alaska. To maintain the lease, the Company is required to make annual advance royalty payments of US$42,500 and pay Federal claim annual maintenance fees, which were US$52,700 in 2015. The lease is subject to a 2.5% net smelter returns (“NSR”) royalty. The Company has a right of first refusal to purchase the NSR or any portion thereof at any time during the term of the lease. The advance royalty payments are deductible from the NSR royalty. Option and Joint Venture Agreement with Dowa Metals & Mining Co., Ltd (“Dowa”) On February 1, 2013, the Company signed an option and joint venture agreement (the “Property Agreement”) with Dowa relating to the Palmer Property, Alaska (the “Project”). Under the terms of the Property Agreement, Dowa has an option to earn a 49% interest in the Project by making aggregate expenditures of US$22,000,000 over a four year period. Expenditures for each year, including option payments, shall not be less than US$3,000,000. Included in the aggregate expenditures are cash payments to the Company totaling US$1,250,000 over four years, of which US$1,000,000 has been received to date. The Company is the operator during the earn-in period. Following Dowa’s completion of the required earn-in expenditures and their exercise of the option, a 51:49 joint venture (the “Joint Venture”) between the Company (51%) and Dowa (49%) is planned for the Project, whereby the Company shall continue as operator. After formation of the Joint Venture, the Property Agreement anticipates that each party shall be responsible for its proportionate share of expenses determined on the basis of ownership or suffer dilution according to standard dilution provisions. The Property Agreement also includes terms that allow Dowa to acquire certain zinc and copper off-take rights in stages, during and upon completion of the earn-in option period. From inception of the Property Agreement to October 31, 2015, the Company received an aggregate of US$15,681,535 from Dowa in respect of exploration expenditures incurred. An amount of $238,334 in recoverable exploration expenditures was also due from Dowa as at October 31, 2015, which was received in November 2015. At the end of the comparative year, the Company had unspent cash call funds from Dowa in the amount of $34,976, which were recorded as a deferred recovery of exploration costs in the Company’s October 31, 2014 statement of financial position. In March 2015, a finder’s fee payment of US$75,970 was paid in connection with the Property Agreement transaction, of which $20,000 was paid in cash and the balance in shares of the Company by the issuance of 493,336 common shares at a deemed value of $69,067. 16 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 5. Exploration and Evaluation Properties (continued) Haines Block Lease In April 2014, the Company was the successful applicant in a competitive lease process offered by the Alaska Mental Health Trust Authority (the “Trust”) for the mineral exploration and development of an approximately 92,000 acre package of land (the “Haines Block”). A formal lease agreement on the property was completed and signed in September 2014. The principal terms of the lease agreement are as follows: 1. Annual payments of US$25,000 per year for the initial 3 year lease term, US$40,000 for years 4 to 6, US$55,000 for years 7 through 9; 2. Work commitments of US$75,000 per year, escalating by US$50,000 annually; 3. Annual payments are replaced by royalty payments upon achieving commercial production; 4. Production royalties payable to the Trust include a sliding scale 1% to 4.5% royalty for gold, based on gold price, and a 3.5% royalty on minerals other than gold. The Haines Block is contiguous with and surrounds the Federal and State mining claims that make up the Palmer Property. The Company paid an aggregate of US$25,500 as part of the lease application process, which includes the first year’s lease of the property. Haines Block Selection Agreement In July 2015, the Company signed a Selection Agreement (the “Selection Agreement”) with Dowa on the Haines Block mining lease. Under the terms of the Selection Agreement, Dowa selected a small subset of the Haines Block (the “Selection Area”) including both surface and mineral rights, to become part of the Agreement. The remaining mineral rights of the Haines Block, representing approximately 96 percent of the total Haines Block land package, are 100 percent Constantine-owned, subject to a Right of First Offer (“ROFO”) by Dowa that expires on September 1, 2017. The main elements of the Selection Agreement are as follows: 1. Dowa has selected a Haines Block land parcel with surface and mineral rights comprising approximately 3483 acres, exclusive of all pre-existing federal claims, to be included as part of the Palmer Property and therefore subject to Dowa’s option to earn a 49% joint venture interest. 2. Constantine will maintain its 100% interest in the balance of the property of the Haines Block exclusive of the Selection Area and any exploration done in such area outside of the Selection Area will be at Constantine’s expense. 3. Dowa and Constantine will share the annual rental requirements of the Lease of US$25,000 for the first 3 year lease term, in a proportion of 49:51, which are amounts of US$12,250 and US$12,750, respectively, until a Joint Venture (“JV”) is formed. 4. Dowa will meet the minimum exploration requirements of the Lease during the Option period and until such time as a JV is formed. These minimum requirements are US$75,000 by September 1, 2015, escalating by US$50,000 annually thereafter and these expenditures will be deemed to be earn-in expenditures paid by Dowa. 5. Constantine has granted Dowa a ROFO on Haines Block lands located outside of the Selection Area for a 3 year period beginning as of September 1, 2014, and terminating on September 1, 2017. 17 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 5. Exploration and Evaluation Properties (continued) b) Ontario Properties i) Munro-Croesus Property The Company owns 100% of the Munro-Croesus gold mineral property, including the former Munro- Croesus gold mine, consisting of 22 patented mining claims and leases (416 hectares), located 90 kilometers east of Timmins, Ontario. Under the terms of the original acquisition agreement, there is a 2% NSR production royalty payable on the property, of which 0.5% can be purchased by the Company for $1,000,000, with a right of first refusal on the remaining 1.5% NSR royalty. ii) Golden Mile Property In March 2012, the Company entered into an option agreement to acquire the Golden Mile property in northern Ontario, Canada. Under the terms of the agreement, in order to maintain the option the Company must make payments of $175,000 and issue 180,000 of the Company’s shares over a four year period commencing on December 10, 2012. A total of $72,000 has been paid and a total of 120,000 shares have been issued as at October 31, 2015. See Note 13. iii) Four Corners Property The Company owns a 100% interest in the 63 claim Four Corners property located east of Timmins, Ontario. Under the terms of the original acquisition agreement, the vendors retained a 2.5% NSR royalty of which 1.0% can be purchased by the Company at any time for $500,000, with a right of first refusal on the remaining 1.5% NSR royalty. c) Yukon Land Position and Joint Venture The Company and Carlin Gold Corporation (“Carlin Gold”) control over 3,000 claims in the Mayo and Watson Lake Mining Districts, Yukon. The claims are distributed in twelve blocks that total approximately 65,000 hectares (250 square miles). In April 2015, subsequent to an impairment review in accordance with IFRS, the Company recorded a $858,218 writedown of the property to a carrying value of $1. 18 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 6. Share Capital a) Common Shares Authorized: unlimited common shares without par value Issued and outstanding: 116,846,001 common shares i) On March 6, 2015, the Company issued 493,336 shares valued at $69,067 as part of a success fee payment in regard to the option and joint venture agreement on the Palmer property (Note 5a). ii) On December 10, 2014, the Company issued 48,000 shares valued at $6,720 related to the Golden Mile property (Note 5b(ii)). iii) On April 29, 2014, the Company issued 75,000 shares valued at $7,500 related to the Trapper Gold property. iv) On March 3, 2014, the Company issued 185,000 shares at a deemed price of $0.07 per share, for total consideration of $12,950, pursuant to the terms of an Exploration Agreement signed with certain First Nations groups in Ontario in January 2014. b) Stock Options The Company has established a stock option plan whereby the board of directors may, from time to time, grant options to directors, officers, employees or consultants. Options granted must be exercised no later than five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is not less than the closing price on the Exchange on the last trading day preceding the grant date. Options begin vesting on the grant date based on a schedule outlined in the share purchase option plan. The maximum number of options to be granted under the plan is 10% of the Company’s issued capital. On March 6, 2015, the Company issued 1,400,000 incentive share options to management and employees, exercisable at a price of $0.14, expiring March 6, 2020. The stock options were issued to directors, officers and employees of the Company. 