UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
[ ] Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 or
[ x ] Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2012
Commission File Number 001-35404
EURASIAN MINERALS INC.
(Exact name of Registrant as specified in its charter)
British Columbia, Canada
(Province or other jurisdiction of
incorporation or organization)
1000
(Primary Standard Industrial Classification
Code Number)
98-102691
(I.R.S. Employer
Identification Number)
Suite 501 – 543 Granville Street
Vancouver, British Columbia V6C 1X8
Canada
(604) 688-6390
(Address and telephone number of Registrant’s principal executive offices)
DL Services, Inc.
Columbia Center
701 Fifth Avenue, Suite 6100
Seattle, Washington 98104-7043
(206) 903-8800
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class:
Common Shares, no par value
Name of each exchange on which registered:
NYSE MKT LLC
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
For annual reports, indicate by check mark the information filed with this Form:
[ x ] Annual information form
[ x ] Audited annual financial statements
Indicate the number of outstanding shares of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
72,051,872 Common Shares, no par value, as at December 31, 2012.
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.
[ x ] Yes [ ] No
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the Registrant was required to submit and post such files).
[ x ] Yes [ ] No
EXPLANATORY NOTE
Eurasian Minerals Inc. (the “Company” or the “Registrant”) is a Canadian issuer that is permitted, under the multijurisdictional disclosure system
adopted in the United States, to prepare this annual report on Form 40-F (this “Annual Report”) pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), in accordance with Canadian disclosure requirements, which are different from those of the United States.
The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act and Rule 405 under the Securities Act of 1933, as amended.
Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3
thereunder.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report, including the documents incorporated by reference herein, may contain forward-looking statements. These forward-looking
statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates,
work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability
of a project, timelines, strategic plans, completion of transactions, market prices for metals or other statements that are not statements of fact. These
statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the
extent that they involve estimates of the mineralization that will be encountered if the property is developed.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, identified by words or phrases such as “expects,” “anticipates,” “believes,” “plans,” “projects,”
“estimates,” “assumes,” “intends,” “strategy,” “goals,” “objectives,” “potential,” “possible” or variations thereof or stating that certain actions, events,
conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and
similar expressions) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements are based on a number of material assumptions, including those listed below, which could prove to be significantly
incorrect:
(cid:122) the Company’s ability to achieve production at any of its mineral properties;
(cid:122) estimated capital costs, operating costs, production and economic returns;
(cid:122) estimated metal pricing, metallurgy, mineability, marketability and operating and capital costs, together with other assumptions underlying the
Company’s resource and reserve estimates;
(cid:122) the Company’s expected ability to develop adequate infrastructure at a reasonable cost;
(cid:122) assumptions that all necessary permits and governmental approvals will be obtained;
(cid:122) assumptions made in the interpretation of drill results, the geology, grade and continuity of the Company’s mineral deposits;
(cid:122) the Company’s expectations regarding demand for equipment, skilled labor and services needed for exploration and development of mineral
properties; and
(cid:122) the Company’s activities will not be adversely disrupted or impeded by development, operating or regulatory risks.
2
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results
to differ from those reflected in the forward-looking statements, including, without limitation:
(cid:122) uncertainty of whether there will ever be production at the Company’s mineral exploration and development properties;
(cid:122) uncertainty of estimates of capital costs, operating costs, production and economic returns;
(cid:122) uncertainties relating to the assumptions underlying the Company’s resource and reserve estimates, such as metal pricing, metallurgy,
mineability, marketability and operating and capital costs;
(cid:122) risks related to the Company’s ability to commence production and generate material revenues or obtain adequate financing for its planned
exploration and development activities;
(cid:122) risks related to the Company’s ability to finance the development of its mineral properties through external financing, joint ventures or other
strategic alliances, the sale of property interests or otherwise;
(cid:122) risks related to the third parties on which the Company depends for its exploration and development activities;
(cid:122) dependence on cooperation of joint venture partners in exploration and development of properties;
(cid:122) credit, liquidity, interest rate and currency risks;
(cid:122) risks related to market events and general economic conditions;
(cid:122) uncertainty related to inferred mineral resources;
(cid:122) risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of the Company’s mineral deposits;
(cid:122) risks related to lack of adequate infrastructure;
(cid:122) mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labor disputes or other unanticipated
difficulties with or interruptions in development, construction or production;
(cid:122) the risk that permits and governmental approvals necessary to develop and operate mines on the Company’s properties will not be available on a
timely basis or at all;
(cid:122) commodity price fluctuations;
(cid:122) risks related to governmental regulation and permits, including environmental regulation;
(cid:122) risks related to the need for reclamation activities on the Company’s properties and uncertainty of cost estimates related thereto;
(cid:122) uncertainty related to title to the Company’s mineral properties;
(cid:122) uncertainty as to the outcome of potential litigation;
(cid:122) risks related to increases in demand for equipment, skilled labor and services needed for exploration and development of mineral properties, and
related cost increases;
(cid:122) increased competition in the mining industry;
(cid:122) the Company’s need to attract and retain qualified management and technical personnel;
(cid:122) risks related to hedging arrangements or the lack thereof;
(cid:122) uncertainty as to the Company’s ability to acquire additional commercially mineable mineral rights;
(cid:122) risks related to the integration of potential new acquisitions into the Company’s existing operations;
(cid:122) risks related to unknown liabilities in connection with acquisitions;
(cid:122) risks related to conflicts of interest of some of the directors of the Company;
(cid:122) risks related to global climate change;
(cid:122) risks related to adverse publicity from non-governmental organizations;
(cid:122) uncertainty as to the Company’s PFIC status;
(cid:122) uncertainty as to the Company’s status as a “foreign private issuer” and “emerging growth company” in future years;
(cid:122) uncertainty as to the Company’s ability to maintain the adequacy of internal control over financial reporting; and
(cid:122) risks related to regulatory and legal compliance and increased costs relating thereto.
This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements
about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from
those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to
under the heading “Description of the Business—Risk Factors” in the AIF (as defined below), which is incorporated by reference herein.
3
The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and
the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions
should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
RESOURCE AND RESERVE ESTIMATES
Certain documents filed as Exhibits to this Annual Report have been prepared in accordance with the requirements of the securities laws in effect in
Canada, which differ from the requirements of United States securities laws. Unless otherwise indicated, all resource and reserve estimates included in
such Exhibit documents have been prepared in accordance with Canadian National Instrument 43-101 (“NI 43-101”) and the Canadian Institute of
Mining and Metallurgy Classification System. NI 43-101 is a rule developed by the Canadian Securities Administrators, which establishes standards for
all public disclosure an issuer makes of scientific and technical information concerning mineral projects. NI 43-101 permits an historical estimate made
prior to the adoption of NI 43-101 that does not comply with NI 43-101 to be disclosed using the historical terminology if the disclosure: (a) identifies
the source and date of the historical estimate; (b) comments on the relevance and reliability of the historical estimate; (c) states whether the historical
estimate uses categories other than those prescribed by NI 43-101; and (d) includes any more recent estimates or data available.
Canadian standards, including NI 43-101, differ significantly from the requirements of the U.S. Securities and Exchange Commission (the
“Commission”), and resource information contained in the Exhibit documents may not be comparable to similar information disclosed by U.S.
companies. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserves.” Under U.S.
standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and
legally produced or extracted at the time the reserve determination is made. The Commission’s disclosure standards normally do not permit the
inclusion of information concerning “measured mineral resources,” “indicated mineral resources” or “inferred mineral resources” or other descriptions
of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the Commission. U.S.
investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher
category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare
cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable.
Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the Commission normally only permits
issuers to report mineralization that does not constitute “reserves” by Commission standards as in-place tonnage and grade without reference to unit
measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the Commission, and reserves reported by the
Company in compliance with NI 43-101 may not qualify as “reserves” under Commission standards. Accordingly, information concerning mineral
deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards.
Unless otherwise indicated, all dollar amounts in this Annual Report are in Canadian dollars. The exchange rate of Canadian dollars into U.S. dollars,
based upon the noon rate of exchange as reported by the Bank of Canada was U.S.$1.00 = Cdn.$0.9949 on December 31, 2012, and was U.S.$1.00 =
Cdn.$1.0148 on April 2, 2013.
CURRENCY
4
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are filed as Exhibits to this Annual Report are hereby incorporated by reference herein:
(cid:122) the Annual Information Form of the Company for the year ended December 31, 2012 (the “AIF”);
(cid:122) the Management’s Discussion and Analysis of the Company for the year ended December 31, 2012; and
(cid:122) the Audited Consolidated Financial Statements of the Company as at and for the year ended December 31, 2012 and as at and for the nine-month
period ended December 31, 2011, including the notes thereto, together with the Report of the Independent Registered Public Accounting Firm
thereon (the “Financial Statements”).
The Company prepares its Financial Statements, which are filed as Exhibit 99.3 to this Annual Report, in accordance with International Financial
Reporting Standards, as issued by the International Accounting Standards Board (“IFRS”), and such standards are subject to Canadian auditing and
auditor independence standards. IFRS differs in some significant respects from generally accepting accounting principles in the United States of
America, and thus the Company’s financial statements may not be comparable to financial statements of U.S. companies. Effective December 31, 2011,
the Company changed its fiscal year end from March 31 to December 31.
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this Annual Report, the Company carried out an evaluation, under the supervision of the Company’s Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded
that, as of the end of the period covered by this Annual Report, the Company’s disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized
and reported within the time periods specified in Commission rules and forms, and (ii) accumulated and communicated to the Company’s management,
including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-
15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Management conducted an evaluation of the design and operation of the Company’s internal control over financial reporting as of December 31, 2012,
based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the
operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that the Company’s
internal control over financial reporting was effective as of December 31, 2012 and no material weaknesses were discovered.
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
The Company qualifies as an “emerging growth company” under Section 3 of the Exchange Act, as a result of enactment of the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, "emerging growth companies" are exempt from Section 404(b) of the Sarbanes-Oxley Act
of 2002, which generally requires that a public company’s registered public accounting firm provide an attestation report relating to management’s
assessment of internal control over financial reporting. The Company qualifies as an "emerging growth company" and therefore has not included in, or
incorporated by reference into, this Annual Report such an attestation report as of the end of the period covered by this Annual Report.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
During the period covered by this Annual Report, no changes occurred in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company’s management, including the Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and
procedures or internal procedures will prevent all error and all fraud. A control system can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion by two or more people, or by management override of the control. The design of any
system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and may not be detected.
5
BOARD OF DIRECTORS
The Company’s board of directors (the “Board”) consists of the following individuals: Brian E. Bayley, David M. Cole, M. Stephen Enders, Brian K.
Levet, George K. C. Lim, James A. Morris and Michael D. Winn. The Board has determined that Messrs. Bayley, Levet, Lim and Morris are
“independent directors” under Section 803A of the NYSE MKT Company Guide (the “Company Guide”).
A copy of the mandate of the Board and the charters for the Audit Committee, the Compensation Committee and the Corporate Governance Committee
are available on the Company’s Internet website at www.eurasianminerals.com, under the heading “Values.”
AUDIT COMMITTEE
The Board has a separately designated standing Audit Committee established for the purpose of overseeing the accounting and financial reporting
processes of the Company and audits of the financial statements of the Company in accordance with Section 3(a)(58)(A) of the Exchange Act. As of the
date of this Annual Report, the Company’s Audit Committee is comprised of Messrs. Bayley, Lim and Morris, each of whom the Board has determined
is independent under Section 803A of the Company Guide and Rule 10A-3 under the Exchange Act.
The Board has also determined that each member of the Audit Committee is financially literate, meaning each such member has the ability to read and
understand a set of financial statements that present a breadth and level of complexity of the issues that can reasonably be expected to be raised by the
Company’s financial statements. In addition, the Board has determined that the Audit Committee’s chairman, Mr. Lim, is an “audit committee financial
expert” within the meaning of the rules of the Commission.
The information provided on Schedule A to the AIF, which includes the Audit Committee charter, and the information provided on Schedule B to the
AIF, which includes certain Audit Committee matters, are hereby incorporated by reference herein. The Company’s Audit Committee charter is also
available on the Company’s Internet website at www.eurasianminerals.com, under the heading “Values.”
CODE OF ETHICS
The Company has adopted a code of ethics that applies to directors, officers and employees of, and consultants to, the Company (the “Code of Ethics”).
The Code of Ethics has been posted on the Company’s Internet website at www.eurasianminerals.com, under the heading “Values,” or may be obtained,
without charge, upon request from the Company’s Corporate Secretary at (604) 688-6390.
6
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The total fees billed to the Company for professional services rendered by the Company’s principal accountants for the year ended December 31, 2012
and the nine-month period ended December 31, 2011 are as set forth on Schedule B to the AIF, under the heading “External Auditor Service Fees (By
Category),” which is hereby incorporated by reference herein.
The information provided on Schedule A to the AIF, and the information on Schedule B to the AIF under the heading “Pre-Approval Policies and
Procedures,” are hereby incorporated by reference herein.
PRE-APPROVAL POLICIES AND PROCEDURES
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements.
CONTRACTUAL OBLIGATIONS
The following table presents, as of December 31, 2012, the Company’s known contractual obligations, aggregated by type of contractual obligation as
set forth below:
Contractual Obligations
Long-Term Debt Obligations
Capital (Finance) Lease
Obligations
Operating Lease Obligations
Purchase Obligations
Other Long-Term Liabilities
Reflected on the Registrant’s
Balance Sheet under IFRS
Total
Total
Less than
1 year
1-3 years
3-5 years
More than
5 years
Payments due by period
$
$
–
–
–
–
–
–
$
$
7
–
–
–
–
–
–
$
$
$
–
–
–
–
–
–
$
–
–
–
–
–
–
$
$
–
–
–
–
–
–
NYSE MKT CORPORATE GOVERNANCE
The Company’s common shares are listed on the NYSE MKT LLC (the “NYSE MKT”). Section 110 of the Company Guide permits the NYSE MKT to
consider the laws, customs and practices of foreign issuers in permitting deviations from certain NYSE MKT listing criteria, and to grant exemptions
from certain NYSE MKT listing criteria based on these considerations. A company seeking relief under these provisions is required to provide written
certification from independent local counsel that the non-complying practice is not prohibited by home country law. A description of the significant
ways in which the Company’s governance practices differ from those followed by U.S. domestic companies pursuant to the Company Guide is set forth
below.
Corporate Governance Committee. Section 804 of the MKT Guide generally requires that a listed company’s board nominations must be either selected,
or recommended for the board’s selection, by a nominating committee comprised solely of independent directors or by a majority of the independent
directors. The Company’s Corporate Governance Committee is currently comprised of Messrs. Levet, Lim and Winn. Mr. Winn, however, is not
considered independent under Section 803A of the Company Guide.
Quorum for Shareholders’ Meetings. Section 123 of the Company Guide recommends that a listed company’s bylaws provide for a quorum of not less
than 33 1/3 percent of such company’s shares issued and outstanding and entitled to vote at a meeting of shareholders. The Company’s articles of
incorporation (which are the equivalent of bylaws under the Company’s home country law) generally provide that, subject to special rights and
restrictions attached to any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two shareholders who are
present in person or represented by proxy.
Proxy Delivery. The Company Guide requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings of a listed
company, and requires that these proxies be solicited pursuant to a proxy statement that conforms to Commission proxy rules. The Company is a
“foreign private issuer” under Rule 3b-4 of the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set
forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company solicits proxies in accordance with applicable rules and regulations in
Canada.
Shareholder Approval Requirements. NYSE MKT requires a listed company to obtain the approval of its shareholders for certain types of securities
issuances, including private placements that may result in the issuance of common shares (or securities convertible into common shares) equal to 20
percent or more of presently outstanding shares for less than the greater of book or market value of the shares. The Company may seek a waiver from
NYSE MKT’s shareholder approval requirements in circumstances where the securities issuance would not trigger such a requirement under British
Columbia law or under the rules of the TSX Venture Exchange, on which the Company’s common shares are also listed.
None.
MINE SAFETY DISCLOSURE
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
The Company undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the
securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
The Company has previously filed with the Commission a written consent to service of process and power of attorney on Form F-X. Any change to the
name or address of the Company’s agent for service shall be communicated promptly to the Commission by amendment to the Form F-X referencing
the file number of the Company.
8
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly
caused this Annual Report to be signed on its behalf by the undersigned, thereto duly authorized.
SIGNATURES
EURASIAN MINERALS INC.
/s/ David M. Cole
By:
Name: David M. Cole
Title: President and Chief Executive Officer
Date: April 2, 2013
9
The following documents are being filed with the Commission as Exhibits to this Annual Report.
Exhibit
Description
EXHIBIT INDEX
99.1
99.2
99.3
99.4
99.5
99.6
99.7
99.8
99.9
99.10
99.11
99.12
99.13
99.14
99.15
99.16
99.17
Annual Information Form for the year ended December 31, 2012
Management’s Discussion and Analysis for the year ended December 31, 2012
Audited Consolidated Financial Statements as at and for the year ended December 31, 2012 and as at and for the nine-month period
ended December 31, 2011, including the notes thereto, together with the Report of the Independent Registered Public Accounting Firm
thereon
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
Consent of Davidson & Company LLP
Consent of John E. Dreier
Consent of Gary H. Giroux
Consent of Duncan Large
Consent of Simon Meldrum
Consent of Michael P. Sheehan
Consent of Mesut Soylu
Consent of Chris Spurway
Consent of Dean Turner
Consent of Andrew J. Vigar
10
Annual Information Form
For the Year Ended
December 31, 2012
Dated April 1, 2013
TABLE OF CONTENTS
FORWARD-LOOKING INFORMATION
PRELIMINARY NOTES
Date of Information
Currency and Exchange Rates
Glossary of Geological and Mining Terms
CORPORATE STRUCTURE
Name, Address and Incorporation
Inter-corporate Relationships
GENERAL DEVELOPMENT OF THE BUSINESS
Overview
Three Year History
Significant Acquisitions
DESCRIPTION OF THE BUSINESS
Overview
Risk Factors
MINERAL PROPERTIES
Turkey
Haiti
Australia and Asia-Pacific
North America
Sweden
Serbian Royalty Properties
Kyrgyz Republic & Central Asia
DESCRIPTION OF CAPITAL STRUCTURE
DIVIDENDS
MARKET FOR SECURITIES
DIRECTORS AND OFFICERS
INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
TRANSFER AGENT AND REGISTRAR
MATERIAL CONTRACTS
INTERESTS OF EXPERTS
Names of Experts
Interests of Experts
ADDITIONAL INFORMATION
SCHEDULE A - AUDIT COMMITTEE MATTERS
SCHEDULE B - AUDIT COMMITTEE MATTERS
3
4
4
4
4
9
9
9
11
11
11
14
14
14
17
22
22
31
32
34
36
37
38
39
39
39
40
42
43
43
43
43
45
45
46
52
3
FORWARD-LOOKING INFORMATION
This Annual Information Form (“AIF”) may contain “forward-looking statements” that reflect the Company’s current expectations and
projections about its future results. When used in this AIF, words such as “estimate”, “intend”, “expect”, “anticipate” and similar
expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future
operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual
results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking
statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify
commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for
the development of a mineral project and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this AIF or as of
the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified above and
elsewhere in this AIF, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
4
PRELIMINARY NOTES
Date of Information
Unless otherwise indicated, all information contained in this Annual Information Form (“AIF”) is as of December 31, 2012.
Currency and Exchange Rates
In this AIF, unless otherwise specified, all references to “dollars” and to “$” are to Canadian dollars, references to “U.S. dollars” and to
“US$” are to United States dollars. The Bank of Canada noon buying rates for the purchase of one United States dollar using Canadian
dollars were as follows for the indicated periods:
End of period
High for the period
Low for the period
Average for the period
Year Ended December 31
2012
0.9949
1.0443
0.9642
0.9996
2011
1.0170
1.0778
0.9686
1.0163
2010
0.9846
1.2643
1.0113
1.0904
The Bank of Canada noon buying rate on April 1, 2012 for the purchase of one United States dollar using Canadian dollars was
Cdn.$1.0167 (one Canadian dollar on that date equalled U.S.$0.9836) .
Glossary of Geological and Mining Terms
Certain terms used in this AIF are defined as follows:
Amphibolite: metamorphic rock composed chiefly of amphibole with minor plagioclase and little quartz.
Andalusite: an aluminium-silicate metamorphic mineral found in high-temperature, low pressure metamorphic terranes.
Aplite: an intrusive igneous rock in which quartz and feldspar are the dominant minerals.
Assay: the chemical analysis of an ore, mineral or concentrate to determine the amount of valuable species.
Breccia: rock consisting of more or less angular fragments in a matrix of finer-grained material.
Carbonaceous: containing carbon or coal, especially shale or other rock containing small particles of carbon distributed throughout the
whole mass.
Common Shares: common shares in the capital of Eurasian.
Dacite: an igneous, volcanic rock with high iron content.
Diabase: a fine-grained intrusive igneous rock.
Diorite: intermediate coarse grained igneous rock.
5
Dyke: a tabular igneous intrusion that cuts across the bedding or foliation of the country rock, generally vertical in nature.
Footwall: the underlying side of a fault, ore body, or mine working; particularly the wall rock beneath an inclined vein or fault.
Formation: a persistent body of igneous, sedimentary, or metamorphic rock, having easily recognizable boundaries that can be traced in
the field without recourse to detailed paleontologic or petrologic analysis, and large enough to be represented on a geologic map as a
practical or convenient unit for mapping and description.
Granitoid: pertaining to or composed of granite.
Gneiss: a type of rock formed by high-grade regional metamorphic processes from pre-existing formations of igneous or sedimentary
rocks.
Hanging wall: the overlying side of an ore body, fault, or mine working, especially the wall rock above an inclined vein or fault.
ICP AES: Inductively couple plasma atomic emission spectroscopy is a geochemical analytic technique.
ICP MS: Inductively couple plasma mass spectroscopy is a geochemical analytic technique.
ICP MS/AAS: Inductively couple plasma mass spectroscopy/atomic absorption spectroscopy is a geochemical analytic technique.
Igneous rock: rock that is magmatic in origin.
Indicated mineral resource: that part of a mineral resource for which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic
parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable
exploration and test information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Inferred mineral resource: that part of a mineral resource for which the quantity and grade or quality can be estimated on the basis of
geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based
on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and
drill holes.
Intercalated: said of layered material that exists or is introduced between layers of a different character; especially said of relatively thin
strata of one kind of material that alternates with thicker strata of some other kind, such as beds of shale intercalated in a body of sandstone.
JV: joint venture.
Kriging: a weighted, moving-average interpolation method in which the set of weights assigned to samples minimizes the estimation
variance, which is computed as a function of the variogram model and locations of the samples relative to each other, and to the point or
block being estimated.
6
Lamprophyre: a group of dark-coloured, porphyritic, medium grained igneous rocks usually occurring as dykes or small intrusions.
Leach: to dissolve minerals or metals out of ore with chemicals.
Measured mineral resource: that part of a mineral resource for which quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical
and economic parameters to support production planning and evaluation of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
Meta: a prefix that, when used with the name of a sedimentary or igneous rock, indicates that the rock has been metamorphosed.
Mineral reserve: the economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors
that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and
allowances for losses that may occur when the material is mined.
Mineral resource (deposit): a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth’s
crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location,
quantity, grade, geological characteristics and continuity of a mineral resource (deposit) are known, estimated or interpreted from specific
geological evidence and knowledge.
Net smelter return or NSR royalty: a type of royalty based on a percentage of the proceeds, net of smelting, refining and transportation
costs and penalties, from the sale of metals extracted from concentrate and doré by the smelter or refinery.
NI 43-101: National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
Oxide: a compound of ore that has been subjected to weathering and alteration as a result of exposure to oxygen for a long period of time.
Pegmatite: a very coarse-grained igneous rock that has a grain size of 20 millimetres or more.
Phyllite: a regional metamorphic rock, intermediate in grade between slate and schist. Minute crystals of sericite and chlorite impart a silky
sheen to the surfaces of cleavage.
Porphyry: igneous rock consisting of large-grained crystals dispersed in a fine-grained matrix or groundmass.
Probable reserve: the economically mineable part of an indicated and, in some circumstances, a measured mineral resource demonstrated
by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic
and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
Run-of-mine: ore in its natural state as it is removed from the mine that has not been subjected to additional size reduction.
7
Schist: a strongly foliated crystalline rock, which readily splits into sheets or slabs as a result of the planar alignment of the constituent
crystals. The constituent minerals are commonly specified (e.g. “quartz-muscovite-chlorite schist”).
Shear zone: a tabular zone of rock that has been crushed and brecciated by parallel fractures due to “shearing” along a fault or zone of
weakness. These can be mineralized with ore-forming solutions.
Strike: the direction, or course or bearing of a vein or rock formation measured on a level surface.
Strip (or stripping) ratio: the tonnage or volume of waste material that must be removed to allow the mining of one tonne of ore in an
open pit.
Sulfides or sulphides: compounds of sulfur (or sulphur) with other metallic elements.
Tailing: material rejected from a mill after the recoverable valuable minerals have been extracted.
Vein: sheet-like body of minerals formed by fracture filling or replacement of host rock.
Linear Measurements
1 inch
1 foot
1 yard
1 mile
Area Measurements
1 acre
1 hectare
1 square mile
Units of Weight
1 short ton
1 long tonne
1 metric tonne
1 pound (16 oz)
1 troy oz
1 troy oz per short ton
1 troy oz per long ton
Analytical
1%
1 gram/tonne
1 troy oz/short ton
10 ppb
100 ppm
=
=
=
=
=
=
=
=
=
=
=
=
=
=
2.54 centimetres
0.3048 metre
0.9144 metre
1.609 kilometres
0.4047 hectare
2.471 acres
640 acres or 259 hectares or 2.590 square kilometres
2000 pounds or 0.893 long tonne
2240 pounds or 1.12 short tons
2204.62 pounds or 1.10 short tons
0.454 kilograms or 14.5833 troy ounces
31.103486 grams
34.2857 grams per metric ton
30.6122 grams per metric ton
percent metric tonne
grams per short ton
troy oz Values
1%
0.0001%
0.003429%
10,000
1
34.2857
291.667
0.0291667
1
0.00029
2.917
Temperature Conversion Formulas
Degrees Fahrenheit
Degrees Celsius
=
=
(°C x 1.8) + 32
(°F - 32) x 0.556
8
Frequently Used Abbreviations and Symbols
AA
Ag
As
Au
°C
cm
C.P.G.
Cu
F
°F
g
g/t
Hg
kg
km
m
Ma
Mn
n
oz
opt
oz/ton
oz/tonne
Pb
ppb
ppm
sq
Sb
Tl
Zn
atomic absorption spectrometry
silver
arsenic
gold
degrees Celsius (centigrade)
centimetre
Certified Professional Geologist
copper
fluorine
degrees Fahrenheit
gram(s)
grams per tonne
mercury
kilogram
kilometre
metre(s)
million years ago
manganese
number or count
troy ounce
ounce per short ton
ounce per short ton
ounce per metric tonne
lead
parts per billion
parts per million
square
antimony
thallium
zinc
9
CORPORATE STRUCTURE
Name, Address and Incorporation
Eurasian Minerals Inc. (the “Company” or “Eurasian” or “EMX”) was incorporated under the laws of the Yukon Territory of Canada on
August 21, 2001 as 33544 Yukon Inc. and, on October 10, 2001, changed its name to Southern European Exploration Ltd. On November
24, 2003, the Company completed the reverse take-over of Marchwell Capital Corp., a TSX-V listed company incorporated in Alberta on
August 12, 1996 and which subsequently changed its name to Eurasian Minerals Inc. On September 24, 2004, EMX continued into British
Columbia from Alberta under the Business Corporations Act.
EMX’s head office is located at Suite 501 – 543 Granville Street, Vancouver, British Columbia V6C 1X8, Canada, and its registered and
records office is located at Northwest Law Group, Suite 704 – 595 Howe Street, Vancouver, British Columbia V6C 2T5, Canada.
Eurasian is a reporting issuer under the securities legislation of British Columbia and Alberta and is listed on the TSX Venture Exchange
(“TSX-V”), as a Tier 1 issuer, and the NYSE MKT (formerly known as the American Stock Exchange or AMEX). The Common Shares
are traded on the TSX-V under the symbol EMX and on the NYSE MKT under the symbol EMXX.
Inter-corporate Relationships
The corporate structure of Eurasian, its material (holding at least 10% of EMX’s assets, by value) subsidiaries, the percentage ownership
that Eurasian holds or has contractual rights to acquire in such subsidiaries (if not wholly-owned) and the jurisdiction of incorporation of
such corporations is set out in the following chart:
10
11
GENERAL DEVELOPMENT OF THE BUSINESS
Overview
Eurasian is engaged in the acquisition and exploration of precious and base metals properties. The Company conducts exploration on
properties located primarily in Turkey, Haiti, Sweden, North America, and the Australia and Asia-Pacific region.
Three Year History
Fiscal Year Ended March 31, 2010
On January 29, 2010, the Company acquired Bronco Creek Exploration, Inc. (“Bronco Creek” or “BCE”), an Arizona company, for its
portfolio of gold and copper properties in Nevada, Wyoming and Arizona. In the acquisition the Company issued 2,127,790 Common
Shares and 1,063,895 non-transferable warrants, each entitling the purchase of one additional EMX share for $2.00 until January 29, 2012.
See “Mineral Properties – North America”.
On March 12, 2010, International Finance Corporation (“IFC”), a corporation headquartered in Washington, D.C. and established by the
member countries of the World Bank Group, invested US$5 million by the purchase of 2,559,510 Common Shares and 1,919,633 share
purchase warrants. Each warrant entitles IFC to purchase a further Common Share for $2.88 until the earlier of (a) three years from the date
on which the drilling commences on the Company’s Treuil-La Mine property in Haiti, or (b) February 19, 2015.
Fiscal Year Ended March 31, 2011
The Company appointed Dr. M. Stephen Enders to the position of Executive Chairman on May 7, 2010.
On June 4, 2010, Eurasian completed the first tranche of a $5.28 million private placement financing by issuing 2 million Common Shares
at $2.20 per share to Newmont for proceeds of $4.4 million. On June 9, 2010, the Company closed the second and final tranche of the
financing by issuing 400,000 Common Shares at $2.20 per share to IFC for proceeds of $880,000.
On August 3, 2010, Dr. Eric Jensen was promoted from Chief Geologist to Global Generative Exploration Team Leader.
The Company entered into an option and joint venture agreement on July 13, 2010 with Rodinia Resources Pty. Ltd., a private Australian
company, to acquire the Koonenberry gold property in Australia, subject to a 2% NSR royalty in favour of Rodinia. Under the agreement,
EMX made a cash payment of A$ 50,000 and satisfied an advanced minimum royalty payment of A$ 70,000 by the issuance of 28,283
Common Shares. To exercise its option, the Company must, over a period of five years, make a series of additional advanced royalty
payments totalling A$ 2,020,000 (half in cash and half in Common Shares), and incur exploration expenditures of A$5,000,000. If a
bankable feasibility study on the property is issued, EMX may acquire 1.5% of the NSR royalty for A$ 8,000,000 less all advanced
minimum royalty payments previously paid. See “Mineral Properties – Australia and Asia Pacific”.
Eurasian announced on September 3, 2010 that it intended to pay discretionary bonuses through the issuance of 480,000 Common Shares in
aggregate to two officers and a director of the Company over the next two years. The purpose of the bonuses was to reward these
individuals for the Company’s successes to date and to provide them with a long term incentive to remain with the Company. Following
shareholder approval, the first tranche of Common Shares was issued on September 27, 2010.
12
On August 11, 2010, the Company purchased a Swedish subsidiary of Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), an
international mining company based in Phoenix, Arizona, the main assets of which were 1% NSR royalties over two advanced copper
projects (the Viscaria and Adak Projects) in northern Sweden, two exploration permits in Sweden and a comprehensive exploration
database on Sweden. The purchase was completed on August 12, 2010. The purchase price was US$150,000 and 160,000 Common Shares.
See “Mineral Properties – Sweden”.
In September 2010, the Company appointed Mr. Paul H. Zink as President of Eurasian Capital, the Company’s royalty and merchant
banking division.
In November 2010, Eurasian completed a private placement financing raising $17.5 million from the sale of 7 million units at $2.50 each of
this placement. Newmont purchased 1 million units for $2.5 million and IFC purchased 800,000 units for $2 million. Each Unit consisted
of one Common Share and one transferable share purchase warrant. Each warrant is exercisable over a five year period expiring in
November 2015 to purchase one Common Share at a purchase price of $3.50 during the first year (expired), $4.00 during the second year
(expired), $4.50 during the third year, $5.00 during the fourth year and $5.50 during fifth year. If the volume weighted average price of the
Common Shares on the Exchange is at least 30% above the current exercise price of the warrants for a period of 30 consecutive trading
days, the Company may give notice that the warrants must be exercised within 15 trading days or they will be cancelled. In connection with
some of the subscriptions, the Company paid finder’s fees in respect of subscriptions introduced by various finders of $1,321,747 (5%) and
issued 513,300 finder warrants (5%), with each finder warrant being exercisable until November 2012 to acquire one Common Share for
$2.65.
In February 2011, Eurasian entered into a Strategic Alliance and Earn-in Agreement with Antofagasta Minerals S.A. (“Antofagasta”), a
publicly traded (LSE: ANTO) copper mining company headquartered in Chile. This agreement focuses primarily on copper exploration in
Sweden and includes a regional strategic exploration alliance that covers all of Sweden (subject to certain exclusions) an agreement to
designate Eurasian’s Kiruna South copper property as a Designated Project and granting Antofagasta the right to earn up to a 70% interest
therein and a $5,005,000 private placement in Eurasian. See “Mineral Properties – Sweden”.
On March 1, 2011 Antofagasta purchased 1,540,000 units from the Company at a price of $3.25 per unit for proceeds of $5,005,000. Each
unit consisted of one Common Share and one-half of one Common Share purchase warrant. Each full warrant entitles Antofagasta to
purchase one additional Common Share for $4.00 until March 1, 2013. As part of the same private placement, Eurasian issued an additional
3.96 million units for additional proceeds of $12,870,000. In connection with some of the subscriptions, Eurasian paid finders’ fees of
$464,978 (5%) and issued 286,140 finder warrants (5%), each finder warrant being exercisable to acquire one Common Share for $3.50
until March 2013.
On March 18, 2011, Mr. Brian K. Levet was appointed to the Board of Directors.
Fiscal Period Ended December 31, 2011
Subsequent to the fiscal year ended March 31, 2011, Eurasian changed its fiscal year end from March 31 to December 31, effective for the
period ending December 31, 2011. The change in fiscal year end was made for the purpose of streamlining Eurasian’s financial reporting.
13
On April 7, 2011, a Regional Acquisition Agreement between Bronco Creek and Vale S.A. a publicly traded (NYSE: VALE and São
Paulo, New York, Hong Kong, Paris and Madrid stock exchanges), which focuses on identifying and developing copper projects in the
western United States, was reached. See “Mineral Properties – North America”.
In July 2011, the Company announced that it intended to pay discretionary bonuses through the issuance of an aggregate of 300,000
Common Shares to five officers and one director under its Incentive Stock Grant Program approved by disinterested shareholders at the
Company’s annual general meeting held on August 24, 2010. The Common Shares would be issued in three tranches over a two year
period. The Company also announced that it intends to issue an aggregate of 157,500 Common Shares as a bonus to 15 employees and
consultants. The Common Shares will be issued in three tranches over a two year period. The first tranche of Common Share were issued
on October 14, 2011.
Fiscal Year Ended December 31, 2012
On January 24, 2012, Eurasian filed with the United States Securities and Exchange Commission (“SEC”) a registration statement on Form
40-F relating to the registration of its Common Shares under the Securities and Exchange Act of 1934 in the United States. On January 30,
2012, the Common Shares were listed for trading on the NYSE MKT under the ticker symbol “EMXX.”
On February 9, 2012, Eurasian announced that it had extended the expiration date from January 9, 2012 to February 22, 2012 of 678,611
warrants held by employees or insiders of, or consultants to, BCE or Eurasian. These warrants were issued on January 29, 2010 as part of
the consideration paid by Eurasian in connection with the acquisition of BCE. Due to a trading blackout imposed by Eurasian relating to the
merger with Bullion Monarch Mining, Inc. (“Bullion” or “BULM”), the warrant holders were unable to exercise the warrants until the
blackout was lifted subsequent to the public announcement of the merger agreement on February 7, 2012. Each warrant entitled the holder
to purchase one share of Eurasian common stock at a price of Cdn. $2.00. Each of the 678,611 warrants was exercised on or before the
expiration date, as extended, resulting in gross proceeds to Eurasian of Cdn. $1,357,222.
On April 2, 2012, a subsidiary of Eurasian and its joint venture partner, ASX listed Chesser Resources Limited (“Chesser”), signed an
Option Agreement (the “Sisorta Agreement”) on the Sisorta gold property located in north-central Turkey with Çolakoglu Ticari Yatirim
A.S. (“Çolakoglu”), a privately owned Turkish company. The Sisorta Agreement required Çolakoglu to make an up-front payment of 100
troy ounces of gold bullion, or its cash equivalent, and to undertake a US $500,000 work commitment over the first year. Çolakoglu
terminated its option on March 21, 2013.
In May 2012, Dr. Enders resigned as Executive Chairman of the Board and was appointed Chief Operating Officer. Mr. Michael Winn
assumed the role of Chairman of the Board.
On August 15, 2012, the Company appointed Ms. Jan N. Steiert as Chief Legal Officer of the Company.
On August 17, 2012, the Company completed its acquisition of Bullion following approval of the Merger by BULM's shareholders at a
special meeting held earlier that day. Under the terms of the Merger Agreement, BULM shareholders received 0.45 of an EMX Common
Share and US$0.11 in cash for each share of BULM common stock held as of the record date. The value of the total consideration paid to
BULM shareholders was approximately US$36.4 million.
In connection with the closing of the Merger, Mr. James (Andy) Morris, former President of Bullion, joined Eurasian’s Board of Directors.
In addition, Mr. R. Don Morris, former CEO of Bullion, was appointed to EMX's advisory board. Both appointments were effective August
17, 2012.
14
On August 23, 2012, the Company announced that intended to pay discretionary bonuses through the issuance of an aggregate of 364,500
Common Shares as a bonus to five officers and a director. The Common Shares will be issued under the Company’s Incentive Stock Grant
Program of up to 300,000 Common Shares available each year which was approved by disinterested shareholders at the Company’s Annual
General Meeting held on August 24, 2010 and through an additional one time issuance of up to 700,000 Common Shares as bonuses to
certain officers and directors which was approved by shareholders at the Company’s Annual General Meeting held on August 16, 2011.
The Common Shares will be issued in three tranches over a period of two years. The first tranche was issued on October 15, 2012.
Mr. Paul H. Zink, President of Eurasian Capital, left the Company on January 31, 2013.
