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Kiska Metals Corporation
Notes to the consolidated interim financial statements
March 31, 2012 and 2011
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management)
21. Income taxes (continued)
At December 31, 2011, the Company has unrecognized losses for income tax purposes of approximately
$68,829,000 which may be used to offset taxable incomes of future years. If unused, these losses will
expire as follows:
2014 $ 955,000
2015 2,632,000
2026 5,330,000
2027 8,247,000
2028 14,786,000
2029 8,163,000
2030 11,026,000
2031 17,690,000
$ 68,829,000
The Company also has unrecognized resource related tax deductions of approximately $8,100,000
available for deduction against future Canadian taxable income, which can be carried forward indefinitely.
In assessing the Company’s ability to utilize deferred tax assets, management considers whether it is
probable that some portion or all of the deferred tax assets will be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income during the periods in
which those temporary differences are or become deductible or during the periods before expiry of the
loss carry forwards. Management considers the scheduled reversal of deferred tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over the periods in which tax assets
are deductible, management currently believes it is probable that the Company will not realize the
benefits of the deferred tax assets.
22. Financial risk management objectives and policies
The Group’s principal financial instruments comprise financial liabilities and financial assets. The Group’s
principal financial liabilities, other than derivatives, comprise accounts payable and accrued liabilities, and
due to related parties. The main purpose of these financial instruments is to manage short term cash flow
and raise finance for the Group’s capital expenditure program. The Group has various financial assets
such as accounts receivable and cash and short-term deposits, which arise directly from its operations.
Risk exposures and responses
The Group manages its exposure to key financial risks in accordance with the Group’s financial risk
management policy. The objective of the policy is to support the delivery of the Group’s financial targets
while protecting future financial security. The main risks that could adversely affect the Group’s financial
assets, liabilities or future cash flows are market risks, comprising commodity price risk, cash flow interest
rate risk and foreign currency risk and liquidity risk and credit risk. Management reviews and agrees
policies for managing each of these risks which are summarized below.
The Group’s senior management oversees the management of financial risks. The Group’s senior
management is supported by the board of directors (the “board”) that advises on financial risks and the
appropriate financial risk governance framework for the Group. The board provides assurance to the
Group’s senior management that the Group’s financial risk-taking activities are governed by appropriate
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