19 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 6. Share Capital (continued) b) Stock Options (continued) A summary of the status of the Company’s stock options at October 31, 2015 and 2014 and changes during the years therein is as follows: Balance, beginning of year Granted Expired or Cancelled Balance, end of year Year ended October 31, 2015 Number of Weighted average options exercise price 7,325,000 1,400,000 (50,000) $ 0.08 0.14 0.11 Year ended October 31, 2014 Number of options 4,800,000 5,400,000 (2,875,000) Weighted average exercise price $ 0.16 0.07 0.19 8,675,000 $ 0.09 7,325,000 $ 0.08 The fair value cost of the stock options granted during the periods ended October 31, 2015 and 2014 were calculated using the Black-Scholes Pricing Model using the following range of assumptions: Risk-free interest rate Expected life (in days) Annualized volatility Dividend rate October 31, 2015 0.59% 1,825 82.51% n/a October 31, 2014 1.33% 1,825 85.05% n/a The fair value computed using the Black-Scholes model is only an estimate of the potential value of the individual options and the Company is not required to make payments for such transactions. An amount of $126,258 was charged to share-based payments expense for the year ended October 31, 2015 (2014- $187,487). A summary of the Company’s stock options outstanding as at October 31, 2015 is as follows: Expiry Date March 5, 2017 January 17, 2019 March 6, 2020 Weighted Average Exercise Price 0.11 0.07 0.14 0.09 $ Number of Options Outstanding 1,875,000 5,400,000 1,400,000 8,675,000 Weighted Average Remaining Contractual Life (in years) 0.37 2.11 4.85 Number of Options Exercisable 1,875,000 4,400,000 1,200,000 7,475,000 20 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 6. Share Capital (continued) b) Stock Options (continued) Of the 1,400,000 options issued on March 9, 2015, an amount of 1,200,000 were vested immediately and 200,000 options are subject to a vesting agreement, whereby 100,000 options will be vested on each of the first and second anniversaries of the option. A summary of the Company’s stock options outstanding as at October 31, 2014 is as follows: Expiry Date March 5, 2017 January 17, 2019 Weighted Average Exercise Price 0.11 0.07 0.08 $ Number of Options Outstanding 1,925,000 5,400,000 7,325,000 Weighted Average Remaining Contractual Life (in years) 0.62 3.11 Number of Options Exercisable 1,925,000 4,000,000 5,925,000 Of the 5,400,000 options issued on January 17, 2014, an amount of 4,000,000 were vested immediately and 1,400,000 options are subject to a vesting agreement, whereby 400,000 options were vested on the first anniversary date of the issuance of the options, and 500,000 options will be vested on each of the second and third anniversaries of the option. 7. Related Party Transactions The following represents the details of related party transactions paid or accrued for the years ended October 31, 2015 and 2014: For the years ended October 31, Consulting, administrative and technical directors Consulting fees paid to officers Accounting and administration fees paid or accrued to a company 50% owned by an officer Share-based payments to key management fees paid or accrued to companies owned by 2015 2014 $ 43,178 $ 9,833 178,426 81,296 72,000 36,000 71,745 96,087 $ 365,349 $ 223,216 As at October 31, 2015, the unpaid portion of amounts due to key management is $3,199 (2014-$3,966). The Company paid NS Star Enterprises Ltd., a company controlled by a director, $41,044 for management and administration services during the year ended October 31, 2015 (2014 - $15,300). The Company paid Morfopoulos Consulting Associates Ltd., a company controlled by the CFO, $72,000 for accounting, and management and administration services during the year ended October 31, 2015 (2014 - $72,000). The Company paid D. Green Geoscience Inc., a company controlled by the vice-president of exploration, $178,426 for technical consulting and management and administration services during the year ended October 31, 2015 (2014 - $177,821). The Company paid 44984 Yukon Ltd., a company controlled by a director of the Company, $2,134 for miscellaneous field operating supplies and services during the year ended October 31, 2015 (2014 - $3,833). 21 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 8. Management of Capital The Company manages its cash, common shares, stock options and warrants as capital. 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 development of its exploration and evaluation properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. The Company does not have any externally imposed capital requirements to which it is subject. There were no significant changes in the Company’s approach or the Company’s objectives and policies for managing its capital. 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 or adjust the amount of cash and cash equivalents. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. 9. Financial Instruments a) Financial Risk Management The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s financial instruments consist of cash and cash equivalents, amounts receivable, available-for-sale investments, trade payables and amounts due to related parties. The fair values of cash and cash equivalents, amounts receivable, deposits, trade payables and amounts due to related parties approximate their book values because of the short-term nature of these instruments. b) Financial Instrument Risk Exposure The Company is exposed in varying degrees to a variety of financial instrument-related risks. The Board approves and monitors the risk management processes. Credit Risk The Company’s only exposure to credit risk is on its cash and cash equivalents. Cash and cash equivalents are with a Canadian Schedule 1 bank and a US bank for its subsidiary. The Company has no asset-backed commercial paper. Liquidity Risk The Company ensures that there is sufficient capital in order to meet short-term business requirements, after taking into account the Company’s holdings of cash. A portion of the Company’s cash is invested in business accounts which are available on demand. 22 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 9. Financial Instruments (continued) Market Risk The only significant market risk exposure to which the Company is exposed is interest rate risk. The Company’s bank account earns interest income at variable rates. The fair value of its marketable securities portfolio is relatively unaffected by changes in short-term interest rates. The Company’s future interest income is exposed to short-term rates and fluctuations, however management does not consider this risk to be significant. Exchange Risk As at October 31, 2015, the majority of the Company’s cash was held in the USA in U.S. dollars. The Company’s significant operations are carried out in Canada and in Alaska, USA. As a result a portion of the Company’s cash and cash equivalents, amounts receivable, and trade payables are denominated in US dollars and are therefore subject to fluctuations in exchange rates. Management does not believe that the exchange risk is significant. c) Fair Value Measurements The carrying value of financial assets and financial liabilities at October 31, 2015 and 2014 is as follows: As at Financial Assets FVTPL, measured at fair value Cash Loans and receivables, measured at amortized cost Amounts receivable Exploration costs recoverable from joint venture partner Available-for-sale, measured at fair value Available-for-sale investments Financial Liabilities Other liabilities, measured at amortized cost Trade payables and accrued liabilities Amount due to joint venture partner Amounts due to related parties 2015 2014 $ 396,069 $ 587,481 39,965 238,334 11,819 - 31,074 100,990 $ 282,643 - 3,199 $ 198,569 23,802 3,966 The fair value hierarchy of financial instruments measured at fair value is as follows: As at Cash Available-for-sale investments The Company does not use Level 2 or Level 3 valuation inputs. 2015 Level 1 2014 Level 1 $ 396,069 31,074 $ 587,481 100,990 23 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 10. Segmented Information The Company has one operating segment, which is exploration and evaluation of its mining properties. At October 31, 2015, the Company operates in two geographic areas, being Canada and the United States. The following is an analysis of net loss for the period, current assets and non-current assets by geographical area: Current Assets As at October 31, 2015 As at October 31, 2014 Deposits As at October 31, 2015 As at October 31, 2014 Exploration and Evaluation Properties As at October 31, 2015 As at October 31, 2014 Performance Bonds As at October 31, 2015 As at October 31, 2014 Equipment As at October 31, 2015 As at October 31, 2014 11. Income Taxes Canada United States Total $ 380,207 421,264 $ 346,265 310,890 $ 726,472 732,154 19,887 27,835 3,212,259 3,990,572 - - 2,968 8,429 - - 19,887 27,835 9,964,242 10,429,331 13,176,501 14,419,903 32,688 28,178 - - 32,688 28,178 2,968 8,429 A reconciliation of income taxes at statutory rates is as follows: 2015 2014 Net loss for the year $ (1,414,641) $ (1,087,362) Expected income tax expense Net adjustment for amortization and other non-deductible amounts Unrecognized benefit of DIT assets (421,413) 257,654 163,759 (282,714) 150,569 132,145 Total income tax recovery $ - $ - There are no deferred tax assets presented in the statement of financial position. 