Significant Acquisitions
On August 17, 2012, the Company completed its acquisition of Bullion following approval of the Merger by BULM's shareholders at a
special meeting held on the same day. Under the terms of the Merger Agreement, BULM shareholders received 0.45 of an EMX Common
Share and US$0.11 in cash for each share of BULM common stock held as of the record date. The value of the total consideration paid to
BULM shareholders is approximately US$36.4 million. A business acquisition report relating to the Merger was filed by the Company on
October 31, 2012.
Overview
DESCRIPTION OF THE BUSINESS
Eurasian is engaged in the acquisition and exploration of precious and base metals properties. All of its properties are in the exploration
stage and it does not have any properties on which mining is carried out.
Specialized Skill and Knowledge
All aspects of Eurasian business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, finance,
accounting and law.
Competitive Conditions
Competition in the mineral exploration industry is intense. Eurasian competes with other companies, many of which have greater financial
resources and technical facilities, for the acquisition and exploration of mineral interests, as well as for the recruitment and retention of
qualified employees and consultants.
Raw Materials (Components)
Other than water and electrical or mechanical power – all of which are readily available on or near its properties – Eurasian does not
require any raw materials with which to carry out its business.
Intangible Property
Eurasian does not have any need for nor does it use any brand names, circulation lists, patents, copyrights, trademarks, franchises, licenses,
software (other than commercially available software), subscription lists or other intellectual property in its business.
Business Cycle & Seasonality
Eurasian’s business is not cyclical or seasonal.
Economic Dependence
15
Eurasian’s business is not substantially dependent on any contract such as a contract to sell the major part of its products or services or to
purchase the major part of its requirements for goods, services or raw materials, or on any franchise or licence or other agreement to use a
patent, formula, trade secret, process or trade name upon which its business depends.
Renegotiation or Termination of Contracts
It is not expected that Eurasian’s business will be affected in the current financial year by the renegotiation or termination of contracts or
sub-contracts.
Environmental Protection
All phases of Eurasian’s exploration are subject to environmental regulation in the various jurisdictions in which it operates.
Environmental legislation is evolving in a manner which requires stricter standards and enforcement, increased fines and penalties for non-
compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and
their officers, directors and employees. While manageable, Eurasian expects this evolution (which affects most mineral exploration
companies) might result in increased costs.
Employees
At December 31, 2012, Eurasian had 58 employees and consultants working at various locations throughout the world.
Foreign Operations
The majority of Eurasian’s properties are located outside of North America and many are located in areas traditionally considered to be
risky from a political or economic perspective.
Bankruptcy Reorganizations
There has not been any voluntary or involuntary bankruptcy, receivership or similar proceedings against Eurasian within the three most
recently completed financial years or the current financial year.
Material Reorganizations
Except as disclosed under the heading “Three Year History,” there has not been any material reorganization of Eurasian or its subsidiaries
within the three most recently completed financial years or the current financial year.
Social or Environmental Policies
Eurasian has implemented various social policies that are fundamental to its operations, such as policies regarding its relationship with the
communities where the Company operates.
Eurasian is committed to the implementation of a comprehensive Health, Safety, Environment, Labor and Community Policy and a pro-
active Stakeholder Engagement Strategy (the “Policies”). These Policies will be reviewed and updated on an annual or “as needed” basis.
EMX ensures these Policies are made known to all its managers, staff, contractors and partners, and that the requirements contained therein
are adequately planned, resourced implemented and monitored wherever EMX is actively managing the project and where EMX has
obtained a formal commitment from its joint venture partners to adopt the same Policies.
1. Environmental Policy
16
The Company believes that good environmental management at every project it manages, whether in the exploration phase, feasibility
stage, project construction or mine site operation, requires proactive health and safety procedures, transparent interaction with local
communities and implementation of prudent expenditures and business performance standards that constitutes the foundation for successful
exploration and subsequent development if the results warrant it.
Eurasian will develop and implement appropriate standard operating procedures for different stages of its ground technical surveys,
prospecting and evaluation and development work which procedures will be designed to meet all applicable environmental requirements
and best environmental practices in the mineral exploration industry.
2. Community Relations, Communication and Notification Policy
Proactive interaction with the stakeholders that the Company’s exploration and development programs may impact on is considered an
important part of the long-term investment that the Company is planning in worldwide exploration programs but particularly in Haiti and
Turkey.
Eurasian recognizes that from the inception of exploration activities or a new field work program, and as the exploration project progresses
towards development, it will be important to:
(cid:122) communicate and proactively engage with all local communities and other stakeholders that may be affected by its exploration
programs;
(cid:122) inform and obtain a consensus with the full range of stakeholders that may be impacted upon by exploration, evaluation and
development; and
(cid:122) identify any vulnerable or marginalized groups within the affected communities (e.g. women, elders or handicapped) and ensure
they are also reached by above information disclosure and consultation activities.
In these respects, Eurasian will work actively and transparently with governmental authorities, other elected parties, non-governmental
organizations, and the communities themselves to ensure that the communities are aware of the activities of the Company, and that the
impact and benefits of such activities are a benefit to the communities.
When detailed or advanced exploration activities, including drilling, evaluation and other such programs, are implemented, the Company
will endeavor to identify how the impacts of such work on communities can best be managed, and how benefits can best be provided to
communities through its activities. This will be undertaken in consultation with the affected communities.
3. Labour, Health and Safety Policy
The health and safety of its employees, contractors, affected communities and any other role players that may participate and be affected by
the activities of EMX are crucial to the long term success of the Company.
17
The Company will establish and maintain a constructive work-management relationship, promote the fair treatment, non-discrimination,
and equal opportunity of workers in accordance with IFC’s Performance Standards 2, Labor and Working Conditions.
Every effort will be made through training, regular reviews and briefings, and other procedures to ensure that best practice labour, health
and safety and good international industry practices are implemented and maintained by Eurasian including prompt and in-depth accident
and incident investigation and the implementation of the conclusions thereof. The Company will take measures to prevent any child labour
and/ or forced labour.
The Company’s aim is at all times to achieve zero lost-time injuries and fatalities.
4. Development Stage Environmental and Social Management Policy
Eurasian will communicate and consult with local communities and stakeholders with a view to fostering mutual understanding and shared
benefits through the promotion and maintenance of open and constructive dialogue and working relationships.
Risk Factors
Investment in the Common Shares involves a significant degree of risk and should be considered speculative due to the nature of Eurasian’s
business and the present stage of its development. Prospective investors should carefully review the following factors together with other
information contained in this AIF before making an investment decision.
Mineral Property Exploration Risks
The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored ultimately become
producing mines. At present, none of the Company’s properties has a known commercial ore deposit. The main operating risks include:
ensuring ownership of and access to mineral properties by confirmation that option agreements, claims and leases are in good standing and
obtaining permits for drilling and other exploration activities.
Eurasian is currently earning an interest in certain of its properties through option agreements and acquisition of title to the properties is
only completed when the option conditions have been met. These conditions generally include making property payments, incurring
exploration expenditures on the properties and can include the satisfactory completion of pre-feasibility studies. If the Company does not
satisfactorily complete these option conditions in the time frame laid out in the option agreements, the Company’s title to the related
property will not vest and the Company will have to write-off the previously capitalized costs related to that property.
The market prices for precious and base metals can be volatile and there is no assurance that a profitable market will exist for a production
decision to be made or for the ultimate sale of the metals even if commercial quantities of precious and other metals are discovered.
Revenue and Royalty Risks
Eurasian cannot predict future revenues or operating results of the area of mining activity. Management expects future revenues from its
Carlin Trend royalty property in Nevada to fluctuate depending on the level of future production and the price of gold. Specifically, there is
a risk that Newmont Mining Corporation will cease to operate in the Company’s area of interest, therefore there can be no assurance that
ongoing royalty payments will materialize or be received by Eurasian.
Financing and Share Price Fluctuation Risks
18
Eurasian has limited financial resources, and has no assurance that additional funding will be available for further exploration and
development of its projects. Further exploration and development of one or more of the Company’s projects may be dependent upon the
Company’s ability to obtain financing through equity or debt financing or other means. Failure to obtain this financing could result in delay
or indefinite postponement of further exploration and development of its projects which could result in the loss of one or more of its
properties.
The securities markets can experience a high degree of price and volume volatility, and the market price of securities of many companies,
particularly those considered to be development stage companies such as Eurasian, may experience wide fluctuations in share prices which
will not necessarily be related to their operating performance, underlying asset values or prospects. There can be no assurance that share
price fluctuations will not occur in the future, and if they do occur, the severity of the impact on Eurasian’s ability to raise additional funds
through equity issues.
Foreign Countries and Political Risks
The Company operates in countries with varied political and economic environments. As such, it is subject to certain risks, including
currency fluctuations and possible political or economic instability which may result in the impairment or loss of mineral concessions or
other mineral rights, opposition from environmental or other non-governmental organizations, and mineral exploration and mining
activities may be affected in varying degrees by political stability and government regulations relating to the mineral exploration and
mining industry. Any changes in regulations or shifts in political attitudes are beyond the control of the Company and may adversely affect
its business. Exploration and development may be affected in varying degrees by government regulations with respect to restrictions on
future exploitation and production, price controls, export controls, foreign exchange controls, income taxes, expropriation of property,
environmental legislation and mine and site safety.
Notwithstanding any progress in restructuring political institutions or economic conditions, the present administration, or successor
governments, of some countries in which Eurasian operates may not be able to sustain any progress. If any negative changes occur in the
political or economic environment of these countries, it may have an adverse effect on the Company’s operations in those countries. The
Company does not carry political risk insurance.
Competition
The Company competes with many companies and individuals that have substantially greater financial and technical resources than the
Company for the acquisition and development of its projects as well as for the recruitment and retention of qualified employees.
Return on Investment Risk
Investors cannot expect to receive a dividend on their investment in the foreseeable future, if at all.
No Assurance of Titles or Borders
The acquisition of the right to exploit mineral properties is a very detailed and time consuming process. There can be no guarantee that the
Company has acquired title to any such surface or mineral rights or that such rights will be obtained in the future. To the extent they are
obtained, titles to the Company’s surface or mineral properties may be challenged or impugned and title insurance is generally not
available. The Company’s surface or mineral properties may be subject to prior unregistered agreements, transfers or claims and title may
be affected by, among other things, undetected defects. Such third party claims could have a material adverse impact on the Company’s
operations.
Currency Risks
19
The Company’s equity financings are sourced in Canadian dollars but much of its expenditures are in local currencies or United States
dollars. At this time, there are no currency hedges in place. Therefore, a weakening of the Canadian dollar against the United States dollar
or local currencies could have an adverse impact on the amount of exploration conducted.
Joint Venture Funding Risk
Eurasian’s strategy is to seek partners through joint ventures to fund exploration and project development. The main risk of this strategy is
that funding partners may not be able to raise sufficient capital in order to satisfy exploration and other expenditure terms in a particular
joint venture agreement. As a result, exploration and development of one or more of the Company’s property interests may be delayed
depending on whether Eurasian can find another partner or has enough capital resources to fund the exploration and development on its
own.
Insured and Uninsured Risks
In the course of exploration, development and production of mineral properties, the Company is subject to a number of risks and hazards in
general, including adverse environmental conditions, operational accidents, labor disputes, unusual or unexpected geological conditions,
changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods, and earthquakes. Such
occurrences could result in the damage to the Company’s property or facilities and equipment, personal injury or death, environmental
damage to properties of the Company or others, delays, monetary losses and possible legal liability.
Although the Company may maintain insurance to protect against certain risks in such amounts as it considers reasonable, its insurance
may not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these
risks at economically feasible premiums or for other reasons. Should such liabilities arise, they could reduce or eliminate future profitability
and result in increased costs, have a material adverse effect on the Company’s results and a decline in the value of the securities of the
Company.
Some work is carried out through independent consultants and the Company requires all consultants to carry their own insurance to cover
any potential liabilities as a result of their work on a project.
Environmental Risks and Hazards
The activities of the Company are subject to environmental regulations issued and enforced by government agencies. Environmental
legislation is evolving in a manner that will require stricter standards and enforcement and involve increased fines and penalties for non-
compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and
their officers, directors and employees. There can be no assurance that future changes in environmental regulation, if any, will not
adversely affect Eurasian’s operations. Environmental hazards may exist on properties in which the Company holds interests which are
unknown to the Company at present.
Fluctuating Metal Prices
20
Factors beyond the control of the Company have a direct effect on global metal prices, which have fluctuated widely, particularly in recent
years, and there is no assurance that a profitable market will exist for a production decision to be made or for the ultimate sale of the metals
even if commercial quantities of precious and other metals are discovered on any of Eurasian’s properties. Consequently, the economic
viability of any of the Company’s exploration projects and its ability to finance the development of its projects cannot be accurately
predicted and may be adversely affected by fluctuations in metal prices.
Extensive Governmental Regulation and Permitting Requirements Risks
Exploration, development and mining of minerals are subject to extensive laws and regulations at various governmental levels governing
the acquisition of the mining interests, prospecting, development, mining, production, exports, taxes, labour standards, occupational health,
waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. In addition, the current and future
operations of Eurasian, from exploration through development activities and production, require permits, licenses and approvals from some
of these governmental authorities. Eurasian has obtained all government licenses, permits and approvals necessary for the operation of its
business to date. However, additional licenses, permits and approvals may be required. The failure to obtain any licenses, permits or
approvals that may be required or the revocation of existing ones would have a material and adverse effect on Eurasian, its business and
results of operations.
Failure to comply with applicable laws, regulations and permits may result in enforcement actions thereunder, including orders issued by
regulatory or judicial authorities requiring Eurasian’s operations to cease or be curtailed, and may include corrective measures requiring
capital expenditures, installation of additional equipment or remedial actions. Eurasian may be required to compensate those suffering loss
or damage by reason of its mineral exploration activities and may have civil or criminal fines or penalties imposed for violations of such
laws, regulations and permits. Any such events could have a material and adverse effect on Eurasian and its business and could result in
Eurasian not meeting its business objectives.
Key Personnel Risk
Eurasian’s success is dependent upon the performance of key personnel working in management and administrative capacities or as
consultants, The loss of the services of senior management or key personnel could have a material and adverse effect on the Company, its
business and results of operations.
Conflicts of Interest
In accordance with the laws of British Columbia, the directors and officers of a corporation are required to act honestly, in good faith and in
the best interests of the corporation. Eurasian’s directors and officers may serve as directors or officers of other companies or have
significant shareholdings in other resource companies and, to the extent that such other companies may participate in ventures in which the
Company may participate, such directors and officers may have a conflict of interest in negotiating and concluding terms respecting the
extent of such participation. If such a conflict of interest arises at a meeting of the Company’s directors, a director with such a conflict will
abstain from voting for or against the approval of such participation or such terms.
Passive Foreign Investment Company
21
U.S. investors in common shares should be aware that based on current business plans and financial expectations, Eurasian currently
expects that it will be a passive foreign investment company (“PFIC”) for the year ending December 31, 2012 and expects to be a PFIC in
future tax years. If Eurasian is a PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be
required to treat any gain realized upon a disposition of common shares, or any so-called “excess distribution” received on its common
shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely
and effective “qualified electing fund” election (“QEF Election”) or a “mark-to-market” election with respect to the common shares. A
U.S. shareholder who makes a QEF Election generally must report on a current basis its share of Eurasian’s net capital gain and ordinary
earnings for any year in which Eurasian is a PFIC, whether or not Eurasian distributes any amounts to its shareholders. For each tax year
that Eurasian qualifies as a PFIC, Eurasian intends to: (a) make available to U.S. shareholders, upon their written request, a “PFIC Annual
Information Statement” as described in Treasury Regulation Section 1.1295 -1(g) (or any successor Treasury Regulation) and (b) upon
written request, use commercially reasonable efforts to provide all additional information that such U.S. shareholder is required to obtain in
connection with maintaining such QEF Election with regard to Eurasian. Eurasian may elect to provide such information on its website
www.EurasianMinerals.com.
Corporate Governance and Public Disclosure Regulations
The Company is subject to changing rules and regulations promulgated by a number of United States and Canadian governmental and self-
regulated organizations, including the SEC, the Canadian Securities Administrators, the NYSE MKT and the TSX Venture Exchange.
These rules and regulations continue to evolve in scope and complexity and many new requirements have been created in response to laws
enacted by the United States Congress, making compliance more difficult and uncertain. For example, on July 21, 2010, the United States
Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which resulted in the SEC adopting rules that will
require the Company to disclose on an annual basis, beginning in 2014, certain payments made by the Company, its subsidiaries or entities
controlled by it, to the U.S. government and foreign governments, including sub-national governments. The Company’s efforts to comply
with the Dodd-Frank Act, the rules and regulations promulgated thereunder, and other new rules and regulations have resulted in, and are
likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from
revenue-generating activities to compliance activities.
Internal Controls over Financial Reporting
The Company requires an annual assessment by management of the effectiveness of the Company’s internal control over financial
reporting beginning with the fiscal year ended December 31, 2012. The Company may in the future fail to achieve and maintain the
adequacy of its internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, and
the Company may not be able to ensure that it can conclude on an ongoing basis that it has effective internal control over financial
reporting. Future acquisitions of companies may provide the Company with challenges in implementing the required processes, procedures
and controls in its acquired operations. Acquired companies may not have disclosure controls and procedures or internal control over
financial reporting that are as thorough or effective as those required by securities laws currently applicable to the Company.
22
No evaluation can provide complete assurance that the Company’s internal control over financial reporting will detect or uncover all
failures of persons within the Company to disclose material information otherwise required to be reported. The effectiveness of the
Company’s controls and procedures could also be limited by simple errors or faulty judgments. In addition, should the Company expand in
the future, the challenges involved in implementing appropriate internal control over financial reporting will increase and will require that
the Company continue to improve its internal control over financial reporting.
Turkey
MINERAL PROPERTIES
Eurasian holds exploration and exploitation licenses in Turkey’s Western Anatolia and Eastern Pontides mineral belts. The properties
include bulk tonnage gold, gold-silver vein, and porphyry copper (gold) targets. EMX also holds royalty interests on Balya and other
properties. Drill programs were conducted at the Akarca property and the Sisorta joint venture project, as well as the Balya royalty property
during 2012. In addition, EMX continued evaluating and partnering other projects in the property portfolio, while assessing new
exploration opportunities.
Akarca Property
The Akarca Property is a 2006 EMX grassroots exploration discovery located in Turkey’s Western Anatolia region, and is wholly-owned
by Eurasian.
The Property had been in a joint venture with a subsidiary of Centerra Gold Inc. pursuant to an agreement dated December 23, 2008
whereby Centerra could earn up to a 70% interest in the Property. In mid-2012, Centerra earned an initial 50% interest in the Property as a
result of investing over US $5 million in drilling, geological mapping, geochemical sampling, and geophysical surveys. EMX regained
100% interest in the Akarca Property from Centerra in October, 2012 in return for relieving Centerra of certain exploration and payment
obligations. The Company is currently in advanced discussions with a number of potential partners interested in the Property.
The following is the summary from a technical report dated November 1, 2011 (“the Akarca Report”) prepared by John E. Dreier (Ph.D.,
AIPG CPG, of Exploration, Development, and Mining Inc.) and Mesut Soylu (Ph.D., AIPG CPG, the Country Manager, Turkey, of
Eurasian). The Akarca Report may be found in the Company’s filings at www.sedar.com, and sections 4.0, 5.0, 6.0, 7.0, 9.0, 10.0, 11.0,
14.0, and 26.0 of the Akarca Report are specifically incorporated by reference herein.
23
“This report was prepared in compliance with Standards of Disclosure for Mineral Projects (“NI 43-101”) on behalf of Eurasian
Minerals Inc. (“Eurasian” or “EMX”) for the Akarca gold-silver property, located in Bursa province, Turkey. The purpose of the
report is to provide a technical assessment of exploration results dating from EMX’s initial discovery of mineralization at Akarca,
through completion of the 2011 drill program, and to propose future work programs to advance this property of merit. Gold-silver
mineralization was discovered by Eurasian in 2006, and exploration licenses granted on open ground that had undergone very
limited, pre-modern, mining-related activity. The Akarca property is covered by one exploitation license (#20064048) and a second
license (#200610847) that is currently in the process of being converted from exploration to exploitation status. These two licenses
cover a combined area of 3901.31 hectares.
Since December 23, 2008 the property has been under option to a wholly owned subsidiary of Centerra Gold Inc. (“Centerra”). The
licenses are held in AES Madencilik Ltd. Sti. (“AES” or the “AES JV”), a company incorporated under the laws of Turkey for the
purposes of the option and subsequent joint venture and jointly owned by Centerra and Eurasian. Centerra has exclusive rights to
maintain a 50% shareholding interest in AES and the Akarca property, by funding $5 million in Phase One exploration expenditures
over 4 years (current expenditures total approximately US $4.4 million), and paying EMX US $1 million within 30 days of the
initial earn-in. Centerra can increase its interest to 70% by funding a further US $5 million of exploration within two years of
earning its initial 50% shareholding interest in AES.
At the request of Mr. David M. Cole, CEO, President and Director of Eurasian Minerals Inc., John E. Dreier, CPG, (the independent
“author” responsible for the contents of the current report), was commissioned in July, 2011 to update EMX’s previous NI 43-101
report for the Akarca project. The initial technical report, with an effective date of October 1, 2008, was authored by Dr. Mesut
Soylu, CPG, EMX’s Business Unit Manager for Turkey (the non-independent “coauthor” of the current report). This current report
substantially updates the earlier technical report with three years of further exploration work on the property.
There have been no previous licenses granted on the property, and there are no other agreements, back-in rights or other
encumbrances that the property is subject to. Initially Eurasian, and since 2008 the AES JV, have kept the Akarca licenses in good
standing according to the requirements of Turkish mining law. Access, infrastructure and available workforce are adequate to
support the development of a mineral deposit at Akarca.
Akarca occurs in the Western Pontides tectonic belt of western Anatolia, where deformation and magmatism occurred from the
Cretaceous to the Neogene. Late Miocene extension created numerous fault-bounded basins, including the sedimentary basin that
hosts the Akarca deposit. The geology at Akarca is dominated by Neogene-aged basin-fill sedimentary units, with local
intercalations of tuffaceous rocks, that unconformably overlie Paleozoic schists and re-crystallized limestones. These rock sequences
are cut by multiple zones of structurally controlled, low sulfidation epithermal (“LSE”) veining, silicification, and associated gold-
silver mineralization.
The Akarca property covers six primary mineralized zones within a district-scale area of 6 by 1.5 kilometers. EMX and the AES JV
have conducted surface sampling, geologic mapping, geophysical surveys, and drill campaigns that have characterized the target
areas with: a) 2,293 soil samples, b) 2,500 rocks samples of various types (i.e., channel, grab, float, etc.), c) four induced
polarization ("IP") surveys, d) 61 core holes totalling over 7,600 meters, and e) 11 reverse circulation ("RC") holes totalling
approximately 1,400 meters. The property geology, for the most part, is concealed beneath a thin veneer of soil and vegetation, with
exposures principally occurring as discontinuous outcrops of veins and silicified zones, or in drainages or road cuts. As a result, the
soil geochemistry and IP-resistivity surveys have been instrumental in broadly outlining areas of gold-silver mineralization and
buried vein targets. Within the target areas, outcrop mapping, rock sampling, and drilling have delineated the LSE vein systems and
structurally controlled corridors of silicification along strike and down dip.
24
The known mineralized zones are oriented northeast-southwest and northwest-southeast, reflecting extension and horst and graben
creation of the sedimentary basins hosting the mineralization. The vein systems range from approximately 100 to over 400 meters in
length on the surface. The vein widths typically vary from 0.5 to 15 meters, and locally are in excess of 75 meters as constituted by
brecciated and silicified zones in addition to the quartz veins. Gold and silver are hosted as both structurally focused vein-style, as
well as lithologically controlled disseminated-style mineralization. The quartz veins tend to host the higher grade mineralization,
while the silicified halos in the wall-rocks host lower grade disseminated mineralization. Gold and silver grades in the mineralized
zones range from greater than 0.2 ppm Au and geochemically anomalous Ag to over 10 ppm Ag, with locally higher grades of
greater than 10 ppm Au and/or greater than 100 ppm Ag. The vein targets have only been tested to shallow depths of 30 to 110
meters below the surface. The mineralized zones are to a large extent oxidized to a relatively consistent 80 to 100 meters below the
surface. A summary of exploration results for the six principal target areas is given below:
(cid:122)
(cid:122)
(cid:122)
The Kucukhugla Tepe zone, located in the south of the Central Target area, is defined as a northwest trending 100 meter wide
corridor of oxide gold-silver mineralization occurring in two sub-parallel systems of veining and stockworking. Over 78% of
627 rock samples assayed greater than 0.2 ppm gold, and more than 32% exceeded 10 ppm silver. There are multiple high-
grade surface samples greater than 10.0 ppm gold (n=34), and 100 ppm silver (n=43). Significant mineralization was
intersected in 16 out of 20 holes along 600 meters of strike length, including an intercept of 63.7 meters (51-54m true width)
averaging 1.54 ppm gold and 14.53 ppm silver.
The Hugla Tepe zone occurs in the middle of the Central Target area, and is outlined as a 650 by 350 meter gold-in-soil
anomaly (i.e., > 0.1 ppm Au) with IP-resistivity targets. The northeast trending vein zone can be followed at the surface for
about 400 meters and is up to 7 to 8 meters thick. Hugla Tepe is relatively low grade, with a median grade of 0.29 ppm gold
from 267 rock samples. Significant mineralization was intersected in 20 out of 21 holes along 650 meters of strike length,
delineating oxide gold-silver mineralization to depths of approximately 80-100 meters.
The Fula Tepe zone, located at the north end of the Central Target area, consists of a 900 by 200 meter northeast trending
corridor of anomalous gold- and silver-in-soil geochemistry, veining, wall-rock silicification, and IP-resistivity anomalies.
The median grades from 195 rock samples are relatively high at 1.14 ppm gold and 13 ppm silver, with high-grade
maximums of 31 ppm gold and 322 ppm silver. Drilling has delineated 350 by 140 meters of the zone, including an intercept
of 15.4 meters (10m true width) averaging 1.96 ppm gold and 15.95 ppm silver.
25
(cid:122)
Sarikaya Tepe, located west of the Central Target area, is a 500 by 75 meter zone of surface exposed quartz veining and
silicification coincident with a steep north-northwest trending topographic high. Three core holes delineated approximately
200 meters of strike length, and include a near surface intercept of 14.2 meters averaging 4.61 ppm gold, and a deeper zone
with an intercept of 67.9 meters averaging 1.35 ppm gold and 16.08 ppm silver. In addition to the thicker intercepts of gold-
silver mineralization, there are also higher grade sub-intervals such as 11.4 meters averaging 4.90 g/t gold and 45.75 g/t silver
and 5.8 meters averaging 10.00 g/t gold and 4.16 g/t silver.
(cid:122) Arap Tepe is a three by two kilometer, northwest trending corridor of multiple, sub-parallel zones of oxide gold-silver
mineralization, quartz veining, and IP-resistivity anomalies located approximately three kilometers east of the Central Target
area. The veins range from 35 to 205 meters in strike length, and from 1 to 16 meters in width. The Arap Tepe vein zones
host high-grade surface samples, including Zone A with rock chip sample results of 19.55 ppm gold, and Zone B with
channel sample results including 54.8 ppm gold and 24.7 ppm silver over 0.7 meters. Another noteworthy characteristic of
the Arap Tepe target area is the presence of nine IP-resistivity anomalies representing over 3000 meters of untested vein zone
targets beneath cover. Drill results include 11 out of 13 holes with significant intercepts, including 55.4 meters averaging
3.10 ppm gold from Zone A, which has 250 meters of drilled strike length.
(cid:122)
The Percem Tepe prospect, located north of Arap Tepe, is an 800 meter long northwest trend of oxide gold-silver
mineralization, silicification and quartz veining, as well as concealed targets identified by IP-resistivity anomalies. Drill
confirmation consisted of four holes that intersected two zones (i.e., Zones B and C) located approximately 650 meters from
each other, including an intercept of 102.2 meters (66 – 86m true width) averaging 0.57 ppm gold and 5.50 ppm silver.
Eurasian and the AES JV have adhered to Best Practice guidelines of the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM) for the surface exploration and drilling programs. The surface and drill samples taken are representative of the altered and
gold-silver mineralized material. Independent data verification by the independent author (Dreier) included sampling during the
Akarca core review, field checks of drill collars, field checks of geologic mapping, and drill database assay verification in the office.
Review of EMX’s assay quality assurance (“QA”) results for drill and surface samples confirmed that all quality control (“QC”)
tests were passed for standard, blank, and duplicate samples. The independent data verification work confirmed that the EMX and
the AES JV exploration results are representative and reproducible.
Exploration results from the EMX and AES JV programs have established Akarca as a property of merit, with zones of higher grade
vein and lower grade bulk tonnage gold-silver mineralization that have district-scale exploration potential. Overall, Akarca has only
been tested to relatively shallow depths, especially when considering the evidence for a shallow depth of erosion, and the vertical
ranges typical for the low sulfidation styles of vein mineralization. Basement-hosted structures present excellent exploration targets
at depth for follow-up. All of the vein zones drill tested to date remain open down dip as well as along strike. There are also a
significant number of IP-resistivity targets that remain untested that provide further upside exploration potential on the property.
There are no significant risks that affect the reliability or confidence in the exploration information used as a basis for this report.
A 12 month exploration program is recommended that totals approximately US $4.5 million, and includes a) 10,000 meters of core
drilling, b) trenching and channel sampling programs to extend the gold-silver zones along strike and identify parallel zones at
surface, c) extension and in-fill of the soils grids, d) additional geologic mapping to complete a 1:10,000 scale compilation for the
entire property, e) additional IP surveys and a gravity survey, f) early-stage metallurgical testing, and g) initiation of an
environmental impact assessment ("EIA") study. The surface sampling, geologic mapping, and geophysical surveys will further
define the mineralized zones at surface, and may result in the identification and discovery of new target zones. The recommended
drilling will support a) definition of the mineralized zones along strike and down-dip, b) exploration for basement-hosted gold-silver
mineralization, and c) testing concealed targets identified by IP-resistivity. As the Akarca property advances toward resource
definition, it is important to establish the metallurgical properties of the mineralized material with a modest program that includes
bottle roll and other tests. Finally, as a requirement to keep the licenses in good standing, it is critical to continue with ongoing
environmental monitoring, and to initiate the required EIA study."
26
Subsequent to the filing of the Akarca Report, license (#200610847) was converted from exploration to exploitation status. In addition,
2012 exploration programs were conducted that included drilling, surface trenching, geochemical sampling, geologic mapping, and
geophysical surveys to explore for new discoveries, as well as extend the known mineralized zones.
Initial 2012 work commenced with a gravity survey and structural geologic compilation that identified through-going structural trends
interpreted as important controls for gold-silver mineralization. This new structural framework provided an important tool for further
delineating the known gold-silver prospects, as well as for increasing the potential to discover new mineralized zones under cover, and
served as an important guide for drill targeting.
EMX reported mid-2012 Akarca exploration results on July 19, 2012 that included a drill intercept of 26.1 meters averaging 4.47 g/t gold
and 16.39 g/t silver, with a higher-grade sub-interval of 5.8 meters averaging 13.59 g/t gold and 49.65 g/t silver at the Sarikaya Tepe
prospect (true widths interpreted to be 55-65% of reported interval). This intercept is notable as a new target type hosted above and at the
intersection of vein structures and the underlying basement contact, thereby increasing the project's exploration potential.
EMX initiated a follow-up drill program in December, 2012 to test new target concepts, as well as extend gold-silver mineralization
identified from previous exploration. The first two holes were drilled at the Sarikaya Tepe prospect, with results that included an oxide
intercept starting at surface of 36.4 meters averaging 5.67 g/t gold and 53.31 g/t silver, with a sub-interval of 2.15 meters averaging 89.34
g/t gold and 835.16 g/t silver (true widths interpreted as 60-75% of reported interval length). The drill results also included an oxide
intercept starting at 18.2 meters of 101.0 meters averaging 1.25 g/t gold and 7.95 g/t silver at Percem Tepe (true width interpreted as 65-
75% of reported interval length). Overall, EMX's 2012-2013 drill program extended the strike length of the targeted prospects, confirmed
continuity of the mineralized zones, and intersected the highest grade gold-silver mineralization encountered to date on the property. These
latest results, from three different prospect areas, underscore the district-scale exploration potential of the Akarca property.
To date, 88 drill holes totaling over 11,000 meters, 3,100 rock and 3,300 soil geochemical samples, 74 line-kilometers of IP-resistivity
surveys, and a property-wide gravity survey have been completed, mostly paid for by partner funding. Less than 20% of the 14,000 meters
of vein target strike length as currently defined by mapping and IP-resistivity anomalies have been drill tested so far.
Refer to EMX news releases dated July 19, 2012, January 18, 2013, and March 1, 2013 for more information on the Akarca exploration
results and a description of the Quality Assurance and Quality Control measures used by Eurasian for the project.
Sisorta Joint Venture Property
27
The Sisorta Project is located in north-eastern Turkey and is held by a joint venture consisting of Chesser Resources Ltd. (51%) and EMX
(49%). Chesser is the manager of the joint venture. The JV had granted Çolakoglu Ticari Yatirim A.S., a privately owned Turkish
company, an option to buy the Sisorta JV property in April 2012, but was subsequently advised by Çolakoglu that the option was
terminated effective March 21, 2013.
The following is a portion of the summary from a technical report dated July 31, 2009 (“the Sisorta Report”) prepared by Andrew Vigar
(BAppSc, FAusIMM, MSEG, of Mining Associates Pty. Ltd.), Simon Meldrum (B.Sc., MSEG, a Consulting Exploration Geologist), Gary
Giroux (M.A.Sc., P.Eng., Mem APEG, of Giroux Consultants Ltd.), and Mesut Soylu (Ph.D., AIPG CPG, former Country Manager,
Turkey, of Eurasian). The full Sisorta Report may be found in the Company’s filings at www.sedar.com, and sections 4.0, 5.0, 6.0, 7.0, 9.0,
10.0, 11.0, 12.0, 13.0, 17.0, and 20.0 of the Sisorta Report are specifically incorporated by reference herein.
“This report is a technical review of the geology, exploration and current mineral resource estimates for the Sisorta Project. The
Sisorta property is located in the Eastern Pontides mineral belt, within the province of Sivas in north-eastern Turkey. The property
consists of one Mineral Exploration License (“MEL”) over 2 separate areas (AR91997a and AR91997b), covering a combined
2,669.04 hectares. The license is held by EBX Madencilik Ltd. Sti., a Turkish corporation wholly owned by Eurasian Minerals, Inc.
(“EMX”). Chesser Resources Limited (“Chesser”) entered into a farm-in agreement in October 2007 to earn an initial 51% interest
in the Sisorta Project. At the request of Dr. Rick Valenta, Managing Director of Chesser and David M. Cole, CEO and President of
EMX, Mining Associates Pty Ltd (“MA”) was commissioned in June 2009 to prepare an Independent Technical Report on the
Sisorta Project to Canadian NI43-101 standards.
The Eastern Pontides mineral belt is a region with a long and productive mining history. The base metal vein deposits near Sisorta
were discovered prior to modern records being kept, but the bulk of the small scale private mining that has taken place there dates
back to the beginning of the twentieth century. Exact production figures are unknown, but the region is actively being explored and
mined today at several locations.
28
Security, access, infrastructure and available workforce are all favorable for the development of a mineral resource at Sisorta due to
previous activity by both the mining and logging industries. MTA, the Turkish government’s geologic research organization,
initially discovered copper anomalies near Sisorta while conducting regional stream sediment sampling in the 1970s and 1980s.
MTA claimed the area for mineral exploration and drilled 10 core holes between 1995 and 1998. EMX’s Turkish subsidiary, Eurasia
Madencilik, under the direction of co-author M. Soylu, obtained the property from the Mining Bureau’s auction in 2004, and began
an exploration effort from 2004 to 2006 that has included a broad range of exploration techniques including soil and rock sampling
and 12 drill holes. EMX follow-up field work continued in 2007 including the drilling of an additional 6 holes, after which time
Chesser initiated its farm-in requirements. The 2008 work funded by Chesser includes the 2008 drilling (40 exploration core holes
and 3 metallurgical holes) and resource estimation programs.
The geology of the area is dominated by Cretaceous age basalt flows and pyroclastics overlain by porphyritic andesite to dacite tuffs
and flows. This volcanic package is intruded by stocks of granodiorite composition. The regional scale structural trend in the Eastern
Pontides is dominated by east-west oriented faults with locally complex folding. Locally, two sets of faults are prominent near
Sisorta, and appear to be some of the main controls to mineralization there, one oriented northwest and the other northeast. Both
structure sets are steeply dipping.
The Sisorta deposit as defined to date is localised within the environs of Evliya Tepe (Evliya Hill). The Sisorta gold deposit is an
example of the high sulfidation epithermal (“HSE”) class of deposits, and exhibits typical features such as a vuggy silica lithocap
underlain by advanced argillic style alteration. The lithocap represents the largely oxidized, gold enriched top to the system, and is
underlain by less oxidized mineralization that is copper anomalous at depth. The deposit appears to be controlled primarily by
intersecting northwest and northeast structures and Late Cretaceous andesite host rocks. Mineralization is coeval with the host and
genetically related to caldera-associated hydrothermal activity.
Sample protocols, including sample methods, preparation, analysis and data verification have been conducted in accordance with
NI43-101 requirements, with appropriate quality assurance/quality control procedures in place since the inception of EMX’s work in
2004. Exploration work covered by this report consists of the 2004-2008 mapping, sampling, geophysical surveying, and drilling
programs and associated work. The outcome of the field work has resulted in a resource estimate on the Sisorta deposit completed
by G. H. Giroux, P.Eng., of Giroux Consultants Ltd in June 2009.
The resource database consisted of 72 diamond drill holes with a combined length of 10,039 metres and a combined 7,772 assays for
gold, silver, arsenic, copper, molybdenum, lead and zinc (6631 EMX/Chesser and 1141 MTA).
A geologic three dimensional solid model was developed to constrain the resource estimate. A total of five domains were modelled:
North Zone, Deep Zone, East Zone, West Zone and South Zone.
Within each domain uniform down hole composites were produced that honoured the domain boundaries. Composites 5 metres in
length were calculated with short intervals at the domain boundaries combined with adjoining samples if less than 2.5 metres. As a
result, the composites formed a uniform support of 5 +/- 2.5 metres.
29
Within the East and West domains pair-wise, relative semi-variograms were produced in the directions along strike, down dip and
across dip. Nested spherical models were fit to each direction with a geometric anisotropy demonstrated. Within the waste between
the modelled solids isotropic nested spherical models were fit to the data. For the remaining domains there was insufficient data to
develop semi-variograms so the overall orientation of the envelope was used. A total of 1,618 specific gravity determinations from
core samples resulted in bulk density measurements for the oxide, transition and sulphide zones, averaging 2.38, 2.55 and 2.71
tonnes per cubic metre, respectively.
A block model with blocks 10 x 10 x 10 metres in dimension was used over the domain solids. The proportion of each solid and the
percentage below surface topography was recorded for each block. The geologic continuity has been established through surface
mapping and core logging and led to the development of the mineral domains estimated.
