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Alliance Mining Corp. Interim / Quarterly Report 2024
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Interim / Quarterly Report
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For Nine Months Ended September 30, 2024
Condensed Interim Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
- Notice of No Auditor Review of Interim Financial Statements
- Condensed Interim Statements of Financial Position
- Condensed Interim Statements of Shareholders’ Deficiency
- Condensed Interim Statements of Comprehensive Income (Loss)
- Condensed Interim Statements of Cash Flows
- Notes to the Condensed Interim Financial Statements
NOTICE OF NO AUDITOR REVIEW OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3), if an auditor has not performed a review of the Condensed interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited interim financial statements of Alliance Mining Corp. for the period ended September 30, 2024, have been prepared by management and approved by the Audit Committee and the Board of Directors of the Company and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these interim financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.
ALLIANCE MINING CORP.
Interim Statement of Financial Position
(Expressed in Canadian Dollars)
(Unaudited)
| | Note | September 30, 2024
$ | December 31, 2023
$ |
| --- | --- | --- | --- |
| ASSETS | | | |
| CURRENT | | | |
| Cash | | 474 | 252 |
| Sales Tax Recoverable | | 5,107 | 4,470 |
| | | 5,581 | 4,722 |
| LIABILITIES | | | |
| CURRENT | | | |
| Accounts Payable and Accrued Liabilities | | 430,288 | 617,543 |
| Advances Payable | 3 | 57,000 | 57,000 |
| Loan Payable | 4 | 112,521 | 31,423 |
| Other Payable - Current | 5 | 31,449 | - |
| Convertible Debenture Payable - Current | 6 | 28,873 | 209,808 |
| Due to Related Parties | 10 | 506,505 | 2,190,997 |
| | | 1,166,636 | 3,106,771 |
| LONG-TERM | | | |
| Interest Payable | 5,6,7 | 22,380 | - |
| Other Payable | 5 | 111,898 | - |
| Convertible Debenture Payable | 6 | 102,731 | - |
| Due to Related Parties | 10 | 1,140,201 | - |
| | | 1,377,210 | - |
| | | 2,543,846 | - |
| SHAREHOLDERS’ DEFICIENCY | | | |
| Share Capital | 9 | 5,634,890 | 5,634,890 |
| Equity Component of Convertible Debentures | | 1,494 | 1,494 |
| Deficit | | (8,174,649) | (8,738,433) |
| | | (2,538,265) | (3,102,049) |
| | | 5,581 | 4,722 |
Nature of Operations and Ability to Continue as a Going Concern (Note 1)
The accompanying notes are an integral part of these financial statements.
Approved on behalf of the Board:
"Al Beaton"
Al Beaton, Director
"Chris Anderson"
Chris Anderson, Director
ALLIANCE MINING CORP.
Interim Statement of Shareholders’ Deficiency
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| | Number of Class
“A” Common
Shares | Share
Capital
$ | Equity
Component of
Convertible Loan
$ | Deficit
$ | Total Shareholders’
Deficiency
$ |
| --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2022 | 8,744,316 | 5,634,890 | 1,494 | (8,078,353) | (2,441,969) |
| Net Comprehensive Loss | - | - | - | (537,452) | (537,452) |
| Balance, September 30, 2023 | 8,744,316 | 5,634,890 | 1,494 | (8,615,805) | (2,979,421) |
| Balance, December 31, 2023 | 8,744,316 | 5,634,890 | 1,494 | (8,738,433) | (3,102,049) |
| Net Comprehensive Income | - | - | - | 563,784 | 563,784 |
| Balance, September 30, 2024 | 8,744,316 | 5,634,890 | 1,494 | (8,174,649) | (2,538,265) |
The accompanying notes are an integral part of these financial statements.
4
ALLIANCE MINING CORP.