24 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 11. Income Taxes (continued) Subject to confirmation with regulatory authorities, deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognized are attributable to the following: Deferred income tax assets (liabilities): Net mineral property carrying amounts in excess of tax pools $ Equipment Share issue costs Non-capital loss carryforwards 2015 2014 (2,319,000) 51,000 3,000 6,606,000 $ (2,670,000) 51,000 116,000 6,358,000 $ 4,341,000 $ 3,855,000 The Company has Canadian non-capital losses of approximately $5,360,000 (2014 - $5,506,000) and US non-capital losses of US $954,000 (2014 – US $ 936,000), which will be available to reduce future taxable income in Canada and the US, respectively. The respective non-capital losses will begin to expire in 2016 until 2035. The Canadian non-capital losses, if not utilized, will expire in the years presented below: 2016 2027 2028 2029 2030 2031 2032 2033 2034 2035 $ 161,000 447,000 594,000 656,000 820,000 995,000 790,000 540,000 203,000 154,000 $ 5,360,000 12. Commitments The Company has a lease agreement for the rental of office space, which expires on May 31, 2021. The future minimum lease obligations under the lease are as follows: 2016 fiscal year 2017 fiscal year 2018 fiscal year 2019 fiscal year 2020 fiscal year 2021 fiscal year Amount 44,287 39,660 40,486 42,469 43,626 25,449 235,977 $ $ The Company currently rents out a portion of its office space on a month-to-month basis for $1,000 per month. 25 Notes to Consolidated Financial Statements For the years ended October 31, 2015 and 2014 _____________________________________________________________________________________ 13. Event Subsequent to the end of the Reporting Period On January 28, 2016, the Company received a US $250,000 option payment from Dowa in connection with its Joint Venture Agreement with Dowa on the Palmer property. On December 10, 2015, the Company issued 60,000 shares valued at $5,000 as part of an option payment on the Golden Mile property (Note 5b(ii)). 26 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) General The information in this Management’s Discussion and Analysis, or MD&A, is intended to assist the reader in the understanding and assessment of the trends and significant changes in the results of operations and financial conditions of Constantine Metal Resources Ltd. (the “Company” or “Constantine”). This MD&A should be read in conjunction with the audited consolidated financial statements of the Company, including the notes thereto, for the years ended October 31, 2015 and 2014, and the MD&A of such financial statements, and other information relating to the Company on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. The Company’s audited consolidated financial statements for the years ended October 31, 2015 and 2014 have been prepared in accordance with International Financial Reporting Standards (“IFRS”). This MD&A has taken into account information available up to and including February 9, 2016. Constantine is a junior exploration company engaged in the exploration and development of several exploration properties. Its principal project is a polymetallic (copper-zinc-gold-silver) massive sulphide advanced exploration project in southeast Alaska known as the Palmer Project. Constantine also has gold properties in Ontario and the Yukon. The Company’s principal Ontario gold projects are the Golden Mile project in the Timmins gold camp and the Munro-Croesus project, which includes the past-producing high-grade Croesus gold mine located east of the Timmins gold camp. The Company is a reporting issuer in British Columbia, Alberta and Ontario and trades on the TSX Venture Exchange under the symbol CEM. Historical results of operations and trends that may be inferred from the following discussions and analysis may not necessarily indicate future results from operations. The Company is currently engaged in exploration and development of mineral properties and does not have any source of revenue or operating assets, however the Company has generated cash flow from option earn-in agreements, from fees for management of option-joint venture exploration projects and from sale of available-for-sale investments. The recoverability of the amounts shown for mineral properties is dependent upon the ability of the Company to obtain necessary financing to complete exploration, technical studies and, if warranted, development and future profitable production or proceeds from the disposition of properties. The amounts shown as mineral properties represent net costs to date and do not necessarily represent present or future values. Highlights  US$250,000 Option Payment Received from Dowa – At the end of January 2016, the Company received a US$250,000 option payment from Palmer project partner Dowa Metals & Mining Co., Ltd. (“Dowa”). The funds will be used for general working capital.  No Equity Dilution in 2015 – The Company was once again successful in funding a major exploration program on the Palmer project, while sustaining its corporate operations, without the necessity of having to seek an equity financing in these weak financial markets.  Inferred Resource Estimate Almost Doubled at Palmer – In May 2015, the Company published an updated resource estimate for the Palmer project, almost doubling its size to 8,125,000 tonnes (see details below). This resource estimate also indicates the opportunity for additional expansion, as many drill intercepts included in the resource are open to expansion. 1 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars)  2015 Drill Program Completed at Palmer - The Company completed a 7,700 meter drill program in 2015, focused on exploring for extensions of the deposit within a localized target area. The 2015 drill program exceeded the original 6,000 meters of diamond drilling that was planned at the beginning of the season. Results of the drill program were disclosed in the Company’s November 24, 2015 news release and are also summarized below.  Land Trust Selection Agreement Completed - the Agreement (“Selection Agreement”) signed in June 2015 allows Dowa to include a 3,483 acre portion of the total 92,000 acre parcel (“Haines Block”) leased from the Alaska Mental Health Trust Authority. The Selection Agreement land is immediately adjacent to the Company’s 2015 drilling activities on the Palmer Property. The Agreement benefits both parties, and leaves Constantine with a 100% interest in the balance of about 89,000 acres of highly prospective lease land. 2 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars)  Land Trust Exploration – over $620,000 was spent on exploration work on the Haines Block in 2015. The work included mapping and geochemical sampling of several identified VMS prospects and alteration zones located proximal to the Palmer Property. The work also included LIDAR imaging for topographic and geological mapping, reconnaissance scale geochemical surveying, soil sampling, and prospecting to identify new prospects within prospective host rocks. Promising VMS targets with high-grade surface sample results in boulders and outcrop have been identified at the Tsirku prospect and the Waterfall Zone on 100% Constantine-controlled Haines Block lands. One drill hole was collared on the Selection Agreement land to test the western extension of the South Wall Zone.  Environmental Studies and Engineering – approximately $770,000 has been spent to date on environmental and engineering studies to support permitting. Studies include surface and groundwater hydrology, geotechnical, water quality, wildlife and plant surveys, rock quality characterization, meteorology, natural hazard assessment, and terrain and surficial geology analysis Base Metal Projects Palmer Project (southeast Alaska, USA) Palmer is a resource expansion stage, high-grade volcanogenic massive sulphide (VMS) project, with an Inferred Mineral Resource of 8.1 million tonnes grading 1.41% copper, 5.25% zinc, 0.32 g/t gold and 31.7 g/t silver*. The Project is being advanced in partnership with Dowa Metals & Mining Co., Ltd. who can earn 49% in the project by making aggregate expenditures of US$22 million over four years. The Palmer project is located in a very accessible part of coastal southeast Alaska, with road access to the edge of the property and within 60 kilometers of the year-round deep sea port of Haines. Mineralization at Palmer occurs within the same belt of rocks that is host to the Greens Creek mine, one of the world’s richest VMS deposits. There are at least 25 separate base metal and/or barite occurrences and prospects on the Palmer property, indicating the potential for discovery of multiple deposits beyond the RW-South Wall deposit area. * See the Company's news release date May 11, 2015 and available on www.sedar.com. Resource estimate utilizes an NSR cut- off of US$75/t with assumed metal prices of US$1200/oz for gold, US$18/oz for silver, US$2.75/lb for copper, and US$1.00/lb for zinc. Estimated metal recoveries are 89.6% for copper, 84.9% for zinc, 75% for gold (61.5% to the Cu concentrate and 13.5% to the Zn concentrate) and 89.7% for silver (73.7% to the Cu concentrate and 16% to the Zn concentrate) as determined from metallurgical locked cycle flotation tests. An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. The Company holds a 99 year mining lease dated December 19, 1997 on 340 mining claims that comprise the original Palmer property. To maintain the lease, the Company is required to make annual advance royalty payments of US $42,500 and pay Federal claim maintenance fees, which were US $52,700 in 2015. The lease is subject