Chair’s Corporate Governance Statement
The information was reviewed on September 8, 2023.
As Chairman of the Board of Directors of the Corporation, it is my responsibility to ensure that Amaroq has both sound corporate governance and an effective Board. I continue to provide leadership and to ensure that the Board is performing its role effectively and has the capacity, ability, structures, corporate governance systems and support to enable it to function effectively and continue to do so.
The Corporation operates to the highest applicable regulatory standards; the Board recognises the value and importance of high standards of corporate governance and believes that our systems provide the most appropriate framework for a corporation of our size and stage of development.
The Corporation is subject, among other laws and regulations, to instruments published by relevant Canadian securities regulators. One such instrument, NI 58-101 Disclosure of Corporate Governance Practices, prescribes certain disclosure by the Corporation of its corporate governance practices and NP 58-201 Corporate Governance Guidelines provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Corporation.
As a result of the Corporation’s listing on the TSX-V and being a reporting issuer in the Canadian province of Ontario, the Corporation has established corporate governance practices and procedures appropriate for a publicly listed Corporation in Canada. The Corporation complies with Canadian corporate governance standards appropriate for publicly listed companies.
Since listing on AIM on July 31, 2020, the Board further complies with the recommendations set out in the corporate governance guidelines for smaller quoted companies published by the Quoted Companies Alliance (‘QCA’) Corporate Governance Code, as amended from time to time. It requires AIM-quoted companies to adopt a ‘comply or explain’ approach in respect of the application of guidance contained within. This report follows the structure of these guidelines and explains how we have applied the guidance. The Board considers that the Corporation complies with the QCA Code in all respects.
On November 3, 2022, the Corporation achieved a successful capital fundraising and became listed on the Nasdaq First North Growth Market in Iceland. In 2023, with a defined path to cashflow and substantial backing from Icelandic investors, the Corporation made the strategic move to transfer its shares to the Main Market of Nasdaq Iceland. As part of this transition, the Corporation committed to adhering to the Corporate Governance Guidelines published by the Iceland Chamber of Commerce, Nasdaq Iceland, and the SA Confederation of Icelandic Enterprise.
The Corporation’s shares were admitted to trading on the Main Market on September 21, 2023.
This Governance section of the Annual Report also includes reports from our five committees: the Audit and Risk Management Committee, the Corporate Governance and Nomination Committee, and the Technical, Safety and Sustainability Committee, the Compensation Committee and the Disclosure Committee, all with formally delegated duties and responsibilities.
Ultimate responsibility for the quality of, and approach to, corporate governance lies with me as Chairman of the Board, and an effective Board is at the heart of the governance structure. Sound corporate governance begins with engaged, capable, and experienced directors; and I believe that outstanding professionals on the Board of Amaroq mean we are a well-functioning and balanced team.
Graham Stewart
Chairman
Amaroq Minerals Ltd.
QCA Code Overview
The QCA Code has ten principles of corporate governance, these are:
- Establish a strategy and business model which aims to promote long-term value for shareholders;
- Seek to understand and meet shareholder needs and expectations;
- Consider wider stakeholder and social responsibilities and their implications for long term success;
- Embed effective risk management, considering both opportunities and threats, throughout the organisation;
- Maintain the board as a well-functioning balanced team led by the Chair;
- Ensure that between them the directors have the necessary up to date experience, skills and capabilities;
- Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
- Promote a corporate culture that is based on ethical values and behaviours;
- Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board;
- Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Corporation believes that it is in compliance with the QCA Code.
QCA Code Analysis
Establish a strategy and business model which promote long-term value for the shareholders
The board has a shared view of the Corporation’s purpose, business model and strategy. Amaroq is focused on the development of the cornerstone Nalunaq Project as the means to become self-funded, unlock the true mineral potential of its large licence holdings in Greenland and deliver significant value to all stakeholders.
The Corporation has established an unrivalled footprint and large gold and strategic minerals licence portfolio in Greenland.
The Corporation maintains a Risk Matrix which focuses on the risks facing the business both from an operational and corporate perspective. As a result of the revised strategy and business model, the risks facing the Corporation were also reviewed to ensure the Corporation continued to be positioned to promote long-term value for its shareholders.
The Board takes steps to mitigate the risks. Various challenges to the execution of the Corporation’s strategy are highlighted in the section covering principal risks and uncertainties facing the business. The Corporation has implemented remuneration policies that reinforce this strategy, by rewarding Executive directors and senior management in a manner that ensures that they are properly incentivised and motivated to perform in the best interests of shareholders.