Interim Statement of Comprehensive Income (Loss)
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| --- | --- | --- | --- | --- |
| | 2024 | 2023 | 2024 | 2023 |
| Note | $ | $ | $ | $ |
| EXPENSES | | | | |
| Accounting, Audit and Legal | 15,000 | 9,973 | 37,071 | 39,929 |
| Advertising, Promotions, and Investor Relations | 4,500 | 4,500 | 13,500 | 34,500 |
| Automotive and Travel | 750 | 750 | 2,250 | 2,250 |
| Bank Charges | 18 | 89 | 102 | 125 |
| Consulting | 45,000 | 45,000 | 135,000 | 135,000 |
| Exploration and Acquisition Costs | - | - | 6,237 | - |
| Interest on Notes Payable | 149,843 | 26,772 | 321,261 | 75,494 |
| Management Fees | - | - | - | 900 |
| Office and Administration | 19,695 | 18,901 | 58,273 | 200,701 |
| Regulatory and Filing Fees | - | 2,944 | 11,193 | 14,053 |
| Rent | 7,500 | 7,500 | 22,500 | 34,500 |
| | 242,306 | 116,429 | 607,387 | 537,452 |
| NET LOSS FOR THE PERIOD | (242,306) | (116,429) | (607,387) | (537,452) |
| OTHER ITEMS: | | | | |
| Gain on Revaluation of Long-Term Loans and Payables | - | - | 1,171,171 | - |
| NET COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD | (242,306) | (116,429) | 563,784 | (537,452) |
| BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE | (0.03) | (0.03) | 0.06 | (0.06) |
| WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING | 8,744,316 | 8,744,316 | 8,744,316 | 8,744,316 |
The accompanying notes are an integral part of these financial statements.
5
ALLIANCE MINING CORP.
Interim Statement of Cash Flows
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| | Nine Months Ended
September 30, | |
| --- | --- | --- |
| | 2024 | 2023 |
| | $ | $ |
| CASH PROVIDED FROM (UTILIZED FOR) | | |
| OPERATING ACTIVITIES | | |
| Net Income (Loss) for the Period | 563,784 | (537,452) |
| Adjustments for Non-Cash Items | | |
| Gain on Revaluation of Long-Term Debt | (1,171,171) | - |
| Accretion Expense | 89,605 | - |
| | (517,782) | (537,452) |
| Change in Non-Cash Working Capital Accounts | | |
| Sales Tax Recoverable | (637) | 69 |
| Prepaid Expenses | - | 6,040 |
| Accounts Payable and Accrued Liabilities | 48,112 | 297,556 |
| Interest Payable | 84,816 | - |
| Loan Payable | - | 2,582 |
| Convertible Debenture Payable | 6,277 | 17,237 |
| Due to Related Parties | 277,706 | 214,416 |
| | (101,508) | 448 |
| FINANCING ACTIVITIES | | |
| Proceeds from Loans and Advances | 101,730 | - |
| | 101,730 | - |
| CHANGE IN CASH | 222 | 448 |
| Cash, Beginning of the Period | 252 | 212 |
| CASH, END OF THE PERIOD | 474 | 660 |
The accompanying notes are an integral part of these financial statements.
6
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS AND ABILITY TO CONTINUE AS A GOING CONCERN
Alliance Mining Corp. (the "Company") was incorporated on February 3, 2002, under the laws of the Canada Business Corporation Act and is involved in the acquisition, exploration, and development of mineral properties. In October 2018, the continuation of Alliance Mining Corp. from the federal jurisdiction of the Canada Business Corporations Act into the province of British Columbia was completed. The continuation results in the company becoming subject to all the provisions of the Business Corporations Act (British Columbia).
The Company holds mineral claims located in Manitoba, Canada. The head office, principal address, and records office of the Company are located at 888 Dunsmuir Street, Vancouver, Suite 888, British Columbia, Canada, V6C 3K4.
These financial statements have been prepared in accordance with International Financial Reporting Standards on the basis that the Company is a going concern and will be able to meet its obligations and continue its operations for its next fiscal year. Several conditions as set out below cast uncertainties on the Company's ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon the financial support from its shareholders and other related parties, its ability to obtain financing for the continuing exploration and development of its mineral properties, the existence of economically recoverable reserves, and the attainment of profitable operations or proceeds from disposition of these properties.