to a 2.5% net smelter return (“NSR”) royalty. The Company has a right of first refusal to purchase the NSR or any portion thereof at any time during the term of the lease. The advance royalty payments are deductible from the NSR royalty. In September 2014, a formal agreement was signed between the Alaska Mental Health Trust Authority, a state corporation within Alaska (the “Trust”) and the Company for an upland mining lease on the approximately 92,000 acre Haines Block land package surrounding the Palmer property. Constantine 3 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) acquired the Haines Block for mineral exploration and development in a competitive lease process offered by the Trust. The Haines Block is contiguous with and surrounds the Federal and State mining claims that make up the approximately 16,000 acre Palmer property. The Trust owns the subsurface mineral estate of the Haines Block and a small subset of the block is held fee simple, for which the Trust owns both the surface and subsurface estate. General lease terms include annual rental of US $25,000 per year for the initial 3 year lease term, US $40,000 for years 4 to 6, US $55,000 for years 7 through 9, with work commitments of US$75,000 per year, escalating by US$50,000 annually. There is a mandatory acreage reduction of 25,000 acres at the end of the first and second 3 year lease terms. The lease can be extended beyond year 9 by making annual rental payments and continuing to diligently pursue exploration and development on the lease. Annual payments are replaced by royalty payments upon achieving commercial production. Production royalties payable to the Trust include a sliding scale 1% to 4.5% royalty for gold based on gold price, and a 3.5% royalty on minerals other than gold. The Alaska State production royalty levied on State lands does not apply to production on Trust lands. Dowa exercised the right under the Constantine-Dowa Option-JV Agreement (see Selection Agreement below) to include a portion of Mental Health Trust Lease land (3,483 acres) that is immediately adjacent to the Company’s current drilling activities as part of the Palmer Property to the benefit of both parties and at the same time leaves Constantine with a 100% interest in the balance of approximately 89,000 acres of highly prospective Haines Block land. Updated Mineral Resource Estimate The 2015 resource estimate significantly increases the size of the deposit, highlighting the success of recent drill campaigns and the growing potential of the project. It is open to expansion in most areas with the thickest part of the deposit located at the current down dip limit of the South Wall Zone where mineral zoning and geophysics support potential for a high-grade copper core within a more extensive area of zinc-copper-barite mineralization. The Inferred Mineral Resource estimate is tabulated below for a range of NSR (Net Smelter Return) cut- off values based on assumed underground mining and milling costs. The resource utilizes a base case cut-off of $75 per tonne and has an effective date of May 11, 2015. Tonnes 9,133,000 8,125,000 7,072,000 Grade Cu (%) 1.30 1.41 1.51 Zn (%) 5.00 5.25 5.53 Au (g/t) 0.30 0.32 0.34 Ag (g/t) 30.2 31.7 33.7 CuEq (%) ZnEq (%) 3.03 3.23 3.43 11.83 12.61 13.39 Cut-off NSR US$ 60 75 95 Notes: 1. NSR equals (US$45.69 x Cu% + US$11.70 x Zn% + US$25.04 x Au g/t + US$0.43 x Ag g/t). NSR formula is based on assumed values for offsite costs, metal recovery, and metal prices. Offsite costs include transportation of concentrate, smelter treatment charges, and refining charges. 2. Assumed metal prices are US$2.75/lb for copper (Cu), and US$1.00/lb for zinc (Zn), US$1200/oz for gold (Au), US$18/oz for silver (Ag). 4 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) 3. Estimated metal recoveries are 89.6% for copper, 84.9% for zinc, 75% for gold (61.5% to the Cu concentrate and 13.5% to the Zn concentrate) and 89.7% for silver (73.7% to the Cu concentrate and 16% to the Zn concentrate) as determined from metallurgical locked cycle flotation tests. 4. Density was estimated by inverse distance squared interpolation; unique density values were determined by conventional analytical methods for all assay samples. 5. Copper equivalent (CuEq%) and zinc equivalent (ZnEq%) values were calculated based on the NSR formula above (e.g. CuEq% = Cu% + (Zn% x $11.70 + Au g/t x $25.04 + Ag g/t x $0.43)/$45.69 6. Mineral resources as reported are undiluted. 7. Mineral resource tonnages have been rounded to reflect the precision of the estimate. 8. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineralization at the Palmer Project contains an unusually high concentration of barite. Barite is an inert, high-density industrial mineral that is in demand for use in oil and gas drilling, with the majority of US consumption met by imports from Asia. Barium content within the resource area averages approximately 13 to 15%, which equates to a barite mineral content of approximately 22 to 25% by weight*. The Company will be evaluating the potential to produce a marketable barite concentrate. *Average barium content within the resource area is based on analysis and block modelling of barium XRF assay data that is available for 95% of all samples included within the mineralized wireframes. There is insufficient data and confidence to include barium in the Inferred Mineral Resource and the range of average barite mineral content is presented herein for the purpose of highlighting exploration potential only. Resource Model The independent mineral resource estimate prepared by James N. Gray of Advantage Geoservices Ltd. is reported in accordance with Canadian Securities Administrators' NI 43-101 and conforms to the Canadian Institute of Mining "Estimation of Mineral Resources and Mineral Reserves Best Practices" guidelines. Eighty-two diamond drill holes were used in generating the geological model for the South Wall and RW zones, 48 of which intersect the interpreted mineralized zones in 19,000 meters of core. Outlier assays were capped and all assays within the mineralized zones composited to 1.5 meter lengths. Metal grades were estimated using inverse distance cubed interpolation into a 3D block model with block dimensions of 6 x 6 x 6 meters. Three dimensional geologic solids were constructed by Darwin Green, Vice President of Exploration and reviewed by QP Ian Cunningham-Dunlop, P. Eng., and, in general, were limited to material grading > 0.5% Cu or > 2% Zn that could be demonstrated to be correlative with definable stratabound zones. As a general rule, solids were extended no more than 50 meters up-dip, down-dip and along strike from a drill hole; the Inferred Mineral Resource includes only mineralization within 75 meters of a drill hole. A total of five solids were constructed for sulphide mineralization: South Wall Zone 1, South Wall Zone 2-3, South Wall EM Zone, RW West, and RW East. The complete NI 43- 101 Technical Report was published on SEDAR on June 25, 2015. An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. 2015 Project Development and Drilling Program Completed at Palmer Project development in 2015 included completion of a 7,700 meter drill program and a variety of environmental and engineering work programs at a cost of over US $ 5.5 million. This work included 5 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) engineering design work, water quality studies, rock geochemical characterizations studies, geotechnical studies, plant and wildlife surveys, hydrogeology studies, and meteorological work. A Plan of Operations was completed in 2015 to support permitting the construction of an access road to the South Wall area. The Plan is subject to a federal Environmental Assessment process, with public and agency scoping review initiated on December 2nd. The Company is targeting approval in Q2 2015 with the objective of commencing construction during the 2015 summer field season. The 7,736 meters of core drilling was completed, consisting of 8 wide spaced exploration drill holes, 1 geotechnical drill hole, and the extension of a 2014 drill hole. The scope of the drilling was focused on exploring for extensions of the deposit within a localized target area. Drill holes primarily tested areas around the South Wall EM Zone, including the fault displaced offset of the zone referred to as the Lower Offset target. EM Zone mineralization was intersected in three holes, extending the known extent of the mineralized system approximately 100 meters east (holes CMR15-72 and 73) and 65 meters up dip (hole CMR15-75). Mineralization in these holes is chert-barite dominant with base metal bearing footwall pyrite- pyrrhotite stringer zones. Significant intersections include:  4.2 meters grading 0.5% copper, 3.98% zinc, 60.4 g/t silver, 0.65 g/t gold in CMR15-75  3.0 meters grading 2.32% copper and 14.9 g/t silver in hole CMR15-75  8.0 meters grading 1.33% zinc and 21.6 g/t silver in hole CMR15-73  10.5 meters grading 1.56% zinc in hole CMR15-72 Four drill holes targeted the Lower Offset target below a fault structure that displaces the down-dip projection of the EM Zone. One of the four holes, CMR15-69, successfully intersected EM Zone equivalent massive pyrrhotite mineralization and intense hydrothermal alteration approximately 160 meters below the fault, including 7.2 meters grading 0.43% copper and 0.46% zinc. The other three drill holes to test the Lower Offset target area did not intersect EM Zone correlative stratigraphy. This includes CMR14-56 