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Bocana Resources Corp. — Audit Report / Information 2025
Jan 29, 2026
46312_rns_2026-01-28_d3f500ee-3514-4b99-9b38-a2018a770828.pdf
Audit Report / Information
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Bocana Resources Corp.
Consolidated Financial Statements
September 30, 2025 and 2024
(expressed in Canadian dollars)
RSM
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of Bocana Resources Corp.
Opinion
We have audited the consolidated financial statements of Bocana Resources Corp. (the "Company"), which comprise the consolidated statements of financial position as at September 30, 2025 and 2024, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at September 30, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the Consolidated financial statements, which indicates that the Company incurred a net loss of $421,464 during the year ended September 30, 2025 and, as of that date, the Company's current liabilities exceeded its total assets by $685,443. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended September 30, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our auditor's report.
Other Information
Management is responsible for the other information. The other information comprises the Management's Discussion and Analysis (MD&A).
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
THE POWER OF BEING UNDERSTOOD
ASSURANCE | TAX | CONSULTING
RSM Canada LLP is a limited liability partnership that provides public accounting services and is the Canadian member firm of RSM International, a global network of independent assurance, tax and consulting firms. Visit rsmcanada.com/aboutus for more information regarding RSM Canada LLP and RSM International.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
We obtained the MD&A prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Stephen McCourt.
RSM Canada LLP
Chartered Professional Accountants
Licensed Public Accountants
January 28, 2026
Toronto, Ontario
Bocana Resources Corp.
Consolidated Statements of Financial Position
(expressed in Canadian dollars)
| September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Notes | $ | $ |
| Assets | ||
| Current | ||
| Cash | 37,689 | 33,181 |
| Receivables | 55,974 | 42,269 |
| Prepaid expenses | 28,812 | 28,810 |
| 122,475 | 104,260 | |
| Liabilities | ||
| Current | ||
| Accounts payable and accrued liabilities | 12 | 697,807 |
| Advances from directors | 6, 12 | 54,644 |
| Due to joint venture | 5 | 55,467 |
| 807,918 | 370,622 | |
| Shareholders' equity | ||
| Share capital | 7 | 7,635,935 |
| Warrants | 7 | 1,149,200 |
| Contributed surplus | 7 | 1,170,000 |
| Foreign currency reserve | 176,815 | |
| Deficit | (10,817,393) | |
| (685,443) | (266,362) | |
| 122,475 | 104,260 | |
| Nature of operations | 1 | |
| Going concern | 2 | |
| Investment in joint venture | 5 | |
| Subsequent events | 13 | |
| Approved by the Board: | Timothy J. Turner | Christian Shomber |
| Director | Director |
See accompanying notes to the consolidated financial statements
Bocana Resources Corp.
Consolidated Statements of Loss and Comprehensive Loss
(expressed in Canadian dollars)
| Years ended September 30, | |||
|---|---|---|---|
| 2025 | 2024 | ||
| Notes | $ | $ | |
| Expenses | |||
| Professional fees | 12 | 34,807 | 42,536 |
| Consulting | 12 | 213,933 | 208,665 |
| Stock-based compensation | 7 | 2,600 | 9,750 |
| General and administrative | 36,369 | 32,604 | |
| Public company costs | 33,213 | 26,199 | |
| Investor relations | - | 7,500 | |
| Exploration and evaluation | 8 and 12 | 90,955 | 486,712 |
| Travel | - | 809 | |
| Interest | 6 and 12 | 2,753 | - |
| Foreign exchange loss (gain) | 6,834 | (3,340) | |
| Interest income | - | (5,236) | |
| 421,464 | 806,199 | ||
| Net loss | (421,464) | (806,199) | |
| Other comprehensive loss that may be reclassified to profit or loss in subsequent years (net of tax) | |||
| Currency translation adjustment | (217) | (9,302) | |
| Comprehensive loss | (421,681) | (815,501) | |
| Net loss per share-basic and diluted | - | (0.01) | |
| Weighted average number of shares outstanding - basic and diluted | 101,227,661 | 101,227,661 |
See accompanying notes to the consolidated financial statements
Bocana Resources Corp.