The Company has not yet achieved profitable operations and has accumulated losses of $8,174,649 and a working capital deficiency of $1,161,055 as at September 30, 2024; accordingly, the Company will need to raise additional funds through future issuance of securities or debt financing. Although the Company has raised funds in the past, there can be no assurance the Company will be able to raise sufficient funds in the future, in which case the Company may be unable to meet its obligations as they come due in the normal course of business. It is not possible to predict whether financing efforts will be successful or if the Company will attain a profitable level of operations.
The current cash resources are not adequate to pay the Company's accounts payable and to meet its minimum commitments at the date of these financial statements, including planned corporate and administrative expenses, and other project implementation costs, accordingly, there is significant doubt about the Company's ability to continue as a going concern. These financial statements do not give effect to adjustments that would be necessary to the carrying amounts and classifications of assets and liabilities should the Company be unable to continue as a going concern.
NOTE 2 – MATERIAL ACCOUNTING POLICIES
a) Statement of Compliance
The interim financial statements have been prepared in accordance to IAS 34 Interim Financial Reporting using accounting policies consistent with the International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").
These unaudited financial statements were approved and authorized for issue by the board of Directors on November 26, 2024.
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
b) Basis of Preparation
These interim financial statements have been prepared on a historical cost basis except for financial instruments classified as available-for-sale that have been measured at fair value. Cost is the fair value of the consideration given in exchange for net assets. These interim financial statements do not include all the information required for full annual financial statements. The interim financial statements should be read in conjunction with the Company's annual financial statements for the year ended December 31, 2023. The accounting policies, methods of computation and presentation applied in these financial statements are consistent with those of the previous financial year.
NOTE 3 – ADVANCES PAYABLE
| September 30, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Advances Payable | 57,000 | 57,000 |
Advances payable are non-interest bearing, unsecured and have no specific terms of repayment unless otherwise specified.
NOTE 4 – LOAN PAYABLE
| Loan Payable | 85,800 | 10,500 |
|---|---|---|
| Accrued Interest | 26,721 | 20,923 |
| 112,521 | 31,423 |
On August 15, 2018, the Company entered into an agreement with an arm's length individual for a loan of $33,000. During the year ended December 31, 2021, the Company repaid $22,500 leaving an outstanding balance of $10,500. The loan is unsecured, has a term of one year and is subject to an interest rate of 12% per annum.
During the period ended September 30, 2024, the Company received loan proceeds of $75,300 (2023 - $Nil) from an arm's length individual. The loans are subject to an interest rate of 12% and 21% per annum. The Company recorded $5,798 (2023- $2,582) in interest expense.
NOTE 5 – OTHER PAYABLE
| Reclassification to Long-Term Payable | 235,367 | - |
|---|---|---|
| Gain on Revaluation of Long-Term Payable | (105,554) | - |
| 129,813 | ||
| Accretion Expense | 13,534 | |
| 143,347 | - | |
| Interest Payable – Long-Term | 9,415 | - |
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
On April 1, 2024, the Company entered into an agreement with an arm's length creditor to extend the payment due date of a $235,367 payable to March 31, 2027, in exchange for a simple interest rate of 8% per annum component to be payable at maturity. The initial fair value of $129,813 was recorded using a discount rate of 20%. A gain on the revaluation of the long-term payable of $105,554 was recorded in other items on the Statement of Comprehensive Income.
For the period ended September 30, 2024, the Company recorded accretion expense of $13,534 and interest expense of $9,415. As at September 30, 2024, $31,449 was recorded as the current portion of the long-term payable and $111,898 was classified as long-term.
NOTE 6 – CONVERTIBLE DEBENTURE PAYABLE
| September 30, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Convertible Debenture Payable - Current | 85,000 | 85,000 |
| Accrued Interest | 131,086 | 124,808 |
| 216,086 | 209,808 | |
| Reclassification to Long-Term Debenture Payable | (216,086) | - |
| - | 209,808 | |
| Convertible Debenture Payable – Long-Term | 216,086 | - |
| Gain on Revaluation of Long-Term Debenture Payable | (96,908) | - |
| 119,178 | - | |
| Accretion Expense | 12,426 | - |
| 131,604 | - | |
| Interest Payable - Long-Term | 12,965 | - |
On May 5, 2015, the Company issued a $75,000 convertible debenture (the “Debenture”). At the option of the holder, the principal amount of the Debenture is to be converted into 60,000 units. One unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the company at an exercise price of five cents per share for 60 months following the date of issuance of the units. The Debenture had a maturity date of October 5, 2015 and was subject to an interest rate of 10% over the term of the Debenture.