For the Sisorta deposit the drill density is too sparse at this time to consider any of the resource measured. For the better drilled areas
within the West and East zones, all blocks estimated in Pass 1 or 2 using up to 1/2 the semi-variogram range were classified as
Indicated. The remaining blocks within the West and East zones and all resources within the sparsely drilled North, South and Deep
zones were classified as Inferred.
The results are tabulated as a series of Grade-Tonnage Tables showing all resources combined and then broken down into each
Domain. At this time no economic analysis has been completed and as a result, the economic cut-off has yet to be established. A
value of 0.40 g/t Au (grams/tonne gold) has been selected as a possible open pit cut-off for this deposit. The following table lists the
resource estimate by class and metallurgy.
Cut-off, Au
g/t
Au
g/t
Ag
g/t
Gold
ounces
Silver
ounces
Sisorta Resource Sorted by Class and Metallurgy.
Cyanide leach tests (bottle rolls) have indicated recovery rates between 92% for oxide material and 14% to 46% for sulphide
material suggesting the oxide portion of the deposit will be amenable to heap leach treatment.
The Sisorta gold deposit is considered to be an excellent exploration target with much of the structurally and lithologically
favourable ground yet to be tested. Overall, the drilling to date has intersected gold mineralization over minable thicknesses in a
majority of holes drilled. The gold mineralized material is predominantly oxidized and recovers well. The resources currently
outlined are favourably situated on top of Evliya Tepe with minimal overburden, and would be amenable to open pitting with a low
strip ratio. An expanded drilling program is recommended to extend beyond the existing mineralized zones, and to follow up new
targets outside the immediate resource area in order to determine the true extent of the property's mineralization.
30
MA investigated the interpretation and estimation techniques of the resource estimate. Globally, Giroux’s resource estimates are
reasonable for this broad level of study, accepting that the mineralization model (HSE) is suited to bulk low grade mining. MA
believes that surface mining in the area may be viable. Further drilling will be required in order to upgrade the current resource
classifications prior to conversion to reserves. MA also believes that recent and historical exploration has demonstrated that the
mineralized systems within the tenement are prospective for the discovery of additional gold mineralization of a similar nature to
that at the current Sisorta deposit.
The following recommendations have been made after this review of the technical data of the Sisorta Project:
(cid:122) the collection and insertion of field duplicates should be conducted at the time of logging.
(cid:122) drill hole locations and surveys should be validated in the field.
(cid:122) the block modelling and estimation methods should be reviewed prior to more detailed studies being undertaken.
(cid:122) the quick logs for all of the holes should be completed with a careful interpretation of the data section by section.
(cid:122) additional drilling should be targeted beyond the limits of the current drill pattern to have a significant impact (increase) on
resource tonnage.”
Subsequent to the 2009 Sisorta Technical Report, the joint venture’s 2010-2011 exploration work on the property consisted of six core
holes totaling approximately 950 metres, spectrographic alteration mapping, geologic mapping, and maintenance of the permits and
licenses to keep the property in good standing.
As reported to EMX by Çolakoglu, in 2012 Çolakoglu completed a 46 hole, 5,500 meter diamond drill program and other work totaling
approximately US $2.5M in expenditures before terminating its option in March 2013. In addition, Çolakoglu made an upfront cash
payment to EMX of US $80,200. EMX and Chesser are currently evaluating the data generated from Çolakoglu’s work, and initiating
discussions with other parties interested in the property’s oxide gold and porphyry copper exploration potential.
Balya Royalty Property
The Balya royalty property is located in the historic Balya lead-zinc-silver mining district in northwestern Turkey. EMX holds an
uncapped, 4% NSR royalty that it retained when it sold the property to private Turkish mining company Dedeman Madencilik San ve Tic.
A.S. in 2006. Dedeman converted the Balya exploration license to an exploitation license in February, 2012 as a key step to advancing the
project from exploration to production status.
Eurasian has been advised by Dedeman about its recent exploration work as follows. Dedeman’s 2012 diamond drill program focused on
resource delineation for the Hastanetepe lead-zinc-silver zone. The new drilling expanded the high-grade lead-zinc-silver mineralization in
the Hastanetepe zone to the east and southeast, and included intercepts of 14.3 meters (172.8 -187.1 m) averaging 18.15 % lead, 9.14%
zinc, and 242.4 g/t silver, and 18.0 meters (33-51 m) averaging 13.83% lead, 4.68% zinc, and 110.0 g/t silver (true widths are estimated at
70-90% of the reported interval length). Since acquiring the property from EMX in 2006, Dedeman has completed 176 core holes totaling
over 31,000 meters. Refer to EMX news releases dated January 30, 2012 and October 2, 2012 for more information on Dedeman's drill
results and a discussion of the Quality Assurance/Quality Control procedures used for the project. Dedeman's efforts continue to focus on
the Hastanetepe zone.
Golcuk Property
31
The Golcuk copper-silver property is located in the Eastern Pontides metallogenic belt of northeast Turkey, and is covered by one
exploitation license. The mineralization at Golcuk primarily occurs as stacked, stratabound horizons with disseminated copper and silver
hosted in volcanic units, as well as in localized cross-cutting fault-controlled veins and stockworks of bornite, chalcopyrite and chalcocite.
Pasinex Resources Ltd. (CNSX: PSE; FSE: PNX) of Vancouver, British Columbia signed an option agreement in July, 2012 to acquire a
100% interest in EMX’s Golcuk property for a combination of staged issuances of three million Pasinex shares and work commitments
totalling US $750,000 over a four year period. EMX retains a 2.9% NSR royalty, which Pasinex has the option of buying down to 2%
within six years of the agreement date for US $1,000,000.
Trab-23 Property
The Trab-23 gold (copper-molybdenum) porphyry property is located in northeast Turkey, and covers over 19 square kilometers. The
property was acquired by EMX at minimal cost in 2007.
Tumad Madencilik Sanayi ve Ticaret A.S. ("Tumad"), a private Turkish company, executed a definitive option agreement in February,
2013 to acquire Trab-23 from EMX. The agreement provides for in-ground spending requirements to further develop the asset's value, a
revenue stream of annual earn-in and pre-production payments, and a revenue stream based upon production. Following exercise of its
option to acquire the property, Tumad may elect to retain the property, and after such election, shall pay annual minimum royalties of US
$100,000 commencing upon the first anniversary of such exercise. Upon production from the Trab-23 licenses, Tumad will pay EMX
Turkey a 3% NSR royalty from production. The annual minimum royalties will be credited to 80% of the NSR royalty then payable.
Qualified Person
Mr. Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the
above technical disclosure on Turkey.
Haiti
Eurasian and joint venture partner Newmont Ventures Limited (“Newmont”), a wholly owned subsidiary of Newmont Mining Corporation
(NYSE: NEM), are exploring a land position along 130 kilometers of strike length of Haiti’s Massif du Nord mineral belt. Newmont is
funding and managing exploration for six joint venture Designated Projects across northern Haiti that contain multiple gold, copper,
copper-gold and copper-gold-silver occurrences, prospects, and deposits.
Joint Venture Exploration Programs
An over-arching focus of the joint venture’s exploration programs has been systematic evaluation of the JV’s extensive property portfolio
across northern Haiti. The 2012 programs included: (a) geological mapping (69 square kilometers) and road-cut/trench mapping (645
meters), (b) geochemical sampling (combined total of 14,060 soil/auger, rock, BLEG, and channel/trench samples), and (c) ground
geophysical surveys (148.9 line-kilometers of magnetics and 39.4 line-kilometers of dipole IP). This work was conducted on several high
priority projects and exploration targets at the La Miel, Northwest Haiti, North Central Haiti, Northeast Haiti, and Grand Bois “surrounding
properties” Designated Projects.
32
A Memorandum of Understanding (“MOU”) signed by the JV and the government of Haiti was announced in April, 2012. The MOU
established protocols to continue discussions regarding the pending Mining Convention, and allowed drilling on select projects.
Subsequently, Newmont reported reconnaissance drilling at the La Miel Designated Project that consisted of thirteen core holes totaling
2,207 meters.
Government Negotiations and Mining Convention
Negotiations with the Government of Haiti to conclude the Mining Convention are ongoing. Once ratified, the Mining Convention will set
the financial and related conditions for project exploration, development, exploitation and closure. The joint venture has put all field
exploration programs in Haiti on care and maintenance status pending a satisfactory outcome of these discussions.
EMX’s Grand Bois Research Permit
As announced in April, 2012 Newmont relinquished its interest to EMX in the 50 square kilometer Research Permit that covers the Grand
Bois historic resource area. The joint venture’s previous drilling tested the near-surface, oxide gold zone, as well as the property’s copper
exploration potential.
EMX has been in discussions with the Haitian government for a two year license extension to explore the property’s porphyry potential.
Although initial indications were positive, it is now unclear whether the extension will be granted or not. As a result, EMX put work related
to the Grand Bois technical report on hold pending the government’s decision on the requested license extension.
Qualified Person
Mr. Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the
above technical disclosure on Haiti.
Australia and Asia-Pacific
Eurasian’s Australia and Asia-Pacific business unit continued to focus on exploration of the Koonenberry gold belt in New South Wales,
Australia. The Company also acquired the Neavesville gold-silver property that is located in the Hauraki goldfield of New Zealand's North
Island, and subsequently executed a definitive agreement with Glass Earth Gold Limited (TSX-V: GEL; NZAX: GEL) for an option to
acquire the property from Eurasian. EMX continues to identify early stage exploration opportunities throughout the region.
Koonenberry Property
EMX’s Koonenberry gold project is covered by over 1,600 square kilometers of contiguous exploration licenses either 100% owned or
controlled by Eurasian. The licenses cover prospective ground that hosts gold occurrences and exploration targets along the length of the
100 kilometer Koonenberry gold belt. The license package was reduced from the previous year following the relinquishment of less
prospective areas.
EMX’s exploration team completed 400 square kilometers of 1:20,000 scale geological mapping and rock-chip sampling, in addition to
finishing BLEG (Bulk Leach Extractable Gold) stream sediment sampling over the entire project area in 2012. As well, a series of detailed
geochemical grids were completed over structural targets identified by more than 1,000 samples of surficial lag, 17,000 meters of shallow
regolith drilling, and a number of trenches. This substantial work program led to the identification of priority targets for follow-up reverse
circulation (“RC”) drilling.
33
Eurasian’s 1,300 meters of RC drilling identified zones of bedrock gold mineralization hosted in carbonaceous sediments with silica-sulfide
alteration within the Nuntherungie Basin. Drill intercepts include 5 meters averaging 0.7 g/t gold, 9 meters averaging 0.4 g/t gold, 4 meters
averaging 0.6 g/t gold, and 2 meters averaging 0.6 g/t gold (true widths unknown). These drill results are an especially important
advancement for the project, as a key objective at Koonenberry has been to identify and delineate the bedrock source(s) of eluvial gold
specimens found on the property.
Exploration in 2013 will follow-up on further first-pass exploration targets resulting from EMX’s enhanced understanding of the geological
and mineralization controls in the region. On-going discussions continue with potential parties interested in partnering with EMX on the
property.
EMX’s Koonenberry exploration samples were collected in accordance with accepted industry standards and procedures. Samples were
typically submitted to ALS Chemex in Brisbane (ISO 17025 accredited). Gold was analyzed by fire assay with an ICP AES finish, and
multi-element analyses were determined with aqua regia digestion and ICP MS/AAS techniques. BLEG analysis was by ICP MS. Routine
QA/QC analysis was conducted on all assay results, including the systematic utilization of blanks, standards, and field duplicates.
Neavesville Property
The Neavesville property occurs in the Hauraki goldfield of New Zealand's North Island. The property hosts a variety of gold-silver
mineralization styles that include replacement bodies in black shales and breccias, as well as higher-grade, structurally controlled quartz
veins. This mineralization has geologic features similar to other deposits of the Hauraki goldfield, including Newmont's Martha Hill gold-
silver mine located 25 kilometers to the southeast. EMX acquired the Neavesville exploration permits by staking, and with minimal cost.
EMX granted an option to acquire the property to Glass Earth Gold Limited in November, 2012. The agreement was structured with (a) in-
ground spending requirements to further develop the asset's value, including 5,000 meters of drilling to confirm the historic results and
issue a current NI 43-101 or JORC compliant resource technical report, (b) a pre-production revenue stream denominated in terms of gold
ounces, and (c) a revenue stream based on production, all to the benefit of EMX.
The Neavesville project consists of two exploration permits totaling over 30 square kilometers that cover two main centers of epithermal
gold-silver mineralization (i.e., Neavesville and Chelmsford). The principal target, named Trig Bluffs, has a historic near-surface inferred
resource of 3.2 million tonnes averaging 2.7 g/t gold and 8.9 g/t silver, and containing 289,000 ounces of gold and 944,000 ounces of silver
(R. Brathwaite, IGNS report, 1999; 2001). In addition, a separate higher-grade historic inferred mineral resource of approximately 0.47
million tonnes at 7.1 g/t gold and 20.7 g/t silver, and containing 107,000 ounces of gold and 312,000 ounces of silver, was reported for
mineralization at depth beneath Trig Bluffs (R. Brathwaite, IGNS report, 1999; 2001). A Qualified Person has not performed sufficient
work to classify the historic estimates as current mineral resources, and EMX is not treating the estimates as current mineral resources. The
historic estimates should not be relied upon until they can be confirmed. However, the drill-delineated Trig Bluffs gold-silver
mineralization described by the IGNS report is considered relevant.
34
During the reporting period, EMX conducted reconnaissance due diligence geologic mapping, verification rock sampling, and a
geophysical survey at Neavesville. Over 20% of EMX's rock samples (total of 35 samples) assayed greater than 0.2 g/t gold, including 4.12
g/t, 2.74 g/t, and 1.89 g/t gold. EMX conducted an orientation CSAMT (Controlled Source Audio-Frequency Magneto Tellurics)
geophysical survey over the project, which highlighted the known areas of mineralization, as well as a number of previously unknown or
untested mineralized targets. The CSAMT survey highlighted the relatively underexplored nature of the project, even though the property
hosts a historic JORC resource.
See EMX’s news release dated November 19, 2012 for further details on the historic resource, agreement with Glass Earth, EMX’s
exploration results and a description of the Quality Assurance and Quality Control measures used by Eurasian for its Neavesville project.
Qualified Person
Mr. Chris Spurway, MAIG, MAusIMM, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has
reviewed and approved the above technical disclosure on Australia and the Asia-Pacific.
North America
Eurasian’s property and royalty portfolio in North America, held through wholly-owned subsidiary Bronco Creek Exploration (“BCE”), is
comprised of 24 exploration properties covering more than 46,000 hectares in Arizona, Nevada, Utah, and Wyoming. The portfolio
includes porphyry copper-molybdenum, porphyry copper-gold, bulk tonnage gold, and high-grade gold-silver vein targets. Eurasian
currently has five properties partnered through BCE.
EMX acquired four new porphyry copper projects and one gold project through generative work substantially funded by its partners in
2012. In addition, EMX acquired two grassroots gold exploration properties in Alaska during the year.
The Copper Basin copper-molybdenum property is a Designated Project with Vale Exploration Canada Inc. (“Vale”). Vale can earn an
initial 60% interest in the Copper Basin Designated Project by spending US $4.5 million in exploration expenditures over a four year
period that started in September, 2011. Vale is 100% funding a 2013 drill program. EMX also had a Regional Acquisition Agreement with
Vale, but Vale elected to terminate the regional program in 2012. EMX now 100% controls the properties that were covered under the
regional program with Vale, and has quickly gained interest from a number of potential partners for available projects in the portfolio.
Copper Basin Designated Project
The Copper Basin copper-molybdenum property is located in central Arizona, approximately 50 kilometers north-northwest of Phoenix.
The project contains numerous surface shows of copper mineralization, and portions of the property were explored during the porphyry
copper exploration boom of the 1960s and 1970s. Fifteen known drill holes were completed during this time period within a tightly
confined, 500 by 1000 meter area. Most of the holes were shallow (i.e., less than 130 meters total depth), but Humble Oil and Refining
Company completed five deeper holes. The historic drill results identified the presence of a copper-molybdenum mineralized porphyry
system.
The Company’s geologic mapping, geochemical sampling, and an airborne (ZTEM and magnetic) geophysical survey identified four new
copper-molybdenum mineralized breccias during the last year. The breccias show evidence for multiple pulses of alteration and
mineralization. EMX’s work has increased the surface expression of the Copper Basin system from 0.5 square kilometers to a 1.5 square
kilometer target area of porphyry-style alteration and mineralization. The Copper Basin drill program with Vale is currently underway, with
Eurasian as the operator.
Mesa Well Property
35
The Mesa Well property, located in southeastern Arizona, is a porphyry copper-molybdenum target.
A four-hole, 2,151 meter drill program, funded by Vale, was completed in the first quarter of 2012. Two holes intersected porphyry-style
alteration and veining with associated weak copper-molybdenum mineralization that increased in intensity to the north. Vale relinquished
its rights to the Mesa Well Designated Project in June, 2012. EMX has completed permitting for a follow-up drill program over new target
areas.
Silver Bell West JV Property
The Silver Bell West JV project, partnered with GeoNovus Minerals Corp. (TSX-V: GNM), of Vancouver, British Columbia, is a porphyry
copper-molybdenum target adjacent to the active ASARCO Oxide Pit mine located northwest of Tucson, Arizona.
EMX recently completed a GeoNovus funded geologic mapping campaign that identified surface alteration and mineralization patterns for
follow-up drill testing. As announced by GeoNovus in a February 19, 2013 news release, the two hole 2013 drill program totalled 696.5
meters, and encountered hydrothermally altered granite; assay results are pending.
Red Hills JV Property
The Red Hills porphyry copper-molybdenum property, located in central Arizona, is partnered with GeoNovus and Inmet Mining Corp.
(TSX: IMN) of Toronto, Ontario.
In September GeoNovus issued a news release on the 2012 drill results. As reported by GeoNovus, reconnaissance hole RH-2 confirmed
the presence of a fault-displaced portion of a porphyry system under sedimentary cover (i.e., Tertiary gravels), including intercepts of
0.39% Cu over 9.75 meters and 0.42% Cu over 11.8 meters (true widths are unknown). In a February 25, 2013 news release GeoNovus
announced commencement of a follow-up drill program that is currently underway.
Middle Mountain Property
The Middle Mountain property is a porphyry copper-molybdenum target located in central Arizona that is partnered with GeoNovus and
Inmet.
Beginning in September 2012, two holes totaling 687 meters were drilled to test IP anomalies and geochemical zoning identified from
historic data. EMX’s evaluation of the exploration data, which includes 30 kilometers of IP and 16 drill holes totaling 4,323 meters, led to
the conclusion that the drilling to date significantly reduced the property’s potential. On February 8, 2013 Inmet and GeoNovus terminated
the program.
Superior West JV Property
The Superior West JV with Freeport McMoRan Copper & Gold Inc. (NYSE: FCX) of Phoenix, Arizona is located west of the historic
mining town of Superior, Arizona, and adjacent to the Resolution Copper property.
The Superior West property covers several porphyry copper targets, as well as the western extension of the historic Magma Vein. Freeport
completed a two hole, 1,972 meter reconnaissance drill program in 2012 that targeted a previously identified geophysical anomaly adjacent
to historic drilling, and intersected weak porphyry-style alteration and anomalous copper geochemistry.
36
Yerington West JV Property
The Yerington West JV property is located in the Yerington mining district of west-central Nevada.
EMX geologists identified a previously unrecognized porphyry center concealed beneath younger cover rocks in the southwestern portion
of the district. JV partner Entrée Gold Inc. of Vancouver, British Columbia (TSX: ETG; NYSE: EGI), initially funded drilling in 2010,
with one hole reaching the target depths beneath post-mineral cover, and intersecting 120 meters of porphyry-style mineralization. Entrée
completed a second hole in 2012, and encountered weak alteration and mineralization. Based upon EMX’s structural geologic
reconstructions, the most recent hole is situated distal from the projected porphyry center, and as a result, significant mineralization was not
expected.
Other Work Conducted by Eurasian in the Western U.S. and Alaska
EMX continued field evaluation of other properties in the BCE portfolio, as well as grassroots exploration for Carlin-type systems in
Nevada and porphyry copper targets in Arizona, Nevada, and Utah. New opportunities were also evaluated in Alaska, including the Moran
Dome and Liberty gold properties.
EMX is in discussions with a number of potential partners for available North American properties, as well as for regional exploration
alliances.
Qualified Person
Mr. Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the
above technical disclosure on North America.
Sweden
Eurasian’s Swedish subsidiary has a portfolio of 27 exploration permits totaling over 1050 square kilometers. This portfolio includes
porphyry copper and Iron-Oxide-Copper-Gold (IOCG) properties, in addition to known areas of copper, gold, and platinum group element-
enriched styles of mineralization. EMX entered into a Strategic Alliance and Earn-In Agreement focused on copper exploration with
Antofagasta Minerals S.A. in 2011. The Company’s 2012 work focused on property acquisitions, assessments and drill evaluation of
portions of the Kiruna South Designated Project.
EMX and Antofagasta Strategic Alliance
EMX and Antofagasta are conducting copper exploration in Sweden under a Strategic Regional Alliance Agreement. Seventeen of EMX’s
exploration licenses are in partnership with Antofagasta. EMX nominates properties with high exploration potential for Antofagasta’s
consideration as Designated Projects. Antofagasta can choose to accept Designated Project status for a property by entering into a Joint
Venture Earn-in Agreement with a right to earn up to 70% of the project. If a property is declined as a Designated Project, EMX is free to
advance that property on its own terms with no further obligation to Antofagasta. Kiruna South is a Designated Project comprised of
multiple exploration licenses in the Kiruna area. In 2012, Antofagasta sole funded work within the Kiruna South Designated Project.
Antofagasta also selected the Norrmyran property as a Designated Project in January 2012, but later relinquished its rights and the property
is now 100% controlled by EMX.
Kiruna South Designated Project
37
The Kiruna South Designated Project is located in the Kiruna iron-copper-gold metallogenic province of northern Sweden.
EMX reported results from a seven hole, 1,975 meter reconnaissance diamond drill program at the Sakkek prospect on July 9, 2012. Drill
hole SAK-1B intercepted 60.5 meters of 0.24 % copper and 0.11 g/t gold and drill hole SAK-2B intercepted 147.3 meters of 0.17 % copper
and 0.1 g/t gold (true widths unknown). Drill hole SAK-4, drilled 300 meters to the south, also intersected mineralization at the bottom of
the hole. Mineralization in these three holes is primarily hosted in hydrothermal breccias and vein swarms cutting strongly altered
granitoids and rhyolitic dikes. See Company news release dated July 9, 2012 for further details on EMX’s exploration results and a
description of the Quality Assurance and Quality Control measures used for the Sakkek prospect drilling.
EMX and Antofagasta also conducted reconnaissance diamond drilling on the Saivo 3 prospect during the last year targeting a 25 kilometer
long structural corridor containing multiple geochemical copper anomalies identified by historic till sampling programs. Three shallow
reconnaissance core holes intersected copper mineralization developed along structural features cutting weakly altered granitoid and
metasedimentary host rocks. A program of deep till sampling is planned to refine drill targeting for a follow-up campaign.
Other EMX Property Interests in Sweden
EMX is advancing the Storåsen copper-gold-PGE property and the Aitik South copper-gold property outside of the Strategic Regional
Alliance with Antofagasta. EMX also holds royalty interests in the Viscaria and Adak properties acquired from the 2010 purchase of the
Phelps Dodge Exploration Sweden AB assets.
Serbian Royalty Properties
EMX has NSR royalties of 2% on gold and silver, and 1% on all other metals over certain properties held by Reservoir Minerals Inc. (TSX-
V: RMC) of Vancouver, British Columbia. Eurasian’s Serbian properties were sold to a predecessor in title to Reservoir in 2006 for cash,
NSR royalties, work commitments, and other considerations.
Reservoir announced encouraging drill results from their Timok joint venture with Freeport McMoran during 2012 (Reservoir news
releases dated March 1, July 16, September 4, and December 10, 2012). EMX’s Brestovac royalty property is part of the land package that
makes up the Timok JV. Reservoir’s drill results are not on EMX’s royalty ground, but are located approximately 1,000 meters east of the
property boundary. Although Brestovac has prospective geology related to the nearby area that Reservoir reported the drill results from,
this is not necessarily indicative that similar mineralization occurs within EMX’s royalty property position. Elsewhere in EMX’s Serbian
royalty portfolio, encouraging high-grade gold intercepts were recently reported by Reservoir from the Deli Jovan project (Reservoir news
release dated February 27, 2013).
Qualified Person
Dr. Duncan Large, Eur. Geol., C. Eng, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and
approved the above technical disclosure on Sweden and the Serbian Royalty Properties.
Far East Russia - Malmyzh
38
In September, 2012 the Company announced its participation in ongoing discoveries at the Malmyzh porphyry copper-gold district in Far
East Russia. Eurasian identified InterGeo Resources LLC ("IGR"), a privately-held exploration company based in Russia, as an early-stage
investment opportunity in 2011. EMX owns a 36% equity position on a fully-diluted basis. The Malmyzh exploration and mining licenses
are held by a joint venture between IGR (51%) and Freeport McMoran (49%), with IGR operating and managing the project.
IGR advised that diamond drilling confirmed porphyry copper-gold mineralization at fourteen separate target areas within a district-scale,
16 by 5 kilometer intrusive corridor. Malmyzh's porphyry centers occur as Cretaceous-aged dioritic to granodioritic stocks that intruded
and altered siltstone and sandstone sedimentary sequences. Copper-gold porphyry mineralization consists of near-surface (i.e., within 2-50
meters of the surface) zones of chalcocite enrichment grading into chalcopyrite-rich and chalcopyrite-bornite-magnetite mineralization. As
of September, 90 drill holes (29,300 meters) had been completed with 59 holes intersecting significant (>0.3% copper equivalent) copper-
gold mineralization. IGR reported drill intercepts from two of the fourteen prospects as highlighted below:
(cid:122) Freedom Prospect: 111.6 meters (25.2-136.8m) averaging 0.80% copper and 1.01 g/t gold (1.51% Cu equivalent) within a broader
zone of 459.3 meters (25.2-484.5m) averaging 0.36% copper and 0.41 g/t gold (0.65% Cu equivalent),
(cid:122) Central Prospect: 406.7 meters (43.9-450.6m) averaging 0.52% copper and 0.29 g/t gold (0.72% Cu equivalent), and
(cid:122) Central Prospect: 223.1 meters (423.1-646.2m) averaging 0.54 % copper and 0.18 g/t gold (0.66% Cu equivalent).
Copper equivalent is calculated as Cu% + (Au g/t X 0.7) . Metallurgical recoveries and net smelter returns are assumed to be 100%.
Reported intervals are interpreted as true widths in porphyry style mineralization. Further discussion of IGR’s exploration results, and
EMX’s due diligence data verification and Quality Assurance/Quality Control procedures can be found in the Company’s September 6,
2012 news release.
EMX understands that IGR is continuing exploration assessment with a 2012-2013 drilling program currently in progress. EMX believes
that Malmyzh is rapidly developing into a belt-scale exploration play.
Mr. Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the
above technical disclosure on Malmyzh.
Kyrgyz Republic & Central Asia
EMX’s Gezart property and other assets were sold to South Korea’s Young Hyun Chemical Company for a 2.5% NSR royalty and a US
$30,000 cash payment. All of EMX’s in-country assets have been divested, debts cleared, and programs terminated.
39
DESCRIPTION OF CAPITAL STRUCTURE
Eurasian’s authorized capital consists of two classes of equity securities, an unlimited number of Common Shares without par value, and an
unlimited number of preferred shares without par value.
As of April 1, 2013, Eurasian had 72,304,540 Common Shares and no preferred shares issued and outstanding. All of the issued Common
Shares are fully paid and not subject to any future call or assessment. The Common Shares rank equally as to voting rights, participation
and distribution of Eurasian’s assets upon liquidation, dissolution or winding-up and the entitlement to dividends. Holders of Common
Shares are entitled to receive notice of, attend and vote at all meetings of shareholders of Eurasian. Each Common Share carries one vote at
such meetings. Holders of Common Shares are entitled to dividends if and when declared by the directors and, upon liquidation, to receive
such portion of the assets of Eurasian as may be distributable to such holders.
DIVIDENDS
Eurasian has not, since its incorporation, paid any dividends on any of its Common Shares. Eurasian has no present intention to pay
dividends, but Eurasian’s Board of Directors will determine any future dividend policy on the basis of earnings, financial requirements and
other relevant factors. See “General Development of Business – Risk Factors”. The Company is prohibited from paying any dividend
which would render it insolvent.
MARKET FOR SECURITIES
The Common Shares of Eurasian are traded in Canada on the TSX-V under the symbol EMX and on the NYSE MKT under the symbol
EMXX.
The following sets forth the high and low market prices and the volume of the Common Shares traded on the TSX-V during the periods
indicated:
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
August 2012
September 2012
October 2012
November 2012
December 2012
High
$2.60
$2.75
$2.60
$2.34
$2.33
$2.15
$2.01
$2.16
$2.43
$2.57
$2.37
$2.15
Low
$2.15
$2.46
$2.23
$2.03
$2.01
$1.93
$1.66
$1.74
$2.12
$2.15
$1.92
$1.97
Volume
51,967
57,060
56,900
32,765
30,409
36,538
24,990
23,305
50,505
39,218
30,682
51,347
40
DIRECTORS AND OFFICERS
The name, province or state and country of residence and position with the Company of each director and executive officer of the
Company, and the principal business or occupation in which each director or executive officer has been engaged during the immediately
preceding five years, effective on the date of this AIF, is as follows:
Name, Place of Residence
and Position with
Company(1)
David M. Cole
Colorado
United States of America
Brian E. Bayley (2) (3) (4)
British Columbia
Canada
Michael D. Winn(4)
California
United States of America
George K. C. Lim (2) (3)(4)
British Columbia
Canada
M. Stephen Enders
Colorado
United States of America
Brian K. Levet (3)
Western Australia
Australia
James A. Morris (1)(2)
Utah
United States of America
Present and Principal Occupation
during the last five years
Positions Held & Date of
Appointment as Director
President and CEO of the Company, March 2003 to
present.
President, CEO and Director
November 24 , 2003
Resource Lending Advisor to Sprott Resource Lending
Corp. (publicly traded (TSX and NYSE-Amex) lending
company to resource issuers); President of Ionic
Management Corp. (private management company);
Director and officer of public resource companies.
President of Seabord Capital Corp. (private consulting
company providing analysis of mining and energy
companies). Director and officer of public resource
companies.
Director
May 13, 1996
Chairman
May 23, 2012
Chief Financial Officer of Dundarave Resources Inc.
(publicly traded (TSX-V) mineral exploration company).
Director
August 28, 2008
Director
November 24 , 2003
Chief Operating Officer of the Company, May 23, 2012 to
present
Chief Operating Officer
May 23, 2012
Director of Renaissance Resource Partners (private
company providing consulting services to resource
companies), February 2009 to present
Senior Vice President of Newmont, September 2003 to
January 2009.
Executive Chairman
May 7, 2010 to May 23, 2012
Director
May 19, 2009
Retired, January 2011 to present; Various executive and
management positions at Newmont, 1983 to December
2010.
Director
March 18, 2011
Managing Partner of Vineyard Cove LLC (a private human
services company providing managed care)
Director
August 17, 2012
Founder and President of M&P Development, LLC (private
real estate development company), 2005 to 2012.
Name, Place of Residence
and Position with
Company(1)
Christina Cepeliauskas
British Columbia
Canada
Valerie A. Barlow
British Columbia
Canada
41
Present and Principal Occupation
during the last five years
Positions Held & Date of
Appointment as Director
Chief Financial Officer
Corporate Secretary
Chief Financial Officer of
º the Company, September 2008 to present;
º Atico Mining Corporation, May 2011 to present,
º Reservoir Capital Corp. (TSX-V: REO), May
2009 to present, and
º Reservoir Minerals Inc.(TSX-V: REM), October
2011 to May 22, 2012
Corporate Secretary of
º the Company, January 2011 to present,
º Sundance Minerals Ltd., September 15, 2011 to
present, and
º Seabord Services Corp., August 2010 to present,
Formerly
º Acting Corporate Secretary of Sierra Geothermal
Power Corp., September 2009 to August 2010;
º Corporate Secretary of Jinshan Gold Mines Inc. (TSX),
May 2009 to September 2009;
º Assistant Corporate Secretary of Jinshan Gold Mines
Inc., May 2008 to May 2009;
º Corporate Administrator of Jinshan Gold Mines; April
2005 to May 2008.
1.
2.
3.
4.
The information as to country of residence and principal occupation has been furnished by the respective directors and officers
individually.
Denotes member of the Audit Committee.
Denotes member of the Compensation and Benefits Committee.
Denotes member of the Nominating and Corporate Governance Committee.
Each director’s term of office expires at the next annual general meeting of Eurasian’s shareholders.
Shareholdings of Directors and Senior Officers
As at April 1, 2013, the directors and executive officers, as a group, beneficially owned, directly or indirectly, or exercised control or
direction over, 3,473,540 Common Shares of Eurasian representing approximately 4.8% of the outstanding Common Shares of Eurasian.
Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions
Other than as described below, no director or executive officer of Eurasian are, or within the last ten years have been:
(i)
a director, chief executive officer or chief financial officer of any reporting issuer that, while such person was acting in that
capacity or after the director or executive officer ceased to be a director, chief executive officer or chief financial officer of
the issuer but which resulted from an event while the director or executive officer was a director, chief executive officer or
chief financial officer of that issuer, was the subject of a cease trade or similar order or an order that denied access to any
statutory exemption for a period of more than 30 consecutive days or was declared bankrupt or made a voluntary assignment
in bankruptcy, made a proposal under any legislation relating to bankruptcy or been subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, receiver-manager or trustee appointed to hold the assets of that
person;
42
(ii)
(iii)
(iv)
bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or became subject to or instituted any
proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold their
assets;
subject to any penalties or sanctions imposed by a court or securities regulatory authority relating to securities legislation or
has entered into a settlement agreement with a securities regulatory authority; or
any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a
reasonable investor in making an investment decision.
1.
Brian E. Bayley was a director from June 15, 2001 to November 30, 2010 of American Natural Energy Corp. (TSX-V listed) which
was issued cease trading orders by the:
(a) British Columbia Securities Commission (“BCSC”), Autorité des marchés financiers de Québec (“AMF”) and Manitoba
Securities Commission (“MSC”) in June 2003 for failing to file financial statements and pay filing fees. The orders were rescinded
in August and September 2003 when it filed its financial statements and paid the filing fees; and
(b) BCSC in July 2007, AMF in August 2007, Ontario Securities Commission (“OSC”) in August, 2007, Alberta Securities
Commission (“ASC”) in November 2007 and MSC in March 2008 for failing to file financial statements and Management’s
Discussion & Analysis. The orders were rescinded on October 29, 2008 when it filed the financial statements and Management’s
Discussion & Analysis.
2.
Brian E. Bayley has been a director since December 14, 1999 of Esperanza Silver Corp. (TSX-V listed) which became aware in
early 2003 that it was subject to outstanding cease trading orders issued by the ASC on September 17, 1998 and AMF on August 12,
1997 for the failure of previous management to file financial statements and pay filing fees. Esperanza’s new management filed the
financial statements and paid the filing fees and the orders were rescinded on May 16, 2003 by the AMF and on August 1, 2003 by
the ASC.
Conflicts of Interest
Directors and officers of Eurasian may, from time to time, be involved with the business and operations of other mining issuers, in which
case a conflict may arise. See “Development of Business – Risk Factors” for more details.
Audit Committee Information
Information Concerning the Audit Committee of the Company, as required by National Instrument 52-110 Audit Committees of the
Canadian Securities Administrators., is provided in Schedule A to this Annual Information Form.
INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Eurasian is unaware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of (i) any director
or executive officer of Eurasian, (ii) a person or company that is, as of the date hereof, the direct or indirect beneficial owner of, or who
exercises control or direction over, more than 10% of any class or series of Eurasian’s outstanding securities, and (iii) any associate or
affiliate of any person or company referred to in either (i) or (ii) above, in any transaction within the three most recently completed
financial years or during the current financial year which has materially affected or would materially affect Eurasian or any of its
subsidiaries.
43
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for Eurasian is Computershare Investor Services Inc., Vancouver, British Columbia, Canada.
MATERIAL CONTRACTS
Material contracts under NI 51-102 are contracts, other than contracts entered into in the ordinary course of the Company’s business that
are material to the Company. The following is a list of material contracts entered into since January 1, 2012 and material contracts entered
into prior to January 1, 2012 that remain in effect.
1.
2.
3.
4.
5.
6.
Registrar and Transfer Agency Agreement between the Company and Montreal Trust Company dated August 12, 1996
appointing Montreal Trust as the Company’s registrar and the provision of transfer agency services for the Common Shares.
Assignment of Agencies Agreement among the Company, Montreal Trust Company of Canada and Computershare Trust
Company of Canada dated January 26, 2001 appointing Computershare as the Company’s registrar and transfer agent for the
Common Shares.
Services Agreement between the Company and Seabord Services Corp. dated January 1, 2012 in respect of Seabord
providing various consulting, administrative, accounting, management and related services.
Listing Agreement dated January 3, 2012 with the TSX Venture Exchange, pursuant to which the Common Shares are listed
and traded on the Exchange.
Listing Agreement dated January 17, 2012 with the NYSE MKT, pursuant to which the Common Shares are listed and traded
on the NYSE MKT.
Option Agreement dated March 31, 2012 between the Company, Çolakoglu and Chesser relating to the Sisorta property in
Turkey.
7.
Agreement and Plan of Merger dated February 7, 2013 between the Company, EMX (Utah) Corp. and BULM.
Names of Experts
INTERESTS OF EXPERTS
The following persons, firms and companies are names as having prepared or certified a report, valuation statement or opinion described or
included in a filing, or referred to in a filing, made under National Instrument 51-102 Continuous Disclosure Obligations by the Company
during or relating to, its most recently completed financial year and whose profession or business gives authority to the report, valuation
statement or opinion made by the person, firm or company.
Name
Davidson and Company LLP,
Chartered Accountants
John E. Dreier, Ph.D, CPG 11190
Simon Meldrum, BSc. (Hons)(Geo),
MemSEG, MemAIG
Andrew J. Vigar,
Mining Associates Pty. Ltd.
Gary H. Giroux, P.Eng, MASc.
44
Description
Independent Auditors, Report of Independent Registered Public
Accounting Firm dated March 28, 2013 for financial statements
as at December 31, 2012 and December 31, 2011 and the year
ended December 31, 2012 and the nine-month period ended
December 31, 2011.
