Disclosure Criteria

We disclose on our website only those investments which have already been disclosed to the public through either a press release, a regulatory filing or in our interim or annual financial statements, and only if the Fair Value of the investment is at least $1,000,000 (see Valuation Policy immediately below).

The investments disclosed will include the following:

• The top five investments, by Fair Value, in each Sector. Click here for a description of our investment sectors.
• Any investment in which we have a partially diluted ownership interest of at least 5%.
• Any investment for which we have filed regulatory report known as a Section 101 report, thereby making our investment public.

Valuation Policy

At each financial reporting period, the Company’s management estimates the Fair Value of investments based on the criteria below:

(i) Publicly-traded investments:

• Securities which are traded on a recognized securities exchange and for which no sales restrictions apply are recorded at fair values based on quoted market prices at the reporting date or the closing price on the last day the security traded before the reporting date if there were no trades on the reporting date.
• Securities which are traded on a recognized securities exchange but which are escrowed or otherwise restricted as to sale or transfer are recorded at amounts discounted from market value. In determining the discount for such investments, the Company considers the nature and length of the restriction, business risk of the investee company, its stage of development, market potential, relative trading volume and price volatility and any other factors that may be relevant to the ongoing and realizable value of the investments.
• For warrants which are not traded on a recognized securities 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 closing bid price at the consolidated balance sheet date of the underlying security less the exercise price of the warrant, or zero.

(ii) Privately-held investments:

• All privately-held investments are initially recorded at cost, being the fair value at the time of acquisition.  Thereafter, at each reporting period, the fair value of an investment may, depending upon the circumstances, be adjusted using one or more of the valuation techniques described below. 
• The determinations of fair value of the Company’s privately-held investments at other than initial cost are subject to certain limitations.  Financial information for private companies in which the Company has investments may not be available and, even if available, that information may be limited and/or unreliable.  Use of the valuation techniques described below may involve uncertainties and determinations based on the Company’s judgment and any value estimated from these techniques may not be realized or realizable. 
• The following circumstances are used to determine if the fair value of a privately-held investment should be adjusted upward or downward at each reporting period.  Absent the occurrence of any of these events, the fair value of the investment is left unchanged.
  
  The fair value of a privately-held investment may be adjusted upward if:
  
  
  
  
  1. There has been a significant subsequent equity financing provided by outside investors, at a valuation above the current fair value of the investee company, in which case the fair value of the investment is set to the value at which that financing took place;
  2. there have been significant corporate, political or operating events affecting the investee company that, in management’s opinion, have a positive impact on the investee company’s prospects and therefore its fair value.  In these circumstances, the adjustment to the fair value of the investment will be based on management’s judgment and any value estimated may not be realized or realizable.

  Such events include, without limitation:
  

  1. Political changes in a country in which the investee company operates which, for example, reduce the corporate tax burden, permit mining where, or to an extent that, it was not previously allowed, or reduce or eliminate the need for permitting or approvals;
  2. receipt by the company of environmental, mining, aboriginal or similar approvals, which allow the investee company to proceed with its project(s);
  3. filing by the investee company of a National Instrument 43-101 technical report in respect of a previously non-compliant resource;
  4. release by the investee company of positive exploration results, which either proves or greatly expands their resource prospects; and
  5. important, positive management changes by the investee company that we believe will have a very positive impact on the investee company’s ability to achieve its objectives and build value for shareholders.
     

  In the circumstances described above under (i) through (v), an adjustment to the fair value of an investment will be based upon management’s judgment and any value estimated may not be realized or realizable.

  The fair value of a privately-held investment may be adjusted downward if:

  1. There has been a significant subsequent equity financing provided by outside investors, at a valuation below the current fair value of the investee company, in which case the fair value of the investment is set to the value at which that financing took place;
  2. the investee company is placed into receivership or bankruptcy;
  3. based on financial information received from the investee company, it is apparent to the Company that the investee company is unlikely to be able to continue as a going concern;
  4. there have been significant corporate, political or operating events affecting the investee company that, in management’s opinion, have a negative impact on the investee company’s prospects and therefore its fair value.  The amount of the change to the fair value of the investment is based on management’s judgment and any value estimated may not be realized or realizable.

  Such events include, without limitation:

  1. Political changes in a country in which the investee company operates which increases the tax burden on companies, which prohibit mining where it was previously allowed, which increases the need for permitting or approvals, etc.
  2. denial of the investee company’s application for environmental, mining, aboriginal or similar approvals which prohibit the investee company from proceeding with its projects;
  3. the investee company releases negative exploration results;
  4. changes to the management of the investee company take place which the Company believes will have a negative impact on the investee company’s ability to achieve its objectives and build value for shareholders.”

  In the circumstances described above under (i) through (iv), an adjustment to the fair value of an investment will be based upon management’s judgment and any value estimated may not be realized or realizable.

  Options and warrants of private companies are carried at nil

(iii)   Equity accounted investments:

Investments in which the Company has significant influence, but does not control, are accounted for using the equity method.  Under the equity method, the investment is initially recorded at cost and the carrying value is adjusted thereafter, to reflect the Company’s pro-rata share of income or loss of the equity accounted investment and any dividends received from the investment.   The Company’s share of net income and losses of such investments are included in the consolidated statements of operations.

(iv) Other investment instruments:

Included in Pinetree’s investments may be certain instruments that are accounted for as follows:

• Convertible debentures and convertible notes are valued as though converted to common shares.
• Debt instruments are fair valued at the lesser of their discounted cash flow or the fair value of the underlying security.
• Cumulative dividends expected to be received are included in the fair value of each investment.