The Debenture is recorded in part as a liability and in part as shareholders’ equity. The Company uses the “residual valuation” method to determine the debt and equity components of the convertible debenture. Under the residual valuation method, the liability component is determined by estimating the present value of the future cash payments discounted at a rate of interest which the Company would be charged by the market for similar debt without the conversion option. The difference between the net proceeds of the debenture and the liability component is recorded as a separate component of shareholders’ equity.
The Debenture has been accreted to its face value at maturity through a charge to operations. For the year ended December 31, 2015, the Company recorded accretion expense in the amount of $1,494.
9
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
On February 5, 2016, the Company and the lender entered into an agreement to extend the term of the debenture to an open-ended maturity date, by agreeing to an extension fee of $10,000 and to increase the interest rate on the debenture to 12% per annum.
On April 1, 2024, the Company and the lender re-negotiated the terms of the agreement, changing the debenture terms from an open-ended maturity to a maturity date of March 31, 2027, consequently reclassifying the current payable of $216,086 to long-term, and being subject to a simple interest rate of 12% per annum with interest payment due on March 31, 2027. The initial fair value of the long-term debenture was recorded at $119,178 using a discount rate of 20%. A gain on the revaluation of the long-term debenture of $96,908 was recorded in other items in the Statement of Comprehensive Income (Loss).
For the period ended September 30, 2024, the Company recorded accretion expense of $12,426. As at September 30, 2024, $28,873 was recorded as the current portion of the long-term debenture and $102,731 was classified as long-term.
For the period ended September 30, 2024, the Company recorded interest expense of $19,242 (2023 - $17,237) of which $12,965 (2023 - $Nil) is non-current.
NOTE 7 – LONG-TERM INTEREST PAYABLE
| September 30, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Interest on Other Payable | 9,415 | - |
| Interest on Convertible Debenture Payable | 12,965 | - |
| 22,380 | - |
For the period ended September 30, 2024, the Company recorded $22,380 (2023 - $Nil) in interest expense on long-term other payable and convertible debenture. As the interest is due March 31, 2027, it is classified as long-term.
NOTE 8 – EXPLORATION AND EVALUATION ASSET
a) Red Rice Lake Property, Bisset, Manitoba, Canada
In January 2017, the Company signed an option agreement with Tiberius Gold Corp. (“Tiberius”) a private company, under which the Company may acquire 100% of the Red Rice Lake property (the “Property”) located in the Bissett Gold Mine Camp in Manitoba (the “Transaction”). Under the terms of the agreement, the Company may earn-in a 100% interest in the Property by making certain staged cash payments and/or share payments of common shares of the Company to Tiberius totalling $1,250,000 ($250,000 annually over a five-year period).
On November 21, 2017, the Transaction was approved by the TSX-V. Pursuant to the terms of the Agreement, the Company issued 20,000 common shares with a value of $25,000 to an arm’s length party as finder’s fee.
The Company made the first payment by issuing 200,000 common shares to Tiberius on February 09, 2018. The fair value recognized of $200,000 was based on the closing quoted market price of the Company’s shares at the date of issuance.
10
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
In March 2018, the Company entered into three agreements to acquire the net smelter rights (NSR) regarding the Red Rice Lake property. Pursuant to the terms of the agreements, the Company issued a total of 24,000 common shares valued at $30,000 and made two cash payments totaling $50,000.
On February 27, 2020 and May 4, 2020, the Company made the remaining four payments of $250,000 each by issuing 800,000 common shares of its capital to Tiberius Gold Corp. The Company has completed all payments to acquire 100% of Tiberius' property located in the Bisset Gold Mine Camp in Manitoba. The fair value recognized of $100,000 was based on the closing quoted market price of the Company's shares at the date of issuance.