Technical Report Author; Report dated November 1, 2011 and
titled Akarca Gold-Silver Project Technical Report, Turkey
Technical Report Author; Report dated July 31, 2009 and titled
Technical Report on the Exploration Results and Resource
Estimates for the Sisorta Property, Sivas Province, Turkey
Technical Report Author; Report dated July 31, 2009 and titled
Technical Report on the Exploration Results and Resource
Estimates for the Sisorta Property, Sivas Province, Turkey
Technical Report Author; Report dated July 31, 2009 and titled
Technical Report on the Exploration Results and Resource
Estimates for the Sisorta Property, Sivas Province, Turkey
Interests of Experts
45
Davidson and Company LLP have advised the Company that they are independent of the Company within the rules of professional conduct
of the Institute of Chartered Accountants of British Columbia.
To the Company’s knowledge, none of the other experts named in the foregoing section had, at the time they prepared or certified such
report, valuation statement or opinion, received after such time or will receive any registered or beneficial interest, directly or indirectly, in
any securities or other property of the Company.
None of such experts nor director, officer or employee of such experts is or is expected to be elected, appointed or employed as a director,
officer or employee of the Company or of any associated or affiliate of the Company.
ADDITIONAL INFORMATION
Additional information, including directors’ and officers’ remuneration and indebtedness, principal, is holders of the Company’s securities,
securities authorized for issuance under equity compensation plans, where applicable, is contained in the Company’s Management’s
Information Circular for its most recent annual meeting of shareholders.
Additional financial information is provided in the Company’s financial statements and Management’s Discussion and Analysis
(“MD&A”) for its most recently completed financial year, all of which are filed on SEDAR. See Schedule A for the particulars of the Audit
Committee’s charter and related matters.
Other additional information related to the Company may be found on SEDAR at www.sedar.com.
46
SCHEDULE A - AUDIT COMMITTEE MATTERS
I.
MANDATE
The Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Eurasian Minerals Inc. (the “Company”) shall assist
the Board in fulfilling its financial oversight responsibilities by overseeing the accounting and financial reporting processes of the
Company and the audits of the financial statements of the Company. The Committee’s primary duties and responsibilities under this
mandate are to serve as an independent and objective party to monitor:
1.
2.
3.
4.
The quality and integrity of the Company’s financial statements and other financial information;
The compliance of such statements and information with legal and regulatory requirements;
The qualifications and independence of the Company’s independent external auditor (the “Auditor”); and
The performance of the Company’s internal accounting procedures and Auditor.
II.
STRUCTURE AND OPERATIONS
A.
Composition
The Committee shall be comprised of at least three members, majority of whom is a director of the Company who meets the independence,
financial literacy and other requirements set out below.
B.
Qualifications
No member of the Committee may, other than in his or her capacity as a member of the Committee, the Board, or any other committee of
the Board, accept directly or indirectly any consulting, advisory, or other “compensatory fee” (as such term is defined under applicable
United States securities laws and stock exchange rules (collectively, the “U.S. Rules”)) from, or be an “affiliated person” (as such term is
defined under applicable U.S. Rules) of, the Company or any subsidiary of the Company unless an exemption or exception under
applicable U.S. Rules is available.
A member of the Committee must not have participated in the preparation of the financial statements of the Company or any current
subsidiary of the Company at any time during the past three years unless an exemption or exception under applicable U.S. Rules is
available.
Each member of the Committee must be able to read and understand fundamental financial statements, including the Company’s balance
sheet, income statement, and cash flow statement.
At least one member of the Committee must be:
1.
Financially sophisticated, in that he or she has past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background which results in the individual’s financial
sophistication, including but not limited to being or having been a chief executive officer, chief financial officer, other senior
officer with financial oversight responsibilities.
2.
An “audit committee financial expert” (as such term is defined under applicable U.S. Rules).
C.
Appointment and Removal
47
In accordance with the Company’s Articles, the members of the Committee shall be appointed by the Board and shall serve until such
member’s successor is duly elected and qualified or until such member’s earlier resignation or removal. Any member of the Committee
may be removed, with or without cause, by a majority vote of the Board.
D.
Chair
Unless the Board shall appoint a Chair, the members of the Committee shall designate a Chair by the majority vote of all of the members of
the Committee. The Chair shall call, set the agendas for, and chair all meetings of, the Committee.
E.
Sub-Committees
The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services, provided that a decision of such subcommittee to grant a pre-
approval shall be presented to the full Committee at its next scheduled meeting.
F. Meetings
The Committee shall meet as often as is necessary to fulfil its duties respecting the Company’s quarterly and annual financial statements
but not less than on a quarterly basis as provided in this Charter. The Committee should meet with the Auditor and management annually to
review the Company’s financial statements in a manner consistent with, and to discharge its duties under, Section III of this Charter.
The Auditor shall be given reasonable notice of, and be entitled to attend and speak at, each meeting of the Committee concerning the
Company’s annual financial statements and, if the Committee feels it is necessary or appropriate, at every other meeting. On request by the
Auditor, the Chair shall call a meeting of the Committee to consider any matter that the Auditor believes should be brought to the attention
of the Committee, the Board or the shareholders of the Company.
At each meeting, a quorum shall consist of a majority of the members comprising the Committee.
As part of its goal to foster open communication, the Committee may periodically meet separately with each of management and the
Auditor to discuss any matters that the Committee believes would be appropriate to discuss privately.
The Committee may invite to its meetings any director, any manager of the Company, and any other person whom it deems appropriate to
consult in order to carry out its responsibilities. The Committee may also exclude from its meetings any person it deems appropriate to
exclude in order to carry out its responsibilities.
III. DUTIES
A.
Introduction
48
The following functions shall be the common recurring duties of the Committee in carrying out its purposes outlined in Section I of this
Charter. These duties should serve as a guide with the understanding that the Committee may fulfill additional duties and adopt additional
policies and procedures as may be appropriate in light of changing business, legislative, regulatory or other conditions. The Committee
shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purposes of the
Committee outlined in Section I of this Charter.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern which the
Committee in its sole discretion deems appropriate for study or investigation by the Committee.
The Committee shall be given full access to the Company’s internal accounting staff, managers, other staff and Auditor as necessary to
carry out these duties. While acting within the scope of its stated purpose, the Committee shall have all the authority of, but shall remain
subject to, the Board. Notwithstanding the foregoing, the Committee is directly responsible for the appointment, compensation, retention
and oversight of the work of the Auditor and any other registered public accounting firm engaged for the purpose of preparing or issuing an
audit or performing other audit, review or attest services for the Company.
The Company must provide appropriate funding, as determined by the Committee, for payment of (i) compensation to any registered public
accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the
Company, (ii) compensation to any independent counsel or other advisors employed by the Committee, and (iii) ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying out the Committee’s duties.
B.
Powers and Responsibilities
The Committee will have the following responsibilities and, in order to perform and discharge these responsibilities, will be vested with the
powers and authorities set forth below, namely, the Committee shall:
Independence of Auditor
1).
2).
3).
Actively engage in a dialogue with the Auditor with respect to any disclosed relationships or services that may impact the objectivity
and independence of the Auditor and, obtain a formal written statement from the Auditor setting forth all relationships between the
Auditor and the Company.
Take, or recommend that the Board take, appropriate action to oversee the independence of the Auditor.
Require the Auditor to report directly to the Committee.
49
4).
Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the Auditor
and former independent external auditor of the Company.
Performance & Completion by Auditor of its Work
5).
6).
7).
Be directly responsible for the appointment, compensation, retention and oversight of the work of the Auditor and any other
registered public accounting firm engaged (including resolution of disagreements between management and the Auditor or such
public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other
audit, review or attest services for the Company.
Review annually the performance of the Auditor, and either appoint a new Auditor or recommend to shareholders that the existing
Auditor be re-elected.
Pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the
Company by the Auditor; provided, however, that pre-approval of services other than audit, review or attest services is not required
if such services:
(a)
constitute, in the aggregate, no more than 5% of the total amount of revenues paid by the Company to the Auditor during the
fiscal year in which the services are provided;
(b) were not recognized by the Company at the time of the engagement to be non-audit services; and
(c)
are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or
by one or more members of the Committee to whom authority to grant such approvals has been delegated by the Committee.
Preparation of Financial Statements
8).
Discuss with management and the Auditor significant financial reporting issues and judgments made in connection with the
preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of
accounting principles, any major issues as to the adequacy of the Company’s internal controls and any special steps adopted in light
of material control deficiencies.
9).
Discuss with management and the Auditor any correspondence with regulators or governmental agencies and any employee
complaints or published reports which raise material issues regarding the Company’s financial statements or accounting policies.
10). Discuss with management and the Auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures
on the Company’s financial statements.
11). Discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control
such exposures, including the Company’s risk assessment and risk management policies.
12). Discuss with the Auditor the matters required to be discussed relating to the conduct of any audit, in particular:
a)
The adoption of, or changes to, the Company’s significant auditing and accounting principles and practices as suggested by
the Auditor or management.
50
b)
Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to
requested information, and any significant disagreements with management.
Public Disclosure by the Company
13). Review the Company’s annual and quarterly financial statements, management discussion and analysis (MD&A) and press releases
respecting earnings before the Board approves and the Company publicly discloses this information.
14). Review the Company’s financial reporting procedures and internal controls to be satisfied that adequate procedures are in place for
the review of the Company’s public disclosure of financial information extracted or derived from its financial statements, other than
disclosure described in the previous paragraph, and periodically assessing the adequacy of those procedures.
15). Review any disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer during their
certification process of the Company’s financial statements and public disclosure about any significant deficiencies in the design or
operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a
significant role in the Company’s internal controls.
Related Party Transactions
16). Review and approve related party transactions if required under applicable U.S. Rules.
Manner of Carrying Out its Mandate
17). Consult, to the extent it deems necessary or appropriate, with the Auditor but without the presence of management, about the quality
of the Company’s accounting principles, internal controls and the completeness and accuracy of the Company’s financial statements.
18). Request any officer or employee of the Company or the Company’s outside counsel or Auditor to attend a meeting of the Committee
or to meet with any members of, or consultants to, the Committee.
19). Have the authority, to the extent it deems necessary or appropriate, to retain independent legal counsel, and accounting or other
consultants to advise the Committee.
20). Meet separately, to the extent it deems necessary or appropriate, with management and the Auditor.
21). Make periodic reports to the Board as is necessary or required.
22). Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
23). Annually review the Committee’s own performance.
24).
Provide an open avenue of communication between the Auditor and the Board.
51
25). Not delegate these responsibilities other than to one or more independent members of the Committee the authority to pre-approve,
which the Committee must ratify at its next meeting, audit and permitted non-audit services to be provided by the Auditor.
C. Whistle-Blower Policy
The Committee shall establish and annually review the procedures for (i) the receipt, retention and treatment of complaints received by the
Company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by
employees of the Company of concerns regarding questionable accounting or auditing matters.
D.
Limitation of Audit Committee’s Role
While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct
audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with
generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the
Auditor.
This Charter, as amended, was approved by the Board of Directors on March 28, 2013.
52
SCHEDULE B - AUDIT COMMITTEE MATTERS
Overview
The Audit Committee of the Board is principally responsible for
(cid:122) recommending to the Board the external auditor to be nominated for election by the Company’s shareholders at each annual general
meeting and negotiating the compensation of such external auditor.
(cid:122) overseeing the work of the external auditor.
(cid:122) reviewing the Company’s annual and interim financial statements, Management Discussion & Analysis (MD&A) and press releases
regarding earnings before they are reviewed and approved by the Board and publicly disseminated by the Company.
(cid:122) reviewing the Company’s financial reporting procedures and internal controls to ensure adequate procedures are in place for the
Company’s public disclosure of financial information extracted or derived from its financial statements, other than disclosure
described in the previous paragraph.
Composition of the Audit Committee
The Audit Committee consists of three directors all of whom are independent and financially literate. In addition, the Company’s governing
corporate legislation requires the Company to have an Audit Committee composed of a minimum of three directors, all of whom are not
officers or employees of the Company. The Audit Committee complies with these requirements.
The following table sets out the names of the members of the Audit Committee and whether they are ‘independent’ and ‘financially
literate’.
Name of Member
Brian E. Bayley
George K. C. Lim (Chairman)
James A. Morris
Independent (1)
Financially Literate (2)
Yes
Yes
Yes
Yes
Yes
Yes
(1)
(2)
To be considered to be independent, a member of the Committee must not have any direct or indirect ‘material relationship’ with the
Company. A material relationship is a relationship which could, in the view of the Board reasonably interfere with the exercise of a
member’s independent judgment.
To be considered financially literate, a member of the Committee must have the ability to read and understand a set of financial
statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and
complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.
The Company is currently in the process of arranging for a suitable independent director to assume Mr. Winn’s position on the Audit
Committee.
Relevant Education and Experience
53
The education and experience of each member of the Audit Committee relevant to the performance of his responsibilities as an Audit
Committee member and, in particular, any education or experience that would provide the member with:
1.
2.
3.
an understanding of the accounting principles used by the Company to prepare its financial statements;
the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals
and reserves;
experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised
by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; and
4.
an understanding of internal controls and procedures for financial reporting,
are as follows:
Name of Member
Brian E. Bayley
George K. C. Lim
James A. Morris
Education
Experience
B.A. (Hon) – 1977
University of Victoria
Victoria, BC
M.B.A. – 1979
Queen’s University
Kingston, ON
Member of Institute of Chartered
Accountants of B.C. – 1985
Member of Certified General
Accountants of B.C. - 1985
BSc – Business Management
Brigham Young University
Director and officer of numerous publicly traded
companies (1986 – present), including Sprott
Resource Lending Corp. (publicly traded natural
resource lending company), and investor in
numerous publicly traded companies during
which time and as a result of such investments
has reviewed and analyzed numerous financial
statements.
CFO of various publicly traded companies and
has worked in the mining industry since 1999.
Prior to that was in public practice for 24 years.
Also worked with Audit Committees and
Boards of Directors on matters relating to audits
for numerous years.
Mr. Morris is currently Managing Partner of
Vineyard Cove LLC, a private human services
company providing managed care. Mr. Morris
has the business expertise to understand and
evaluate financial statements, and the
accounting principles applied to natural resource
companies financial statements.
Complaints
54
The Audit Committee has established a “Whistleblower Policy” which outlines procedures for the confidential, anonymous submission by
employees regarding the Company’s accounting, auditing and financial reporting obligations, without fear of retaliation of any kind. If an
applicable individual has any concerns about accounting, audit, internal controls or financial reporting matters which they consider to be
questionable, incorrect, misleading or fraudulent, the applicable individual is urged to come forward with any such information, complaints
or concerns, without regard to the position of the person or persons responsible for the subject matter of the relevant complaint or concern.
The applicable individual may report their concern in writing and forward it to the Chairman of the Audit Committee in a sealed envelope
labelled “To be opened by the Chairman of the Audit Committee only.”
Further, if the applicable individual wishes to discuss any matter with the Audit Committee, this request should be indicated in the
submission. Any such envelopes received by the Company will be forwarded promptly and unopened to the Chairman of the Audit
Committee.
Promptly following the receipt of any complaints submitted to it, the Audit Committee will investigate each complaint and take appropriate
corrective actions.
The Audit Committee will retain as part of its records, any complaints or concerns for a period of no less than seven years. The Audit
Committee will keep a written record of all such reports or inquiries and make quarterly reports on any ongoing investigation which will
include steps taken to satisfactorily address each complaint.
The “Whistleblower Policy” is reviewed by the Audit Committee on an annual basis.
Audit Committee Oversight
Since the commencement of the Company’s most recently completed financial year, there has not been a recommendation of the Audit
Committee to nominate or compensate an external auditor which was not adopted by the Board.
Reliance on Exemptions in NI 52-110
Since the commencement of the Company’s most recently completed financial year, the Company has not relied on:
(cid:122) the exemption in section 2.4 (De Minimis Non-audit Services) of NI 52-110 (which exempts all non-audit services provided by the
Company’s auditor from the requirement to be pre-approved by the audit committee if such services are less than 5% of the
auditor’s annual fees charged to the Company, are not recognized as non-audit services at the time of the engagement of the auditor
to perform them and are subsequently approved by the audit committee prior to the completion of that year’s audit);
(cid:122) the exemption in section 3.5 (Death, Disability or Resignation of Audit Committee Member) of NI 52-110 (which exempts a
replacement member of the Audit Committee from being independent until the later of the next annual general meeting of
shareholders or the six month anniversary of the date on which the vacancy filled by the member was created, if the vacancy
resulted from the death, disability or resignation of an audit committee member; or
55
(cid:122) an exemption from NI 52-110, in whole or in part, granted by a securities regulator under Part 8 (Exemptions) of NI 52-110.
Pre-Approval Policies and Procedures
The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services as described in section III.B
“Powers and Responsibilities – Performance & Completion by Auditor of its Work” of the Charter.
External Auditor Service Fees (By Category)
The following table discloses the fees billed to the Company by its external auditor during the last two financial years.
Financial Year Ending
December 31, 2012
December 31, 2011
Audit Fees (1)
($)
189,000
150,000
Audit Related Fees (2)
($)
93,000
35,000
Tax Fees (3)
($)
Nil
Nil
All Other Fees (4)
($)
Nil
Nil
(1)
The aggregate fees billed by the Company’s auditor for audit fees.
(2)
(3)
The aggregate fees billed for assurance and related services by the Company’s auditor that are reasonably related to the performance
of the audit or review of the Company’s financial statements and are not disclosed in the ‘Audit Fees’ column.
The aggregate fees billed for professional services rendered by the Company’s auditor for tax compliance, tax advice, and tax
planning. These services involved the preparation of the Company’s corporate tax returns.
(4)
The aggregate fees billed for professional services other than those listed in the other three columns.
Reliance on Exemptions in NI 52-110 regarding
Audit Committee Composition & Reporting Obligations
Since the Company was a Venture Issuer as of the end of its last financial year, it relies on the exemption contained in section 6.1 of NI 52-
110 from the requirements of Part 3 Composition of the Audit Committee (as described in ‘Composition of the Audit Committee’ above).
EURASIAN MINERALS INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2012
GENERAL
This Management’s Discussion and Analysis (“MD&A”) for Eurasian Minerals Inc. (the “Company”, “EMX” or “Eurasian”) has been prepared based on
information known to management as of April 2, 2013.
The Company changed its fiscal year end from March 31 to December 31, effective for the period ending December 31, 2011. The change in the fiscal
year end was made for the purpose of streamlining the Company’s financial reporting.
This MD&A is intended to help the reader understand the consolidated financial statements and should be read in conjunction with the audited
consolidated financial statements of the Company for the year ended December 31, 2012 prepared in accordance with International financial reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All dollar amounts included therein and in the following
MD&A are in Canadian dollars except where noted.
FORWARD-LOOKING INFORMATION
This MD&A may contain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. When
used in this MD&A, words such as “estimate”, “intend”, “expect”, “anticipate” and similar expressions are intended to identify forward-looking
statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and
uncertainties and other factors that could cause Eurasian’s actual results, performance, prospects or opportunities to differ materially from those expressed
in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing,
failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals
for the development of a mineral project, increased regulatory compliance costs and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date
otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this MD&A,
and other risk factors and forward-looking statements listed in the Company’s most recently filed Annual Information Form (“AIF”), actual events may
differ materially from current expectations. More information about the Company including its AIF and recent financial reports is available on SEDAR at
www.sedar.com. The Company’s Annual Report on Form 40-F, including the AIF and recent financial reports, is available on SEC’s EDGAR website at
www.sec.gov and on the Company’s website at www.EurasianMinerals.com.
Cautionary Note to Investors Concerning Estimates of Indicated and Inferred Resources
The MD&A may use the terms “Inferred” and “Indicated” resources. Eurasian advises investors that although these terms are recognized and required by
Canadian regulations under National Instrument 43-101 (“NI 43-101”), the U.S. Securities and Exchange Commission (“SEC”) does not recognize these
terms. Investors are cautioned that “inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the basis of feasibility or prefeasibility studies. Investors are cautioned not to assume that part
or all of an inferred resource exists, or is economically or legally mineable. Investors are further cautioned not to assume that any part or all of an
indicated mineral resource will be converted into reserves.
Page 2
COMPANY OVERVIEW
Eurasian is a Tier 1 company that trades on the TSX Venture Exchange and the NYSE MKT. It is primarily in the business of exploring for metals and
minerals. The Company conducts exploration on properties located primarily in Turkey, Haiti, Europe, Southwest United States, and the Asia Pacific
region. The Company started receiving royalty income as of August 17, 2012 when it acquired Bullion Monarch Mining, Inc. (“Bullion” or “BULM”).
Eurasian operates primarily as a prospect generator. Under the prospect generation business model, Eurasian develops and acquires quality mineral
exploration projects and then options or sells such projects to other parties. By optioning or selling interests in its projects to third parties, Eurasian
reduces its exposure to the costs and risks associated with early stage mineral exploration. This preserves the Company’s treasury, which can be utilized
for further project acquisitions and strategic investments. In consideration for selling or optioning its projects, the Company typically retains an equity
interest in the project or receives shares in the capital of the company acquiring it.
HIGHLIGHTS FOR THE YEAR
(cid:122) The Company acquired Bullion Monarch Mining, Inc. (“Bullion” or “BULM”) effective August 17, 2012. As a result of the acquisition, BULM
has become a wholly-owned subsidiary of EMX. BULM has a 1% gross smelter return (“GSR”) royalty (the “Leeville royalty”) on a portion of
Newmont Mining Corporation's operations and projects on the Carlin Trend in Nevada, including the Leeville mine and the Four Corners project;
(cid:122) The Company signed an agreement with Centerra Gold Inc. (“Centerra”) to regain 100% control of the Akarca gold- silver project in Turkey
previously held within a joint venture option agreement between Eurasian and Centerra. Drilling at the Akarca project continued to discover
additional zones of gold-silver mineralization, as well as extend the known mineralized zones;
(cid:122) Eurasian acquired the Neavesville gold-silver property located in the Hauraki goldfield of New Zealand's North Island by staking, and with
minimal cost. EMX subsequently entered into an agreement with Glass Earth Gold Limited (“GEL”) giving GEL an option to acquire the Property
by way of staged payments and work obligations as well as reimbursement of EMX's exploration costs;
(cid:122) The Company’s common shares began trading on the NYSE MKT (formerly NSYE Amex) under the ticker symbol “EMXX”; and
(cid:122) The Company announced its participation in ongoing discoveries at the Malmyzh porphyry copper-gold district in Far East Russia by way of an
investment in Inter Geo Resources LLC (“IGR”), a privately-held exploration company.
Changes to Management and the Board
James A. Morris was appointed to the Board on August 17, 2012.
Jan N. Steiert was appointed to the newly-created position of Chief Legal Officer of the Company on August 15, 2012.
OUTLOOK
As the year 2013 progresses, the Company is well-poised to take advantage of the prevailing financial market conditions which have adversely impacted
the funding of junior exploration companies. This is especially so in light of EMX’s growing royalty portfolio, which includes the Company’s Northern
Carlin Trend Leeville royalty. The Leeville royalty paid over US $4.1 million during the twelve months ending December 31, 2012, of which US$1.75
million was received by Eurasian since the BULM acquisition on August 17, 2012. Royalty revenues coupled with projects advanced using partner
funding places EMX in a strong position in the coming year to continue building its portfolio and to acquire quality assets from companies not so strongly
positioned.
Page 3
ACQUISITION OF BULLION MONARCH
On August 17, 2012, the Company completed its acquisition of Bullion following approval of the merger by BULM's shareholders at a special meeting
held on the same day. Under the terms of the merger agreement, BULM shareholders received 0.45 of an EMX common share and US $0.11 in cash for
each share of BULM common stock held as of the record date. The value of the total consideration paid to BULM shareholders was approximately US
$36.4 million.
BULM has a 1% GSR royalty on several of Newmont Mining Corporation's operations and projects on the Carlin Trend. Further details of the acquisition
are outlined in Note 3 to the annual consolidated financial statements for the year ended December 31, 2012.
EXPLORATION REVIEW
EMX’s on-going success in executing the prospect generation business model led to the accomplishment of several corporate goals during the last year.
Major milestones include option agreements to sell the Golcuk and Trab-23 properties in Turkey and an option agreement to sell the Neavesville gold-
silver property in New Zealand. All three agreements are structured to generate future revenue streams and provide organically generated royalty assets to
the benefit of EMX. Meanwhile the EMX team continued to develop new early stage opportunities worldwide to fill the exploration pipeline. These
efforts led to investing in the Malmyzh copper-gold joint venture in Far East Russia. EMX’s early investment in Malmyzh at the grassroots stage
positions the Company for participating in the project as it develops into a belt-scale exploration discovery.
The flagship program in Turkey underscores EMX’s longstanding success elsewhere in the exploration portfolio. Drilling at the Akarca gold-silver
project continued to discover additional zones of gold-silver mineralization, as well as extend the known mineralized zones. EMX regained 100% control
of the Akarca asset after Centerra had invested US $5 million adding value on the property. Akarca is a district-scale exploration play that has further
upside discovery potential and is advancing towards initial resource definition.
The last year has been challenging, for the industry in general, and for EMX as well. Although the EMX-Newmont Strategic Venture in Haiti continued
to advance multiple drill-ready projects and generate new high-priority grassroots exploration targets for follow-up, the pending Mining Convention has
yet to be ratified by the Haitian government. In the western U.S., Vale Exploration Canada Inc. (“Vale”) focused their resources on drilling the Copper
Basin Designated Project, and elected to exit the regional strategic alliance. Notwithstanding, these developments emphasize the strength of the prospect
generation business model, which allows the Company to acquire quality exploration properties worldwide, diversify risk, and provide multiple
opportunities for exploration success while preserving the corporate treasury.
FAR EAST RUSSIA - MALMYZH
In September 2012, the Company announced its participation in ongoing discoveries at the Malmyzh porphyry copper-gold district in Far East Russia.
Eurasian identified IGR as an early-stage investment opportunity in 2011. EMX has a 36% equity position on a fully-diluted basis. The Malmyzh
exploration and mining licenses are held by a joint venture between IGR (51%) and Freeport McMoran Exploration Corporation ("Freeport" or "FMEC")
(49%), with IGR operating and managing the project.
IGR advised that diamond drilling confirmed porphyry copper-gold mineralization at fourteen separate target areas within a district-scale, 16 by 5
kilometer intrusive corridor. Copper-gold porphyry mineralization consists of near-surface (i.e., within 2-50 meters of the surface) zones of chalcocite
enrichment grading into chalcopyrite-rich and chalcopyrite-bornite-magnetite mineralization. As of September 2012, 90 drill holes (29,300 meters) had
been completed with 59 holes intersecting significant (>0.3% copper equivalent) copper-gold mineralization. IGR reported drill intercepts from two of the
fourteen prospects as highlighted below:
(cid:122) Freedom Prospect: 111.6 meters (25.2-136.8m) averaging 0.80% copper and 1.01 g/t gold (1.51% Cu equivalent) within a broader zone of 459.3
meters (25.2-484.5m) averaging 0.36% copper and 0.41 g/t gold (0.65% Cu equivalent),
Page 4
(cid:122) Central Prospect: 406.7 meters (43.9-450.6m) averaging 0.52% copper and 0.29 g/t gold (0.72% Cu equivalent), and
(cid:122) Central Prospect: 223.1 meters (423.1-646.2m) averaging 0.54 % copper and 0.18 g/t gold (0.66% Cu equivalent).
Copper equivalent is calculated as Cu% + (Au g/t x 0.7) . Metallurgical recoveries and net smelter returns are assumed to be 100%. Reported intervals are
interpreted as true widths in porphyry style mineralization. Further discussion of IGR’s exploration results and EMX’s due diligence data verification and
Quality Assurance/Quality Control procedures can be found in the Company’s September 6, 2012 news release.
EMX understands that IGR is continuing exploration assessment with a 2012-2013 drilling program currently in progress. EMX believes that Malmyzh is
rapidly developing into a belt-scale exploration play.
Qualified Person
Mr. Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the above technical
disclosure on Malmyzh.
TURKEY
Eurasian holds exploration and exploitation licenses in Turkey’s Western Anatolia and Eastern Pontides mineral belts. The properties include bulk
tonnage gold, gold-silver vein, and porphyry copper gold targets. EMX also holds royalty interests on Balya and other properties. Drill programs were
conducted at the Akarca property and the Sisorta joint venture project, as well as the Balya royalty property during the reporting period. In addition, EMX
continued evaluating and partnering other projects in the property portfolio, while assessing new exploration opportunities.
Akarca
The Akarca project is a 2006 EMX grassroots exploration discovery located in Turkey’s Western Anatolia region. The property contains multiple
prospects of epithermal gold-silver mineralization within a district-scale area. Gold and silver mineralization occurs as structurally focused vein-style and
disseminated-style mineralization in silicified zones. The quartz veins typically host higher-grade mineralization, while the silicified halos in the wall-
rocks host lower-grade disseminated mineralization. The mineralized zones are consistently oxidized to depths of 80 to 100 meters. The property’s six
primary mineralized zones are covered by two exploitation licenses. EMX filed an updated NI 43-101 technical report for Akarca on SEDAR in January
2012.
Akarca had been in a joint venture with a subsidiary of Centerra Gold Inc. (“Centerra”) pursuant to an agreement dated December 23, 2008 whereby
Centerra could earn up to a 70% interest in the property. In mid-2012, Centerra earned an initial 50% interest in the property as a result of investing over
US $5 million in drilling, geological mapping, geochemical sampling, and geophysical surveys. EMX regained 100% interest in the Akarca property from
Centerra in October 2012 in return for relieving Centerra of certain exploration and payment obligations. The Company is currently in advanced
discussions with a number of potential partners interested in the property.
The 2012 exploration program included drilling, surface trenching, geochemical sampling, geologic mapping, and geophysical surveys to explore for new
discoveries, as well as extend the known mineralized zones. Initial 2012 work commenced with a gravity survey and structural geologic compilation that
identified through-going structural trends interpreted as important controls for gold-silver mineralization. This new structural framework provided an
important tool for further delineating the known gold-silver prospects, as well as for increasing the potential to discover new mineralized zones under
cover, and served as an important guide for drill targeting.
EMX reported mid-2012 Akarca exploration results on July 19, 2012 that included a drill intercept of 26.1 meters averaging 4.47 g/t gold and 16.39 g/t
silver, with a higher-grade sub-interval of 5.8 meters averaging 13.59 g/t gold and 49.65 g/t silver at the Sarikaya Tepe prospect (true widths interpreted
to be 55-65% of reported interval). This intercept is notable as a new target type hosted above and at the intersection of vein structures and the underlying
basement contact, thereby increasing the project's exploration potential.
Page 5
EMX initiated a follow-up drill program in December 2012 to test new target concepts, as well as extend gold-silver mineralization identified from
previous exploration. The first two holes were drilled at the Sarikaya Tepe prospect, with results that included an oxide intercept starting at surface of
36.4 meters averaging 5.67 g/t gold and 53.31 g/t silver, with a sub-interval of 2.15 meters averaging 89.34 g/t gold and 835.16 g/t silver (true widths
interpreted as 60-75% of reported interval length). The drill results also included an oxide intercept starting at 18.2 meters of 101.0 meters averaging 1.25
g/t gold and 7.95 g/t silver at the Percem Tepe prospect (true width interpreted as 65-75% of reported interval length). EMX's 2012-2013 drill program
extended the strike length of the targeted prospects, confirmed continuity of the mineralized zones, and intersected the highest grade gold-silver
mineralization encountered to date on the property. These latest results, from three different prospect areas, underscore the district-scale exploration
potential of the Akarca property.
To date, 88 drill holes totaling over 11,000 meters, 3,100 rock and 3,300 soil geochemical samples, 74 line-kilometers of IP-resistivity surveys, and a
property-wide gravity survey have been completed, mostly paid for by partner funding. Less than 20% of the 14,000 meters of vein target strike length as
currently defined by mapping and IP-resistivity anomalies have been drill tested so far.
Refer to EMX news releases dated July 19, 2012, January 18, 2013, and March 1, 2013 for more information on the Akarca exploration results and a
description of the Quality Assurance and Quality Control measures used by Eurasian for the project.
Sisorta
The Sisorta project, located in the Eastern Pontides mineral belt, is an epithermal gold deposit with an NI 43-101 mineral resource at a 0.4 g/t cutoff of
91,000 indicated gold ounces from 3.17 million tonnes averaging 0.89 g/t, and 212,000 inferred gold ounces from 11.38 million tonnes averaging 0.58 g/t.
An overview of the methodology used to estimate these resources are described in EMX’s news release dated June 16, 2009. Near-surface, oxide
mineralization represents 76% of the indicated gold ounces, and 73% of the inferred gold ounces, thereby establishing the property’s potential for
developing a small scale, open pit mining operation.
The Sisorta joint venture is 51% owned by Chesser Resources Ltd. and 49% by EMX. The JV had granted Çolakoglu Ticari Yatirim A.S., a privately
owned Turkish company, an option to buy the Sisorta JV property in April 2012, but was subsequently advised by Çolakoglu that the option was
terminated effective March 21, 2013. In 2012, Çolakoglu completed a 46 hole, 5,500 meter diamond drill program and other technical work totaling
approximately US $2.5 M in expenditures before terminating its option. In addition, Çolakoglu made an upfront cash payment to EMX of US $80,216.
EMX and Chesser are currently evaluating the data generated from Çolakoglu’s work, and initiating discussions with other parties interested in the
property’s oxide gold and porphyry copper exploration potential.
Balya
The Balya royalty property is located in the historic Balya lead-zinc-silver mining district in northwestern Turkey. EMX holds an uncapped, 4% net
smelter return (“NSR”) royalty that it retained when it sold the property to private Turkish mining company Dedeman Madencilik San ve Tic. A.S. in
2006. Dedeman converted the Balya exploration license to an exploitation license in February 2012 as a key step to advancing the project from
exploration to production status.
Eurasian has been advised by Dedeman about its recent exploration work. Dedeman’s 2012 diamond drill program focused on resource delineation for the
Hastanetepe lead-zinc-silver zone. The new drilling expanded the high-grade lead-zinc-silver mineralization in the Hastanetepe zone to the east and
southeast, and included intercepts of 14.3 meters (172.8 –187.1 m) averaging 18.15 % lead, 9.14% zinc, and 242.4 g/t silver, and 18.0 meters (33 – 51 m)
averaging 13.83% lead, 4.68% zinc, and 110.0 g/t silver (true widths are estimated at 70-90% of the reported interval length). Refer to EMX news
releases dated January 30, 2012 and October 2, 2012 for more information on Dedeman’s drill results and a discussion of the Quality Assurance/Quality
Control procedures used for the project. Since acquiring the property from EMX in 2006, dedeman has completed 176 core holes totaling over 31,000
meters. Dedeman’s efforts continue to focus on the Hastanetepe zone.
Page 6
Golcuk
The Golcuk copper-silver property is located in the Eastern Pontides metallogenic belt of northeast Turkey, and is covered by one exploitation license.
The mineralization at Golcuk primarily occurs as stacked, stratabound horizons with disseminated copper and silver hosted in volcanic units, as well as in
localized cross-cutting fault-controlled veins and stockworks of bornite, chalcopyrite and chalcocite.
Pasinex Resources Ltd. (CNSX: PSE; FSE: PNX) of Vancouver, British Columbia signed an option agreement in July 2012 to acquire a 100% interest in
EMX’s Golcuk property for a combination of staged issuances of three million Pasinex shares and work commitments totalling US $750,000 over a four
year period. EMX retains a 2.9% NSR royalty, which Pasinex has the option of buying down to 2% within six years of the agreement date for US
$1,000,000.
Trab-23
The Trab-23 gold (copper-molybdenum) porphyry property is located in northeast Turkey, and covers over 19 square kilometers. The property was
acquired by EMX at minimal cost in 2007.
Tumad Madencilik Sanayi ve Ticaret A.S. ("Tumad"), a private Turkish company, executed a definitive option agreement in February, 2013 to acquire
Trab-23 from EMX. The agreement provides for in-ground spending requirements to further develop the asset's value, a revenue stream of annual earn-in
and pre-production payments, and a revenue stream based upon production. Following exercise of its option to acquire the property, Tumad may elect to
retain the property, and after such election, shall pay annual minimum royalties of US $100,000 commencing upon the first anniversary of such exercise.
Upon production from the Trab-23 licenses, Tumad will pay EMX Turkey a 3% NSR royalty from production. The annual minimum royalties will be
credited to 80% of the NSR royalty then payable.
Other Properties in Turkey
Several potential partners have expressed interest in EMX’s Alankoy copper-gold porphyry property. The Elmali property was dropped early in 2012 due
to a lack of encouraging exploration results. Eurasian continues to evaluate other projects in the portfolio and assess new exploration and acquisition
opportunities in Turkey.
Qualified Person
Mr. Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the above
technical disclosure on Turkey.
AUSTRALIA AND ASIA-PACIFIC
Eurasian’s Australia and Asia-Pacific business unit continued to focus on exploring the Koonenberry gold belt in New South Wales, Australia. The
Company also acquired the Neavesville gold-silver property located in the Hauraki goldfield of New Zealand's North Island and subsequently executed a
definitive agreement with Glass Earth Gold Limited (TSX-V: GEL; NZAX: GEL) for an option to acquire the property from Eurasian. EMX continues to
identify early stage exploration opportunities throughout the region.
Koonenberry, NSW, Australia
EMX’s Koonenberry gold project is covered by over 1,600 square kilometers of contiguous exploration licenses either 100% owned or controlled by
Eurasian. The licenses cover prospective ground that hosts gold occurrences and exploration targets along the length of the 100 kilometer Koonenberry
gold belt. The license package was reduced from the previous year following the relinquishment of less prospective areas.
EMX’s exploration team completed 400 square kilometers of 1:20,000 scale geological mapping and rock-chip sampling, in addition to finishing BLEG
(Bulk Leach Extractable Gold) stream sediment sampling over the entire project area in 2012. As well, a series of detailed geochemical grids were
completed over structural targets identified by more than 1,000 samples of surficial lag, 17,000 meters of shallow regolith drilling, and a number of
trenches. This substantial work program led to the identification of priority targets for follow-up reverse circulation (“RC”) drilling.
Page 7
EMX’s 1,300 meters of RC drilling identified zones of bedrock gold mineralization hosted in carbonaceous sediments with silica-sulfide alteration within
the Nuntherungie Basin. Drill intercepts include 5 meters averaging 0.7 g/t gold, 9 meters averaging 0.4 g/t gold, 4 meters averaging 0.6 g/t gold, and 2
meters averaging 0.6 g/t gold (true widths unknown). These drill results are an especially important advancement for the project, as a key objective at
Koonenberry has been to identify and delineate the bedrock source(s) of eluvial gold specimens found on the property.
Exploration in 2013 will follow-up on further first-pass exploration targets resulting from EMX’s enhanced understanding of the geological and
mineralization controls in the region. On-going discussions continue with potential parties interested in partnering with EMX on the property.
EMX’s Koonenberry exploration samples were collected in accordance with accepted industry standards and procedures. Samples were typically
submitted to ALS Chemex in Brisbane (ISO 17025 accredited). Gold was analyzed by fire assay with an ICP AES finish, and multi-element analyses
were determined with aqua regia digestion and ICP MS/AAS techniques. BLEG analysis was by ICPMS. Routine QA/QC analysis was conducted on all
assay results, including the systematic utilization of blanks, standards, and field duplicates.
