Annual report pursuant to Section 13 and 15(d)

Property, Plant and Equipment

v3.21.2
Property, Plant and Equipment
12 Months Ended
Aug. 31, 2021
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT
10. PROPERTY, PLANT AND EQUIPMENT

  

    Oil
Extraction
Plant
    Other
Property and
Equipment
    Total  
Cost                  
August 31, 2019   $ 35,555,827       438,168       35,993,995  
Additions     2,072,058       692       2,072,750  
August 31, 2020     37,627,885     $ 438,860     $ 38,066,745  
Additions     5,512,715      
-
      5,512,715  
August 31, 2021   $ 43,140,600     $ 438,860     $ 43,579,460  
                         
Accumulated Amortization                        
August 31, 2019   $ 2,148,214       232,131       2,380,345  
Additions    
-
      103,888       103,888  
August 31, 2020     2,148,214     $ 336,019     $ 2,484,233  
Additions    
-
      45,810       45,810  
August 31, 2021   $ 2,148,214     $ 381,829     $ 2,530,043  
                         
Carrying Amount                        
August 31, 2019   $ 33,407,613     $ 206,037     $ 33,613,650  
August 31, 2020   $ 35,479,671     $ 102,841     $ 35,582,512  
August 31, 2021   $ 40,992,386     $ 51,562     $ 41,049,417  

 

(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 400-500 barrels per day. The plant has been substantially relocated to the TMC mining site and expansion of the plant to production of 400-500 barrels per day has been substantially completed.

  

Included in the cost of construction is capitalized borrowing costs as at August 31, 2021 and 2020 of $4,421,055. No borrowing costs were capitalized for the years ended August 31, 2021 and 2020.

 

As a result of the relocation of the plant and the expansion that has taken place to date, the Company reassessed the reclamation and restoration provision and raised an additional liability of $2,375,159  during the fiscal year ended August 31, 2019 which is capitalized to the cost of the plant and will be depreciated according to our depreciation policy.

  

As a result of the relocation of the plant and the planned expansion of the plant’s production capacity to 400-500 barrels per day, and subsequently to an additional 3,000 barrels per day, the Company re-evaluated the depreciation policy of the oil extraction plant and the oil extraction technologies (Note 11) 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 2021 and 2020 fiscal years as there has only been test production during these years.