In August 2022, the Company commenced legal action against Tiberius alleging a breach of the agreement.
As of September 30, 2024, Tiberius has not transferred the 14 mineral claims comprising the Property to the Company.
b) Moose Gold Property, Bisset Gold Mining Camp, Manitoba, Canada
In June 2021, the Company entered into an option agreement to purchase the Moose claim, in the Bissett-Rice Lake district of Southern Manitoba. The Moose claim lies eight kilometers southeast of San Antonio/True North mine-mill complex operated by 1911 Gold Corporation. The Company has the right to purchase a 100% interest in the Moose claims by making cash payments totaling $100,000 over a five year period as follows:
| Cash | ||
|---|---|---|
| $ | ||
| On or before June 11, 2021 | 5,000 | (Paid) |
| On or before June 11, 2022 | 5,000 | (Paid) |
| On or before June 11, 2023 | 5,000 | (Deferred) |
| On or before June 11, 2024 | 5,000 | (Deferred) |
| On or before June 11, 2025 | 5,000 | |
| On or before June 11, 2026 | 75,000 |
100,000
c) Greenbelt Property, Manitoba, Canada
In June 2021, the Company entered into a purchase agreement with 1911 Gold Corporation ("1911 Gold") to acquire 1911 Gold's 50% interest in 27 contiguous mining claims totalling 410 hectares (collectively known as the "Greenbelt Property") located south of Bissett, Manitoba, for total consideration of $500,000, payable in cash or shares. On June 24, 2021, the Company issued 500,000 common shares with a fair value of $500,000 to 1911 Gold.
Subsequent to the share issuance, the Company and 1911 Gold amended the terms of the original purchase agreement such that the $500,000 was to be paid in cash only – in equal monthly payments of $100,000 payable by the 23rd of every month from October 2021 to February 2022. During the year ended December 31, 2021, the Company paid $250,000 to 1911 Gold.
In April 2022, the Company completed payment on the remaining $250,000 and in July 2022, 1911 Gold returned the 500,000 shares back to the Company.
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
TSX-V has approved the Greenbelt Property acquisition. As of September 30, 2024, 1911 Gold has not transferred the 50% interest in 27 contiguous mining claims to the Company.
NOTE 9 – SHARE CAPITAL
a) Authorized Share Capital
Unlimited Number of Class “A” Common Shares, Voting, Without Par Value.
Unlimited Number of Class “B” Common Shares, Non-Voting, Without Par Value.
As at September 30, 2024, there were 8,744,316 (2023 – 8,744,316) common shares issued and outstanding.
b) Issued and Outstanding Common Shares
Shares issued during the period ended September 30, 2024, and 2023:
There were no shares issued during the periods ended September 30, 2024, and 2023.
c) Share Purchase Warrants
The continuity of share purchase warrants for the period ended September 30, 2024, and 2023 is summarized below.
As at September 30, 2024 and 2023, the Company had 2,000,000 outstanding share purchase warrants at a weighted average price of $0.12.
| Expiry Date | Exercise Price | December 31, 2022 / 2023 | Issued | Exercised | Expired/ Cancelled | September 30, 2023 /2024 |
|---|---|---|---|---|---|---|
| December 20, 2027 | $0.12 | 2,000,000 | - | - | - | 2,000,000 |
| Total | 2,000,000 | - | - | - | 2,000,000 |
d) Finders’ Warrants
As at September 30, 2024 and 2023, the Company had no outstanding finders’ warrants.
d) Stock Options
The Company has established a Stock Option Plan which provides for the granting of incentive stock options up to a maximum of 10% of the Company’s issued and outstanding common shares. The terms of the options granted are subject to determination and approval by the Board of Directors. There were no stock options outstanding as at September 30, 2024 and 2023, and December 31, 2023 and 2022.
e) Restricted Share Unit (“RSU”) Plan
During the year ended December 31, 2018, the board of directors and the shareholders approved the adoption of a new Restricted Share Unit Plan (“RSU Plan”). The RSU Plan allows an eligible person to acquire restricted share units of the Company and is designed to provide the Company with an additional tool to compensate certain directors, officers, consultants and other key employees of the Company. The aggregate number of shares available for issuance from treasury under the RSU Plan is 2,163,249 shares and together with any other share compensation arrangement is not to exceed 10% of the issued and outstanding Class “A” common shares of the Company at the grant date.