Neavesville, New Zealand
The Neavesville property occurs in the Hauraki goldfield of New Zealand's North Island. The property hosts a variety of gold-silver mineralization styles
that include replacement bodies in black shales and breccias, as well as higher-grade, structurally controlled quartz veins. This mineralization has
geologic features similar to other deposits of the Hauraki goldfield, including Newmont's Martha Hill gold-silver mine located 25 kilometers to the
southeast. EMX acquired the Neavesville exploration permits by staking and with minimal cost.
EMX granted an option to acquire the property to Glass Earth Gold Limited in November 2012. The agreement was structured with a) in-ground spending
requirements to further develop the asset's value, including 5,000 meters of drilling to confirm the historic results and issue a current NI 43-101 or Joint
Ore Reserves Committee (“JORC”) compliant resource technical report, b) a pre-production revenue stream denominated in terms of gold ounces, and c)
a revenue stream based on production, all to the benefit of EMX.
The Neavesville project consists of two exploration permits totaling over 30 square kilometers that cover two main centers of epithermal gold-silver
mineralization (i.e., Neavesville and Chelmsford). The principal target, named Trig Bluffs, has a historic near-surface inferred resource of 3.2 million
tonnes averaging 2.7 g/t gold and 8.9 g/t silver, and containing 289,000 ounces of gold and 944,000 ounces of silver (R. Brathwaite, IGNS report, 1999;
2001). In addition, a separate higher-grade historic inferred mineral resource of approximately 0.47 million tonnes at 7.1 g/t gold and 20.7 g/t silver, and
containing 107,000 ounces of gold and 312,000 ounces of silver, was reported for mineralization at depth beneath Trig Bluffs (R. Brathwaite, IGNS
report, 1999; 2001). A Qualified Person has not performed sufficient work to classify the historic estimates as current mineral resources, and EMX is not
treating the estimates as current mineral resources. The historic estimates should not be relied upon until they can be confirmed. However, the drill-
delineated Trig Bluffs gold-silver mineralization described in the IGNS report is considered relevant.
During the reporting period, EMX conducted reconnaissance due diligence geologic mapping, verification rock sampling, and a geophysical survey at
Neavesville. Over 20% of EMX's rock samples (total of 35 samples) assayed greater than 0.2 g/t gold, including 4.12 g/t, 2.74 g/t, and 1.89 g/t gold. EMX
conducted an orientation Controlled Source Audio-Frequency Magneto Tellurics (“CSAMT”) geophysical survey over the project, which highlighted the
known areas of mineralization, as well as a number of previously unknown or untested mineralized targets. The CSAMT survey highlighted the relatively
underexplored nature of the project, even though the property hosts a historic JORC resource.
See EMX’s news release dated November 19, 2012 for further details on the historic resource, agreement with Glass Earth, EMX’s exploration results
and for a description of the Quality Assurance and Quality Control measures used by Eurasian for its Neavesville project.
Page 8
Qualified Person
Mr. Chris Spurway, MAIG, MAusIMM, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has reviewed and
approved the above technical disclosure on Australia and the Asia-Pacific.
HAITI
Eurasian and joint venture partner Newmont Ventures Limited (“Newmont”), a wholly owned subsidiary of Newmont Mining Corporation (collectively,
the “JV”), are exploring a land position along 130 kilometers of strike length of Haiti’s Massif du Nord mineral belt. Newmont is funding and managing
exploration for six joint venture Designated Projects across northern Haiti that contain multiple gold, copper, copper-gold and copper-gold-silver
occurrences, prospects, and deposits.
Designated Projects with Newmont
An over-arching focus of the JV’s exploration programs has been systematic evaluation of the JV’s extensive property portfolio across northern Haiti.
These programs included: (a) geological mapping (69 square kilometers) and road-cut/trench mapping (645 meters), (b) geochemical sampling (combined
total of 14,060 soil/auger, rock, BLEG, and channel/trench samples), and (c) ground geophysical surveys (148.9 line-kilometers of magnetics and 39.4
line-kilometers of dipole IP). This work was conducted on several high priority projects and exploration targets at the La Miel, Northwest Haiti, North
Central Haiti, Northeast Haiti, and Grand Bois “surrounding properties” Designated Projects.
A Memorandum of Understanding (“MOU”) signed by the JV and the government of Haiti was announced in April 2012. The MOU established
protocols to continue discussions regarding the pending Mining Convention and allowed drilling on select projects. Subsequently, Newmont reported
reconnaissance drilling at the La Miel Designated Project that consisted of thirteen core holes totaling 2,207 meters.
Government Negotiations and Mining Convention
Negotiations with the Government of Haiti to conclude the Mining Convention are ongoing. Once ratified, the Mining Convention will set the financial
and related conditions for project exploration, development, exploitation and closure. The joint venture has put all field exploration programs in Haiti on
care and maintenance status pending a satisfactory outcome of these discussions.
EMX’s Grand Bois Research Permit
As announced in April 2012 Newmont relinquished its interest to EMX in the 50 square kilometer Research Permit that covers the Grand Bois historic
resource area. The joint venture’s previous drilling tested the near-surface, oxide gold zone, as well as the property’s copper exploration potential.
EMX is in discussions with the Haitian government for a two year extension to explore the property’s porphyry potential. Although initial indications
were positive, it is now unclear whether the license extension will be granted or not. As a result, EMX placed the work related to the Grand Bois technical
report on hold pending the government’s decision on the requested extension.
Qualified Person
Mr. Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the above technical
disclosure on Haiti.
Page 9
NORTH AMERICA
Eurasian’s property and royalty portfolio in North America, held through wholly-owned subsidiary Bronco Creek Exploration (“BCE”), is comprised of
24 exploration properties covering more than 46,000 hectares in Arizona, Nevada, Utah, and Wyoming. The portfolio includes porphyry copper-
molybdenum, porphyry copper-gold, bulk tonnage gold, and high-grade gold-silver vein targets. Eurasian currently has five properties partnered through
BCE.
EMX acquired four new porphyry copper projects and one gold project through generative work substantially funded by its partners in 2012. In addition,
EMX acquired two grassroots gold exploration properties in Alaska during the year.
The Copper Basin copper-molybdenum property is a Designated Project with Vale. Vale can earn an initial 60% interest in the Copper Basin Designated
Project by spending US $4.5 million in exploration expenditures over a four year period that started in September, 2011. Vale is 100% funding a 2013
drill program. EMX also had a Regional Acquisition Agreement with Vale, but Vale elected to terminate the regional program in 2012. EMX now 100%
controls the properties that were covered under the regional program with Vale, and has quickly gained interest from a number of potential partners for
available projects in the portfolio.
Copper Basin Designated Project
The Copper Basin copper-molybdenum property is located in central Arizona, approximately 50 kilometers north-northwest of Phoenix. The project
contains numerous surface shows of copper mineralization and portions of the property were explored during the porphyry copper exploration boom of
the 1960s and 1970s. Fifteen known drill holes were completed during this period within a tightly confined, 500 by 1000 meter area. While most of the
holes were shallow (i.e., less than 130 meters total depth), Humble Oil and Refining Company completed five deeper holes. The historic drill results
identified the presence of a copper-molybdenum mineralized porphyry system.
The Company’s geologic mapping, geochemical sampling, and an airborne (ZTEM and magnetic) geophysical survey identified four new copper-
molybdenum mineralized breccias during the last year. The breccias show evidence for multiple pulses of alteration and mineralization. EMX’s work has
increased the surface expression of the Copper Basin system from 0.5 square kilometers to a 1.5 square kilometer target area of porphyry-style alteration
and mineralization. The Copper Basin drill program with Vale is currently underway, with Eurasian as the operator.
Mesa Well
The Mesa Well property, located in southeastern Arizona, is a porphyry copper-molybdenum target. A four-hole, 2,151 meter drill program, funded by
Vale, was completed in the first quarter of 2012. Two holes intersected porphyry-style alteration and veining with associated weak copper-molybdenum
mineralization that increased in intensity to the north. Vale relinquished its rights to the Mesa Well Designated Project in June 2012. EMX has completed
permitting for a follow-up drill program over new target areas.
Silver Bell West
The Silver Bell West project, partnered with GeoNovus Minerals Corp. (“GeoNovus”) (TSX-V: GNM), is a porphyry copper-molybdenum target
adjacent to the active ASARCO Oxide Pit mine located northwest of Tucson, Arizona. EMX recently completed a GeoNovus funded geologic mapping
campaign that identified surface alteration and mineralization patterns for follow-up drill testing. As announced by GeoNovus in a February 19, 2013
news release, the two hole 2013 drill program totalled 696.5 meters, and encountered hydrothermally altered granite; assay results are pending.
Red Hills
The Red Hills porphyry copper-molybdenum property, located in central Arizona, is partnered with GeoNovus and Inmet Mining Corp. (TSX:IMN). In
September GeoNovus issued a news release on the 2012 drill results. As reported by GeoNovus, reconnaissance hole RH-2 confirmed the presence of a
fault-displaced portion of a porphyry system under Tertiary gravels, including intercepts of 0.39% Cu over 9.75 meters and 0.42% Cu over 11.8 meters
(true widths are unknown). In a February 25, 2013 news release GeoNovus announced commencement of a follow-up drill program that is currently
underway.
Page 10
Middle Mountain
The Middle Mountain property is a porphyry copper-molybdenum target located in central Arizona that is partnered with GeoNovus and Inmet Mining
Corp. Beginning in September 2012, two holes totaling 687 meters were drilled to test IP anomalies and geochemical zoning identified from historic data.
EMX’s evaluation of the exploration data, which in total includes 30 kilometers of IP and 16 drill holes totaling 4,323 meters, led to the conclusion that
the drilling to date significantly reduced the property’s potential. On February 8, 2013, Inmet and GeoNovus terminated the program.
Superior West
The Superior West JV with Freeport McMoRan Exploration Corporation (“Freeport”) is located west of the historic mining town of Superior, Arizona,
and adjacent to the Resolution Copper property. The Superior West property covers several porphyry copper targets, as well as the western extension of
the historic Magma Vein. Freeport completed a two hole, 1,972 meter reconnaissance drill program in 2012 that targeted a previously identified
geophysical anomaly adjacent to historic drilling and intersected weak porphyry-style alteration and anomalous copper geochemistry.
Yerington West
The Yerington West property is located in the Yerington mining district of west-central Nevada. EMX geologists identified a previously unrecognized
porphyry center concealed beneath younger cover rocks in the southwestern portion of the district. Joint venture partner Entrée Gold Inc. (“Entrée”)
(TSX:ETG; NYSE:EGI) funded drilling in 2010, with one hole reaching the target depths beneath post-mineral cover and intersecting 120 meters of
porphyry-style mineralization. Entrée completed a second hole in 2012 that encountered weak alteration and mineralization. Based upon EMX’s
structural geologic reconstructions, the most recent hole is situated distal from the projected porphyry center, and as a result, significant mineralization
was not expected.
Other Work Conducted by Eurasian in the Western U.S. and Alaska
EMX continued field evaluation of other properties in the BCE portfolio, as well as grassroots exploration for Carlin-type systems in Nevada and
porphyry copper targets in Arizona, Nevada, and Utah. New opportunities were also evaluated in Alaska, including the Moran Dome and Liberty gold
properties.
EMX is in discussions with a number of potential partners for available North American properties, as well as for regional exploration alliances.
Qualified Person
Mr. Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the above technical
disclosure on North America.
EUROPE
EMX’s work focused on the exploration programs in Sweden during the year, while also reviewing early-stage business opportunities elsewhere in
Europe.
Sweden
Eurasian’s Swedish subsidiary has a portfolio of 27 exploration permits totaling over 1,050 square kilometers. This portfolio includes porphyry copper
and Iron-Oxide-Copper-Gold (IOCG) properties, in addition to known areas of copper, gold, and platinum group element-enriched styles of
mineralization. EMX entered into a Strategic Alliance and Earn-In Agreement focused on copper exploration with Antofagasta Minerals S.A.
(“Antofagasta”) in 2011. The Company’s 2012 work focused on property acquisitions, assessments and drill testing of portions of the Kiruna South
Designated Project.
Page 11
EMX and Antofagasta Strategic Alliance. EMX and Antofagasta are conducting copper exploration in Sweden under a Strategic Regional Alliance
Agreement. Seventeen of EMX’s exploration licenses are in partnership with Antofagasta. EMX nominates properties with high exploration potential for
Antofagasta’s consideration as Designated Projects. Antofagasta can choose to accept Designated Project status for a property by entering into a Joint
Venture Earn-in Agreement with a right to earn up to 70% of the project. If a property is declined as a Designated Project, EMX is free to advance that
property on its own terms with no further obligation to Antofagasta. Kiruna South is a Designated Project comprised of multiple exploration licenses in
the Kiruna area. In 2012, Antofagasta sole funded work within the Kiruna South Designated Project. Antofagasta also selected the Norrmyran property as
a Designated Project in January 2012, but later relinquished its rights and the property is now 100% controlled by EMX.
Kiruna South Designated Project. The Kiruna South Designated Project is located in the Kiruna iron-copper-gold metallogenic province of northern
Sweden. EMX reported results from a seven hole, 1,975 meter reconnaissance diamond drill program at the Sakkek prospect on July 9, 2012. Drill hole
SAK-1B intercepted 60.5 meters of 0.24 % copper and 0.11 g/t gold and drill hole SAK-2B intercepted 147.3 meters of 0.17 % copper and 0.1 g/t gold
(true widths unknown). Drill hole SAK-4, drilled 300 meters to the south, also intersected mineralization at the bottom of the hole. Mineralization in these
three holes is primarily hosted in hydrothermal breccias and vein swarms cutting strongly altered granitoids and rhyolitic dikes. See Company news
release dated July 9, 2012 for further details on EMX’s exploration results and a description of the Quality Assurance and Quality Control measures used
for the Sakkek prospect drilling.
EMX and Antofagasta also conducted reconnaissance diamond drilling on the Saivo 3 prospect during the last year targeting a 25 kilometer long
structural corridor containing multiple geochemical copper anomalies identified by historic till sampling programs. Three shallow reconnaissance core
holes intersected copper mineralization developed along structural features cutting weakly altered granitoid and metasedimentary host rocks. The joint
venture is planning a program of deep till sampling to refine drill targets for a follow-up campaign.
Other EMX Property Interests in Sweden. EMX is advancing the Storåsen copper-gold-PGE property and the Aitik South copper-gold property outside
of the Strategic Regional Alliance with Antofagasta. EMX also holds royalty interests in the Viscaria and Adak properties acquired from the 2010
purchase of the Phelps Dodge Exploration Sweden AB assets.
Serbian Royalty Properties
EMX has NSR royalties 2% on gold and silver, and 1% on all other metals over certain properties held by Reservoir Minerals Inc. (“Reservoir”) (TSX-V:
RMC). Eurasian’s Serbian properties were sold to a predecessor in title to Reservoir in 2006 for cash, NSR royalties, work commitments, and other
considerations.
Reservoir announced encouraging drill results from their Timok joint venture with Freeport during 2012. (Reservoir’s news releases dated March 1, July
16, September 4, and December 10, 2012). EMX’s Brestovac royalty property is part of the land package that makes up the Timok JV. Reservoir’s drill
results are not on EMX’s royalty ground, but are located approximately 1,000 meters east of the property boundary. Although Brestovac has prospective
geology related to the nearby area that Reservoir reported the drill results from, this is not necessarily indicative that similar mineralization occurs within
EMX’s royalty property position. Elsewhere in EMX’s Serbian royalty portfolio, encouraging high-grade gold intercepts were recently reported by
Reservoir from the Deli Jovan project (Reservoir news release dated February 27, 2013).
Qualified Person
Dr. Duncan Large, Eur. Geol., C. Eng, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed and approved the above
technical disclosure on Europe.
KYRGYZ REPUBLIC
EMX’s Gezart property and other assets were sold to South Korea’s Young Hyun Chemical Company for a 2.5% NSR royalty and a US $30,000 cash
payment. All of EMX’s in-country assets have been divested, debts cleared, and programs terminated.
Page 12
RESULTS OF OPERATIONS
Year ended December 31, 2012
The net loss for the year ended December 31, 2012 was $20,902,053 compared to $9,748,817 for the prior year’s comparative period which was the nine
months ended December 31, 2011 (“prior period” or “2011”) due to the Company’s change in year end. The comparison of a twelve month period for
2012 to the nine month period for 2011 should be considered when reviewing the results of operations. The loss for the year ended December 31, 2012
was made up of $8,330,201 (2011 - $3,837,224) in net exploration expenditures, $9,393,196 (2011 - $5,632,573) in general and administrative expenses,
and other losses totaling $3,715,691 (2011 - $279,020) offset by $537,035 (2011 – $Nil) in net royalty income. Some items to note are:
Revenues:
The Company began receiving royalty revenue from the Leeville royalty on August 17, 2012. Royalty income for the year ended December 31, 2012 was
$1,750,975 offset by gold tax and depletion of $1,213,940 for net royalty income of $537,035 (2011 - $Nil).
Exploration Expenditures:
Net exploration expenditures increased by $4,492,977 to $8,330,201 in the year. Significant aspects of the increase were:
(cid:122) Expenditures at Koonenbury in Australia increased by $1,147,787 to $2,136,044 as the Company was required to meet certain minimum
expenditure commitments pursuant to property agreements.
(cid:122) The Company spent $1,430,225 in Turkey, compared to $486,661 in the prior period. The costs for the Akarca project were primarily paid for by
Centerra in 2011, however, in 2012 the Akarca project reverted back to 100% EMX at which time the Company incurred all expenses on the
project.
(cid:122) The Company incurred $538,123 on exploration projects in Brazil held by its recently acquired wholly owned subsidiary, Bullion Monarch.
(cid:122) In the USA, the Company incurred $1,983,542 in net expenditures compared with $919,258 for the prior period partly due to the termination of
the Regional Acquisition Agreement with Vale during the year, and partly due to increased exploration activities.
(cid:122) In April 2012, Newmont relinquished its interest to EMX in the 50 square kilometer Research Permit that covers the Grand Bois historic resource
area, and the Company incurred $630,527 in expenditures related to ongoing management of the project and a Preliminary Economic Assessment.
General and Administrative and Other
(cid:122) General and administrative (“G&A”) expenses increased from $5,632,573 to $9,393,196 for the current year. The year 2012 was very active at the
corporate level and significant costs were incurred. The Company investigated numerous strategic investments and incurred legal and other
diligence expenses on these business development activities. The Company incurred expenses for its New York Stock Exchange (“NYSE”)
listing, including legal, accounting, filing, and NYSE listing fees. Increases in salaries and consulting costs from $1,385,974 to $3,123,266 were
due to additions to key positions within the Company’s technical team, increased remuneration levels, an accrual for severance payments and an
increased number of consultants engaged to support the Company’s business development area. Other key personnel were added during the year
such as the Company’s Chief Legal Officer. The Company also incurred costs related to the office relocation of its Denver based subsidiary and
an overall increase in the administrative overheads of the Vancouver and US offices to support the increased corporate activity during the year.
The Company has assessed its level of G&A expenditures, and during 2013 has undertaken cost cutting measures aimed at reducing these costs.
Page 13
(cid:122) Substantial costs were incurred for the acquisition of Bullion Monarch ($940,591 in addition to transfer agent and filings fees in excess of
$250,000 directly related to the transaction).
(cid:122) The Company incurred an equity loss in associated companies of $1,144,407 (2011 - $177,411) which is primarily EMX’s portion of the
exploration expenditures incurred by IGR on the Malmyzh project. The Company acquired its interest in IGR in Q3 of 2011 which is reflected in
the lower equity loss of $177,411 in the prior period.
(cid:122) A change in the fair value of held-for-trading investments resulted in a loss of $662,957 for the current year, compared to a loss of $13,326 in the
prior period.
(cid:122) The Company incurred a write-off of exploration and evaluation assets of $1,362,723 which was an increase in loss of $953,851 from the
$408,872 that was written-off in the prior period.
Three month period ended December 31, 2012
The Company had a loss of $6,267,944 (2011 - $3,266,452) for the three months ended December 31, 2012. The loss was greater than its comparative
period for the same reasons discussed above for the year with the exception of the $537,035 net royalty income.
LIQUIDITY
The Company’s working capital position at December 31, 2012 was $22,702,855 (2011 - $40,742,549) and is sufficient to fund its exploration programs
and administrative expenditures through and beyond the next twelve months. The Company obtains its cash requirements through the issuance of shares,
funding from joint venture partners, royalty income, attracting additional joint venture partners and the sale of available investments and marketable
securities all of which are used to finance further property acquisitions, explore and develop its mineral properties, and obtain strategic investments.
During 2012, the Company acquired Bullion and began receiving royalty revenue from Bullion’s 1% GSR on the Leeville royalty. These royalty revenues
will be used to offset expenditures during the upcoming year; however, the Company cannot predict the level of royalty income that it will receive from
Newmont from the GSR.
Operating activities
Cash used in operations was $14,369,528 for the year ended December 31, 2012 (2011 - $5,265,150) and represents expenditures primarily on mineral
property exploration and secondarily on general and administrative expense for both periods, offset by royalty income received in the year.
Financing activities
The Company received $1,049,670 (2011 - $525,728) from the exercise of stock options and $1,898,995 (2011 - $Nil) from the exercise of warrants for a
total of $2,948,665 in cash provided by financing activities.
Investing activities
During the year ended December 31, 2012, Eurasian expended $4,279,727 related to the acquisition of Bullion Monarch Mining (2011 - $Nil) which was
offset by $318,378 of cash acquired in the acquisition. Also during the year, the Company received $360,791 (2011 - $343,145) as interest on its cash and
cash equivalents. The Company expended $1,969,705 (2011 - $566,882) on the purchase of strategic investment marketable securities and received
$768,418 (2011 - $86,200) on the sale of marketable securities. Eurasian expended $2,061,551 (2011 - $1,993,188) on the purchase of its equity
investment in IGR and now owns greater than 36% of IGR on a fully diluted basis. The Company purchased property and equipment in the amount of
$1,236,022 (2011 - $158,215), the majority of which relates to the Company’s new Denver office. Restricted cash utilized $78,473 (2011 - $231,132) and
cash expended in the acquisition of exploration and evaluation assets was $128,146 (2011 - $92,871).
Page 14
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements.
ANNUAL INFORMATION
As at
Financial positions
Working capital
Exploration and evaluation assets (net)
Royalty interest
Total assets
Share capital
Deficit
Financial results
Royalty income
Exploration expenditures (net)
Net loss
Net loss per share - basic and diluted
QUARTERLY INFORMATION
December 31, 2012 December 31, 2011 March 31, 2011
$
22,702,855 $
4,940,941
38,738,592
82,475,787
114,414,001
(55,999,368)
40,742,549 $
6,086,396
-
52,030,105
77,122,016
(35,097,315)
48,076,222
6,253,850
-
57,198,191
75,058,770
(25,348,498)
Year ended
Year ended
December 31, 2012 December 31, 2011 March 31, 2011
Nine month
period ended
$
1,750,975 $
8,330,201
(20,916,730)
(0.35)
- $
3,837,224
(9,748,817)
(0.19)
-
4,755,768
(10,309,566)
(0.26)
Fiscal quarter ended
December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012
Royalty income
Exploration expenditures
Exploration recoveries
Share-based payments
Net loss for the period
Basic and diluted net loss per share
$
1,198,727 $
3,652,142
(847,539)
1,045,146
(6,267,944)
(0.07)
552,248 $
3,541,622
(881,560)
964,063
(6,550,000)
(0.12)
- $
4,180,475
(2,351,981)
197,023
(4,030,597)
(0.08)
-
2,114,067
(1,077,025)
593,377
(4,053,512)
(0.08)
Fiscal quarter ended
December 31, 2011 September 30, 2011 June 30, 2011 March 31, 2011
Royalty income
Exploration expenditures
Exploration recoveries
Share-based payments
Net loss for the period
Basic and diluted net loss per share
-
2,841,775
(2,002,969)
458,091
(3,266,452)
(0.07)
-
2,736,112
(1,113,336)
1,668,471
(4,257,189)
(0.08)
-
2,858,256
(1,482,614)
191,091
(2,225,176)
(0.04)
-
3,189,698
(1,469,725)
601,867
(3,817,547)
(0.08)
Factors that cause fluctuations in the Company’s quarterly results include the timing of stock option grants, foreign exchange gains and losses related to
the Company’s holding of United States dollar denominated working capital items, gains or losses on investments held in its portfolio, along with
fluctuating levels of operations activities on its exploration projects and due diligence undertaken on new prospects. See also “Forward Looking
Information” above.
Page 15
RELATED PARTY TRANSACTIONS
The aggregate value of transactions and outstanding balances relating to key management personnel and directors were as follows:
For the twelve month period ended December 31, 2012
Management
Outside directors
Seabord Services Corp. *
Total
For the nine month period ended December 31, 2011
Management
Outside directors
Seabord Services Corp. *
Total
Salary or Fees
Share-based
Payments
742,003 $
102,000
477,600
1,321,603 $
940,920 $
306,159
-
1,247,079 $
Salary or Fees
Share-based
Payments
408,251 $
72,000
319,800
800,051 $
1,106,131 $
323,951
-
1,430,082 $
$
$
$
$
Total
1,682,923
408,159
477,600
2,568,682
Total
1,514,382
395,951
319,800
2,230,133
(*)Seabord Services Corp. (“Seabord”) is a management services company controlled by Michael Winn, the Chairman of the Board. Seabord provides a
chief financial officer, a corporate secretary, accounting staff, administration staff and office space to Eurasian. Christina Cepeliauskas, the Chief
Financial Officer, and Valerie Barlow, the Corporate Secretary, are employees of Seabord and are not paid directly by Eurasian.
Related Party Assets and Liabilities
Amounts due to:
David M. Cole, President and CEO
Christina Cepeliauskas, CFO
Directors
Seabord Capital Corp.
Service or Term
December 31, 2012
December 31, 2011
Expense reimbursement
Expense reimbursement
Fees and expense reimbursement
Expense Reimbursement
$
$
7,579 $
3,822
38,047
572
50,020 $
33,289
-
-
-
33,289
ACCOUNTING POLICIES
New accounting policies
Revenue Recognition
The Company recognizes revenue in accordance with IAS 18 Revenue. Royalty revenue is recognized when persuasive evidence of an arrangement exists,
title and risk passes to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the sale will
flow to the entity and the costs incurred in respect of the transaction can be measured reliably. Royalty revenue may be subject to adjustment upon final
settlement of estimated metal prices, weights, and assays. Adjustments to revenue from metal prices are recorded monthly and other adjustments are
recorded on final settlement and are offset against revenue when incurred.
Royalty Interests
Page 16
Royalty interests in mineral properties include acquired royalty interests in production stage and development stage properties. In accordance with IAS 38
Intangible Assets, the fair value of acquired royalty interests in mineral properties is capitalized as intangible assets.
Acquisition costs of production stage royalty interests are depleted using the units of production method over the life of the mineral property, which is
calculated using estimated reserves. Acquisition costs of royalty interests on exploration stage mineral properties, where there are no proven and probable
reserves, are not amortized. At such time as the associated exploration stage mineral interests are converted to proven and probable reserves, the cost
basis is amortized over the remaining life of the mineral property, using proven and probable reserves. The carrying values of exploration stage mineral
interests are evaluated for impairment at such time as information becomes available indicating that the production will not occur in the future.
Goodwill
Goodwill represents the excess of the price paid for the acquisition of a consolidated entity over the fair value of the net identifiable tangible and
intangible assets and liabilities acquired. Goodwill is allocated to the cash generating unit to which it relates.
Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is determined by
assessing if the carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount. The assessment of the
recoverable amount used in the goodwill impairment analysis is subject to similar judgments and estimates as described above for property, plant and
equipment and mine properties.
Amendments to IFRS 7 Financial Instruments: Disclosures
The amendments increase disclosure with regards to the transfer of financial assets, especially if there is a disproportionate amount of transfer
transactions that take place around the end of a reporting period.
Amendments to IAS 12 Income Taxes
The amendments are made regarding Deferred Tax: Recovery of Underlying Assets and introduce an exception to the existing principle for the
measurement of deferred tax assets and liabilities arising on an investment property measured at fair value, and the requirement that deferred tax on non-
depreciable assets measured using the revaluation model in IAS 16 Property, Plant and Equipment should always be on a sales basis.
Effective January 1, 2012, the Company has adopted amendments to IFRS 7, Financial Instruments: Disclosures, and IAS 12, Income Taxes, and
concluded that there are no material changes as a result of adopting these amendments.
Significant accounting policies and interpretations issued but not yet effective
The Company has initially assessed that there will be no material reporting changes as a result of adopting the new standards outlined below; however,
enhanced disclosure requirements are expected.
(a) Effective for annual periods beginning on or after January 1, 2013
(cid:122) IFRS 10 Consolidated Financial Statements
This new standard provides a new single consolidation model that identifies control as the basis for consolidation for all types of entities, and
replaces IAS 27 Consolidated and Separate Financial Statements and SIC-12
Consolidation – Special Purpose Entities.
(cid:122) IFRS 11 Joint Arrangements
This new standard improves the accounting for joint arrangements by introducing a principle-based approach that requires a party to a joint
arrangement to recognize its rights and obligations arising from the arrangement. Such a principle-based approach will provide users with greater
clarity about an entity’s involvement in its joint arrangements by increasing the verifiability, comparability and understandability of the reporting
of these arrangements. IFRS 11 supersedes IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities-Non- Monetary
Contributions by Venturers.
Page 17
(cid:122) IFRS 12 Disclosure of Interests in Other Entities
This new standard combines, enhances and replaces the disclosure requirements for subsidiaries, joint arrangements, associates and
unconsolidated structured entities.
(cid:122) IFRS 13 Fair Value Measurement
This new standard defines fair value and sets out a framework for measuring fair value and disclosures about fair value measurements. It applies
when other IFRS require or permit fair value measurements. It does not introduce any new requirements to measure an asset or a liability at fair
value, change what is measured at fair value in IFRS or address how to present changes in fair value.
(cid:122) Amendments to IAS 27 Consolidated and Separate Financial Statements
The amendments provide guidance on the accounting and disclosure requirements for subsidiaries, jointly controlled entities, and associates in
separate, or unconsolidated, financial statements.
(cid:122) Amendments to IAS 28 Investments in Associates
The amendments provide guidance on the application of the equity method to associates, subsidiaries and joint ventures.
(b) Effective for annual periods beginning on or after January 1, 2015
(cid:122) IFRS 9 Financial Instruments
This new standard partially replaces IAS 39 Financial Instruments: Recognition and Measurement.
Critical Account Judgments and Significant Estimates and Uncertainties
The preparation of the consolidated financial statements requires management to make judgments and estimates and form assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the periods presented
therein. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, royalty revenues and expenses.
Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances.
Actual results may differ from these estimates under different assumptions and conditions.
The Company has identified the accounting for the acquisition of Bullion as areas that required critical judgments in applying accounting policies that had
a significant effect on the amounts recognized in the consolidated financial statements. Details of the transaction are disclosed in Note 3 to the
consolidated financial statements for the year ended December 31, 2012.
The Company has identified the following critical accounting policies in which significant judgments, estimates and assumptions are made and where
actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial
position reported in future periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes to consolidated
financial statements for the year ended December 31, 2012.
a)
Royalty interest and related depletion
Page 18
In accordance with the Company’s accounting policy, royalty interests are evaluated on a periodic basis to determine whether there are any indications of
impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss recognized to the extent that
carrying amount exceeds recoverable amount. The recoverable amount of a royalty asset is measured at the higher of fair value less costs to sell and value
in use. The determination of fair value and value in use requires management to make estimates and assumptions about expected production and sales
volumes, commodity prices (considering current and historical prices, price trends and related factors), and reserves. These estimates and assumptions are
subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable
amount of the assets. In such circumstances, some or all of the carrying value of the assets may be further impaired or the impairment charge reduced
with the impact recorded in profit or loss.
b)
Goodwill
Goodwill represents the excess of the price paid for the acquisition of a consolidated entity over the fair value of the net identifiable tangible and
intangible assets and liabilities acquired. Goodwill is allocated to the cash generating unit to which it relates.
Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is determined by
assessing if the carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount. The assessment of the
recoverable amount used in the goodwill impairment analysis is subject to similar judgments and estimates as described above for property, plant and
equipment and royalty properties.
c)
Exploration and Evaluation Assets
Recorded costs of exploration and evaluation assets are not intended to reflect present or future values of exploration and evaluation assets. The recorded
costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that a change in future conditions could require a
material change in the recognized amount
d)
Taxation
The Company’s accounting policy for taxation requires management’s judgment as to the types of arrangements considered to be a tax on income in
contrast to an operating cost. Judgment is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized on the
balance sheet.
Deferred tax assets, including those arising from unused tax losses, capital losses and temporary differences, are recognized only where it is considered
probable that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from
temporary differences caused principally by the expected royalty revenues generated by the royalty property are recognized unless expected tax losses
applicable to the royalty stream are sufficient to offset the taxable income and therefore, taxable income is not expected to occur in the foreseeable future.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future
production and sales volumes, commodity prices, and reserves. Judgments are also required about the application of income tax legislation in foreign
jurisdictions. These judgments and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter
expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the balance sheet and the amount of other tax
losses and temporary differences not yet recognized. In such circumstances, some or the entire carrying amount of recognized deferred tax assets and
liabilities may require adjustment, resulting in a corresponding credit or charge to profit or loss.
Page 19
RISKS AND UNCERTAINTIES
Mineral Property Exploration Risks
The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored ultimately become producing mines.
At present, none of the Company’s properties has a known commercial ore deposit. The main operating risks include: ensuring ownership of and access to
mineral properties by confirmation that option agreements, claims and leases are in good standing and obtaining permits for drilling and other exploration
activities.
Eurasian is currently earning an interest in certain of its properties through option agreements and acquisition of title to the properties is only completed
when the option conditions have been met. These conditions generally include making property payments, incurring exploration expenditures on the
properties and can include the satisfactory completion of pre-feasibility studies. If the Company does not satisfactorily complete these option conditions
in the time frame laid out in the option agreements, the Company’s title to the related property will not vest and the Company will have to write-off the
previously capitalized costs related to that property.
The market prices for precious and base metals can be volatile and there is no assurance that a profitable market will exist for a production decision to be
made or for the ultimate sale of the metals even if commercial quantities of precious and other metals are discovered.
Revenue and Royalty Risks
Eurasian cannot predict future revenues or operating results of the area of mining activity. Management expects future revenues from its Carlin Trend
royalty property in Nevada to fluctuate depending on the level of future production and the price of gold. Specifically, there is a risk that Newmont will
cease to operate in the Company’s area of interest, therefore there can be no assurance that ongoing royalty payments will materialize or be received by
Eurasian.
Financing and Share Price Fluctuation Risks
Eurasian has limited financial resources, and has no assurance that additional funding will be available for further exploration and development of its
projects. Further exploration and development of one or more of the Company’s projects may be dependent upon the Company’s ability to obtain
financing through equity or debt financing or other means. Failure to obtain this financing could result in delay or indefinite postponement of further
exploration and development of its projects which could result in the loss of one or more of its properties.
The securities markets can experience a high degree of price and volume volatility, and the market price of securities of many companies, particularly
those considered to be development stage companies such as Eurasian, may experience wide fluctuations in share prices which will not necessarily be
related to their operating performance, underlying asset values or prospects. There can be no assurance that share price fluctuations will not occur in the
future, and if they do occur, the severity of the impact on Eurasian’s ability to raise additional funds through equity issues.
Foreign Countries and Political Risks
The Company operates in countries with varied political and economic environments. As such, it is subject to certain risks, including currency
fluctuations and possible political or economic instability which may result in the impairment or loss of mineral concessions or other mineral rights,
opposition from environmental or other non-governmental organizations, and mineral exploration and mining activities may be affected in varying
degrees by political stability and government regulations relating to the mineral exploration and mining industry. Any changes in regulations or shifts in
political attitudes are beyond the control of the Company and may adversely affect its business. Exploration and development may be affected in varying
degrees by government regulations with respect to restrictions on future exploitation and production, price controls, export controls, foreign exchange
controls, income taxes, expropriation of property, environmental legislation and mine and site safety.
Notwithstanding any progress in restructuring political institutions or economic conditions, the present administration, or successor governments, of some
countries in which Eurasian operates may not be able to sustain any progress. If any negative changes occur in the political or economic environment of
these countries, it may have an adverse effect on the Company’s operations in those countries. The Company does not carry political risk insurance.
Page 20
Competition
The Company competes with many companies and individuals that have substantially greater financial and technical resources than the Company for the
acquisition and development of its projects as well as for the recruitment and retention of qualified employees.
Return on Investment Risk
Investors cannot expect to receive a dividend on their investment in the foreseeable future, if at all.
No Assurance of Titles or Borders
The acquisition of the right to exploit mineral properties is a very detailed and time consuming process. There can be no guarantee that the Company has
acquired title to any such surface or mineral rights or that such rights will be obtained in the future. To the extent they are obtained, titles to the
Company’s surface or mineral properties may be challenged or impugned and title insurance is generally not available. The Company’s surface or mineral
properties may be subject to prior unregistered agreements, transfers or claims and title may be affected by, among other things, undetected defects. Such
third party claims could have a material adverse impact on the Company’s operations.
Currency Risks
The Company’s equity financings are sourced in Canadian dollars but much of its expenditures are in local currencies or United States dollars. At this
time, there are no currency hedges in place. Therefore, a weakening of the Canadian dollar against the United States dollar or local currencies could have
an adverse impact on the amount of exploration conducted.
Joint Venture Funding Risk
Eurasian’s strategy is to seek partners through joint ventures to fund exploration and project development. The main risk of this strategy is that funding
partners may not be able to raise sufficient capital in order to satisfy exploration and other expenditure terms in a particular joint venture agreement. As a
result, exploration and development of one or more of the Company’s property interests may be delayed depending on whether Eurasian can find another
partner or has enough capital resources to fund the exploration and development on its own.
Insured and Uninsured Risks
In the course of exploration, development and production of mineral properties, the Company is subject to a number of risks and hazards in general,
including adverse environmental conditions, operational accidents, labor disputes, unusual or unexpected geological conditions, changes in the regulatory
environment and natural phenomena such as inclement weather conditions, floods, and earthquakes. Such occurrences could result in the damage to the
Company’s property or facilities and equipment, personal injury or death, environmental damage to properties of the Company or others, delays,
monetary losses and possible legal liability.
Although the Company may maintain insurance to protect against certain risks in such amounts as it considers reasonable, its insurance may not cover all
the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible
premiums or for other reasons. Should such liabilities arise, they could reduce or eliminate future profitability and result in increased costs, have a
material adverse effect on the Company’s results and a decline in the value of the securities of the Company.
Some work is carried out through independent consultants and the Company requires all consultants to carry their own insurance to cover any potential
liabilities as a result of their work on a project.
Page 21
Environmental Risks and Hazards
The activities of the Company are subject to environmental regulations issued and enforced by government agencies. Environmental legislation is
evolving in a manner that will require stricter standards and enforcement and involve increased fines and penalties for non-compliance, more stringent
environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors and employees.