Seek to understand and meet shareholder needs and expectations
Directors put much effort into developing a good understanding of the needs and expectations of the shareholders to form a clear view of the motivations behind their voting decisions.
The Corporation has engaged corporate brokers, in-house investor relations adviser, and an external PR firm. The Corporation believes these appointments facilitate regular dialogue with shareholders to provide a good awareness and understanding of shareholders and their expectations. The Corporation’s Nominated Advisor and Broker, Stifel Europe, is briefed regularly and updates the directors during the year on shareholder expectations.
The Board is committed to maintaining good communication and having constructive dialogue with shareholders by providing effective communication through our Annual Reports along with regulatory announcements.
All shareholders have the opportunity to attend the Annual and Special Meetings of Shareholders and participate in a question-and-answer session to allow direct access to the Board members in attendance and provide an opportunity to ask questions directly to the Corporation. The Annual General Meeting is regarded as an opportunity to meet, listen and present to shareholders, and shareholders are encouraged to attend and ask questions. The results are subsequently published on the Corporation’s website.
To ensure convenience, cost savings, accessibility and environmental benefits, and to mitigate risks to the health and safety of our community, shareholders, employees and other stakeholders, in 2022 and 2023 Amaroq conducted online only shareholders’ meetings. Registered Shareholders and duly appointed proxyholders attended the meeting online and were able to participate, vote, or submit questions during the meeting’s live webcast.
The Corporation has included a contact section on the website including a form and email address which shareholders can use to make contact, and these questions are passed on to the most appropriate member of the team to ensure a fast and accurate response to stakeholder questions.
The Corporation continues to have regular communications with its investor base through investor roadshows, conferences, and direct conversations as appropriate, as well as ensuring regular communication with its broker and PR firms, to ensure it is aware of shareholder views in a timely and accurate manner.
The Corporation issues regular press releases, and quarterly financial statements alongside management discussion and analysis, to ensure that shareholders are informed of the latest operational and corporate developments.
Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board recognises that the long-term success of the Corporation is reliant upon the efforts of all its stakeholders, both internal and external. The Corporation’s main stakeholder groups are the Government of Greenland, the local communities surrounding licence areas, and the Corporation’s employees, contractors, suppliers and customers.
Amaroq seeks to be a socially responsible corporation which has a positive impact on the community in which it operates. We have defined our Core Purpose as “Creating a Greenlandic Legacy”. We will:
• Take time to understand Greenlandic culture and respect traditions
• Engage with local stakeholders to establish how we can collaborate positively
• Be an active member of the community empowering it to grow
• Encourage skills and knowledge transfer to Greenlanders from internal and external sources
• Prioritise Greenlandic laws, guidelines and practices in all our work
• Recognise and celebrate successes
• Ensure all our impacts are positive
• Inspire loyalty and pride
The Corporation has an excellent relationship with various departments of the Government of Greenland, including Licencing, Inspection and Technical, Geology and the Environment Agency for Mineral Resource Activities.
The Corporation adheres to the published government process for executing activities in the field in an environmental and socially responsible manner.
There is a published process for Environmental Impact Assessment, Social Impact Assessment and negotiating an Impact Benefit Agreement in Greenland, which the Corporation is following.
In the longer term, the Corporation is looking at opportunities to utilise green energy (for example, hydroelectricity) to provide power for its projects. Should this be successful, excess renewable energy could be provided to the local communities.
Amaroq has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback which is an essential part of all control mechanisms. The Corporation holds information meetings with the local communities each year to provide updates about the project and take questions. It also meets monthly with representatives from the local business associations.
The Corporation targets significant local employment and in the 2022 field season, over 50% of the workforce were local. It uses local contractors wherever possible and has agreed a Greenlandic procurement policy to ensure transparency of process. No discrimination is tolerated and the Corporation endeavours to give all employees the opportunity to develop their capabilities. Everyone within the Corporation is a valued member of the team and our aim is to help every individual achieve his/her full potential. Weekly team meetings are held where members of the team can raise issues as required with colleagues and the CEO.
The Corporation has a Code of Business Conduct and Ethics and an Integrity Program for directors, officers, employees, consultants and agents which sets out standards and processes for ethical behaviour, as well as the process for raising concerns confidentially.
Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board recognises the need for an effective and well-defined risk management process. Risk management is integral to the ability of the Corporation to deliver on its strategic objectives. The Corporation has embedded in its organization various risk management schemes and procedures.