12
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
NOTE 10 – RELATED PARTY TRANSACTIONS
Details of transactions between the Company and other related parties, in addition to those transactions disclosed elsewhere in these consolidated financial statements, are described below.
a) Related Party Balances
As at September 30, 2024 and December 31, 2023, the Company has the following amounts owed to related parties:
| September 30, 2024 | December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Due to a Director (also an Officer) for Consulting Services, other expenses and loans including interest | 1,601,505 | 2,145,797 |
| Due to a company with a common Director | 40,200 | 40,200 |
| Loans due to persons related to a Director | 5,000 | 5,000 |
| 1,646,705 | 2,190,997 |
b) Compensation of Key Management Personnel and Other Related Parties
The Company incurred consulting and management fees for services provided by key management personnel for the period ended September 30, 2024 and 2023, as described below. All related party transactions were in the ordinary course of business and were measured at their exchange amount.
| September 30, 2024 | September 30, 2023 | |
|---|---|---|
| $ | $ | |
| Consulting Fees & Expense Allowances | 143,393 | 142,791 |
| Management Fees | - | 900 |
| Accrued Interest | 115,293 | 55,676 |
| 258,686 | 199,367 |
-
During the period ended September 30, 2024, the Company accrued $143,393 (2023 - $142,791) in consulting fees and allowances to the CEO and Director of the Company. The Company also paid $Nil (2023 – $900) in management fees to the CFO and Director of the Company.
-
On April 1, 2024, the Company and the CEO and Director of the Company entered into an agreement to extend the payment due date of consulting fees owed to former companies controlled by the CEO and Director in the amount of $1,423,860 to March 31, 2027, in exchange for the payables to be subject to simple interest rates of 8% and 12% per annum payable at maturity. The initial fair value of $785,305 was recorded using a discount rate of 20%. The gain on revaluation of the long-term payables of $638,555 was recorded in other items on the Statement of Comprehensive Income (Loss).
13
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
For the period ended September 30, 2024, the Company recorded accretion expense of $41,953 and interest expense of $33,516 due at maturity. As at September 30, 2024, $190,252 was recorded as the current portion of the long-term payable and $676,929 was classified as long-term.
- On April 1, 2024, the Company and the CEO and Director of the Company entered into an agreement to extend the repayment term of loans payable in the amount of $736,182 due to the CEO and Director and company controlled by the CEO and Director to March 31, 2027. The loans are subject to simple interest rates of 12% and 15% per annum payable at maturity. The initial fair value of $406,028 was recorded using a discount rate of 20%. The gain on revaluation of the long-term loans of $330,154 was recorded in other items on the Statement of Comprehensive Income (Loss).
For the period ended September 30, 2024, the Company recorded accretion expense of $21,691, and interest expense of $23,123 due at maturity. As at September 30, 2024, $98,366 was recorded as the current portion of the long-term payable and $349,994 was classified as long-term.
-
As at September 30, 2024, a total of $288,618 was the current portion relating to the long-term payables and loans and $1,026,924 plus the associated interest payable of $56,638 was classified as long-term for total long-term payables of $1,083,562.
-
For the period ended September 30, 2024, the Company received $26,430 in loan proceeds from a company controlled by the CEO and Director. Loan proceeds of $5,000 bear a simple interest rate of 12% per annum and have a maturity date of March 31, 2027, and $21,430 are subject to an interest rate of 21% per annum and have an open-ended maturity. The loans are unsecured. The Company accrued a total of $115,293 (2023 - $55,676) in associated interest to the CEO for loans and payables of which $2,016 pertained to current loans payable.
