Quarterly report pursuant to Section 13 or 15(d)

Property, Plant and Equipment

v3.21.2
Property, Plant and Equipment
3 Months Ended
Nov. 30, 2019
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT
9. PROPERTY, PLANT AND EQUIPMENT

    Oil
Extraction
Plant
    Other
Property and
Equipment
    Total  
Cost                  
August 31, 2018   $ 23,101,035     $ 394,555     $ 23,495,590  
Additions     12,454,792       43,613       12,498,405  
August 31, 2019     35,555,827       438,168       35,993,995  
Additions     1,887,582       5,692       1,893,274  
November 30, 2019   $ 37,443,409     $ 443,860     $ 37,887,269  
                         
Accumulated Amortization                        
August 31, 2018   $ 2,148,214     $ 158,481     $ 2,306,695  
Additions     -       73,650       73,650  
August 31, 2019     2,148,214       232,131       2,380,345  
Additions     -       74,320       74,320  
November 30, 2019   $ 2,148,214     $ 306,451     $ 2,454,665  
                         
Carrying Amount                        
August 31, 2018   $ 20,952,821     $ 236,074     $ 21,188,895  
August 31, 2019   $ 33,407,613     $ 206,037     $ 33,613,650  
November 30, 2019   $ 35,295,195     $ 137,409     $ 35,432,604  

(a) Oil Extraction Plant

In June 2011, the Company commenced the development of an oil extraction facility on its mineral lease in Maeser, Utah and entered into construction and equipment fabrication contracts for this purpose. On September 1, 2015, the first phase of the plant was completed and was ready for production of hydrocarbon products for resale to third parties. During the year ended August 31, 2017 the Company began the dismantling and relocating the oil extraction facility to its TMC Mineral Lease facility to improve production and logistical efficiencies while continuing its project to increase production capacity to a minimum capacity of 1,000 barrels per day. The plant has been substantially relocated to the TMC mining site and expansion of the plant to production of 1,000 barrels per day has been substantially completed.


The cost of construction includes capitalized borrowing costs for the three months ended November 30, 2019 of $0 (August 31, 2019 - $2,190,309) and total capitalized borrowing costs as at November 30, 2019 of $4,421,055 (August 31, 2019 - $4,421,055).


As a result of the relocation of the plant and the planned expansion of the plant’s production capacity to 1,000 barrels per day, and subsequently to an additional 3,000 barrels per day, the Company reevaluated the depreciation policy of the oil extraction plant and the oil extraction technologies (Note 10) and determined that depreciation should be recorded on the basis of the expected production of the completed plant at various capacities. No amortization has been recorded during the three months ended November 30, 2019 and 2018 as there has only been immaterial production during these periods.