First and foremost, the Corporation maintains a Risk Matrix which covers the principal risks of the business both from an operational and corporate perspective, and which also provides mitigation measures to attenuate such risks to the extent possible. The Risk Matrix is presented to the Audit and Risk Management Committee on a quarterly basis. Additionally, the Corporation develops its projects according to the industry standards regarding project controls. As such, any development project is supported by a specific Risk Register. The Risk Register is used to identify threats by qualifying the probability of occurrence of each risk, as well as quantifying its adverse consequence. The Risk Matrix and Risk Register are periodically reviewed internally.
Both the Risk Matrix and the Risk Register are maintained to support the decisions of the Corporation to recruit key individuals and strategic advisors at various levels to assist Amaroq Minerals in mitigating the principal risks as effectively as possible.
The Board is also responsible for developing and adopting policies and procedures to ensure the integrity of the internal controls and management information systems.
The Corporation currently has a relatively simple control environment given its size and stage of development. As it moves towards development and production, the Board will continue to strengthen and build on the existing control environment.
Maintain the Board as a well-functioning, balanced team led by the Chairman
During 2022 and currently, the Board is comprised of two executive officers (Eldur Olafsson and Jaco Crouse) and six non-executive directors. Of the non-executive directors, the Board considers that Line Frederiksen, Liane Kelly, Warwick Morley-Jepson and Sigurbjorn Thorkelsson are “independent” in accordance with Canadian corporate governance standards, but Graham Stewart and David Neuhauser are not (as a result of being the chairman of the Corporation and as a result of David’s interest in Common Shares, held through Livermore Partners, being over five percent of the Corporation). The Board considers that Graham Stewart, Line Frederiksen, Liane Kelly, Warwick Morley-Jepson and Sigurbjorn Thorkelsson are “independent” from a UK corporate governance perspective, notwithstanding the interests in Common Shares held by Graham Stewart and Sigurbjorn Thorkelsson (through Fossar Holdings Ltd, a company that is jointly owned by Sigurbjorn Thorkelsson and his spouse and is the holding company for Fossar Ltd and Klettar Investments ehf.) but David Neuhauser is not (as a result of his interest in Common Shares, held through Livermore Partners, being over five percent of the Corporation).
Of the non-executive directors, the Board considers that all of them are “independent” in accordance with Icelandic Corporate Governance Guidelines.
The board believes that it has an appropriate balance between executive and non-executive directors.
| Director Name | Independentin the UK | Independentin Canada | Date of Appointment to the Corporation | Length of Service |
| Graham Stewart | Yes | No | 14th April 2017 | 6 years |
| Eldur Olafsson | No | No | 14th April 2017 | 6 years |
| Jaco Crouse | No | No | 27 April 2021 | 2 year |
| Sigurbjorn Thorkelsson | Yes | Yes | 27th July 2020 | 2.5 years |
| Line Frederiksen | Yes | Yes | 9th June 2021 | 2 years |
| David Neuhauser | No | No | 9th June 2021 | 2 years |
| Liane Kelly | Yes | Yes | 26th August 2021 | 1.5 years |
| Warwick Morley-Jepson | Yes | Yes | 26th August 2021 | 1.5 years |
Non-executive directors are expected to dedicate the time and attention necessary to perform and carry out such duties and obligations as is typical for a director. As a minimum, the non-executive directors are expected to spend at least 12 days per year working for the Corporation however, in practice all the Non-Executives spend more than the minimum number of days on Corporation business. Board meetings are open and constructive, with every director participating fully. Senior management can frequently be invited to meetings, providing the Board with a thorough overview of the Corporation.
The following is a table of Board and Committee meetings held during the year to December 31, 2022 and Directors’ attendance1:
| Board Meetings | Audit and Risk Management Committee | CompensationCommittee | Corporate Governance andNomination Committee | Technical, Safety and Sustainability Committee | |
| Total meetings held during the year | 13 | 7 | 5 | 4 | 5 |
| Member Attendance: | |||||
| Executive Directors | |||||
| Eldur Olafsson | 13 / 13 | ||||
| Jaco Crouse | 13 / 13 | ||||
| Non-Executive Directors | |||||
| Graham Stewart | 13 / 13 | 5 / 5 | 4 / 4 | ||
| Sigurbjorn Thorkelsson | 13 / 13 | 7 / 7 | 5 / 5 | ||
| David Neuhauser | 13 / 13 | 7 / 7 | 4 / 4 | ||
| Line Frederiksen | 13 / 13 | 7 / 7 | 5 / 5 | ||
| Liane Kelly | 13 / 13 | 4 / 4 | 5 / 5 | ||
| Warwick Morley-Jepson | 11 / 13 | 5 / 5 | 5 / 5 |
1. Does not include directors attending as invitees.
Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
The Directors have both a breadth and depth of skills and experience to fulfil their roles. The Corporation believes that the current balance of skills in the Board as a whole reflects a very broad range of commercial and professional skills across geographies and industries and each of the Directors has experience in public markets.