that was re-entered and abandoned after advancing 22 meters due to adverse drilling conditions, and holes CMR15-71 and 77 that were completed to significant depths prior to being abandoned. A large portion of the deposit remains open to expansion in the immediate South Wall and RW resource areas. Work is ongoing into understanding and interpreting the geological, geochemical, and geophysical data gained from new drill holes, with the objective of updating the exploration model for future drill planning. Geophysics Borehole and surface electromagnetic (EM) geophysical surveys identified several zones of high conductivity. Conductive plate modeling of the borehole data has generated targets of potential mineralization adjacent to the existing mineral resource and at depth below the current extent of surface drilling. Modeling of surface EM data has generated conductive plate models targets in areas along trend of the RW and South Wall resource areas. The new geophysical data is being incorporated into planning and drill hole targeting. Advanced Project Team and Work Programs Constantine continues to build its advanced project team. Key personnel include Ian Cunningham- Dunlop, P. Eng., Senior Advisor Advanced Projects and Engineering; Henry Bogert, Senior Mining 6 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Engineer; and Rick Richins, Senior Advisor Permitting. All bring a wealth of experience in their respective fields. The company also signed a memorandum of understanding with Alaska Large Mine Permitting Team to gain early input into baseline program design and ensure long lead time data is collected in a manner consistent with the needs of State regulators. Land Trust Selection Agreement The Haines Block is an approximately 92,000 acre land package leased by Constantine from the Alaska Mental Health Trust Authority (see news release dated September 9, 2014), which is subject to an area of interest clause in the Palmer property agreement with Dowa. The main elements of the Selection Agreement are as follows:  Dowa has selected a Haines Block land parcel with surface and mineral rights comprising approximately 3483 acres the “Selection Area” to be included as part of the Palmer Property for which expenditures will apply to Dowa’s 49% Earn-in Expenditures during the Option phase of the property agreement.  Constantine will maintain its 100% interest in the balance of the property of the Haines Block exclusive of the Selection Area and any exploration done in such area outside of the Selection Area will be at Constantine’s expense.  Dowa and Constantine will share the annual rental requirements of the Lease of US$25,000 for the first 3 year lease term, in proportion of 49:51, which are amounts of US$12,250 and US$12,750, respectively, until a Joint Venture (“JV”) is formed.  Dowa will meet the minimum exploration requirements of the Lease during the Option period and until such time as a JV is formed. These minimum requirements are US$75,000 by September 1, 2015, escalating by US$50,000 annually thereafter and these expenditures will be deemed to be earn-in expenditures paid by Dowa.  Constantine has granted Dowa a Right of First Offer on Haines Block lands located outside of the Selection Area for a 3 year period beginning as of September 1, 2014, and terminating on September 1, 2017. 2015 Haines Block Exploration Program A total of $620,250 was spent on exploration work on the Haines Block in 2015. The work included mapping and geochemical sampling of several identified VMS prospects and alteration zones located proximal to the Palmer Property. The work also included LIDAR imaging for topographic and geological mapping, reconnaissance scale geochemical surveying, soil sampling, and prospecting to identify new prospects within prospective host rocks. Work within the Selection Area included surface geophysics and one drill hole, including down hole geophysics, that tested the South Wall on the adjacent federal claims of the Palmer Property. On a portion of the 100% Constantine-controlled Haines Block lands that surround the core of the Palmer Property, new VMS-style massive sulphide mineralization was discovered during our regional exploration work. Significant results include:  Delineation of a 2 km trend of massive sulphide boulders associated with altered and mineralized volcanics at the Tsirku prospect, located 9 km south of the Palmer deposit area. Highlight assays 7 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) of 4.99% copper, 6.32% zinc, 68 g/t silver, and 1.97 g/t gold have been received for chip and grab samples of boulders that range from 0.2 to 1.5 m in size. Mineralization style at this new prospect resembles that of the Palmer deposit, and supports management’s strong belief in the potential to discover other VMS deposits on the Property.  Grab samples grading 8.12% copper and 15.4% zinc have been obtained from outcrop at the Waterfall prospect, located 3 km southwest of the Palmer deposit area. The Waterfall prospect occurs adjacent to the silver-rich Cap (e.g. 23.2 m grading 134 g/t silver in historic drill hole), HG and Nunatak prospects.  See the Company’s news release dated November 24, 2015 for a complete list of assay results. These prospects collectively define a highly prospective and under-explored environment close to the current mineral resource and infrastructure. About the Haines Block and Lease The Haines Block shares similar geology to the Palmer Property and is considered prospective for hosting high-grade massive sulphide mineralization. The property also covers areas upland of the active Porcupine placer gold district that has estimated past production of 82,489 ounces of gold. This represents the first time the Haines Block has been offered to the public for lease, with very limited exploration work having taken place in recent decades. Please refer to the Company’s September 9, 2014 news release for additional details about the Haines Block lease agreement. About the Constantine-Dowa Option and Joint Venture Agreement Under the terms of an Option and Joint Venture Agreement (the “Agreement”) dated February 1, 2013, Dowa has the option to earn a 49% interest in the Palmer project by making aggregate expenditures of US$22,000,000 over a four year period. Expenditures for each year shall not be less than US$3,000,000. Included in the aggregate expenditure are cash payments to Constantine totaling US$1,250,000 over four years, of which US$1,000,000 has been received to date. Constantine is the operator of the project and receives a management fee for work programs during the earn-in period. Constantine has received over US $15 million from Dowa in combined project expenditures, property payments and management fees in connection with the project to date. In March 2015, the Company completed a finder’s fee payment of US$75,970 in connection with the Agreement. The finder’s fee was completed by the payment of US$20,000 cash and the balance through the issuance of 493,336 common shares of the Company. A total of US$203,470 in finder’s fees has been paid in connection with the Dowa agreement, as of the date of this report. The aggregate amount of finder’s fees payable by the Company in regard to the Dowa agreement is capped at US$250,000. Gold Projects Constantine controls a 100% interest in the Munro Croesus and Golden Mile projects in Ontario. The Munro Croesus project includes the famous high-grade past-producing Croesus Gold Mine located along the north side of the Pipestone Fault within the Porcupine Destor Fault zone corridor approximately 75 kilometers east of the center of the Timmins gold camp. The Golden Mile Project is also along the Pipestone Fault, a splay of the Porcupine Destor Deformation Zone and located 30 kilometers east of Timmins and 9 kilometers northeast of Goldcorp’s multi-million ounce Hoyle Pond Gold Mine. The Company did not conduct exploration programs on its Ontario properties in 2015. 8 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Munro-Croesus Project (Ontario) The Munro-Croesus Project comprises the following properties: Munro-Croesus property, the Four Corners Property and the JM Property. These properties straddle an area between the prolific Porcupine Destor Fault Zone (PDDZ), the Pipestone Fault Zone and the Munro Break, and within the same structural corridor that hosts the neighbouring Fenn-Gibb deposit and the Holt-McDermott and Holloway Mines located 25 kilometers to the east, which have produced an aggregate of more than 2 million oz. of gold. Constantine’s Munro-Croesus project area covers an approximately seven kilometer length of this key structural corridor and has several well defined drilling targets. The Munro Croesus property includes the formerly producing Croesus mine, known to have produced some of the highest grade gold ever mined in Ontario. Three drilling programs (8,414 meters) have been carried out by Constantine on the claims since it was acquired in 2007, The drilling located high-grade Croesus type gold veins in the south offset fault block of the Croesus Mine vein and identified a new footwall zone (200 Zone) of high-grade gold mineralization (12.2 g/t gold over 0.46m) at depth under the historic mine workings. A 750 meter short hole drill program is recommended to test high grade vein structures in the immediate hanging wall of the Croesus shaft that were intersected for the first time in the 2011 drill program. Nine rock samples of the northeast trending historic #2 Vein with observed