Annual report pursuant to Section 13 and 15(d)

Income taxes

v2.4.0.8
Income taxes
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Income taxes
14.
Income taxes
   
A reconciliation of income taxes at the statutory Canadian income tax rate to net income taxes included in the accompanying statements of operations is as follows:
 
 
 
Year ended December 31,
 
 
 
2013
 
 
2012
 
 
2011
 
 
 
 
 
 
(Restated)
 
 
(Restated)
 
 
 
 
 
 
 
 
 
 
 
Loss before income taxes
 
(30,353)
 
 
(17,558)
 
 
(16,443)
 
 
 
 
 
 
 
 
 
 
 
Statutory rate
 
26.50
%
 
26.50
%
 
28.3
%
Expected recovery of income tax
 
(8,033)
 
 
(4,663)
 
 
(4,653)
 
Effect of foreign tax rate differences
 
(3,247)
 
 
(1,570)
 
 
(1,277)
 
Non-deductible amounts
 
108
 
 
412
 
 
221
 
Effect of changes in enacted future rates
 
(286)
 
 
(40)
 
 
-
 
Effect of change in foreign exchange rates
 
(161)
 
 
(91)
 
 
33
 
Effect of stock based compensation
 
159
 
 
7
 
 
158
 
Change in valuation allowance
 
11,460
 
 
5,945
 
 
5,518
 
 
 
 
 
 
 
 
 
 
 
Recovery of future income taxes
 
-
 
 
-
 
 
-
 
 
 
Deferred tax assets and liabilities reflect the net tax effects of net operating losses, credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The components of the Company’s deferred tax assets and liabilities are as follows:
  
 
 
As at December 31,
 
 
 
2013
 
2012
 
2011
 
 
 
 
 
(Restated)
 
(Restated)
 
 
 
 
 
 
 
 
 
Deferred income tax assets
 
 
 
 
 
 
 
Capital assets and mineral properties
 
8,337
 
14,301
 
11,745
 
Net operating loss carry forwards
 
39,432
 
24,579
 
16,363
 
Less: valuation allowance
 
(47,769)
 
(38,880)
 
(28,108)
 
 
 
 
 
 
 
 
 
 
 
-
 
-
 
-
 
 
 
 
 
 
 
 
 
Deferred income tax liabilities
 
 
 
 
 
 
 
Mineral properties
 
(3,345)
 
-
 
 
 
 
 
 
 
 
 
 
 
Net deferred tax asset (liability)
 
(3,345)
 
-
 
-
 
 
Based upon the level of historical taxable loss, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences and accordingly has established a full valuation allowance as of December 31, 2013 and 2012.
 
As of December 31, 2013, the Company had available total U.S. net operating loss carryforwards of approximately $54.4 million, which expire in the years 2017 through 2033. As of December 31, 2013, the Company had available total Canadian net operating loss carryforwards of approximately $22.0 million, which expire in the years 2014 through 2033.
 
The Company follows a comprehensive model for recognizing, measuring, presenting and disclosing uncertain tax positions taken or expected to be taken on a tax return. Tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
 
The Company currently has no uncertain tax positions and is therefore not reflecting any adjustments for such in its deferred tax assets.
 
There are open statutes of limitations for tax authorities in U.S., Canada and state jurisdictions to audit the Company’s tax returns for the years ended December 31, 2010, 2011 and 2012.
 
The Company’s policy is to account for income tax related interest and penalties in income tax expense in the accompanying statements of operations. There have been no income tax related interest or penalties assessed or recorded.