An annual review of the skills among the Board was conducted by the Corporate Governance and Nomination Committee (the ‘Committee’). The Committee identified that the Board has a competent mix of industry experience, change management, regulatory, legal, risk management, ESG and financial experience.
The Board are able to seek external advice should it be required to enable them to appropriately perform their duties. The Board have access to Joan Plant, Corporate Secretary who is also a Director of Nalunaq A/S, the wholly owned subsidiary of the Corporation; she has 13 years of experience operating in Greenland and advises and supports the Board and Management on any matter involving Government liaison or Greenland matters in general.
The Corporation is satisfied that the Board composition is appropriate given the size and stage of development of the Corporation. The Board will keep this matter under regular review. The Board shall also review annually the appropriateness and opportunity for continuing professional development of Directors whether formal or informal.
The biographies of the Board and details of the experienced management team, including full information about the Chief Executive Officer, can be found on “Team” section of the website.
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Corporate Governance and Nomination Committee is responsible for carrying out an annual evaluation of the performance of the Board, Board Committees, the Chair, and individual Directors. The Board evaluation process is designed to provide Directors with an opportunity to examine how the Board is operating and to make suggestions for improvement.
Considering that five of the eight directors joined the Board during 2021, the Committee recommended carrying out internal evaluation to review 2022 performance. Rationale for external Board performance evaluation will be considered in 2024.
The performance evaluation took the form of questionnaires that were completed by the Board and committee members. The areas covered were: Board organization, managing the affairs of the Board, strategy and planning, management and human resources, business and risk management, financial and corporate issues, shareholder and corporate communications, policies and procedures. Each Board Committee was evaluated separately.
The performance evaluation results demonstrated that overall, the Board and its Committees are effectively organised and perform well as a whole with each Director contributing well. Respondents highly rated the Board’s performance for 2021-22 as 7.8 out of 10 (with 1 being very poor and 10 being excellent). The Board understands the vision for the future and the Corporation’s long-term strategic direction, cooperation with the management is viewed as excellent. It was concluded that overall, effectiveness and performance of the Board had improved during the past year, with the Board being more diverse, with a competent mix of industry experience, regulatory, risk management, ESG and financial expertise.
The directors identified certain areas for improvement and recommended further steps to enhance the Board performance, such increasing the number of in-person meetings to ensure higher quality discussions, enhancing the Corporation’s KPI system and Risk metrics and developing an ESG-focused training program for the Board members.
Overall, each of the Board committees agreed they were operating effectively in line with its Charter, provided useful reporting to the Board, and that there was an appropriate balance of technical skills and expertise among the members of each committee.
Promote a corporate culture that is based on ethical values and behaviours
One of our values is leading through professionalism and we encourage employees, officers, consultants and directors to show this through the quality of their work, behaving in an ethical manner and always seeking to be a positive ambassador of the organization.
The Corporate Governance and Nomination Committee is responsible for ensuring the “right tone at the top” and that the ethical and compliance commitments of management and employees are understood throughout the Corporation. This is achieved through written Codes of Business Conduct and Ethics addressing such matters as the group’s policy on bribery, political contributions, conflicts of interest and unauthorised payments and the ability to report violations without fear of reprisal.
The Integrity Program provides guidance for every director, officer, consultant and employee of Amaroq Minerals to maintain the highest integrity and it provides procedures to follow when the integrity of any person’s actions or perceived actions are not in accordance with the responsibilities outlined in the Corporation’s Code of Business Conduct and Ethics, Insider Trading and Share Dealing Policy, or other policies and procedures as outlined to directors, officers, consultants and employees. For many companies this program is called a Whistleblower Policy. For the Corporation it is more encompassing and is called the Integrity Program.
Every director, officer, consultant and employee of Amaroq Minerals and its subsidiaries has an ongoing responsibility to report any activity or suspected activity of which he or she may have knowledge relating to the integrity of the Corporation’s financial reporting or which might otherwise be considered sensitive in preserving the reputation of the Corporation.
It is the responsibility of each employee, officer, consultant and director to report such activities whenever he or she has reasonable and bona fide grounds to believe that such an incident has occurred, is occurring or is likely to occur.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
The role of the Board is to focus on governance and stewardship of the business as a whole. The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Corporation as a whole and that this will impact the performance of the Corporation. Good governance requires the Board to be involved in strategic planning, risk management, internal control integrity and external financial and regulatory reporting and compliance. The Board is responsible for the supervision of management and must act in the best interests of the Corporation, its shareholders and greater stakeholders. The Board acts in accordance with the laws of Canada, the articles and by-laws of the Corporation, and the specific terms of reference as laid out for each committee and the Board as a whole.