There can be no assurance that future changes in environmental regulation, if any, will not adversely affect Eurasian’s operations. Environmental hazards
may exist on properties in which the Company holds interests which are unknown to the Company at present.
Fluctuating Metal Prices
Factors beyond the control of the Company have a direct effect on global metal prices, which have fluctuated widely, particularly in recent years, and
there is no assurance that a profitable market will exist for a production decision to be made or for the ultimate sale of the metals even if commercial
quantities of precious and other metals are discovered on any of Eurasian’s properties. Consequently, the economic viability of any of the Company’s
exploration projects and its ability to finance the development of its projects cannot be accurately predicted and may be adversely affected by fluctuations
in metal prices.
Extensive Governmental Regulation and Permitting Requirements Risks
Exploration, development and mining of minerals are subject to extensive laws and regulations at various governmental levels governing the acquisition
of the mining interests, prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic
substances, land use, environmental protection, mine safety and other matters. In addition, the current and future operations of Eurasian, from exploration
through development activities and production, require permits, licenses and approvals from some of these governmental authorities. Eurasian has
obtained all government licenses, permits and approvals necessary for the operation of its business to date. However, additional licenses, permits and
approvals may be required. The failure to obtain any licenses, permits or approvals that may be required or the revocation of existing ones would have a
material and adverse effect on Eurasian, its business and results of operations.
Failure to comply with applicable laws, regulations and permits may result in enforcement actions thereunder, including orders issued by regulatory or
judicial authorities requiring Eurasian’s operations to cease or be curtailed, and may include corrective measures requiring capital expenditures,
installation of additional equipment or remedial actions. Eurasian may be required to compensate those suffering loss or damage by reason of its mineral
exploration activities and may have civil or criminal fines or penalties imposed for violations of such laws, regulations and permits. Any such events
could have a material and adverse effect on Eurasian and its business and could result in Eurasian not meeting its business objectives.
Key Personnel Risk
Eurasian’s success is dependent upon the performance of key personnel working in management and administrative capacities or as consultants, The loss
of the services of senior management or key personnel could have a material and adverse effect on the Company, its business and results of operations.
Conflicts of Interest
In accordance with the laws of British Columbia, the directors and officers of a corporation are required to act honestly, in good faith and in the best
interests of the corporation. Eurasian’s directors and officers may serve as directors or officers of other companies or have significant shareholdings in
other resource companies and, to the extent that such other companies may participate in ventures in which the Company may participate, such directors
and officers may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. If such a conflict of interest
arises at a meeting of the Company’s directors, a director with such a conflict will abstain from voting for or against the approval of such participation or
such terms.
Page 22
Passive Foreign Investment Company
U.S. investors in common shares should be aware that based on current business plans and financial expectations, Eurasian currently expects that it will
be a passive foreign investment company (“PFIC”) for the year ending December 31, 2012 and expects to be a PFIC in future tax years. If Eurasian is a
PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a
disposition of common shares, or any so-called “excess distribution” received on its common shares, as ordinary income, and to pay an interest charge on
a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election (“QEF Election”) or a
“mark-to-market” election with respect to the common shares. A U.S. shareholder who makes a QEF Election generally must report on a current basis its
share of Eurasian’s net capital gain and ordinary earnings for any year in which Eurasian is a PFIC, whether or not Eurasian distributes any amounts to its
shareholders. For each tax year that Eurasian qualifies as a PFIC, Eurasian intends to: (a) make available to U.S. shareholders, upon their written request,
a “PFIC Annual Information Statement” as described in Treasury Regulation Section 1.1295 -1(g) (or any successor Treasury Regulation) and (b) upon
written request, use commercially reasonable efforts to provide all additional information that such U.S. shareholder is required to obtain in connection
with maintaining such QEF Election with regard to Eurasian. Eurasian may elect to provide such information on its website www.EurasianMinerals.com.
Corporate Governance and Public Disclosure Regulations
The Company is subject to changing rules and regulations promulgated by a number of United States and Canadian governmental and self-regulated
organizations, including the SEC, the Canadian Securities Administrators, the NYSE MKT and the TSX Venture Exchange. These rules and regulations
continue to evolve in scope and complexity and many new requirements have been created in response to laws enacted by the United States Congress,
making compliance more difficult and uncertain. For example, on July 21, 2010, the United States Congress passed the Dodd-Frank Wall Street Reform
and Consumer Protection Act, which resulted in the SEC adopting rules that will require the Company to disclose on an annual basis, beginning in 2014,
certain payments made by the Company, its subsidiaries or entities controlled by it, to the U.S. government and foreign governments, including sub-
national governments. The Company’s efforts to comply with the Dodd-Frank Act, the rules and regulations promulgated thereunder, and other new rules
and regulations have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time
and attention from revenue-generating activities to compliance activities.
Internal Controls over Financial Reporting
The Company requires an annual assessment by management of the effectiveness of the Company’s internal control over financial reporting beginning
with the fiscal year ended December 31, 2012. The Company may in the future fail to achieve and maintain the adequacy of its internal control over
financial reporting, as such standards are modified, supplemented or amended from time to time, and the Company may not be able to ensure that it can
conclude on an ongoing basis that it has effective internal control over financial reporting. Future acquisitions of companies may provide the Company
with challenges in implementing the required processes, procedures and controls in its acquired operations. Acquired companies may not have disclosure
controls and procedures or internal control over financial reporting that are as thorough or effective as those required by securities laws currently
applicable to the Company.
No evaluation can provide complete assurance that the Company’s internal control over financial reporting will detect or uncover all failures of persons
within the Company to disclose material information otherwise required to be reported. The effectiveness of the Company’s controls and procedures
could also be limited by simple errors or faulty judgments. In addition, should the Company expand in the future, the challenges involved in
implementing appropriate internal control over financial reporting will increase and will require that the Company continue to improve its internal control
over financial reporting.
Page 23
CONTROLS AND PROCEDURES
The Company became a non-Venture Issuer in conjunction with its listing on NYSE MKT in January 2012. Therefore, it is now required to report on
disclosure controls and procedures and internal controls over financial reporting. The Company retained an independent third party specialist to assist in
the creation, assessment, and evaluation of disclosure and internal controls and procedures.
Disclosure Controls and Procedures
Management is responsible for establishing and maintaining disclosure controls and procedures, which provide reasonable assurance that material
information relating to the Company and its subsidiaries is accumulated and communicated to management to allow timely decisions regarding required
disclosure. Management has evaluated the effectiveness of its disclosure controls and procedures as of December 31, 2012 and believes its disclosure
controls and procedures are effective.
Internal Control over Financial Reporting
The Company’s management, with the participation of its CEO and CFO, are responsible for establishing a system of internal control over financial
reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with IFRS as issued by the IASB. Management evaluated the Company’s internal control over financial reporting at December 31, 2012
and concludes that it is effective and that no material weaknesses were identified.
OUTSTANDING SHARE DATA
At April 2, 2013, the Company had 72,304,540 common shares issued and outstanding. There were also 4,748,700 stock options outstanding with expiry
dates ranging from September 18, 2013 to October 16, 2017, and 10,300,533 warrants outstanding with expiry dates ranging from February 15, 2015 to
November 12, 2015.
Page 24
EURASIAN MINERALS INC.
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
December 31, 2012
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Shareholders of
Eurasian Minerals Inc.
We have audited the accompanying consolidated financial statements of Eurasian Minerals Inc., which comprise the consolidated statements of
financial position as at December 31, 2012 and December 31, 2011 and the consolidated statements of loss, comprehensive loss, shareholders’
equity and cash flows for the year ended December 31, 2012 and nine month period ended December 31, 2011, and a summary of significant
accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance
with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The
procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Eurasian Minerals Inc. as at
December 31, 2012 and December 31, 2011 and its financial performance and its cash flows for the year ended December 31, 2012 and nine
month period ended December 31, 2011 in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
“DAVIDSON & COMPANY
LLP”
Vancouver, Canada
March 28, 2013
Chartered Accountants
EURASIAN MINERALS INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Expressed in Canadian Dollars
ASSETS
Current
Cash and cash equivalents (Note 4)
Investments (Note 6)
Receivables (Note 7)
Prepaid expenses
Total current assets
Non-current
Restricted cash (Note 5)
Property and equipment (Note 8)
Investment in associated companies (Note 9)
Exploration and evaluation assets (Note 10)
Royalty interest (Note 3 and 11)
Reclamation bonds (Note 12)
Goodwill (Note 3 and 13)
Other assets (Note 14)
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current
Accounts payable and accrued liabilities (Note 15)
Income taxes payable
Advances from joint venture partners (Note 16)
Total current liabilities
Non-current
Deferred income tax liability (Note 19)
TOTAL LIABILITIES
SHAREHOLDERS' EQUITY
Capital stock (Note 17)
Commitment to issue shares (Note 17)
Reserves
Deficit
TOTAL SHAREHOLDERS' EQUITY
December 31, 2012 December 31, 2011
$
$
$
21,699,983 $
1,585,022
1,032,058
204,491
24,521,554
77,519
1,576,982
3,002,101
4,940,941
38,738,592
488,522
8,970,514
159,062
57,954,233
41,371,968
943,289
558,702
119,362
42,993,321
155,992
300,901
1,894,868
6,086,396
-
439,565
-
159,062
9,036,784
82,475,787 $
52,030,105
1,549,713 $
228,085
40,901
1,818,699
876,321
-
1,374,451
2,250,772
12,288,419
-
14,107,118
2,250,772
114,414,001
1,097,192
8,856,844
(55,999,368)
68,368,669
77,122,016
495,645
7,258,987
(35,097,315)
49,779,333
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
82,475,787 $
52,030,105
Nature of operations (Note 1)
Events after reporting date (Note 23)
Approved on behalf of the Board of Directors on March 28, 2013:
Signed: “David M Cole”
Director
Signed: “George Lim”
Director
The accompanying notes are an integral part of these consolidated financial statements.
Page 1
EURASIAN MINERALS INC.
CONSOLIDATED STATEMENTS OF LOSS
Expressed in Canadian Dollars
ROYALTY INCOME
Cost of sales
Gold tax
Depletion
Net royalty income
EXPLORATION EXPENDITURES (Note 10)
Less: recoveries
Net exploration expenditures
GENERAL AND ADMINISTRATIVE EXPENSES
Administrative and office
Depreciation (Note 8)
Investor relations and shareholder information
Professional fees
Salaries and consultants
Share-based payments (Note 17)
Transfer agent and filing fees
Travel
Total general and administrative expenses
Year Ended Nine month period ended
December 31, 2011
December 31, 2012
$
1,750,975 $
(88,532)
(1,125,408)
537,035
13,488,306
(5,158,105)
8,330,201
1,258,292
85,643
433,243
764,914
3,123,266
2,799,609
348,079
580,150
9,393,196
-
-
-
-
8,436,143
(4,598,919)
3,837,224
643,204
878
229,109
852,909
1,385,974
2,317,653
46,189
156,657
5,632,573
Loss from operations
(17,186,362)
(9,469,797)
Transaction costs related to a business acquistion (Note 3)
Change in fair value of held-for-trading investments
Equity loss in associated companies (Note 9)
Foreign exchange gain (loss)
Gain (loss) on investments
Interest income
Loss on disposal of equipment
Loss on sale of foreign licences and permits (Note 10)
Option payments received
Write-off of exploration and evaluation assets (Note 10)
Loss before income taxes
Income tax expense
Deferred income tax recovery
Loss for the period
Basic and diluted loss per share
(940,591)
(662,957)
(1,144,407)
(138,143)
30,178
360,791
-
(38,299)
165,783
(1,362,723)
(20,916,730)
(276,918)
291,595
-
(13,326)
(177,441)
100,885
(12,018)
343,145
(111,393)
-
-
(408,872)
(9,748,817)
-
-
$
$
(20,902,053) $
(9,748,817)
(0.35) $
(0.19)
Weighted average number of common shares outstanding
59,990,386
51,554,032
The accompanying notes are an integral part of these consolidated financial statements
Page 2
EURASIAN MINERALS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Expressed in Canadian Dollars
Loss for the period
Other comprehensive gain (loss)
Currency translation adjustment
Comprehensive loss for the period
$
$
Year Ended Nine month period ended
December 31, 2011
December 31, 2012
(20,902,053) $
400,475
(20,501,578) $
(9,748,817)
-
(9,748,817)
The accompanying notes are an integral part of these consolidated financial statements.
Page 3
EURASIAN MINERALS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Expressed in Canadian Dollars
Cash flows from operating activities
Loss for the period
Items not affecting operating activities:
Interest income received
Unrealized foreign exchange effect on cash and cash equivalents
Items not affecting cash:
Change in fair value of held-for-trading investments
Commitment to issue bonus shares
Deferred income tax recovery
Current year income tax expense
Depreciation
Depletion of Royalty Property
Fair value of stock options granted
(Gain) Loss on sale of investments
Loss on disposal of equipment
Share of loss in equity investments
Unrealized foreign exchange (gain) loss
Shares received as option payments
Loss on sale of foreign licences and permits
Write-off of exploration and evaluation assets
Changes in non-cash working capital items:
Receivables
Prepaid expenses
Accounts payable and accrued liabilities
Income taxes payable
Advance from joint venture partner
Total cash used in operating activities
Cash flows from investing activities
Acquisition of exploration and evaluation assets
Acquisition of Bullion Monarch (Note 3)
Cash acquired in acquisition of Bullion Monarch (Note 3)
Interest received on cash and cash equivalents
Proceeds from sale of marketing material (native gold)
Proceeds from sale of investments
Purchase of investments
Purchase of equity investments
Purchase of gold inventory
Restricted cash
Purchase of property and equipment
Reclamation bonds
Total cash used in investing activities
Cash flows from financing activities
Share issuance costs
Proceeds received from options exercised
Proceeds received from warrants exercised
Total cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Supplemental disclosure with respect to cash flows (Note 22)
Year Ended Nine month period ended
December 31, 2011
December 31, 2012
$
(20,902,053) $
(9,748,817)
(360,791)
53,368
662,957
2,198,031
(291,595)
276,918
203,121
1,125,408
1,464,293
(30,178)
-
1,144,407
19,692
(41,467)
38,299
1,362,723
67,870
82,750
(60,898)
(48,833)
(1,333,550)
(14,369,528)
(128,146)
(4,279,433)
318,378
360,791
-
768,418
(1,969,705)
(2,061,551)
-
78,473
(1,236,022)
(48,957)
(8,197,754)
-
1,049,670
1,898,995
2,948,665
(53,368)
(19,671,985)
41,371,968
21,699,983 $
$
(343,145)
-
13,326
1,149,180
-
-
60,837
-
2,112,668
12,018
111,393
177,441
(29,848)
(114,500)
-
408,872
19,035
257,818
(528,691)
-
1,177,263
(5,265,150)
(92,871)
-
-
343,145
56,003
86,200
(566,882)
(1,993,188)
(133,446)
231,132
(158,215)
(26,528)
(2,254,650)
(3,964)
525,728
-
521,764
-
(6,998,036)
48,370,004
41,371,968
The accompanying notes are an integral part of these consolidated financial statements.
Page 4
EURASIAN MINERALS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Expressed in Canadian Dollars
Reserves
Balance as at December 31, 2011
Shares issued on acquisition of Bullion Monarch
Warrants issued for Bullion warrants
Shares issued as bonus shares
Shares issued on exercise of stock options
Shares issued on exercise of warrants
Shares issued on acquisition of exploration and
evaluation assets
Reclassification of fair value of options exercised
Share-based payments
Commitment to issue shares
Equity investment share-based payments (Note 9)
Foreign currency translation adjustment
Loss for the year
Balance as at December 31, 2012
Number of
common shares
51,875,118
17,712,189
-
813,670
639,000
949,497
62,398
-
-
-
-
-
-
72,051,872
Capital stock
77,122,016
$
32,059,062
-
1,596,483
1,049,670
1,898,995
128,122
559,653
-
-
-
-
-
$ 114,414,001
Commitment
to issue shares
495,645
$
-
(1,556,614)
-
-
-
-
-
2,158,161
-
-
-
1,097,192
$
$
$
Share-based
payments
7,258,987
-
102,653
-
-
-
Cumulative
translation
adjustment
Deficit
Total
- $(35,097,315) $ 49,779,333
32,059,062
-
-
102,653
-
-
39,869
-
-
1,049,670
-
-
1,898,995
-
-
-
(559,653)
1,464,293
-
190,089
-
-
8,456,369
$
-
-
-
-
-
400,475
-
-
-
-
-
-
-
(20,902,053)
128,122
-
1,464,293
2,158,161
190,089
400,475
(20,902,053)
$
400,475 $(55,999,368) $ 68,368,669
Reserves
Balance as at March 31, 2011
Shares issued on exercise of stock options
Shares issued as bonus shares
Shares issued on acquisition of exploration and
evaluation assets
Reclassification of fair value of options exercised
Share-based payments
Commitment to issue shares
Share issue costs
Loss for the period
Balance as at December 31, 2011
Number of
common shares
50,961,629
429,300
431,498
$
Capital stock
75,058,770
525,728
1,145,531
Commitment
to issue shares
491,996
-
$
(1,145,531)
$
Share-based
payments
5,393,723
-
-
52,691
-
-
-
-
-
51,875,118
148,547
247,404
-
-
(3,964)
-
77,122,016
$
$
-
-
-
1,149,180
-
-
495,645
$
-
(247,404)
2,112,668
-
-
-
7,258,987
$
$
Cummulative
translation
adjustment
Deficit
Total
- $(25,348,498) $ 55,595,991
525,728
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- $(35,097,315) $ 49,779,333
148,547
-
2,112,668
1,149,180
(3,964)
(9,748,817)
(9,748,817)
The accompanying notes are an integral part of these consolidated financial statements.
Page 5
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
1. NATURE OF OPERATIONS
Eurasian Minerals Inc. (the “Company” or “Eurasian”) and its subsidiaries are engaged in the acquisition, exploration and evaluation of mineral
assets in Turkey, Haiti, Europe, U.S.A. and the Asia Pacific region, and the development of a royalty income stream in Nevada, U.S.A. The
Company’s common shares are listed on the TSX Venture Exchange under the symbol of “EMX”. On January 30, 2012, the Company’s common
shares began trading on the NYSE MKT (formerly known as NYSE Amex) under the symbol of “EMXX”. The Company’s head office is located
at 501 - 543 Granville Street, Vancouver, British Columbia, Canada V6C 1X8.
On August 17, 2012, the Company and its wholly-owned subsidiary, EMX (Utah) Corp. completed an Agreement and Plan of Acquisition with
Bullion Monarch Mining, Inc. (“Bullion”) whereby the Company acquired 100% of the issued and outstanding shares of Bullion (Note 3).
These consolidated financial statements are for the year ending December 31, 2012 and the nine month period ended December 31, 2011. The
Company changed its fiscal year end from March 31 to December 31, effective for the period ending December 31, 2011.
These consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) applicable to a going
concern, which assume that the Company will be able to realize its assets, discharge its liabilities and continue in operation for the following
twelve months.
Management believes it has sufficient funding for operations for the ensuing year, which results in the going concern assumption being an
appropriate underlying concept for the preparation of these consolidated financial statements.
Some of the Company’s activities for exploration and evaluation assets are located in emerging nations and, consequently, may be subject to a
higher level of risk compared to other developed countries. Operations, the status of mineral property rights and the recoverability of investments
in emerging nations can be affected by changing economic, legal, regulatory and political situations.
At the date of these consolidated financial statements, the Company has not identified a known body of commercial grade mineral on any of its
exploration and evaluation assets. The ability of the Company to realize the costs it has incurred to date on these exploration and evaluation assets
is dependent upon the Company identifying a commercial mineral body, to finance its development costs and to resolve any environmental,
regulatory or other constraints which may hinder the successful development of the exploration and evaluation assets.
These consolidated financial statements of the Company are presented in Canadian dollars unless otherwise noted, which is the functional
currency of the parent company and its subsidiaries except as to Bullion Monarch Mining, Inc. (Note 3)
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of Compliance
These consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board
(“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
These consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value
through profit or loss, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual
basis of accounting except for cash flow information.
Some of the comparative figures have been reclassified to conform to the current format.
Page 6
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies
Basis of Consolidation
The consolidated financial statements comprise the accounts of Eurasian, the parent company, and its controlled subsidiaries, after the elimination
of all material intercompany balances and transactions.
Subsidiaries
Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies generally accompanying a
shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Company until the date on which control ceases.
The accounts of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Inter-
company transactions, balances and unrealized gains or losses on transactions are eliminated. The Company’s principal operating subsidiaries are
as follows:
Name
Bullion Monarch Mining, Inc
EMX (USA) Services Corp.
Bronco Creek Exploration Inc.
AES Madencilik Ltd. Sirketi
Eurasia Madencilik Limited Sirketi
Georgian Minerals LLC
Eurasian Minerals Cooperatief U.A.
EMX Georgia Cooperatief U.A.
Ayiti Gold Company S.A.
Marien Mining Company S.A.
Viad Royalties AB
Eurasian Minerals Sweden AB
Eliseror Limited
EMX Australia Pty Ltd
Business Combinations
Place of Incorporation
Utah, USA
Nevada, USA
Arizona, USA
Turkey
Turkey
Georgia
Netherlands
Netherlands
Haiti
Haiti
Sweden
Sweden
Cyprus
Australia
Ownership Percentage
100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
The acquisition method of accounting is used to account for business combinations by the Company. The consideration transferred for the
acquisition of a business is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The
consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-
related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Company recognizes any non-controlling
interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Subsequently, the
carrying amount of non-controlling interest is the amount of the interest at initial recognition plus the non-controlling interest’s share of the
subsequent changes in equity. Total comprehensive income is attributed to non-controlling interest even if this results in the non-controlling
interest having a deficit balance.
Page 7
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Business Combinations (Continued)
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair
value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the statement of loss.
The Company has made an earlier election in terms of IFRS 1 to apply the requirements of IFRS 3 (Revised) – Business Combinations to all
business combinations with effective dates on or after April 1, 2010. The classification and accounting treatment of business combinations with
effective dates prior to April 1, 2010 have not been considered.
Functional and Reporting Currency
The functional currency is the currency of the primary economic environment in which the entity operates. The functional currency for the
Company and its subsidiaries is the Canadian dollar except the functional currency of Bullion Monarch Mining, Inc. is the U.S. dollar. The
functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes
in Foreign Exchange Rates.
Translation of transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or
valuation where items are re-measured. Monetary assets and liabilities denominated in foreign currencies are re-measured at the rate of exchange
at each financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.
Financial Instruments
All financial instruments are classified into one of the following four categories:
(a)
Financial assets and financial liabilities at fair value through profit or loss (“FVTPL”)
Financial assets and financial liabilities classified as FVTPL are acquired or incurred principally for the purpose of selling or
repurchasing them in the near term. They are recognized at fair value based on market prices, with any resulting gains and losses
reflected in profit or loss for the period in which they arise.
(b)
Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity that an
entity has the positive intention and ability to hold to maturity. They are measured at amortized cost using the effective interest rate
method less any impairment loss. A gain or loss is recognized in net income when the financial asset is derecognized or impaired,
and through the amortization process.
Page 8
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Financial Instruments (continued)
(c)
Available-for-sale financial assets
Available-for-sale (“AFS”) financial assets are non-derivative financial assets that are designated as available for sale, or that are
not classified as loans and receivables, held-to-maturity investments, or FVTPL. They are measured at fair value. Fair value is
determined based on market prices. Equity instruments that do not have a quoted market price in an active market are measured at
cost. Gains and losses are recognized directly in other comprehensive income (loss) until the financial asset is derecognized, at
which time the cumulative gain or loss previously recognized in accumulated other comprehensive income (loss) is recognized in
profit or loss for the period.
(d)
Loans and receivables and other financial liabilities
Loans and receivables and other financial liabilities are measured at amortized cost, using the effective interest rate method less
any impairment loss.
The Company’s financial instruments consist of cash and cash equivalents, investments, receivables, restricted cash, reclamation bonds, accounts
payable and accrued liabilities, and advances from joint venture partners. Unless otherwise noted the fair value of these financial instruments
approximates their carrying values.
Cash and cash equivalents are classified as financial assets at FVTPL and are accounted for at fair value. Cash equivalents include highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Cash
equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.
Warrants are classified as derivative financial assets at FVTPL and are accounted for at fair value. For warrants that are not traded on an
exchange, no market value is readily available. When there are sufficient and reliable observable market inputs, a valuation technique is used; if
no such market inputs are available, the warrants are valued at intrinsic value, which is equal to the higher of the market value of the underlying
security less the exercise price of the warrant, or zero.
Marketable securities are classified FVTPL and are measured at fair market value. Marketable securities transferred to the Company as part of an
acquisition are classified as held-for-trading and are carried at fair market value. Changes in fair value of held-for-trading assets are reflected in
the statement of comprehensive loss in the period in which they occur. Changes in fair value of available-for-sale assets are reflected in
accumulated other comprehensive income on the statement of financial position until sold or if there is an other than temporary impairment in
value.
Reclamation bonds are classified as financial assets held-to-maturity.
Restricted cash is classified as financial assets at FVTPL.
The Company classifies its receivables as loans and receivables and its accounts payable and accrued liabilities and advances from joint venture
partners as other financial liabilities.
Page 9
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective
evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of
the financial assets have been impacted.
For all financial assets, objective evidence of impairment could include:
(cid:122) Significant financial difficulty of the issuer or counterparty;
(cid:122) Default or delinquency in interest or principal payments; or,
(cid:122) It becoming probable that the borrower will enter bankruptcy or financial reorganization.
For certain categories of financial assets, that are assessed not to be impaired individually, are subsequently assessed for impairment on a
collective basis. The carrying amount of financial assets is reduced by the impairment loss directly for all financial assets with the exception of
receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable is considered uncollectible, it is
written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
Changes in the carrying amount of the allowance account are recognized in profit or loss.
With the exception of AFS marketable securities, if in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through
profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized
cost would have been has the impairment not been recognized. In respect of AFS marketable securities, impairment losses previously recognized
through profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized directly in
equity.
Equity investment
The Company accounts for its long-term investments in affiliated companies over which it has significant influence on the equity basis of
accounting, whereby the investment is initially recorded at cost, adjusted to recognize the Company’s share of earnings or losses and reduced by
dividends received.
The Company assesses its equity investments for impairment if there is objective evidence of impairment as a result of one or more events that
occurred after the initial recognition of the equity investment and that the event or events has an impact on the estimated future cash flow of the
investment that can be reliably estimated. Objective evidence of impairment of equity investment includes:
(cid:122) Significant financial difficulty of the associated companies;
(cid:122) Becoming probable that the associated companies will enter bankruptcy or other financial reorganization; or,
(cid:122) National or local economic conditions that correlate with defaults of the associated companies.
Page 10
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Exploration and evaluation assets and exploration expenditures
Acquisition costs for exploration and evaluation assets, net of recoveries, are capitalized on a property-by-property basis. Acquisition costs
include cash consideration and the value of common shares, based on recent issue prices, issued for exploration and evaluation assets pursuant to
the terms of the agreement. Exploration expenditures, net of recoveries, are charged to operations as incurred. After a property is determined by
management to be commercially feasible, subsequent development expenditures on the property will be capitalized.
When there is little prospect of further work on a property being carried out by the Company or its partners, when a property is abandoned, or
when the capitalized costs are no longer considered recoverable, the related property costs are written down to management’s estimate of their net
recoverable amount. The costs related to a property from which there is production, together with the costs of production equipment, will be
depleted and amortized using the unit-of-production method.
An exploration and evaluation asset acquired under an option agreement, where payments are made at the sole discretion of the Company, is
capitalized at the time of payment. Option payments received are treated as a reduction of the carrying value of the related acquisition cost for the
mineral property until the payments are in excess of acquisition costs, at which time they are then credited to profit or loss. Option payments are
at the discretion of the optionee and, accordingly, are accounted for when receipt is reasonably assured.
Revenue Recognition
The Company recognizes revenue in accordance with IAS 18 Revenue. Royalty revenue is recognized when persuasive evidence of an
arrangement exists, title and risk passes to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits
associated with the sale will flow to the entity and the costs incurred in respect of the transaction can be measured reliably. Royalty revenue may
be subject to adjustment upon final settlement of estimated metal prices, weights, and assays. Adjustments to revenue from metal prices are
recorded monthly and other adjustments are recorded on final settlement and are offset against revenue when incurred.
Royalty Interests
Royalty interests in mineral properties include acquired royalty interests in production stage and exploration stage properties. In accordance with
IAS 38 Intangible Assets, the fair value of acquired royalty interests in mineral properties is capitalized as intangible assets.
Acquisition costs of production stage royalty interests are depleted using the units of production method over the life of the mineral property,
which is calculated using estimated reserves. Acquisition costs of royalty interests on exploration stage mineral properties, where there are no
proven and probable reserves, are not amortized. At such time as the associated exploration stage mineral interests are converted to proven and
probable reserves, the cost basis is amortized over the remaining life of the mineral property, using proven and probable reserves. The carrying
values of exploration stage mineral interests are evaluated for impairment at such time as information becomes available indicating that the
production will not occur in the future.
Goodwill
Goodwill represents the excess of the price paid for the acquisition of a consolidated entity over the fair value of the net identifiable tangible and
intangible assets and liabilities acquired in a business combination. Goodwill is allocated to the cash generating unit to which it relates.
Page 11
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Goodwill (Continued)
Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is
determined by assessing if the carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount.
Property and Equipment
Property and Equipment is recorded at cost and depreciated over its estimated useful life using the declining balance method at a rate of 20% per
annum. Depreciation on equipment used directly on exploration projects is included in exploration expenditures for that mineral property.
Decommissioning liabilities
Decommissioning liabilities are recognized for the expected obligations related to the retirement of long-lived tangible assets that arise from the
acquisition, construction, development or normal operation of such assets. A decommissioning liability is recognized in the period in which it is
incurred and when a reasonable estimate of the fair value of the liability can be made with a corresponding decommissioning cost recognized by
increasing the carrying amount of the related long-lived asset. The decommissioning cost is subsequently allocated in a rational and systematic
method over the underlying asset’s useful life. The initial fair value of the liability is accreted, by charges to profit or loss, to its estimated future
value. The Company has no known decommissioning liabilities as of December 31, 2012 and 2011.
Environmental disturbance restoration
During the operating life of an asset, events such as infractions of environmental laws or regulations may occur. These events are not related to
the normal operation of the asset and are referred to as environmental disturbance restoration provisions. The costs associated with these
provisions are accrued and charged to profit or loss in the period in which the event giving rise to the liability occurs. Any subsequent adjustments
to these provisions due to changes in estimates are also charged to profit or loss in the period of adjustment. These costs are not capitalized as part
of the long-lived assets’ carrying value.
Impairment of assets
Events or changes in circumstances can give rise to significant impairment charges or reversals of impairment in a particular year. The Company
assesses its cash generating units annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, an
estimate of the recoverable amount is made, which is the higher of the fair value less costs to sell and value in use. The determination of the
recoverable amount requires the use of estimates and assumptions such as long-term commodity prices, discount rates, future capital
requirements, exploration potential and future operating performance. Fair value is determined as the amount that would be obtained from the sale
of the asset in an arm’s length transaction between knowledgeable and willing parties.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, bank deposits and short-term, highly liquid investments that are readily convertible to known
amounts of cash.
Page 12
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Share-based payments
Share-based payments include option and bonus shares granted to directors, employees and non-employees. The Company accounts for share-
based compensation using a fair value based method with respect to all share-based payments measured and recognized, to directors, employees
and non-employees. For directors and employees, the fair value of the options and bonus shares is measured at the date of grant. For non-
employees, the fair value of the options and bonus shares is measured on the earlier of the date at which the counterparty performance is
complete, or the date the performance commitment is reached, or the date at which the equity instruments are granted if they are fully vested and
non-forfeitable. For directors, employees and non-employees, the fair value of the options and bonus shares is accrued and charged to operations,
with the offset credit to share based payment reserve for options, and commitment to issue shares for bonus shares, over the vesting period. If and
when the stock options are exercised, the applicable amounts are transferred from share-based payment reserve to share capital. When the bonus
shares are issued, the applicable fair value is transferred from commitment to issue shares to share capital. Option based compensation awards are
calculated using the Black-Scholes option pricing model while bonus share are valued at the fair value on the date of grant.
Income taxes
Income tax expense consists of current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to
items recognized directly in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is calculated providing for
temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes.
Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable income nor loss. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial
recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable income will be available against which the temporary
difference 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.
Income (Loss) per share
Basic income or loss per share is calculated by dividing the net income or loss for the period by the weighted average number of shares
outstanding during the period. Diluted income or loss per share is calculated whereby the weighted average number of shares outstanding used in
the calculation of diluted income or loss per share assumes that the deemed proceeds received from the exercise of stock options, share purchase
warrants and their equivalents would be used to repurchase common shares of the Company at the average market price during the period, if they
are determined to have a dilutive effect.
Existing stock options and share purchase warrants have not been included in the current period computation of diluted loss per share as to do so
would be anti-dilutive. For the periods presented the basic and diluted losses per share are the same.
Page 13
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Valuation of equity units issued in private placements
The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The
residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the
less easily measurable component.
The fair value of the common shares issued in the private placements was determined to be the more easily measurable component and were
valued at their fair value, as determined by the quoted bid price on the issuance date. The balance, if any, was allocated to the attached warrants.
Any fair value attributed to the warrants is recorded as share-based payment reserve.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief
operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as
the Chief Executive Officer.
Amendments to IFRS 7 Financial Instruments: Disclosures
The amendments increase disclosure with regards to the transfer of financial assets, especially if there is a disproportionate amount of transfer
transactions that take place around the end of a reporting period.
Amendments to IAS 12 Income Taxes
The amendments are made regarding Deferred Tax: Recovery of Underlying Assets and introduce an exception to the existing principle for the
measurement of deferred tax assets and liabilities arising on an investment property measured at fair value, and the requirement that deferred tax
on non-depreciable assets measured using the revaluation model in IAS 16 Property, Plant and Equipment should always be on a sales basis.
Effective January 1, 2012, the Company has adopted amendments to IFRS 7, Financial Instruments: Disclosures, and IAS 12, Income Taxes, and
concluded that there are no material changes as a result of adopting these amendments.
Significant accounting policies and interpretations issued but not yet effective
The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective.
(a) Effective for annual periods beginning on or after January 1, 2013
(cid:122) IFRS 10 Consolidated Financial Statements
This new standard provides a new single consolidation model that identifies control as the basis for consolidation for all types of entities,
and replaces IAS 27 Consolidated and Separate Financial Statements and SIC-12
Consolidation – Special Purpose Entities.
Page 14
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Significant accounting policies and interpretations issued but not yet effective (Continued)
(a) Effective for annual periods beginning on or after January 1, 2013 (Continued)
(cid:122) IFRS 11 Joint Arrangements
This new standard improves the accounting for joint arrangements by introducing a principle-based approach that requires a party to a
joint arrangement to recognize its rights and obligations arising from the arrangement. Such a principle-based approach will provide users
with greater clarity about an entity’s involvement in its joint arrangements by increasing the verifiability, comparability and
understandability of the reporting of these arrangements. IFRS 11 supersedes IAS 31 Interests in Joint Ventures and SIC-13 Jointly
Controlled Entities-Non- Monetary Contributions by Venturers.
(cid:122) IFRS 12 Disclosure of Interests in Other Entities
This new standard combines, enhances and replaces the disclosure requirements for subsidiaries, joint arrangements, associates and
unconsolidated structured entities.
(cid:122) IFRS 13 Fair Value Measurement
This new standard defines fair value and sets out a framework for measuring fair value and disclosures about fair value measurements. It
applies when other IFRS require or permit fair value measurements. It does not introduce any new requirements to measure an asset or a
liability at fair value, change what is measured at fair value in IFRS or address how to present changes in fair value.
(cid:122) Amendments to IAS 27 Consolidated and Separate Financial Statements
The amendments provide guidance on the accounting and disclosure requirements for subsidiaries, jointly controlled entities, and
associates in separate, or unconsolidated, financial statements.
(cid:122) Amendments to IAS 28 Investments in Associates
The amendments provide guidance on the application of the equity method to associates, subsidiaries and joint ventures.
(b) Effective for annual periods beginning on or after January 1, 2015
(cid:122) IFRS 9 Financial Instruments
This new standard partially replaces IAS 39 Financial Instruments: Recognition and Measurement.
The Company has initially assessed that there will be no material reporting changes as a result of adopting the above new standards; however,
enhanced disclosure requirements are expected.
Page 15
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Critical Accounting Judgments and Significant Estimates and Uncertainties
The preparation of the consolidated financial statements requires management to make judgments and estimates and form assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the periods
presented therein. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, royalty revenues and
expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under
the circumstances. Actual results may differ from these estimates under different assumptions and conditions.
The Company has identified the accounting for the acquisition of Bullion as areas that required critical judgments in applying accounting policies
that had a significant effect on the amounts recognized in the consolidated financial statements. Details of the transaction are disclosed in Note 3.
The Company has identified the following critical accounting policies in which significant judgments, estimates and assumptions are made and
where actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the
financial position reported in future periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes
to the consolidated financial statements.
a) Royalty interest and related depletion
In accordance with the Company’s accounting policy, royalty interests are evaluated on a periodic basis to determine whether there are any
indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss recognized
to the extent that carrying amount exceeds recoverable amount. The recoverable amount of a royalty asset is measured at the higher of fair value
less costs to sell and value in use. The determination of fair value and value in use requires management to make estimates and assumptions about
expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors), and
reserves. These estimates and assumptions are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter
these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets
may be further impaired or the impairment charge reduced with the impact recorded in profit or loss.
b) Goodwill
Goodwill represents the excess of the price paid for the acquisition of a consolidated entity over the fair value of the net identifiable tangible and
intangible assets and liabilities acquired. Goodwill is allocated to the cash generating unit to which it relates.
Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is
determined by assessing if the carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount. The
assessment of the recoverable amount used in the goodwill impairment analysis is subject to similar judgments and estimates as described above
for property and equipment and royalty interests.
b) Exploration and Evaluation Assets
Recorded costs of exploration and evaluation assets are not intended to reflect present or future values of exploration and evaluation assets. The
recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that a change in future
conditions could require a material change in the recognized amount.
Page 16
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
2. STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summary of Significant Accounting Policies (Continued)
Critical Accounting Judgments and Significant Estimates and Uncertainties (Continued)
c) Taxation
The Company’s accounting policy for taxation requires management’s judgment as to the types of arrangements considered to be a tax on income
in contrast to an operating cost. Judgment is also required in assessing whether deferred tax assets and certain deferred tax liabilities are
recognized on the statement of financial position.
Deferred tax assets, including those arising from unused tax losses, capital losses and temporary differences, are recognized only where it is
considered probable that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities
arising from temporary differences caused principally by the expected royalty revenues generated by the royalty property are recognized unless
expected offsetting tax losses are sufficient to offset the taxable income and therefore, taxable income is not expected to occur in the foreseeable
future. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on
estimates of future production and sales volumes, commodity prices, and reserves. Judgments are also required about the application of income
tax legislation in foreign jurisdictions. These judgments and assumptions are subject to risk and uncertainty, hence there is a possibility that
changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on
the balance sheet and the amount of other tax losses and temporary differences not yet recognized. In such circumstances, some or the entire
carrying amount of recognized deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to profit or
loss.