widths to 12 meters, located to the southwest and along the same structural trend as the former producing high- grade Croesus Mine yielded seven plus one gram gold assays over a strike length of approximately 400 meters, with a high value of 15.9 grams per tonne gold. The #2 Vein structure has not been drill tested and drilling is proposed to test this southwest extension from the interpreted Croesus vein structure. Eight strategic Munro Croesus property claims lie adjacent to the Fenn-Gib property which was acquired by Lake Shore Gold Corp. (“Lake Shore”) from Barrick Gold Corporation for $60 million. Since acquiring the Fenn-Gib property, Lake Shore carried out additional drilling and completed a NI 43-101 resource estimation. This resource estimate, reported by Lake Shore, includes a total of 40.8 million tonnes grading 0.99 grams per tonne ("gpt") for a total of 1.35 million contained gold ounces in the Indicated category and 24.5 million tonnes at 0.95 gpt for a total of 0.75 million ounces gold in the Inferred category. Lake Shore subsequently completed a drilling program at Fenn-Gib and announced mineralized intercepts confirming expansion potential of Lake Shore’s resource to the west (Lake Shore news release May 1, 2012) towards Constantine's eight “Horseshoe claims”. Constantine’s 100% owned “Horseshoe claims” are located within 300 meters west and along trend from the Fenn-Gib gold resource. The discovery of the Horseshoe Zone gold mineralization in outcrop in 2012 indicates the potential for expansion of the Fenn-Gib gold deposit along trend to the west across the southern part of Constantine’s Horseshoe claims. A 1500 meter drill program would provide an initial test of this highly prospective area. The JM property, part of the Munro Croesus project, was acquired by staking in August 2010 and consists of 2 claims (4 units, 65 hectares) immediately to the north of the Munro Croesus property. The property covers the projected extension of the favourable Croesus mine stratigraphy to the northwest of the Croesus Mine. Geological mapping and sampling was carried out for assessment work and six samples from a new gold showing yielded 5 five assays greater than 3 g/t gold with a high value of 15 g/t gold. On the Four Corners property, Constantine has fulfilled the terms of the underlying option agreement (subject to an annual advanced royalty payment of $5,000/year and a 2.5% Net Smelter Return Royalty) to acquire a 100% interest in the 63 claim property that forms part of the Munro-Croesus project. The Four Corners Property is located 1.2 kilometers east of the Munro Croesus property, contiguous with Lake Shore’s Fenn-Gib property. 9 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) The geological setting at Four Corners shares many similarities to classic Archean gold systems. Since acquiring the Four Corners property in 2008, the Company has previously reported on the drilling of 3 holes (1,079 meters) on the Perry Pond prospect (2009 and 2011) and trenching and drilling of 3 holes (949 meters) in the Canamax zone area (2010 and 2011). The wide spaced (100 meters) drilling at the Canamax Zone identified broad intervals of gold mineralization within a robust carbonate +/- silica+/- fuchsite alteration zone (e.g. 18.25 meters grading 0.34 g/t gold in CMX11-01 and 10.05 meters grading 0.55 g/t gold in CMX11-03A). Golden Mile Property (Ontario) The Company completed a 1,182 meter drill program on the Golden Mile project in Timmins, Ontario in 2014 and regained a 100% interest in the project from option partner, Teck Resources Limited (“Teck”), who funded expenditures of over $1.2 million on the project. Sufficient assessment reporting has been completed to maintain the property in good standing for several years. Drilling confirmed the presence of a major structure interpreted to be a western extension of the Pipestone Fault, which is associated with important gold mineralization along trend to both the east and west of the Golden Mile property. Strongly altered ultramafic rock units were intersected in contact with a graphitic shear zone and pyritic sediments in the two drill holes designed to test the interpreted structural contact. Notably, neither the structure nor the altered ultramafics intersected in these drill holes had been previously identified on government geology maps. The drilling program yielded some weakly anomalous gold. Management is encouraged by the identification of an important structure, alteration with associated pathfinder geochemistry, veining and permissive rock units known to be important hosts for mineralization within the Timmins gold camp. This work has provided an excellent stepping stone for future advancement and discovery on the large, well located land package. The Golden Mile property covers the important Pipestone Fault System where it crosses the “Porcupine Giant Mine Corridor” that has produced more than 55 million ounces of gold. This structural intersection, which contains excellent targets within the Kidd-Munro volcanic sequence and adjacent Porcupine sediments, is overburden covered and has seen very limited drill testing for gold. The 423 claim unit, 68 square kilometer Golden Mile property is located 9 kilometers northeast of Goldcorp Inc.’s multimillion ounce Hoyle Pond deposit and is comparable in area to the West Timmins and Main Camp holdings of the major gold production companies operating in the Timmins Gold Camp. The Company is continuing to evaluate opportunities to joint venture its Ontario gold projects. Yukon Exploration Properties The Company and Carlin Gold Corporation (“Carlin Gold”) control over 3,000 claims in the Mayo and Watson Lake Mining Districts, Yukon. The claims are distributed in twelve blocks that total approximately 65,000 hectares (250 square miles). The Company and Carlin Gold do not plan to pursue exploration on the Yukon exploration properties in the next year. Based on an impairment review of the Yukon properties, conducted by the Company in accordance with IFRS, in April 2015 Constantine recorded a $858,218 writedown of the property to a value of $1. The Company is evaluating opportunities to joint venture its Yukon and Ontario gold projects. 10 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Impairment Review of Exploration and Evaluation Properties In April 2015, the Company recorded a writedown of its Yukon exploration and evaluation properties and incurred a charge of $858,218 on its Statement of Loss. Following the end of the fiscal year, the Company conducted an impairment review of its exploration properties, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. A number of factors were considered, including exploration expenditures, geologic merit, indicated property market value and market capitalization of the Company. Other than the writedown of its Yukon land position and joint venture interest, no other write-downs were indicated as of October 31, 2015 or as of the date of this report. Results of Operations Exploration and Evaluation Property Expenditures In the year ended October 31, 2015, the Company incurred expenditures of $7,382,537 on exploration and evaluation properties. The Palmer project accounted for $7,305,686 of those expenditures. In the year ended October 31, 2015, the Company recorded cost recoveries and project management fees received from Dowa totaling $7,759,123. For the year ended October 31, 2015, the Company incurred costs totaling $76,851 on the remainder of its exploration and evaluation properties. Operating Costs The Company recorded cash operating expenses of $426,808 for the year ended October 31, 2015 compared to cash operating costs of $459,956 for the previous year. A breakdown of total general and administrative costs for the years ended October 31, 2015 is shown in the table below. Total costs were slightly higher than the previous year (2014-$156,205), primarily due to higher conference, trade show and advertising costs. The Company is projecting that such costs will remain in the same range for the next fiscal year. 11 General and Administrative expenses for the year ended October 31, 2015AmountConferences, trade shows and advertising $ 76,629 Accounting and administration60,000Office expenses41,034Transfer agent, listing and filing fees18,166Other4,581Total $ 200,410 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Annual Financial Information Selected annual financial information for the three years ended October 31, 2015, 2014 and 2013 as follows: At October 31, Loss before other items Net loss for the year Loss per share Total assets Total liabilities Total shareholders’ equity Summary of Quarterly Results 2015 $ (558,527) (1,414,641) (0.01) 13,958,516 285,842 13,672,674 2014 $ (657,890) (1,087,362) (0.01) 15,216,499 261,313 14,955,186 2013 $ (531,263) (1,365,872) (0.01) 15,863,681 143,921 15,719,760 In the three months ended October 31, 2015, the Company incurred aggregate expenditures, before cost recoveries, of $3,375,715 on exploration and evaluations properties, most of which ($3,359,686) was incurred on the Palmer project, which was the sole active exploration project during the quarter. The Company recorded cash operating expenses of $77,928 for the three months ended October 31, 2015, compared to cash operating expenses of $112,622 for the same period last year. The following is a summary of certain consolidated financial information of the Company for the past eight quarters: Financial Condition, Liquidity and Capital Resources The Company is not in commercial production on any of its mineral properties and accordingly, it does not generate cash from operations. The Company finances its activities by raising capital through the equity markets, option and joint venture agreements that provide cash payments and management fees, and monetization of assets. In the year ended October 31, 2015, the Company recorded an aggregate of $630,891 (2014-$620,491) in option payments and management and project fees from operating the Palmer project. 