The Corporate Governance and Nomination Committee establishes and monitors the application of the corporate governance principles and practices of the Corporation and ensures that it adheres to best practices, as well as the laws and regulations on corporate governance.
The Corporate Governance and Nomination Committee ensures that the Corporation, its management, directors and members serve in the best interest of its shareholders as detailed in the Integrity Program and that actions are conducted in a professional and transparent manner and in conformity with applicable laws and regulations, as well as internal policies.
The Board meets quarterly with additional meetings as required, and the Board has five committees, as detailed below, which meet during the year at different frequencies.
Audit and Risk Management Committee: The primary function of the Audit and Risk Management Committee is to assist the Board in fulfilling its financial reporting and controls responsibilities to shareholders.
Compensation Committee: The primary function of the Compensation Committee is to determine executive remuneration packages and to ensure that the remuneration policy and practices of the Corporation reward fairly and responsibly, with a clear link to corporate and individual performance.
Corporate Governance and Nomination Committee: The Corporate Governance and Nomination Committee is responsible for reviewing the structure, size and composition of the Board and identifying and nominating, for the approval of Board, candidates to fill vacancies on the Board as and when they arise.
Technical, Safety and Sustainability Committee: The role of the Safety and Environmental Committee is to assist the Corporation and the Board in fulfilling their respective obligations relating to technical, health and safety, environmental and social matters concerning the corporation. Disclosure Committee: The purpose of the Disclosure Committee is to assist the Board in fulfilling its responsibilities in respect of timely and accurate disclosure of all information and establishing and maintaining adequate procedures to comply with these obligations.
Communicate how the Corporation is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Board believes that a healthy dialogue exists between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the Corporation. The Board is committed to maintaining effective communication and having constructive dialogue with its shareholders.
The website of the Corporation is regularly updated to include all relevant reports and information required under AIM Rule 26.
The Corporation holds an Annual and Special Meeting of Shareholders where annual results are presented. A Management Information Circular is distributed to shareholders to notify them of this annual event. The results of voting on all resolutions at general meetings are posted to the Corporation’s website on a timely basis, including any actions to be taken as a result of resolutions which receive a high percentage of votes against from shareholders (which has not yet been the case).
The Corporation’s website provides access to historic press releases, financial information, and other corporate documents including quarterly unaudited interim accounts and MDA and audited annual financial information.
Investors can request to join the Corporation’s mailing list to provide direct access to press releases, updates of the corporate presentation and other information.
The Corporation regularly engages with its shareholders through roadshows, calls and meetings, has various contact methods published on its website, and maintains a presence on LinkedIn, Twitter and Instagram. The Corporations’ only subsidiary Nalunaq A/S maintains a Facebook page.
As required by the QCA Code, the Corporation has implemented additional reporting in its annual reporting cycle in relation to the governance of the Corporation, which will continue to evolve over time.
The Mandate of the Board (Rules of Procedure)
Diversity Policy Statement
The Board recognises the benefits of diversity. Diversity encompasses diversity of perspective, experience, skills, background, knowledge, international and industry experience, and gender, amongst many other factors. A truly diverse Board will include and make good use of, the differences between, and other qualities of, its Directors. These differences will be considered in determining the optimum composition of the Board and where possible should be balanced appropriately. Notwithstanding the foregoing, all Board appointments will always be made on merit, in the context of the skills and experience the Board as a whole requires to be effective.
The Corporate Governance and Nomination Committee of the Board reviews and assesses the composition of the Board (including skills, knowledge, experience and diversity) and makes recommendations to the Board regarding any changes and the appointment of new Directors. The Committee also keeps under review the leadership needs of the Company with a view to ensuring the continued ability of the Company to compete effectively in the marketplace and oversees, with the Chairman, the process of evaluation of the performance of the Board.
In reviewing the composition of the Board and before any appointment is made, the Nomination Committee will consider, in accordance with, and as stated in, its terms of reference, the balance of skills, knowledge, experience and diversity on the Board.
In identifying suitable candidates for appointment to the Board, the Committee will consider candidates on merit against objective criteria and with due regard for the benefits of diversity on the Board.
If required, the Committee will engage appropriate executive search consultants for the search process for non-executive directors. The search process is expected to identify candidates from a variety of backgrounds and perspectives who meet the requirements for the role and with due consideration for the benefits of diversity. The Board will only engage executive search consultants who have signed up to the voluntary code of conduct for executive search firms on gender diversity on corporate boards.