3. ACQUISITION OF BULLION MONARCH MINING, INC.
On February 7, 2012, the Company and its wholly-owned subsidiary, EMX (Utah) Corp. signed an Agreement and Plan of Merger (the
“Acquisition”) with Bullion Monarch Mining, Inc. (“Bullion”) whereby the Company agreed to acquire 100% of the issued and outstanding
shares of Bullion in consideration for 0.45 of each of the Company’s common shares and US$0.11 in cash for each Bullion common share issued
and outstanding. In addition, outstanding Bullion warrants have been replaced by Eurasian warrants exercisable upon the same terms and
conditions as under the applicable agreement, except that each replacement warrant shall be exercisable for 0.45 of each of Eurasian’s common
shares and US$0.11 in cash in lieu of one Bullion common share.
On August 17, 2012, the acquisition of Bullion was completed following approval by Bullion shareholders at a special meeting held on the same
day.
The transaction has been accounted for as a business combination in accordance with IFRS 3, Business Combinations. As per IFRS 3, the
Company has recognized, separately from goodwill, identifiable assets acquired, and liabilities assumed in Bullion at their fair values on the
acquisition date. Accordingly, the Company has determined certain fair value adjustments for the assets and liabilities of Bullion as of August 17,
2012, the closing date of the Acquisition. Furthermore, to reflect the fair value increment of $39,536,000 (US$40,000,000) to the royalty property
held by Bullion which generates royalty income, the Company engaged an independent valuator to estimate the fair value of the royalty
generating property. The independent valuator applied the discounted cash flow model and estimated the fair value of the royalty income stream
at $39,536,000. Consequently, the assets and liabilities in the Bullion purchase price allocation are based on their estimated fair value as shown
below.
Goodwill represents the excess of the purchase price over the estimated fair value of assets acquired and liabilities assumed of Bullion. The
Goodwill is not deductible for tax purposes. The deferred tax liabilities are recognized primarily due to temporary differences between the
accounting value and tax basis of the royalty property assets that may result in
Page 17
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
3. ACQUISITION OF BULLION MONARCH MINING, INC. (Continued)
potential taxable amounts in future years. Subsequent to the closing of the Acquisition, the deferred income tax liabilities will be adjusted in the
period of enactment for the effect of an enacted change in tax laws or rates. The effect, which could be significant, will be included in profit or
loss from operations.
The aggregate amount of the total acquisition consideration is $36,441,148, determined by taking into account the issuance of the Company’s
17,712,289 common shares valued at $32,059,062, the obligation for 1,125,000 warrants valued at $102,653 to replace Bullion’s outstanding
warrants and the payment of $4,279,433.
The following summarizes the consideration transferred and the recognized amounts of assets acquired and liabilities assumed at the acquisition
date.
Purchase Price:
Issuance of 17,712,189 Eurasian common shares in exchange for 39,360,518 Bullion common shares
Fair value of additional obligation for 1,125,000 replacement warrants
Cash payment for 39,360,518 Bullion common shares
Total purchase price
Purchase Price Allocation:
Cash and cash equivalents
Receivables
Prepaid expenses
Investments
Property, plant and equipment, net
Royalty property
Goodwill
Accounts payable
Deferred income tax liabilities
Total purchase price
$
$
$
$
32,059,062
102,653
4,279,433
36,441,148
318,378
541,226
167,879
36,627
258,637
39,536,000
8,896,705
(734,290)
(12,580,014)
36,441,148
The value of the Company’s common shares was calculated based on the issuance of the Company’s 17,712,189 common shares at a price per
share of $1.81 which was the TSX Venture Exchange closing price of the Company’s common share on August 17, 2012, the closing date of the
Acquisition.
The cash payment of $4,279,433 is based on cash consideration per share of US$0.11 for each of the 39,360,518 Bullion common shares
outstanding immediately prior to the completion of the Acquisition.
The assumption and replacement of Bullion warrants is valued using the Black-Scholes option pricing model. The assumptions used in Black-
Scholes option pricing model are as follows: share price of $1.81, adjusted exercise price of $2.39 less the warrant cash consideration of US$0.11,
dividend yield of 0%, expected life of 0.62 years, volatility of 44.66% and risk-free interest rate of 1.21% . Volatility of 44.66% represents the
historical volatility that the Company has used to value similar equity instruments. The fair value of the 1,125,000 replacement warrants is based
on Bullion’s outstanding 2,500,000 warrants adjusted by a factor of 0.45 of each of the Company’s common share per Bullion warrant.
From the closing date of the business combination, royalty revenues of $1,750,975 and net royalty income of $537,035 were generated by Bullion
operations. If this business combination had taken place at the beginning of the year, the Company's pro-forma consolidated royalty revenue
would have been $4,117,405 and pro forma consolidated net royalty income would have been $1,262,834 for the year ended December 31, 2012.
The Company incurred total transaction costs of $940,591 related to the acquisition of Bullion, and these amounts have been expensed in the
consolidated statement of loss for the year ended December 31, 2012.
Page 18
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
3. ACQUISITION OF BULLION MONARCH MINING, INC. (Continued)
The Company believes the addition of Bullion and the currently producing royalty interest and related cash flows from the royalty interest will
help to advance existing projects and help fund the generation of new projects, and other current obligations.
4. CASH AND CASH EQUIVALENTS
Cash consists of deposits at banks earning interest at floating rates based on daily bank deposit rates and cash on hand. Cash equivalents consist of
short-term deposits with maturities less than 90 days.
Cash
Short-term deposits
Total
5. RESTRICTED CASH
December 31, 2012 December 31, 2011
13,486,726
27,885,242
41,371,968
6,891,326 $
14,808,657
21,699,983 $
$
$
At December 31, 2012, the Company classified $77,519 (December 31, 2011 - $155,992) as restricted cash. This amount is comprised of $50,960
(December 31, 2011 - $50,960) held as a security deposit for the Company’s Haiti exploration program, and $26,559 (December 31, 2011 -
$105,032) cash held by wholly-owned subsidiaries of the Company whose full amount is for use and credit to the Company’s exploration venture
partners in Haiti and Sweden.
6. INVESTMENTS
At December 31, 2012, the Company had the following investments:
December 31, 2012
Fair value through profit or loss
Warrants
Marketable securities
Total investments
At December 31, 2011, the Company had the following investments:
December 31, 2011
Fair value through profit or loss
Warrants
Marketable securities
Total investments
Page 19
Cost
Accumulated
unrealized loss
Fair value
$
-
2,152,636
2,152,636 $
- $
(567,614)
(567,614) $
-
1,585,022
1,585,022
Cost
Accumulated
unrealized gain
Fair value
$
-
789,059
789,059 $
37,411 $
116,819
154,230 $
37,411
905,878
943,289
$
$
$
$
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
7. RECEIVABLES
The Company’s receivables arise from royalty receivable, goods and services tax and harmonized sales taxes receivable from government
taxation authorities, and recovery of exploration expenditures from joint venture partners, as follows:
Category
Royalty income receivable
Refundable taxes
Recoverable exploration expenditures and advances
Other
Total
The carrying amounts of the Company’s receivables are denominated in the following currencies:
Currency
Canadian dollars
US dollars
Turkish Lira
Swedish Krona
Other
Total
8. PROPERTY AND EQUIPMENT
December 31, 2012 December 31, 2011
-
305,814
208,428
44,460
558,702
461,631 $
344,362
216,066
9,999
1,032,058 $
$
$
December 31, 2012 December 31, 2011
236,219
150,441
101,904
39,423
30,715
558,702
198,612 $
585,477
131,172
56,572
60,225
1,032,058 $
$
$
During the year ended December 31, 2012, depreciation of $117,478 (nine month period ended December 31, 2011 -$59,959) has been included
in exploration expenditures.
Cost
As at March 31, 2011
Additions
Disposals and derecognition
As at December 31, 2011
Additions
Disposals and derecognition
As at December 31, 2012
Accumulated depreciation
As at March 31, 2011
Additions
Disposals and derecognition
As at December 31, 2011
Additions
Disposals and derecognition
As at December 31, 2012
Net book value
As at March 31, 2011
As at December 31, 2011
As at December 31, 2012
Computer
Field
Office
Vehicles
Building
Land
Total
$
$
$
$
$
70,360
34,374
(17,602)
87,132
31,846
(1,992)
116,986
59,080
7,672
(16,697)
50,055
22,885
(1,524)
71,416
11,280
37,077
45,570
$
$
$
$
$
160,514
63,198
(50,777)
172,935
56,175
(6,426)
222,684
78,729
27,872
(6,537)
100,064
25,133
(6,426)
118,771
81,785
72,871
103,913
$
$
$
$
$
145,633
-
(42,653)
102,980
42,924
(16,697)
129,207
64,445
11,882
(27,178)
49,149
33,142
(16,697)
65,594
81,188
53,831
63,613
$
$
$
$
$
Page 20
476,493
81,342
(276,180)
281,655
196,135
(106,853)
370,937
335,830
13,411
(204,708)
144,533
36,095
(91,864)
88,764
140,663
137,122
282,173
$
$
$
$
$
-
-
-
-
615,302
-
615,302
-
-
-
-
85,866
-
85,866
-
-
529,436
$
$
$
$
$
-
-
-
-
552,277
-
552,277
-
-
-
-
-
-
-
-
-
552,277
$
$
$
$
$
853,000
178,914
(387,212)
644,702
1,494,659
(131,968)
2,007,393
538,084
60,837
(255,120)
343,801
203,121
(116,511)
430,411
314,916
300,901
1,576,982
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
9. INVESTMENTS IN ASSOCIATED COMPANIES
The Company has a 49% equity investment in a private Turkish company with Chesser Resources Ltd, an Australian Stock Exchange listed
exploration company. At December 31, 2012, the Company’s investment in the joint venture was $NIL (December 31, 2011 - $81,171). The
Company’s share of the net loss of the joint venture for the year ended December 31, 2012 was $81,171 (share of net income for the nine month
period ended December 31, 2011 - $2,029).
The Company also has a 30.66% equity investment in Inter Geo Resources LLC (“IGR”). At December 31, 2012, the Company has paid
$4,054,739 towards its investment. At December 31, 2012 the Company’s investment less its share of accumulated equity losses was $3,002,101
(December 31, 2011 - $1,813,718). The Company’s share of the net loss for the year ended December 31, 2012 was $1,063,236 (nine months
ended December 31, 2011 - $179,470). Included in this loss is $190,089 (nine months ended December 31, 2011 - $Nil) of share-based
compensation which is reflected in equity of the Company.
As at December 31, 2012, associated companies’ aggregate assets, aggregate liabilities and net loss for the period are as follows:
December 31, 2012
Aggregate assets
Aggregate liabilities
Loss for the period
The Company's ownership %
The Company's share of loss for the year
$
Turkish Co
104,210 $
(88,617)
(249,627)
49.00%
(81,171)
IGR
4,954,888
(343,378)
(3,467,829)
30.66%
(1,063,236)
As at December 31, 2011, associated companies’ aggregate assets, aggregate liabilities and net loss for the period are as follows:
December 31, 2011
Aggregate assets
Aggregate liabilities
Loss for the period
The Company's ownership %
The Company's share of income (loss) for the period
$
Turkish Co
124,014 $
(626,962)
4,183
49.00%
2,029
IGR
4,247,489
(3,163,578)
(3,521,214)
26.70%
(179,470)
Page 21
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS
Acquisition costs
At December 31, 2012 and 2011, the Company has capitalized the following acquisition costs on its exploration and evaluation assets:
Region
Asia Pacific
Haiti
Kyrgyz Republic
Sweden
Turkey
United States
of America
Properties
Various
Grand Bois property
Grand Bois property (recoveries)
Gezart property
Various
Viad royalties
Alankoy
Golcuk property
Trab
Cathedral Well, Nevada
Copper Springs, Arizona
Jasper Canyon, Arizona
Mesa Well, Arizona
Middle Mountain, Arizona
Mineral Hill, Wyoming
Red Hills, Arizona
Richmond Mountain, Nevada
Silver Bell, Arizona
Superior West, Arizona
Yerington, Nevada
$
$
December 31, 2012
698,124
2,140,720
(2,140,720)
-
16,671
421,084
153,960
34,674
78,587
419,300
-
235,856
-
-
262,062
314,475
262,062
471,711
1,179,280
393,095
December 31, 2011
441,856
2,140,720
(2,140,720)
39,000
16,671
421,084
153,960
34,674
78,587
419,300
786,186
235,856
314,475
262,062
262,062
314,475
262,062
471,711
1,179,280
393,095
Total
$
4,940,941
$
6,086,396
During the year ended December 31, 2012 the Company wrote-off previously capitalized acquisition costs of $1,362,723 (nine month period
ended December 31, 2011 - $408,872) related to the Copper Springs, Mesa Well, and Middle Mountain in the US. All claims are in good standing
and held by the Company, but Management has determined that there was little prospect of significant work on these claims being carried out by
the Company or its partners in the foreseeable future.
Asia Pacific (Australia) exploration licenses
The Company’s Australian properties are comprised of contiguous exploration licenses along the Koonenberry gold belt in New South Wales,
Australia. The Australian properties are acquired either directly through staking or through agreements with three key license holders.
Page 22
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Asia Pacific (Australia) exploration licenses (Continued)
Koonenberry - Perry & Armstrong
On December 7, 2009, the Company entered into an agreement, subsequently amended, to acquire a right to earn up to a 100% interest in an
exploration license. To acquire its interest, the Company is required to provide consideration of A$100,000 (cash and shares) and work
commitments totaling A$350,000 over a period of three years as follows:
Period
Commencement date (paid)
June 30, 2011 (issued and incurred)
June 30, 2012 (incurred)
June 30, 2013
Total
Initial Payment (A$) Expenditures (A$)
-
50,000
100,000
200,000
350,000
20,000 $
80,000
-
-
100,000 $
$
$
Once the 100% ownership is earned by the Company in the vendor’s interest reverts to a 2% net smelter returns royalty (“NSR”), at which time
the Company has the right to buy the 2% NSR (after bankable feasibility study) for consideration equivalent to 10% of the “Proved Ore
Reserves”, as defined in the Code for Reporting of Mineral Resources and Ore Reserves (the “JORC Code”) set by the Australasian Joint Ore
Reserves Committee, of gold contained within the tenement at a price of US$30 per ounce of gold.
Koonenberry - Arastra
On July 13, 2010, the Company entered into an agreement with to acquire a right to earn up to a 100% interest in four Exploration Licenses in
consideration of A$50,000 cash and by making a series of advance minimum royalty payments (“AMR”) totaling A$2,020,000 (half in cash and
half in shares) and satisfying work commitments of A$5,500,000 over a period of five years as follows:
Period
Commencement date
July 13, 2011
July 13, 2012
July 13, 2013
July 13, 2014
July 13, 2015
Total
$
$
Initial Payment (A$)
50,000(paid) $
-
-
-
-
-
50,000 $
Cumulative
Expenditures (A$)
-
300,000(incurred)
1,000,000(incurred)
2,000,000
3,500,000
5,500,000
5,500,000 $
Advance Minimum
Royalty
Payments (A$)
$ 70,000(paid in shares)
100,000(paid)
200,000(paid)
250,000
300,000
1,100,000
2,020,000
EMX Percentage
Interest Earned (%)
0%
0%
50%
50%
50%
100%
Once 100% ownership is earned by the Company, the Vendor’s interest reverts to a 2% NSR, at which time the Company has the right to
purchase 1.5% (after bankable feasibility study) of the NSR for A$8,000,000 less total AMR payments.
Page 23
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Asia Pacific (Australia) exploration licenses (Continued)
Koonenberry - Rockwell
The Company entered into an agreement on March 2, 2011 to earn a 100% interest in the Kayrunnera exploration license. Under this agreement,
the Company will make a series of payments totaling A$200,000 over two years through a combination of A$100,000 cash, A$100,000 in shares,
and satisfying work commitments totaling A$1,100,000 over a three year period as follows:
Period
Commencement date (paid and issued)
March 2, 2012 (paid, issued and incurred)
March 2, 2013 (paid subsequently and incurred)
March 2, 2014
Total
Cash and shares (A$) Expenditures (A$)
-
250,000
350,000
500,000
1,100,000
100,000 $
50,000
50,000
-
200,000 $
$
$
Once the 100% ownership is earned by the Company, the vendor’s interest reverts to a 2% NSR, at which time the Company has the right to buy
1.0% of the NSR for A$5,000,000. The residual 1.0% NSR can be purchased by the Company for an additional A$8,000,000 at any time
thereafter.
In February 2013, the agreement was amended whereby the final payment of cash and shares for A$50,000 was fully paid and received as
A$50,000 cash with no share component.
Koonenberry - Bates
The Company entered into an agreement on May 14, 2010 to earn a 100% interest in two New South Wales exploration license applications.
Under this agreement, the Company will make a payment of A$15,000, and satisfy work commitments totaling A$170,000 over a two year period
as follows:
Period
Commencement date (paid)
May 14, 2011 (incurred)
May 14, 2012 (incurred)
Total
Asia Pacific (New Zealand) permits
Reimbursement of Past
Expenditures (A$) Expenditures (A$)
-
70,000
100,000
170,000
15,000 $
-
-
15,000 $
$
$
On November 15, 2012, the Company signed an option agreement to sell all of the issued share capital of EMX New Zealand (BVI) Inc. (“EMX-
NZ”), a wholly owned subsidiary of the Company to Glass Earth Gold Limited (“GEG”) a TSX Venture Exchange and New Zealand Alternative
Exchange listed company. EMX-NZ is the owner of all of the issued share capital of Hauraki Gold Limited (“HGL”), a company incorporated in
New Zealand and the registered holder of certain exploration permits in New Zealand.
Page 24
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Asia Pacific (New Zealand) exploration licenses (Continued)
In order to complete the option to purchase, GEG must:
i)
ii)
iii)
iv)
Upon execution of the agreement GEG must pay to the Company the sum (in USD) equal to an estimate of past exploration
expenditures ($85,567 received, and recorded as option payments received on the consolidated statement of loss);
Once the right of access to the permits is obtained, GEG must within fifteen days issue and allot to Eurasian such number of GEG
shares as equates to the value at the time of issue of 850 troy ounces of Gold. GEG may elect 1- month prior to the date of access to
delivery 850 troy ounces of Gold or cash in equivalent value to 850 troy ounces of Gold in substitution of GEG shares;
On the first anniversary of the date of being granted Access, and each anniversary date thereafter until the transfer of share is
complete, GEG must delivery an amount equal to 75 troy ounces of Gold. Such amount can be paid in $US cash, Gold Bullion, or
GEG shares;
On completion date of the option agreement and each anniversary date thereafter until start of production from a mine located on or
about the area of permits. The anniversary payments noted above shall increase to 100 troy ounces to be paid in $US cash, Gold
Bullion, or GEG shares.
Haiti exploration permits
Eurasian - Newmont Joint Venture
In April 2008, Eurasian and Newmont Ventures Limited (“Newmont”) established a Joint Venture (“JV”) on the La Miel project and a Regional
Strategic Alliance covering northern Haiti. Under the Regional Strategic Alliance the Company had the right to establish specific exploration
areas, after spending US$200,000 on that area, as a "Designated Project" (“DP”) candidate, at which time Newmont could choose to advance the
project to DP status or decline. If accepted, Newmont could earn an initial 70% interest in a DP by completing a Feasibility Study or solely
funding the first US$10,000,000 in DP expenditures on or before six years from the effective date, whichever comes first. If Newmont declined,
the Company could advance that property on its own terms with no further obligation to Newmont. In December 2008 the Company acquired the
Grand Bois property which became two DP’s with Newmont: the Grand Bois DP and the Grand Bois Surrounding Properties DP. In August
2009, the Company and Newmont established the La Mine DP and in September 2010, the Montagne and Platon licenses were selected as the
Haiti Northwest DP (formerly known as the Montagne DP). In January 2011, the Strategic Venture Agreement concluded, and exploration lands
formerly covered by the agreement became two new DP’s: Northeast Haiti and North Central Haiti. In January 2011 the Grand Bois Surrounding
Properties Joint Venture, Haiti Northwest, and the La Miel DP agreements were all amended to include additional lands.
In April 2012, a memorandum of understanding was signed by the JV and the government of Haiti that establishes protocols to continue
discussions regarding the pending mining convention, and allows drilling on selected projects. Additionally, Newmont relinquished their rights in
the Grand Bois Research Permit that covers the historic gold resource area; as a result, the Company has regained 100% control of the Grand Bois
project.
Page 25
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Haiti exploration permits (Continued)
Eurasian - Newmont Joint Venture (Continued)
Eurasian’s property interests in Haiti are now covered by DP’s, as follows:
La Miel Designated Project
In July 2006, the Company acquired the La Miel gold project in Haiti. On April 18, 2008, the Company and Newmont entered into an agreement
for La Miel, whereby Newmont can earn a 65% participating interest in the La Miel JV by (i) completing a Feasibility Study which identifies a
minimum resource containing at least 3,000,000 ounces of gold (subject to NI 43-101 resource and reserve reporting requirements) or (ii) solely
funding the first US$30,000,000 in venture expenditures over a six year period commencing from the date the government issues the mining
convention and research permits, whichever comes first. If the Company elects that its interest be financed by Newmont, then Newmont may earn
an additional 5% interest in this Project.
La Mine Designated Project
On August 24, 2009, Newmont elected the Treuil and La Mine licenses as a DP. Newmont may earn a 65% participating interest in the La Mine
JV by (i) completing a Feasibility Study which reports a minimum reserve containing at least 2,000,000 ounces of gold (subject to NI 43-101
classification requirements) or (ii) solely funding the first US$20,000,000 in venture expenditures over a six year period commencing from the
date the government issues the mining convention and research permits, whichever comes first. If the Company elects that its interest be financed
by Newmont, then Newmont may earn an additional 5% interest in this Project.
Grand Bois Research Permit and Surrounding Properties Designated Project
On December 22, 2008, the Company, through its Haitian subsidiary Ayiti Gold Company S. A., purchased a 100% interest in the Grand Bois
property from Société Minière Citadelle S.A. and La Geominerale d’Haiti S.A. (together “SMC”), subject to making the payments as follows:
(cid:122) Pay SMC US$1,000,000 (paid) subject to certain deductions required to maintain the property in good standing.
(cid:122) On January 21, 2010, pay an equivalent of US$1,000,000 (paid).
(cid:122) Upon completion of a feasibility study, pay SMC the equivalent of US$3,000,000 in either the Company’s stock or cash, or any
combination thereof.
(cid:122) SMC retains a 20% net profits interest. The Company has the option at any time to purchase SMC's net profits interest for US$15,000,000.
Newmont can earn a 65% interest in the JV by choosing to either fund 100% of the initial US$10,000,000 of expenditures on the project or
complete a positive feasibility study on the property by December 22, 2014. Newmont has reimbursed the Company for the first and second
payments of US$1,000,000 made to SMC. After Newmont earns a 65% interest in the project, the Company has 120 days to elect one of three
options: (a) fund its proportionate share of expenditures for the program; (b) let Newmont fund the Company’s share of expenditures to
production in exchange for receiving an additional 5% interest in the project up to 70%; or (c) convert its 35% interest to a 3.5% NSR royalty and
receive annual US$1,000,000 AMR payments.
During fiscal 2012, Newmont relinquished its rights in the Grand Bois Research Permit. Newmont will retain its exploration interest in the
Designated Project’s permits that surround the Research Permit.
Page 26
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Haiti exploration permits (Continued)
Eurasian - Newmont Joint Venture (Continued)
Haiti Northwest Designated Project
On September 7, 2010, the Platon and La Montagne licenses were elected as a DP. Newmont may earn a 70% participating interest in the Haiti
Northwest DP by solely funding the first US$10,000,000 in venture expenditures within six years following the issuance of the mining
convention and research permits for this Project. If the Company elects that its interest be financed by Newmont, then Newmont may earn an
additional 5% interest in this Project.
Northeast Haiti Designated Project and North Central Haiti Designated Project
On January 18, 2011, the remaining lands that were subject to the Strategic Venture Agreement were formed into two DP’s. Newmont may earn a
70% participating interest in an individual DP by solely funding the first US$10,000,000 in venture expenditures within six years following the
issuance of the mining convention and research permits for each project. If the Company elects that its interest be financed by Newmont, then
Newmont may earn an additional 5% interest.
Gezart, Kyrgyz Republic
On July 2012, the Company sold its wholly owned subsidiary, Altyn Minerals (BVI) Ltd, and its related Kyrgyz Republic subsidiaries, Altyn
Minerals, LLC, and Montex for net proceeds of US$30,000 (received) and a 2.5% NSR. All related balances have been removed from the
Company’s consolidated financial statements and a loss of $38,299 has been recorded on the sale.
Sweden licenses
The Company has been granted exploration permits that comprise the Kiruna South project in Northern Sweden. Additionally, the Company
holds licenses under the Storasen Project and licenses in the regional program. There are no specific spending commitments on the Swedish
licenses and permits.
Eurasian - Antofagasta Joint Venture
On February 17, 2011, the Company entered into a Strategic Alliance and Earn-In Agreement (the “Agreement”) with Antofagasta Minerals S.A.,
(“Antofagasta”). The Agreement includes a regional strategic exploration alliance that covers all of Sweden (subject to certain exclusions), and an
agreement to designate the Kiruna South copper property as a DP, with a right of Antofagasta to earn up to an undivided 70% interest therein.
Regional Strategic Alliance and Designated Projects
The Company and Antofagasta will conduct a regional generative exploration program to identify additional prospective properties for
acquisition, with the Company serving as operator. Antofagasta will contribute funding of at least US$250,000 annually for a minimum two year
period which may be extended. In the event a property meets certain criteria it may be classified as a DP, and will be subject to the terms and
earn-in conditions described below. If a property is declined as a DP, Eurasian is free to advance that property on its own terms with no further
obligation to Antofagasta.
Page 27
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Sweden licenses (Continued)
Regional Strategic Alliance and Designated Projects (Continued)
Upon an Alliance Property being determined to be a DP, Antofagasta may earn a 51% Interest in any DP (other than the Kiruna South DP
described below) by spending an aggregate of US$5,000,000 over five years and making a one-time cash payment on or before the fifth
anniversary equal to the product obtained by multiplying 225,000 pounds of copper times the average price of copper for the previous 30 trading
days. Antofagasta may earn an additional 19% by solely funding further exploration work and maintaining work commitments that escalate to
US$2,000,000 per year by the fourth anniversary of the initial earn-in, delivering a NI 43-101 compliant feasibility study, and making another one
time cash payment equal to the product obtained by multiplying 225,000 pounds of copper times the average price of copper for the previous 30
trading days. In the event Antofagasta completes the earn-in requirements to hold a 70% interest in any DP, each party will fund its share of
further expenditures on a go forward basis. Standard dilution clauses will apply, and if either party's interest is diluted below 10%, their interest
will automatically be converted to a 2% NSR. The Company will also retain the right to convert its participating interest in a DP into a 2% NSR
at any time after Antofagasta earns its 70% interest in such DP and until commercial production is reached. The conversion option also includes
an annual advance royalty payment equal to the product obtained by multiplying 90,000 pounds of copper times the average price of copper for
the previous 30 trading days.
Kiruna South Designated Project
The Kiruna South DP consists of the certain explorations permits. Antofagasta may earn a 51% Interest in the Kiruna South DP by spending an
aggregate of US$10,000,000 over five years and making a one-time cash payment by the fifth anniversary equal to the product obtained by
multiplying 225,000 pounds of copper times the average price of copper for the previous 30 trading days. If Antofagasta completes the First
Option Expenditures, the terms for earning additional interests are the same as described above for the Regional Strategic Alliance and
Designated Projects.
Turkey exploration licenses
The Company has acquired numerous exploration licenses in Turkey for which there are no specific spending commitments.
Sisorta Joint Venture
On October 26, 2007, Eurasian signed an agreement to joint venture the Sisorta gold project with Chesser Resources Limited, (“Chesser”).
Chesser earned a 51% interest in the JV by making payments of 3,000,000 common shares, US$300,000 cash and funding US$4,000,000 in
exploration expenditures.
On April 2, 2012, the Company and Chesser executed an agreement to sell the Sisorta property to a privately owned Turkish company, Colakoglu
Ticari Yatirim A.S. (“Colakoglu”). The agreement requires Colakoglu to make an up-front payment of 100 troy ounces of gold bullion or its cash
equivalent ($80,216 received), and to undertake a US $500,000 work commitment over the first year. After the first year, Colakoglu can exercise
an option to purchase the property for an additional 6,900 troy ounces of gold, or its cash equivalent, with the payments binding on exercise of the
option, but staged over a period of four years after option exercise. A 2.5% NSR from any production on the property will also be received. As
the Company has a 49% interest in Sisorta, its share of the above will comprise 3,381 troy ounces of gold bullion and a 1.225% NSR. The
Company was subsequently advised by Colakoglu that the option was terminated effective March 21, 2013.
Page 28
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Turkey exploration licenses (Continued)
Akarca Joint Venture
On December 23, 2008, the Company signed an option and joint venture agreement (the "Agreement") on the Akarca, Samli, and Elmali
properties in Turkey (the "Properties"), with a subsidiary of Centerra Gold Inc. ("Centerra"), a Canadian gold mining and exploration company.
Centerra may earn a 50% interest by making US$5,000,000 in exploration expenditures over 3 years (incurred) and making a payment of
US$1,000,000 within 30 days of earn-in (not paid).
On October 29th, 2012, the parties signed a Termination of Shareholders Agreement, and in return for relieving Centerra of certain exploration
and payment obligations Eurasian regained 100% control of Akarca.
Dedeman Agreement - Aktutan
On August 7, 2007, the Company entered into an agreement with Dedeman Madencilik San.Vetic A.S. (“Dedeman”) for the sale of the Aktutan
exploration property. Dedeman is required to make a US$40,000 (received) advance royalty payment to the Company prior to August 7, 2008,
US$60,000 (received) prior to August 7, 2009 and US$100,000 prior to August 7, 2010 and thereafter for as long as they hold the property.
Dedeman has drilling and expenditure commitments over the first three years of the agreement depending on results. The Company will retain a
4% NSR and can re-acquire the property if Dedeman decides to relinquish it. As of December 31, 2012, the advance royalty payments due on
August 7, 2011 and August 7, 2012 had not been received.
Dedeman Agreement – Alankoy and Sofular
In November 2006, the Company through its wholly owned subsidiary, Eurasia Madencilik Ltd. Sti, completed an exchange of mineral properties
with Dedeman. The Company transferred its Balya and Sofular lead-zinc properties to Dedeman in exchange for the Alankoy gold-copper
property. The Company made a US$100,000 advance royalty payment to Dedeman for the Alankoy property in May 2008. Dedeman retains a 3%
NSR on the property and a reversionary right to re-acquire the property should the Company decide to relinquish the license. The Company
retains the right to purchase Dedeman’s 3% royalty for US$1,000,000 at any time. Dedeman is to make a US$100,000 advance royalty payment
(received) to the Company for the Balya property prior to the first anniversary of the agreement. Dedeman is also committed to drill a minimum
of 12 exploration holes for a total of 3,000 meters during the first year (completed) and incur expenditures of US$500,000 in year 2 (incurred) and
US$1,000,000 in year 3 (incurred). The Company retains a 4% NSR and a reversionary right to re-acquire the property if Dedeman decides to
relinquish the license. Dedeman also acquired the Sofular properties but the Company retains a 3% NSR on the properties and a reversionary
interest in the properties should Dedeman decide to relinquish one or more of them. Dedeman has the right to purchase the 3% royalty on Sofular
at any time for US$1,000,000.
Golcuk Transfer and Royalty Agreement
On July 17, 2012, the Company entered into an agreement with Pasinex Resources Limited (“PRL”) to transfer 100% interest in the Golcuk
property in exchange for PRL issuing shares to the Company as follows,
i)
ii)
500,000 PRL shares on the initial issuance date;
An additional 500,000 PRL shares on or before the first anniversary of the initial issuance date;
iii)
An additional 1,000,000 PRL shares on or before the second anniversary of the initial issuance date; and,
Page 29
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
Turkey exploration licenses (Continued)
Golcuk Transfer and Royalty Agreement (Continued)
iv)
An additional 1,000,000 PRL Shares on or before the third anniversary of the initial issuance date.
United States exploration licenses
Buckhorn Creek Property, Arizona
The Company holds a 100% interest in the Buckhorn Creek property comprised of certain unpatented federal mining claims and two State of
Arizona exploration permit.
Bullion Creek Property, Arizona
The Company holds a 100% interest in the Bullion Creek property comprised of certain unpatented federal mining claims and one State of
Arizona exploration permit.
Cathedral Well Property and Richmond Mountain Property, Nevada
The Company holds a 100% interest in the Cathedral Well property comprised of certain unpatented federal mining claims, located on Bureau of
Land Management (“BLM”) and National Forest lands subject to a 0.5% NSR. The 100% owned Richmond Mountain property comprises certain
unpatented federal mining claims. The company executed separate agreements for the projects with Ashburton Ventures on March 21, 2012.
Ashburton has an option to acquire an initial 65% and 70% interest, respectively in each project subject to certain ongoing exploration obligations
and cash and share payments. On November 6, 2012, the Company received notification of termination of both property agreements.
Copper Basin Property, Arizona
The Company holds a 100% interest in the Copper Basin property comprised of certain unpatented federal mining claims and one State of
Arizona exploration permit subject to the terms of an Earn-In Agreement dated September 27, 2011 with Vale Exploration (“Vale”). Vale may
earn an initial 60% equity interest in the project for consideration of cash payments and US$4,500,000 in exploration expenditures within four
years.
Copper King Property, Arizona
The company holds a 100% interest in the Copper King property comprised of certain unpatented federal mining claims.
Copper Springs, Globe-Miami District, Arizona
The company holds a 100% interest in the Copper Springs property comprised certain federal unpatented mining claims and Arizona State
exploration permit.
Cruiser Gold Property, Nevada
The Company holds a 100% interest in the Cruiser Gold property comprised of certain unpatented federal lode mining claims.
Page 30
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
United States exploration licenses (Continued)
Frazier Creek Property, Nevada
The Company holds a 100% interest in the Frazier Creek property mineral rights comprised of certain unpatented federal lode mining claims.
French Bullion Property, Nevada
The Company holds a 100% interest in the French Bullion property comprised of certain unpatented federal lode mining claims.
Hardshell Skarn Property, Arizona
The Company holds a 100% interest in the Hardshell Skarn property comprised of certain unpatented federal lode mining claims.
Jasper Canyon Property, Arizona
The Company holds a 100% interest in the Jasper Canyon property comprised of certain unpatented mining claims located in Tonto National
Forest.
Liberty Property, Alaska
The Company holds a 100% interest in the Liberty property comprised of certain State of Alaska prospecting sites.
Lomitas Negras Property, Arizona
The Company holds a 100% interest in the Lomitas Negras property comprised of certain unpatented federal lode mining claims and certain State
of Arizona exploration permits.
Mesa Well Property, Arizona
The Company holds a 100% interest in mineral rights held by certain Arizona State Exploration Permits. During the period ended December 31,
2011, the Company executed a Regional Acquisition Agreement with Vale, whereby as part of the Agreement, Vale elected the Mesa Well
project as the first DP and subject to the terms of an Earn-In Agreement. Vale could earn an initial 60% equity interest in the project for
consideration of cash payments and $4,500,000 in exploration expenditures within four years.
Vale terminated its interest in the Mesa Well property in June 2012.
Middle Mountain Property, Arizona
The Company holds a 100% interest in certain federal unpatented mining claims and certain Arizona State Exploration Permits subject to a
Mining Lease dated March 4, 2008 and a subsequently amended and Restated Mining Lease and Option Agreement dated November 12, 2009,
whereby the Company granted Geo Minerals, (“GEO”) a 100% interest in the Middle Mountain property, for consideration comprising advance
royalty payments, common shares of GEO, and minimum exploration expenditures. The Company retains a 2.5% NSR. The Company executed
an amendment assigning the GEO interest to GeoNovus (“GEN”), after GEO’s merger with New Gold Inc. on November 16, 2011.
Page 31
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
United States exploration licenses (Continued)
Middle Mountain Property, Arizona (Continued)
All exploration expenditures and holding costs have been paid as part of the agreement with GEN but due to current expenditures on the project,
all capitalized costs have been written off during the year ended December 31, 2012.
Mineral Hill Property, Wyoming
The Mineral Hill property is comprised of certain unpatented mining claims staked by the Company on lands administered by the Black Hills
National Forest. The Company owns a 100% interest in the claims subject to a Pooling Agreement dated July 31, 2009 whereby the Company
“pooled” its interest in the mining claims with Mineral Hill LP (“MH”) who owns a 100% interest in certain patented mining claims and
unpatented federal mining claims that adjoin the Company’s property. The Agreement stipulates that consideration received from any third party,
including lease payments, stock distribution, and royalties be divided as to 40% to the Company and 60% to MH. Until such time as a third party
has paid a total of US$5,000,000 in proceeds to the Company and MH, all further consideration will be divided as to 30% to the Company and
70% to MH.
Moran Dome Property, Alaska
The Company holds a 100% interest in the Moran Dome property comprised of certain State of Alaska mining claims and certain State of Alaska
prospecting sites.
Park-Sayler Property, Arizona
The Company holds a 100% interest in the Park-Sayler property comprised of one State of Arizona exploration permit.
Red Hills Property, Arizona
The Red Hills property is comprised of certain federal unpatented mining claims, and certain Arizona State exploration permits. The Company
owns a 100% interest in the mineral rights subject to a Mining Lease dated August 4, 2008 and a subsequent Amended and Restated Mining
Lease and Option Agreement dated November 12, 2009, whereby the Company granted GEO a 100% interest in the Red Hills property, for
consideration of advance royalty payments, common shares of GEO, and minimum exploration expenditures. The Company retains a 2.5% NSR.
The Company executed an amendment assigning the GEO interest to GEN, after GEO’s merger with New Gold Inc. on November 16, 2011.
GEN will continue advancing the project under the terms of the GEO agreement.
Red Picacho Property, Arizona
The Company holds a 100% interest in the Red Picacho property comprised of certain unpatented federal mining claims.
Red Top Property, Arizona
The Company holds a 100% interest in the Red Top property comprised of certain unpatented federal mining claims.
San Manuel Property, Arizona
The Company holds a 100% interest in the San Manuel property comprised of certain State of Arizona exploration permits.
Page 32
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
United States exploration licenses (Continued)
Sand Pass Property, Utah
The Company holds a 100% interest in the Sand Pass property comprised of certain unpatented federal mining claims.