NOTE 11 – COMMITMENTS
On August 01, 2015, the Company renewed the consulting agreement (initially signed August 2012) with a Director of the Company to provide consulting services for a monthly fee of $10,000 for a period of three years. The agreement may be terminated by either party on one hundred eighty days written notice. On August 01, 2018, the consulting agreement was renewed for a period of five years at a rate of $15,000 per month. On August 1, 2023, the agreement was renewed for another 5 years with the same terms.
In January 2023, the Company entered into an Office Service Agreement for a gross monthly fee of $35,000 per month. Additional fees of $7,500 per quarter and $10,000 annually are also payable for the preparation of quarterly and annual financial statements. The agreement is for a five-year term, expiring December 31, 2027. In July 2023, the agreement was re-negotiated resulting in a reduced office service monthly fee of $7,500 per month and quarterly preparation of financial statements fee of $5,000 with the annual preparation fee remaining at $10,000.
NOTE 12 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarized in Note 2 of the audited financial statements. The Company’s risk management is coordinated in close co-operation with the board of directors and focuses on actively securing the Company’s short to medium-term cash flows and raising finances for the Company’s capital expenditure program. The Company does not actively engage in the trading of financial assets for
ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
speculative purposes. The most significant financial risks to which the Company is exposed are described below.
a) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a working capital deficiency of $1,161,055 as at September 30, 2024. The Company is dependent upon the availability of credit from its suppliers and its ability to generate enough funds from equity and debt financing to meet current and future obligations. There can be no assurance that such financing will be available on terms acceptable to the Company.
b) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s loans and payables have fixed interest rates; therefore, management considers this risk to not be significant.
c) Credit Risk
Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. The Company is in the exploration stage and has not yet commenced commercial production or sales. The Company is not exposed to credit risk.
d) Foreign Exchange Risk
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company conducts a significant portion of its business activities in foreign currency. The Company is exposed to foreign exchange risk to the extent it incurs mineral exploration expenditures and operating costs denominated in U.S. Dollars. The Company does use derivatives to manage its exposure to foreign exchange risk.
e) Commodity Price Risk
Commodity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in commodity prices. The ability of the Company to develop its mineral properties and the future profitability of the Company are directly related to the market price of gold. The Company has not hedged any of its future gold sales. The Company’s input costs are also affected by the price of fuel. The Company closely monitors gold and fuel prices to determine the appropriate course of action to be taken.
f) Fair Values
The Company uses the following hierarchy for determining fair value measurements:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement. The Company’s financial instruments measured at fair value use Level 1 valuation technique during the period ended September 30, 2024 and December 31, 2023. The carrying values of the Company’s financial assets and liabilities approximate their fair values as at September 30, 2024 and December 31, 2023.
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ALLIANCE MINING CORP.
Notes to the Financial Statements
For the Nine Months Ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
NOTE 13 – CAPITAL MANAGEMENT
The Company manages its share capital as capital, which as at September 30, 2024, was $5,634,890 (December 31, 2023 - $5,634,890). The Company’s objectives when managing capital are:
i) to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and
ii) to ensure the entity has the capital and capacity to support a long-term growth strategy.
The Company’s capital structure reflects the requirements of a company focused on significant growth in a capital-intensive industry. The Company faces lengthy development lead times, as well as risks associated with rising capital costs and timing of project completion because of the availability of resources, permits and other factors beyond our control. The Company’s operations are also affected by potentially significant volatility of the metals and materials cycles.
Management continually assesses the adequacy of the Company’s capital structure and adjusts within the context of its strategy, the base metal mining industry, economic conditions, and the risk characteristics of the Company’s assets. To adjust or maintain its capital structure, the Company may enter new credit facilities or issue new shares.
The Company has several key policy guidelines for managing its capital structure:
i) maintain a liquidity cushion that allows the Company to address operational and/or industry disruptions or downturns
ii) ensure the Company has enough funding to complete its development programs at or around the time a definitive decision is made to move forward with a project; and
iii) maintain a conservative level of debt relative to total capital and earnings within the context of financial forecasts for pricing, costs and production
The Company’s share capital is not subject to external restrictions. The Company has not paid or declared any dividends since the date of incorporation, nor are any contemplated in the foreseeable future. There were no changes in the Company’s approach to capital management during the period ended September 30, 2024.
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