12 For Quarter EndedTotalAssetsIncome(Loss)Income(Loss)per shareOctober 31, 2015$ 13,958,516 $ (148,405)$ (0.00)July 31, 2015 14,885,665 (101,128) (0.00)April 30, 2015 14,087,749 (1,117,375) (0.01)January 31, 2015 15,083,372 (47,733) (0.00)October 31, 2014 15,216,499 (150,468) (0.00)July 31, 2014 17,581,033 (72,603) (0.00)April 30, 2014 15,354,071 (189,706) (0.00)January 31, 2014 15,383,934 (674,585) (0.01) Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) The Company's cash position at October 31, 2015 was $396,069 (2014-$587,481) and its working capital at October 31, 2015 was $440,630 (2014-$470,841). At October 31, 2015, the Company had $238,334 in exploration costs recoverable from Dowa, which were received in November 2015. The Company’s cash position and working capital as of the date of this report are approximately $430,000 cash and $360,000 working capital The Company is dependent on equity capital to fund exploration and development of exploration properties and its on-going operations. Constantine currently has an option/joint venture agreement in place which is projected to fund its major project in Alaska in 2016, however additional working capital will be required in order to finance further exploration work on its other properties. At this time, the Company has no material contractual commitments for capital expenditures. Off-Balance Sheet Arrangements The Company has not entered into any off-balance sheet financing arrangements. Related Party Transactions The following represents the details of related party transactions paid or accrued for the years ended October 31, 2015 and 2014: As at October 31, 2015, the unpaid portion of amounts due to key management is $3,199 (2014-$3,966). The Company paid NS Star Enterprises Ltd., a company controlled by a director, $41,044 for management and administration services during the year ended October 31, 2015 (2014 - $15,300). The Company paid Morfopoulos Consulting Associates Ltd., a company controlled by the CFO, $72,000 for accounting, and management and administration services during the year ended October 31, 2015 (2014- $72,000). The Company paid D. Green Geoscience Inc., a company controlled by the vice-president of exploration, $178,426 for technical consulting and management and administration services during the year ended October 31, 2015 (2014 - $177,821). The Company paid 44984 Yukon Ltd., a company controlled by a director of the Company, $2,134 for miscellaneous field operating supplies and services during the year ended October 31, 2015 (2014 - $3,833). 13 For the years ended October 31,20152014Consulting,administrativeandtechnicalfeespaidoraccruedtocompaniesownedbydirectors $ 43,178 $ 9,833 Consulting fees paid to officers 178,426 81,296 Accounting and administration fees paid or accrued to a company 50% owned by an officer72,00036,000Share-based payments to key management71,745 96,087 $ 365,349 $ 223,216 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Management of Capital The Company manages its cash, common shares and stock options as capital. 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 development of its mineral properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. The Company does not have any externally imposed capital requirements to which it is subject. 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 or adjust the amount of cash and cash equivalents. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. In order to maximize ongoing exploration efforts, the Company does not pay out dividends. The Company’s investment policy is to keep its cash treasury on deposit in an interest bearing Canadian chartered bank account. Summary of Outstanding Shares Data The Company had 116,846,001 shares outstanding on October 31, 2015 and 116,906,061 shares outstanding as of the date of this report. In December 2015, the Company issued 60,000 shares in regard to a property option payment on the Golden Mile property. In March 2015, the Company issued 493,336 shares as part of a success fee payment in regard to the option and joint venture agreement on the Palmer property In December 2014, the Company issued 48,000 shares in regard to a property option payment on the Golden Mile property. On March 6, 2015, an aggregate of 1,400,000 stock options at a price of $0.14 and exercisable for five years were granted to directors, officers and employees of the Company. The following stock options were outstanding at October 31, 2015: No. of Stock Options 1,875,000 5,400,000 1,400,000 8,675,000 Price per Share $0.11 $0.07 $0.14 Expiry Date March 5, 2017 January 17, 2019 March 6, 2020 14 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Corporate Governance Management of the Company is responsible for the preparation and presentation of the interim and annual financial statements and notes thereto, MD&A and other information contained in this MD&A. Additionally, it is management’s responsibility to ensure the Company complies with the laws and regulations applicable to its activities. The Company’s management is held accountable to the Board of Directors (“Directors”), each member of which is elected annually by the shareholders of the Company. The Directors are responsible for reviewing and approving the annual audited financial statements and MD&A. Responsibility for the review and approval of the Company’s unaudited interim financial statements and MD&A is delegated by the Directors to the Audit Committee, which is comprised of three directors, two of whom are independent of management. Additionally, the Audit Committee pre-approves audit and non-audit services provided by the Company’s auditors. The auditors are appointed annually by the shareholders to conduct an audit of the financial statements in accordance with generally accepted auditing standards. The external auditors have complete access to the Audit Committee to discuss the audit, financial reporting and related matters resulting from the annual audit as well as assist the members of the Audit Committee in discharging their corporate governance responsibilities. Risk Factors Companies operating in the mining industry face many and varied kind of risks. While risk management cannot eliminate the impact of all potential risks, the Company strives to manage such risks to the extent possible and practical. Following are the risk factors most applicable to the Company. Financial The Company has not generated any revenue since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. As at October 31, 2015, the Company has incurred losses since inception and has an accumulated operating deficit of $8,525,761. The continuation and long-term viability of the Company remains dependent upon its ability to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. Industry Exploring and developing mineral resource projects bears a high potential for all manner of risks. Additionally, few exploration projects successfully achieve development due to factors that cannot be predicted or foreseen. Moreover, even one such factor may result in the economic viability of a project being detrimentally impacted such that it is not feasible or practical to proceed. The Company monitors its risk based activities and periodically employs experienced consulting, engineering, insurance and legal advisors to assist in its risk management reviews. 15 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Although the Company has taken steps to verify the title to mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the company's title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects. Metal Prices The principal activity of the Company is the exploration and development of precious metal and base metal resource properties. The feasible development of such properties is highly dependent upon the price of gold, silver, copper lead and zinc. A sustained and substantial decline in precious metal and base metal commodity prices could result in the write-down, termination of exploration and development work or loss of its interests in identified resource properties. Although such prices cannot be forecasted with certainty, the Company carefully monitors factors which could affect precious metal and base metal commodity prices in order to assess the feasibility of its resource projects. Political Risk The resource properties on which the Company is actively pursuing its exploration and development activities are located in Alaska, USA and Ontario, Canada. While the political climate in Alaska, British Columbia and Ontario is considered by the Company to be stable, there can be no assurances that this will continue indefinitely. To alleviate such risk, the Company funds its operations on an as-needed basis. The Company does not presently maintain political risk insurance for its foreign exploration projects. Environmental Exploration and development projects are subject to the environmental laws and regulations of the state of Alaska and of the United States of America (Palmer project) and the