Silver Bell West, Silver Bell District, Arizona
The Company holds a 100% interest in mineral rights comprised of certain federal unpatented mining claims subject to a Letter of Agreement
dated August 26, 2009 whereby, the Company granted GEO a 100% interest in the Silver Bell West property, for consideration of advance
royalty payments, common shares of GEO, and warrants to purchase GEO common shares, and minimum exploration expenditures. The
Company retains a 2.5% NSR. On December 15, 2011, the Company executed an amendment assigning the GEO interest to GEN, after GEO’s
merger with New Gold Inc.
Superior West Project, Arizona
The Company holds a 100% interest in the mineral rights comprised of certain federal unpatented mining claims, located on Tonto National
Forest lands and unpatented federal mining claims under option. The Company may earn a 100% interest in the option claims, for the
consideration of cash payments totaling US$1,000,000 on or before July 31, 2014 and subject to a 2% NSR Royalty, 1% of which may be
purchased for US$2,000,000 in 0.5% increments.
By Earn-In Agreement dated July 31, 2009, the Company granted Freeport-McMoran Mineral Properties, a wholly owned subsidiary of Freeport-
McMoran Exploration Corporation (“FMEC”) two separate rights to acquire a 51% and a subsequent 19% interest. The initial interest in the
Superior West property may be acquired for cash consideration, making all property and option payments on behalf of the Company to the
original owners of the property and minimum exploration expenditures. FMEC may acquire the additional 19% interest by solely funding and
delivering a feasibility study.
Yerington West Property, Nevada
The Yerington West property is comprised of certain unpatented federal mining claims located on lands administered by the BLM. By Option
Agreement, dated September 24, 2009, the Company granted Entrée Gold Inc. (“ETG”) the right to acquire an 80% interest in the property, for
consideration of cash payments, common shares of ETG, advanced production payments, minimum exploration expenditures and delivery of a
bankable feasibility study by November 23, 2019 as follows:
Period
Commencement date - September 24, 2009 (received)
Satisfaction Date (received)
30 days after Satisfaction Date (received)
180 dats after Satisfaction Date (received)
November 23, 2010 (received and incurred)
November 23, 2011 ( received and incurred)
November 23, 2012 (received and incurred)
November 23, 2014
November 23, 2015
November 23, 2016
November 23, 2017
November 23, 2018
November 23, 2019
Total
$
$
Cash Payments ($USD) ETG Shares Expenditures Advanced Production
Payments
-
-
-
-
-
-
-
50,000
50,000
50,000
75,000
75,000
75,000
375,000
- $
-
-
-
300,000
600,000
1,000,000
-
-
-
-
-
-
1,900,000 $
- $
-
50,000
-
22,500
12,500
-
-
-
-
-
-
-
20,000
20,000
-
50,000
-
50,000
-
-
-
-
-
-
-
140,000
85,000 $
Page 33
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (Continued)
United States exploration licenses (Continued)
EMX - VALE Regional Acquisition Agreement
On April 6, 2011, the Company signed a Regional Acquisition Agreement with Vale focused on identifying and developing copper projects in the
western United States. The Agreement includes a regional exploration portfolio generation program, under which Vale has elected to make the
Mesa Well and Copper Basin copper properties the first DP. The Company will be the operator of the program, and Vale will provide 100% of all
regional exploration funding, with a minimum first year expenditure of US$350,000. Vale may earn an initial 60% interest in any new
acquisition, as well as those within the Company's current portfolio, as a DP by spending US$4,500,000 in exploration over a four year period.
Vale may earn an additional 15% in a DP by (a) solely funding exploration work at a minimum of US$1,000,000 per year; (b) producing a
feasibility study within seven years of DP election; and (c) making a $500,000 cash payment to the Company.
On August 31, 2012, Vale terminated its interest in the Regional Acquisition Agreement. The Company received a termination fee of $87,500 in
November 2012, and all capitalized costs have been written off during fiscal 2012. As of year-end, all projects under the alliance have reverted
back to the Company with the exception of Copper Basin designate project.
Mexico
Pursuant to a consulting agreement entered into on July 27, 2010 and terminated on March 8, 2011, the Company earned the right to transfer title
of certain mineral claim tenures known as the Rosa Blanca property, located in San Luis Potosi State, Mexico, and the Bonanza property, located
in Hidalgo State, Mexico to Windstorm Resources Inc. (“Windstorm”),. On September 21, 2011, the Company entered into an agreement with
Windstorm, granting Windstorm the option to acquire an undivided 100% interest in the properties. To earn its interest, Windstorm is required to
issue a total of 1,000,000 shares over a period of five years with 100,000 due within 15 days from approval of the agreement (received 100,000
shares at a value of $8,000 or $0.08 per share), and incurring $2,000,000 in qualifying expenditures over five years.
Page 34
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (continued)
Exploration expenditures
During the year ended December 31, 2012, the Company incurred the following exploration expenditures by projects, which were expensed as
incurred:
Sweden
Kiruna
South
Other
Total
Vale
$
48,896 $
51,420
381,140
156,823
357,505
17,348
54,702
-
53,689 $ 102,585 $
79,416
27,996
569,512
188,372
217,415
60,592
635,691
278,186
156,137
138,789
104,954
50,252
170,195
170,195
- $
274 $
4,040
295,403
USA
Geonovus Alaska Other
total
USA
233,644 $
231,036 $
146,399
44,048
413,425
-
427,837
122,960
840,810 1,522,797
662,677
376,956
76,466
71,786
197,049
197,049
60,209
-
9,878 189,365
71,219 352,344
51,392
96,738
-
750
-
-
2,333 $
38,102
118,022
105,634
258,424
137,591
3,931
-
USA
Turkey
As ia Pacific
Akarca Other Total
Koonenbury Other Total
Haiti
Other *
Total
14,106 $ 80,969 $
32,430
99,502
330,392
40,536
135,792 193,225
346,158 267,461
42,866
174,565
43,501 160,989
54,608
-
95,075 $
131,932
370,927
329,017
613,620
217,432
204,490
54,608
22,851 $ 35,253 $
334,798
1,038
504,024
27,843
203,503
534,429 131,197
17,754
69,245
- 101,711
81,538
43,772
58,104 $ 63,485 $
33,124
335,836
-
-504,024
90,728
231,346
665,626 339,012
-
-
84,360
99,292
113,016
101,711
89,847 $
10,904
-
94,823
632,834
186,702
91,296
254,792
642,740
737,611
1,857,889
1,391,166
4,409,581
1,322,240
590,223
862,715
77,640
40,741
17,253
42,902
94,893
83,643
1,186,215 1,028,225 2,214,441
813,123 2,072,702
1,259,579
143,889
87,441
-
-
1,347,020
$ (160,805) $ 158,654 $
180,763
591
845,392
953,714
106,494
-
869,571 2,216,591 1,060,208
56,448
-
-
31,092
26,977
-
365,891
61,248
158,151
29,565
19,740
19,195
505,279 684,403 2,072,360 4,107,434 1,317,835 912,018
-
32,328 1,527,015
540,973
-
157,570
50,824
252
-
203,943
235,364
439,307
-
236,523 2,123,892
827,161
726,935
72,693
-
799,628
173,819
-
-
-
-
-
193,559
19,195
2,229,853
726,935
72,693
-
799,628
(2,150) $ (214,816) $ (321,882) $684,403 $ 1,835,837 $ 1,983,542 $ 518,207 $ 912,018 $ 1,430,225 $
79,304
15,727
4,091
127,712
55,957
503,330
148,897
331,824 171,506
69,593
1,301,112
373,030
2,136,044 625,140 2,761,183 630,527 1,544,867 13,488,306
4,326,652
374,152
457,301
5,158,105
2,136,044 $ 607,146 $ 2,743,189 $ 630,527 $ 1,544,867 $ 8,330,201
-
-
17,994
17,994
-
-
17,994
17,994
-
-
-
-
-
-
-
-
-
-
-
-
Administration Cost
Assays
Drilling / Trenching
Logistics
Personnel
Property Cost
Professional Services
Share based payments
Technical Studies And
Consultants
Travel
Total Expenditures
Recoveries
Operator fees
Other Property Income
Total Recoveries
Net Expenditures
*Significant components of “Other” exploration expenditures for the year ended December 31, 2012 include Brazil - $538,123, Georgia -
$211,763, Kyrgyz Republic - $100,513, and Geothermal activities - $301,594.
Page 35
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
10. EXPLORATION AND EVALUATION ASSETS (continued)
Exploration expenditures (continued)
During the nine month period ended December 31, 2011, the Company incurred the following exploration expenditures by projects, which were
expensed as incurred:
Kiruna
South
$ 25,749
Administration
12,841
Assays
128,316
Drilling / trenching
61,300
Logistics
214,224
Personnel
Property costs
73,421
Professional fees
30,829
Share-based payments 124,143
-
Technical studies
16,398
Travel
687,221
Total expenditures
(567,837)
Recoveries
(39,749)
Operator fees and
other
Total recoveries
(607,586)
Sweden
Other
Total
$ 24,696
1,684
16,449
56,935
178,056
65,854
25,988
85,849
1,300
18,425
475,236
(403,113)
(27,295)
$
50,445
14,525
144,765
118,235
392,280
139,275
56,817
209,992
1,300
34,823
1,162,457
(970,950)
(67,044)
Copper
Basin
$ 2,423 $
-
-
51,720
108,356
79,819
199
34,707
105,349
59
382,632
(398,205)
(21,410)
Mesa
Well
23 $
497
458,724
68,764
115,313
33,163
67,731
2,496
746,711
(750,485)
(85,370)
USA
Other
Total
Akarca
87,531
7,138
1,027
98,134
717,211
551,525
- 22,117
168,886
130,303
- 78,034
1,861,906
(563,373)
(253,148)
$
89,977
7,635
459,751
218,618
940,880
664,507
22,316
271,324
238,148
78,093
2,991,249
(1,712,063)
(359,928)
$
954
31,424
630,327
131,613
209,896
136,426
28,972
87,048
57,126
-
1,313,786
(1,151,952)
(57,581)
Turkey
Other
$ 56,189
27,690
49,178
106,355
181,622
31,456
98,547
39,929
9,781
1,899
602,646
(148,828)
(71,410)
Total
$
57,143
59,114
679,505
237,968
391,518
167,882
127,519
126,977
66,907
1,899
1,916,432
(1,300,780)
(128,991)
Koonenbury
Asia Pacific
Other
Total
Other*
Total
$
13,380
92,648
-
72,583
337,269
15,523
21,413
189,136
196,747
49,558
988,257
-
-
$ 38,184
-
-
772
54,249
46,739
935
41,231
9,664
23,665
215,439
-
-
$
51,564
92,648
-
73,355
391,518
62,262
22,348
230,367
206,411
73,223
1,203,696
-
-
$
87,169
47,728
21,906
144,973
267,042
89,809
108,385
105,535
230,663
59,099
1,162,309
(12,445)
(46,718)
$
336,298
221,650
1,305,927
793,149
2,383,238
1,123,735
337,385
944,195
743,429
247,137
8,436,143
(3,996,238)
(602,681)
(430,408)
(1,037,994)
(419,615)
(835,855)
(816,521)
(2,071,991)
(1,209,533)
(220,238)
(1,429,771)
-
-
-
(59,163)
(4,598,919)
Net Expenditures
$ 79,635
$ 44,828
$ 124,463
$ (36,983) $
(89,144) $ 1,045,385
$
919,258
$
104,253
$ 382,408
$
486,661
$
988,257
$ 215,439
$ 1,203,696
$ 1,103,146
$ 3,837,224
*Significant components of “Other” exploration expenditures for the nine months ended December 31, 2011 include Alaska - $354,843, Kyrgyz
Republic - $252,847, Geothermal activities - $193,516, and Georgia - $138,021.
Page 36
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
11. ROYALTY INTEREST
Carlin Trend Royalty Claim Block
On August 17, 2012, the Company and its wholly-owned subsidiary, EMX (Utah) Corp. completed the acquisition of Bullion (Note 3). As part of
the acquisition, the Company acquired the Carlin Trend Royalty Claim Block in Nevada. The Carlin Trend Royalty Claim Block includes the
following Royalty Properties:
Leeville Mine: Located in Eureka County, Nevada, the Company is receiving a continuing one-percent (1%) gross smelter return royalty
(“GSRR”).
East Ore Body Mine: Located in Eureka County, Nevada, the property is currently being mined and the Company is receiving a continuing one-
percent (1%) GSRR.
North Pipeline: Located in Lander County, Nevada. Should the property become producing, the Company will receive a production royalty of
US$0.50 per yard of ore processed or 4% of net profit, whichever is greater.
The Company capitalized $39,536,000 (US$40,000,000) for the Carlin Trend Royalty Claim Block which represents the fair value on the
acquisition date (Note 3). During the period from acquisition to December 31, 2012, $1,750,975 in royalty income was included in operations
offset by a 5% direct gold tax and depletion.
Since acquisition from August 17, 2012 to December 31, 2012:
Opening Balance, August 17, 2012
Adjusted for:
Depletion
Cumulative translation adjustments
Ending Balance, December 31, 2012
12. RECLAMATION BONDS
$
$
39,536,000
(1,125,408)
328,000
38,738,592
Reclamation bonds are held as security towards future exploration work and the related future potential cost of reclamation of the Company’s
land and unproven mineral interests. Once reclamation of the properties is complete, the bonds will be returned to the Company. Management has
determined that it has no decommissioning or restoration provisions related to the properties as of December 31, 2012 (December 31, 2011 -
$nil).
Australia - various properties
Turkey - various properties
United States of America - various properties
Total
Page 37
December 31, 2012 December 31, 2011
51,870
151,700
235,995
439,565
73,386 $
184,256
230,880
488,522 $
$
$
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
13. GOODWILL
Goodwill represents the excess of the price paid for the acquisition of Bullion over the fair value of the net identifiable tangible and intangible
assets and liabilities acquired.
Since acquisition to December 31, 2012:
Opening Balance, August 17, 2012
Adjusted for:
Cumulative translation adjustment
Ending Balance, December 31, 2012
14. OTHER ASSETS
$
$
8,896,705
73,809
8,970,514
Other assets consist of native gold that the Company has purchased for marketing purposes. During the year ended December 31, 2012, there
were no transactions related to the native gold. During the year ended December 31, 2012, the Company recorded a gain of $Nil (nine month
period ended December 31, 2011 - $2,472 gain) on sales of native gold.
15. ACCOUNTS PAYABLE and ACCRUED LIABILITIES
Accounts payable
Accrued liabilities
Total
16. ADVANCES FROM JOINT VENTURE PARTNERS
December 31, 2012 December 31, 2011
421,402
454,919
876,321
978,960 $
570,753
1,549,713 $
$
$
Advances from joint venture partners relate to unspent funds received pursuant to approved exploration programs by the Company and its joint
venture partners. The Company’s advances from joint venture partners consist of the following:
Haiti
Sweden
U.S.A.
Other
Total
17. CAPITAL STOCK
Authorized
December 31, 2012 December 31, 2011
105,032
387,218
749,264
132,937
1,374,451
5,550 $
20,932
14,419
-
40,901 $
$
$
As at December 31, 2012, the authorized share capital of the Company was an unlimited number of common and preferred shares without par
value.
Common shares
For the year ended December 31, 2012, the Company issued:
(cid:122) 17,712,189 common shares valued at $32,059,062 as part consideration for the Bullion acquisition (Note 3).
Page 38
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
17. CAPITAL STOCK (Continued)
Common shares (Continued)
(cid:122) 813,670 bonus shares valued at $1,596,483 to officers, employees and consultants of the Company.
(cid:122) 639,000 common shares for gross proceeds of $1,049,670 pursuant to the exercise of stock options.
(cid:122) 949,497 common shares for gross proceeds of $1,898,995 pursuant to the exercise of warrants.
(cid:122) 62,398 common shares valued at $128,122 towards the acquisition of the Koonenbury property.
For the nine month period ended December 31, 2011, the Company issued:
(cid:122) 431,498 bonus shares valued at $1,145,531 to directors, officers, employees and consultants of the Company.
(cid:122) 429,300 common shares for gross proceeds of $525,728 pursuant to the exercises of stock options.
(cid:122) 52,691 common shares with an aggregate value of $148,547 towards the acquisition of the Koonenbury property.
Stock options
The Company adopted a stock option plan (the “Plan”) pursuant to the policies of the TSX Venture Exchange. The maximum number of shares
that may be reserved for issuance under the plan is limited to 10% of the issued common shares of the Company at any time. The vesting terms
are determined at the time of the grant, subject to the terms of the plan.
During the year ended December 31, 2012 and the nine month period ended December 31, 2011, the change in stock options outstanding is as
follows:
Balance as at March 31, 2011
Granted
Exercised
Cancelled / expired
Balance as at December 31, 2011
Granted
Exercised
Cancelled / expired
Number of options outstanding as at December 31, 2012
Number of options exercisable as at December 31, 2012
Page 39
Weighted
Average
Exercise Price
1.85
2.77
1.22
1.20
2.24
2.04
1.63
2.45
Number
3,134,501 $
1,446,000
(429,300)
(8,334)
4,142,867
1,361,500
(639,000)
(66,667)
4,798,700 $
4,798,700 $
2.26
2.26
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
17. CAPITAL STOCK (Continued)
Stock options (Continued)
The following table summarizes information about the stock options which were outstanding and exercisable at December 31, 2012:
Date Granted
April 22, 2008
September 18, 2008
December 19, 2008
May 22, 2009
February 8, 2010
May 7, 2010
June 7, 2010
September 2, 2010
November 10, 2010
February 1, 2011
March 18, 2011
July 19, 2011
August 3, 2011
August 29, 2011
September 9, 2011
December 11, 2011
February 13, 2012
March 13, 2012
July 5, 2012
August 22, 2012
October 16, 2012
Total
Number of Options
10,000
340,000
10,000
10,000
150,000
987,500
23,000
108,200
177,500
50,000
150,000
1,301,000
10,000
50,000
40,000
40,000
110,000
50,000
80,000
1,019,500
82,000
4,798,700
Exercisable
10,000
340,000
10,000
10,000
150,000
987,500
23,000
108,200
177,500
50,000
150,000
1,301,000
10,000
50,000
40,000
40,000
110,000
50,000
80,000
1,019,500
82,000
4,798,700
Exercise Price
1.66
1.00
1.00
1.20
1.74
2.18
2.05
2.21
2.51
3.21
2.91
2.80
2.70
2.66
2.70
2.10
2.54
2.51
1.96
1.94
2.44
Expiry Date
April 22, 2013
September 18, 2013
December 19, 2013
May 22, 2014
February 8, 2015
May 7, 2015
June 7, 2015
September 2, 2015
November 10, 2015
February 1, 2016
March 18, 2016
July 19, 2016
August 3, 2016
August 29, 2016
September 9, 2016
December 11, 2016
February 13, 2017
March 13, 2017
July 5, 2017
August 22, 2017
October 16, 2017
The weighted average remaining useful life of stock options is 3.24 years.
Bonus shares
The Company has received TSX-Venture Exchange approval for the issuance of certain bonus shares as discretionary bonuses earned by the
President and CEO, Chairman, directors, officers, area managers and certain employees of the Company pursuant to an annual compensation
review. The purpose of these bonuses is to reward these individuals for the Company's successes to date and to provide them with a long term
incentive to remain with the Company.
Page 40
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
17. CAPITAL STOCK (Continued)
Share-based payments
During the year ended December 31, 2012, the Company recorded aggregate share-based payments of $3,662,324 (nine months ended December
31, 2011 - $3,261,848) as they relate to the fair value of options granted, fair value of performance bonus shares, and the accrual for the fair value
of bonus shares granted.
Year ended December 31, 2012
Commitment to issue bonus shares
Shares issued as performance bonuses
Fair value of options granted
Year ended December 31, 2011
Commitment to issue bonus shares
Fair value of options granted
General and
Administrative
Expenses
Exploration
Expenditures
1,780,846 $
-
1,018,763
2,799,609 $
377,315 $
39,870
445,530
862,715 $
General and
Administrative
Expenses
Exploration
Expenditures
Total
2,158,161
39,870
1,464,293
3,662,324
Total
900,168 $
1,417,485
2,317,653 $
249,012 $
695,183
944,195 $
1,149,180
2,112,668
3,261,848
$
$
$
$
The weighted average fair value of the stock options granted during the year ended December 31, 2012 was $1.07 per stock option (nine months
ended December 31, 2011 - $1.46 per stock option). The fair value of stock options granted was estimated using the Black-Scholes option pricing
model with weighted average assumptions as follows:
Risk free interest rate
Expected life (years)
Expected volatility
Dividend yield
Warrants
During the year ended December 31, 2012, the change in warrants outstanding was as follows:
Balance as at March 1, 2011 and December 31, 2011
Granted (Note 3)
Exercised
Expired
Balance as at December 31, 2012
Page 41
Year ended Nine month period ended
December 31, 2011
2.05%
5
60.90%
-
December 31, 2012
1.17%
5
60.34%
-
Number
13,457,629 $
1,125,000
(949,497)
(367,994)
13,265,138 $
Weighted Average
Exercise Price
3.38
2.42
2.00
2.45
3.42
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
17. CAPITAL STOCK (Continued)
Warrants (Continued)
As at December 31, 2012, the following share purchase warrants were outstanding and exercisable:
Private placement, March 12, 2010
Private placement, November 8, 2010
Private placement, November 12, 2010
Finders warrants, November 8, 2010
Private placement, March 1, 2011
Private placement, March 14, 2011
Private placement, March 18, 2011
Finders unit warrants, March 14, 2011
Finders unit warrants, March 18, 2011
Finders warrants, March 14, 2011
Finders warrants, March 18, 2011
Bullion acquisition warrants, August 17, 2012 (Note 3)
Total
Number of Warrants
1,919,633 $
6,200,000
800,000
255,900
770,000
460,500
1,519,500
8,075
63,460
16,150
126,920
1,125,000
13,265,138
Exercise Price
2.88
4.00 (1)
4.00 (2)
4.00 (1)
4.00 (3)
4.00 (3)
4.00 (3)
4.00 (3)
4.00 (3)
3.50 (3)
3.50 (3)
2.39 (4)
Expiry Date
March 12, 2015
November 8, 2015
November 12, 2015
November 8, 2015
March 1, 2013
March 14, 2013
March 18, 2013
March 14, 2013
March 18, 2013
March 14, 2013
March 18, 2013
April 1, 2013
(1)
(2)
(3)
(4)
$3.50 per share on or before November 8, 2011, and the price escalates $0.50 per year on the anniversary date.
$3.50 per share on or before November 12, 2011, and the price escalates $0.50 per year on the anniversary date.
Expired unexercised subsequent to the year ended December 31, 2012.
US$1.09 original Bullion warrant less US$0.11 cash in lieu of one Bullion common share adjusted by a factor of 0.45 and translated to
$CAD.
The weighted average remaining life of warrants is 1.94 years.
18. RELATED PARTY TRANSACTIONS
The aggregate value of transactions and outstanding balances relating to key management personnel were as follows:
For the twelve month period ended December 31, 2012
Management
Outside directors
Seabord Services Corp. *
Total
For the nine month period ended December 31, 2011
Management
Outside directors
Seabord Services Corp. *
Total
Salary or Fees
Share-based
Payments
742,003 $
102,000
477,600
1,321,603 $
940,920 $
306,159
-
1,247,079 $
Salary or Fees
408,251 $
72,000
319,800
800,051 $
Share-based
Payments
1,106,131 $
323,951
-
1,430,082 $
$
$
$
$
Total
1,682,923
408,159
477,600
2,568,682
Total
1,514,382
395,951
319,800
2,230,133
* Seabord Services Corp. (“Seabord”) is a management services company controlled by the Chairman of the board of directors of the Company.
Seabord provides a chief financial officer, a corporate secretary, accounting and administration staff, and office space to the Company. The Chief
Financial Officer and Corporate Secretary are employees of Seabord and are not paid directly by the Company.
Page 42
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
18. RELATED PARTY TRANSACTIONS (Continued)
Related Party Assets and Liabilities
Amounts due to:
David M. Cole, President and CEO
Christina Cepeliauskas, CFO
Directors
Seabord Capital Corp.
Service or Term
December 31, 2012
December 31, 2011
Expense reimbursement
Expense reimbursement
Fees and expense reimbursement
Expense Reimbursement
$
$
7,579 $
3,822
38,047
572
50,020 $
33,289
-
-
-
33,289
19. INCOME TAXES
Deferred Income Tax Liability
The tax effects of temporary differences between amounts recorded in the Company’s accounts and the corresponding amounts as computed for
income tax purposes gives rise to deferred tax liabities as follows:
Royalty interest
Other
December 31, 2012 December 31, 2011
-
-
-
(13,049,936) $
761,517
(12,288,419) $
$
$
As at December 31, 2012, no deferred tax assets are recognized on the following temporary differences as it is not probabe that sufficient future
taxable profit will be available to realize such assets:
Tax loss carry forwards
Share issue costs
Exploration and evaluation assets
Other
Income Tax Expense
Current tax expense
Deferred tax expense
$
$
December 31, 2012 December 31, 2011 Expiry Date Range
2026-2032
2012-2015
No expiry
No expiry
25,327,000 $
605,000
9,197,677
3,121,408 $
24,881,000
893,000
4,067,000
88,000
December 31, 2012 December 31, 2011
-
-
-
276,918
(291,595)
(14,677) $
$
$
The provision for income taxes differs from the amount calculated using the Canadian federal and provincial statutory income tax rates of 25.0%
(2011 – 26.5%) as follows:
Expected income tax (recovery)
Effect of lower tax rates in foreign jurisdictions
Permanent differences
Change in unrecognized deductible temporary differences and other
Foreign exchange
Page 43
December 31, 2012 December 31, 2011
(2,358,000)
105,000
934,000
1,048,000
271,000
-
(5,229,182) $
(706,374)
3,232,117
2,651,517
37,245
(14,677) $
$
$
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
20. SEGMENTED INFORMATION
The Company operates within the resource industry. At December 31, 2012 and 2011, the Company had equipment and exploration and
evaluation assets located geographically as follows:
EXPLORATION AND EVALUATION ASSETS
Asia Pacific
Kyrgyz Republic
Sweden
Turkey
United States of America
Total
PROPERTY AND EQUIPMENT
Asia Pacific
Brazil
Canada
Georgia
Haiti
Kyrgyz Republic
Sweden
Turkey
United States of America
Total
December 31, 2012 December 31, 2011
441,856
39,000
437,755
267,221
4,900,564
6,086,396
698,124 $
-
437,755
267,221
3,537,841
4,940,941 $
December 31, 2012 December 31, 2011
-
-
42,582
-
-
36,576
46,851
133,043
41,849
300,901
185,617 $
35,680
28,931
16,510
17,675
-
35,068
120,535
1,136,966
1,576,982 $
$
$
$
$
The Company’s royalty interest, goodwill, and royalty income and depletion are part of a cash generating unit located in the United States.
21. RISK AND CAPITAL MANAGEMENT: FINANCIAL INSTRUMENTS
The Company considers items included in shareholders’ equity as capital. The Company’s objective when managing capital is to safeguard the
Company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.
The Company currently has continuing royalty revenues to fund a portion of ongoing costs. In order to fund future projects and pay for
administrative costs, the Company will spend its existing working capital and raise additional funds as needed. As at December 31, 2012, the
Company had working capital of $22,702,855 (December 31, 2011 - $40,742,549). Management has assessed that this working capital is
sufficient for the Company to continue as a going concern beyond one year. The Company manages the capital structure and makes adjustments
in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure,
the Company may issue new shares through public and/or private placements, sell assets, or return capital to shareholders. The Company is not
subject to externally imposed capital requirements.
Fair Value
The Company characterizes inputs used in determining fair value using a hierarchy that prioritizes inputs depending on the degree to which they
are observable. The three levels of the fair value hierarchy are as follows:
(cid:122) Level 1: inputs represent quoted prices in active markets for identical assets or liabilities. Active markets are those in which transactions
occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Page 44
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
21. RISK AND CAPITAL MANAGEMENT: FINANCIAL INSTRUMENTS (Continued)
Fair Value (Continued)
(cid:122) Level 2: inputs other than quoted prices that are observable, either directly or indirectly. Level 2 valuations are based on inputs, including
quoted forward prices for commodities, market interest rates, and volatility factors, which can be observed or corroborated in the market
place.
(cid:122) Level 3: inputs that are less observable, unavoidable or where the observable data does not support the majority of the instruments’ fair
value.
As at December 31, 2012, there were no changes in the levels in comparison to December 31, 2011. Financial instruments measured at fair value
on the statement of financial position are summarized in levels of the fair value hierarchy as follows:
Assets
Cash and cash equivalents
Restricted cash
Fair value through profit or loss securities
Total
Level 1
21,699,983 $
77,519
1,585,022
23,362,524 $
$
$
Level 2
-
-
-
-
$
$
Level 3
- $
-
-
- $
Total
21,699,983
77,519
1,585,022
23,362,524
The carrying value of receivables, accounts payable and accrued liabilities, and advances from joint venture partners approximate their fair value
because of the short-term nature of these instruments. The Company assessed that there were no indicators of impairment for these financial
instruments.
The Company’s financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, market risk, liquidity risk and
currency risk.
Credit Risk
The Company is exposed to credit risk by holding cash and cash equivalents and receivables. This risk is minimized by holding a significant
portion of the funds in Canadian banks. The Company has minimal exposure with respect to its receivables.
Interest rate risk
The Company is exposed to interest rate risk because of fluctuating interest rates. Management believes the interest rate risk is low given the
current low global interest rate environment. Fluctuations in market rates is not expected to have a significant impact on the Company’s
operations due to the short term to maturity and no penalty cashable feature of its cash equivalents. A 1% increase or decrease in effective interest
rates would increase or decrease net shareholders’ equity by approximately $21,000.
Market risk
The Company is exposed to market risk because of the fluctuating values of its publicly traded marketable securities and other company
investments. The Company has no control over these fluctuations and does not hedge its investments.
Based on the December 31, 2012 portfolio values, a 10% increase or decrease in effective market values would increase or decrease net
shareholders’ equity by approximately $159,000.
Page 45
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
21. RISK AND CAPITAL MANAGEMENT: FINANCIAL INSTRUMENTS (Continued)
Liquidity risk
Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by careful
management of its working capital to ensure the Company’s expenditures will not exceed available resources.
Commodity risk
The Company’s royalty revenues are derived from a royalty interest and are based on the extraction and sale of precious and base minerals and
metals. Factors beyond the control of the Company may affect the marketability of metals discovered. Metal prices have historically fluctuated
widely. Consequently, the economic viability of the Company’s royalty interests cannot be accurately predicted and may be adversely affected by
fluctuations in mineral prices.
Currency risk
Foreign exchange risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not
the entity’s functional currency. The Company operates in Canada, Haiti, Turkey, the Kyrgyz Republic, Sweden, Australia and the U.S.A. The
Company funds cash calls to its subsidiary companies outside of Canada in U.S. dollars (“USD”) and a portion of its expenditures are also
incurred in local currencies.
The exposure of the Company’s cash and cash equivalents, receivables and accounts payable and accrued liabilities to foreign exchange risk as at
December 31, 2012 is as follows:
Accounts
Cash and cash equivalents
Receivables
Accounts payable and accrued liabilities
Total
USD amount
$
2,489,442
589,256
(539,282)
2,539,416
$
The balances noted above reflect the USD balances held within the parent company and any wholly owned subsidiaries. Balances denominated in
another currency other than the functional currency held in foreign operations are considered immaterial and cash balances will be spent prior to
significant foreign exchange fluctuations. For the year ended December 31, 2012, the average United States dollar (“USD”) to Canadian dollar
(“CAD”) foreign exchange rate was US$1 for CAD$ 0.9966. Based on the above net exposures and assuming that all other variables remain
constant, a 1% change in USD against CAD would result in a change in the loss/gain of approximately $25,000 for the period.
22. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
The significant non-cash investing and financing transactions during the year ended December 31, 2012 included:
a.
b.
c.
d.
e.
Reclassification of $559,653 of share based payment reserve to share capital from the exercise of options;
Issuance of 62,398 common shares valued at $128,122 for the acquisition of mineral properties; and
Issuance of 773,330 bonus shares valued at $1,556,614 applied to commitment to issue shares;
Acquisition of Bullion as described in Note 3;
Adjusted non-current assets and liabilities for $400,475 related to cumulative translation adjustments.
Page 46
EURASIAN MINERALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in Canadian Dollars
For the Year Ended December 31, 2012
22. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Continued)
The significant non-cash investing and financing transactions during the nine month period ended December 31, 2011 included:
a.
b.
c.
d.
Re-allocation of $247,404 of share based payment reserve to share capital from the exercise of options;
Issuance of 52,691 common shares valued at $148,547 for the acquisition of mineral properties;
Issuance of 305,998 bonus shares valued at $689,316 included in share-based payments; and,
Issuance of 125,500 bonus shares valued at $456,215 included in exploration expenditures.
23. EVENTS AFTER REPORTING DATE
Subsequent to December 31, 2012, the Company:
a)
b)
c)
Executed a definitive agreement with a private Turkish company, giving the private company an option to acquire the Company’s
Trab-23 gold (copper-molybdenum) porphyry project in northeast Turkey. The agreement with the private Turkish Company
consists of in-ground spending requirements to further develop the asset's value; a revenue stream of annual earns-in and pre-
production payments; and a revenue stream based upon production.
Issued 202,668 bonus shares valued at $394,213 to executives and employees of the Company.
Received $56,600 on the exercise of 50,000 stock options.
Page 47
CERTIFICATIONS PURSUANT TO RULE 13A-14(A) OF THE EXCHANGE ACT, AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 99.4
I, David M. Cole, certify that:
1. I have reviewed this annual report on Form 40-F of Eurasian Minerals Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods
presented in this report;
4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control
over financial reporting; and
5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
issuer’s internal control over financial reporting.
Date: April 2, 2013
/s/ David M. Cole
David M. Cole
President and Chief Executive Officer
CERTIFICATIONS PURSUANT TO RULE 13A-14(A) OF THE EXCHANGE ACT, AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 99.5
I, Christina Cepeliauskas, certify that:
1. I have reviewed this annual report on Form 40-F of Eurasian Minerals Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods
presented in this report;
4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control
over financial reporting; and
5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
issuer’s internal control over financial reporting.
Date: April 2, 2013
/s/ Christina Cepeliauskas
Christina Cepeliauskas
Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 99.6
In connection with the Annual Report of Eurasian Minerals Inc. (the “Company”) on Form 40-F for the year ended December
31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David M. Cole, the
President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Date: April 2, 2013
/s/ David M. Cole
David M. Cole
President and Chief Executive Officer
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 99.7
In connection with the Annual Report of Eurasian Minerals Inc. (the “Company”) on Form 40-F for the year ended December
31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christina Cepeliauskas,
the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Date: April 2, 2013
/s/ Christina Cepeliauskas
Christina Cepeliauskas
Chief Financial Officer
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Annual Report on Form 40-F for the year ended December 31, 2012 of Eurasian
Minerals Inc. of our report dated March 28, 2013, relating to the consolidated financial statements as at and for the year ended December 31,
2012 and as at and for the nine-month period ended December 31, 2011.
“DAVIDSON & COMPANY
LLP”
Vancouver, Canada
April 2, 2013
Chartered Accountants
CONSENT OF JOHN E. DREIER
Exhibit 99.9
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name and to the use
of the technical report entitled “Akarca Gold-Silver Project Technical Report, Turkey,” dated November 1, 2011, and the
information derived from such report, included in the Annual Information Form of the Company for the year ended December
31, 2012, which is filed as an exhibit to, and incorporated by reference into, the Annual Report.
Dated: April 2, 2013
/s/ John E. Dreier
John E. Dreier
CONSENT OF GARY H. GIROUX
Exhibit 99.10
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name and to the use
of the technical report entitled “Technical Report on the Exploration Results and Resource Estimates for the Sisorta Property,
Sivas Province, Turkey,” dated July 31, 2009, and the information derived from such report, included in the Annual Information
Form of the Company for the year ended December 31, 2012, which is filed as an exhibit to, and incorporated by reference into,
the Annual Report.
Dated: April 2, 2013
/s/ Gary H. Giroux
Gary H. Giroux
CONSENT OF DUNCAN LARGE
Exhibit 99.11
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name included in the
Annual Information Form and the Management’s Discussion and Analysis of the Company for the year ended December 31,
2012, which are filed as exhibits to, and incorporated by reference into, the Annual Report.
Dated: April 2, 2013
/s/ Duncan Large
Duncan Large
CONSENT OF SIMON MELDRUM
Exhibit 99.12
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name and to the
use of the technical report entitled “Technical Report on the Exploration Results and Resource Estimates for the Sisorta
Property, Sivas Province, Turkey,” dated July 31, 2009, and the information derived from such report, included in the Annual
Information Form of the Company for the year ended December 31, 2012, which is filed as an exhibit to, and incorporated by
reference into, the Annual Report.
Dated: April 2, 2013
/s/ Simon Meldrum
Simon Meldrum
CONSENT OF MICHAEL P. SHEEHAN
Exhibit 99.13
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name included in
the Annual Information Form of the Company and the Management’s Discussion and Analysis of the Company, each for the
year ended December 31, 2012, which are filed as exhibits to, and incorporated by reference into, the Annual Report.
Dated: April 2, 2013
/s/ Michael P. Sheehan
Michael P. Sheehan
CONSENT OF MESUT SOYLU
Exhibit 99.14
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name and to the
use of the technical reports entitled “Technical Report on the Exploration Results and Resource Estimates for the Sisorta
Property, Sivas Province, Turkey,” dated July 31, 2009, and “Akarca Gold-Silver Project Technical Report, Turkey,” dated
November 1, 2011, and the information derived from such reports, included in the Annual Information Form of the Company
and the Management’s Discussion and Analysis of the Company, each for the year ended December 31, 2012, as applicable,
which are filed as exhibits to, and incorporated by reference into, the Annual Report.
Dated: April 2, 2013
/s/ Mesut Soylu
Mesut Soylu
CONSENT OF CHRIS SPURWAY
Exhibit 99.15
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name included in the
Annual Information Form and the Management’s Discussion and Analysis of the Company for the year ended December 31,
2012, which are filed as exhibits to, and incorporated by reference into, the Annual Report.
Dated: April 2, 2013
/s/ Chris Spurway
Chris Spurway
CONSENT OF DEAN TURNER
Exhibit 99.16
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name included in the
Annual Information Form and the Management’s Discussion and Analysis of the Company for the year ended December 31,
2012, which are filed as exhibits to, and incorporated by reference into, the Annual Report.
Dated: April 2, 2013
/s/ Dean Turner
Dean Turner
CONSENT OF ANDREW J. VIGAR
Exhibit 99.17
In connection with the filing of the annual report on Form 40-F (the “Annual Report”) of Eurasian Minerals Inc. (the
“Company”) with the U.S. Securities and Exchange Commission, I hereby consent to the references to my name and to the
use of the technical report entitled “Technical Report on the Exploration Results and Resource Estimates for the Sisorta
Property, Sivas Province, Turkey,” dated July 31, 2009, and the information derived from such report, included in the Annual
Information Form of the Company for the year ended December 31, 2012, which is filed as an exhibit to, and incorporated by
reference into, the Annual Report.
Dated: April 2, 2013
/s/ Andrew J. Vigar
Andrew J. Vigar