environmental laws and regulations of Canada and the province of Ontario (Munro-Croesus and Golden Mile projects). As such laws are subject to change, the Company monitors proposed and potential changes and management believes the Company remains in compliance with current environmental regulations in the relevant jurisdictions. On the Palmer project, reclamation of disturbances related to the Company’s permitted exploration activities are bonded under the Alaska State-wide Bond Pool. The Company has also contracted an ASTM Phase 1 environmental site assessment (ESA) on the federal lode mining claims of the Palmer project. The ESA concluded that there are no environmental concerns associated with the Property. The Munro Croesus project includes the very small past producing Munro Croesus Gold Mine that mined approximately 5000 tons of ore. The Company has assumed the environmental liability at the Croesus minesite on the Munro Croesus property. To date it has not incurred any material expenses, however it does remain an uncertain liability. The Ontario government requires a closure plan if the claims are abandoned or become inactive and the closure plan will require some water sampling and site reclamation costs. The previous owner completed remediation of what the Company considers to be the major liabilities, which included capping the Walsh and Croesus shafts. The Croesus minesite was visited by a mines inspector in September 2010 and an inspection report received from the Ministry of Northern Development, Mines and Forestry (Ontario) in early 2011. The summary of field observations and recommendations in the Inspection Report are near surface stope stability concerns and recommendation for a crown pillar stability assessment. There is a specific near-term recommendation to secure the location of a small raise to surface that is filled with waste rock with a fence and signs. The bedrock around the small raise to surface that is filled with waste rock and the crown pillar at the Croesus shaft 16 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) was cleared of surface rubble by an excavating program in October 2011. The small raise area was fenced and cautionary signage was installed. A preliminary evaluation of the near surface stope stability and a crown pillar stability assessment was completed by a qualified engineer, independent of the Company. The initial conclusion based on historic data and new information from drill data through the old workings and the recent excavation work is that the “old workings will stand for a long time” and that “surface subsidence would be minimal at the down-dip edge of the zone and could be as much as 1 meter near the upper edge.” Now that the crown pillar is exposed, a site visit by a qualified Ontario mining engineer is required with formal reporting of the conclusions to be made to the Ministry of Northern Development, Mines and Forestry (Ontario). Surface water samples upstream and downstream of the site have been recommended to determine water quality issues. No specific schedule has been established to carry out this work. Operational Exploration development projects require third party contractors for the execution of certain activities. The availability and cost of third party contractors is subject to a competitive environment for their use, which is beyond the control of the Company. Credit risk Credit risk is the risk of potential loss to the Company if a customer or counterparty to a financial instrument fails to meets its contractual obligations. The Company’s credit risk is limited to the carrying amount on the balance sheet and arises from the Company’s cash and receivables. The Company’s cash is held primarily through a Canadian chartered bank, which is a high-credit quality financial institution. The credit risk in receivables is considered low by management as it consists primarily of amounts owing for Canadian government sales tax credits. Liquidity risk Liquidity risk is the risk that the Company will not meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. At October 31, 2015, the Company had a cash balance of $396,069 to settle current liabilities of $285,842. All other financial liabilities have maturities of 30 days or are due on demand and are subject to normal trade terms. Market risk Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange rates. Interest rate risk The Company has cash balances and no interest-bearing debt. The Company’s current policy is to invest excess cash in investment-grade short-term certificates of deposits issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. 17 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) Foreign currency rate risk The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. Management believes the foreign exchange risk derived from currency conversions is insignificant and therefore does not hedge its foreign exchange risk. Sensitivity analysis The carrying value of cash, receivables, accounts payable, and amounts due to related parties closely approximate their fair values in view of the relatively short periods to maturities of these financial instruments. Based on management’s knowledge of and experience in the financial markets, management does not believe that the Company’s current financial instruments will be materially affected by credit risk, liquidity risk or market risk. Forward-Looking Statements Forward-looking statements include, but are not limited to statements regarding the use of proceeds, costs and timing of the development of new deposits, statements with respect to success of exploration and development activities, permitting time lines, currency fluctuations, environmental risks, unanticipated reclamation expenses, and title disputes or claims. Forward-looking statements often, but not always are identified by the use of words such as “plans”, “seeks”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “targets”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “should”, “could”, “would”, “might”, “will”, or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on a number of assumptions and factors, including assumptions regarding general market conditions; future prices of gold and other metals; possible variations in ore resources, grade or recovery rates; actual results of current exploration activities; actual results of current reclamation activities; conclusions of future economic evaluations; changes in project parameters as plans continue to be refined; failure of plant, equipment, or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; risks related to joint venture operations; timing and receipt of regulatory approvals of operations; the ability of the Company and other relevant parties to satisfy regulatory requirements; the availability of financing for proposed transactions and programs on reasonable terms; the ability of third-party service providers to deliver services on reasonable terms and in a timely manner; and delays in the completion of development or construction activities. Other factors that could cause the actual results to differ include market prices, results of exploration, availability of capital and financing on acceptable terms, inability to obtain required regulatory approvals, unanticipated difficulties or costs in any rehabilitation which may be necessary, market conditions and general business, economic, competitive, political and social conditions. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, there may be other factors which cause actual results to differ. Significant additional drilling is required by the Company at its Palmer property to fully understand the system size before a meaningful resource can be calculated 18 Management’s Discussion and Analysis For the year ended October 31, 2015 (Expressed in Canadian dollars) and completed. Accordingly, readers should not place undue reliance on forward-looking statements. This MD&A includes, but is not limited to, forward-looking statements regarding: the Company’s plans for upcoming exploration work on the Company’s exploration properties in Alaska, and the Company’s ability to meet its working capital needs for the next fiscal year. Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. Approval Darwin Green, P. Geo., Vice-President Exploration for Constantine, and a qualified person as defined by Canadian National Instrument 43-101, has reviewed the technical information contained in this MD&A and has also verified the analytical data for drill core samples disclosed in this release by reviewing the blanks duplicates and certified reference material standards and confirming that they fall within limits as determined by acceptable industry practice. Ian Cunningham-Dunlop, P.Eng. and Technical Advisor to Constantine Metal Resources Ltd., is a Qualified Person as defined by NI 43-101 for the Palmer project. James N. Gray, P.Geo. of Advantage Geoservices Ltd. is the Qualified Person as defined by NI 43-101 for the resource estimate discussed above. They have reviewed and approved the contents of this MD&A. The Board of Directors of the Company has approved the disclosure contained in this MD&A. A copy of this MD&A will be provided to anyone who requests it. Additional Information Additional disclosures pertaining to the Company’s technical reports, management information circulars, material change reports, press releases and other information are available on the SEDAR website at www.sedar.com. 19 

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