Consolidated Statements of Changes in Equity
(expressed in Canadian dollars)
| Share capital | Contributed surplus | Foreign currency reserve | Deficit | Total | |||
|---|---|---|---|---|---|---|---|
| Number of common shares (note 7) | $ (note 7) | Warrants $ (note 7) | |||||
| Balance, September 30, 2024 | 101,227,661 | 7,635,935 | 1,149,200 | 1,167,400 | 177,032 | (10,395,929) | (266,362) |
| Stock-based compensation | - | - | - | 2,600 | - | - | 2,600 |
| Other comprehensive loss | - | - | - | - | (217) | - | (217) |
| Net loss | - | - | - | - | - | (421,464) | (421,464) |
| Balance, September 30, 2025 | 101,227,661 | 7,635,935 | 1,149,200 | 1,170,000 | 176,815 | (10,817,393) | (685,443) |
| Balance, September 30, 2023 | 101,227,661 | 7,587,935 | 1,197,200 | 1,157,650 | 186,334 | (9,589,730) | 539,389 |
| Fair value of expired warrants | - | 48,000 | (48,000) | - | - | - | - |
| Stock-based compensation | - | - | - | 9,750 | - | - | 9,750 |
| Other comprehensive loss | - | - | - | - | (9,302) | - | (9,302) |
| Net loss | - | - | - | - | - | (806,199) | (806,199) |
| Balance, September 30, 2024 | 101,227,661 | 7,635,935 | 1,149,200 | 1,167,400 | 177,032 | (10,395,929) | (266,362) |
See accompanying notes to the consolidated financial statements
Bocana Resources Corp.
Consolidated Statements of Cash Flows
(expressed in Canadian dollars)
| Years ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| $ | $ | |
| Cash provided by (used in) | ||
| Operating activities | ||
| Net loss | (421,464) | (806,199) |
| Stock-based compensation | 2,600 | 9,750 |
| Interest income accrued | - | (5,236) |
| Interest expense on advances from directors not paid | 2,753 | - |
| Changes in non-cash operating working capital | ||
| Receivables | (13,705) | (10,962) |
| Prepaid expenses | (2) | 104,053 |
| Accounts payable and accrued liabilities | 327,402 | (6,478) |
| (102,416) | (715,072) | |
| Investing activities | ||
| Due to joint venture | 55,467 | - |
| Financing activities | ||
| Advances from directors | 51,457 | - |
| Interest income received | - | 5,236 |
| 51,457 | 5,236 | |
| Net increase (decrease) in cash | 4,508 | (709,836) |
| Cash, beginning of year | 33,181 | 743,017 |
| Cash, end of year | 37,689 | 33,181 |
| Supplementary information | ||
| Interest paid | - | - |
| Income taxes paid | - | - |
See accompanying notes to the consolidated financial statements
5
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
- Nature of operations
Bocana Resources Corp. is a public company engaged in the acquisition, exploration and development of mineral resources in South America.
The Company's registered office is located at 800 - 333 7th Avenue S.W., Calgary, AB T2P 2Z1.
Letter of intent/Venture Gold, Inc. ("VG")
On October 6, 2025, the Company entered into an arm's length non-binding letter of intent for an investment of up to US$20,000,000 for a 50% interest in VG for working capital and the development and exploration of several projects within the Idaho Springs/Central City Mining District in Colorado. The investment was expected to be made through Arizore LLC. (see below, Joint venture agreement/Arizore LLC). On January 4, 2026, the letter of intent lapsed. Management of the Company and VG are continuing discussions regarding a potential transaction, however there can be no assurance that any agreement will be reached or that any transaction will be completed.
Joint venture agreement/Arizore LLC
On September 23, 2025, the Company and Arizore Ltd. ("Members") signed a joint venture agreement to establish Arizore LLC, a limited liability company incorporated in Nevada, to acquire, hold, explore, develop and operate claims and establish a tokenization platform. Each Member holds a 50% interest in Arizore LLC.
Arizore Ltd. shall provide up to US$60,000,000 in funding loans to Arizore LLC ("Funding Loans") to fund acquisition costs, due diligence, capital expenses and operational costs for claims and the Company shall have no obligation to contribute any funding. All Funding Loans shall be secured by a first-priority security interest on a proportionate basis (or an undivided interest) to the value of the assets of Arizore LLC.
Arizore Ltd. intends to develop and operate a secure, compliance-focused digital infrastructure for the tokenization of mining-related assets, intended to enable digital representations of certain assets or cash flows of Arizore LLC. All intellectual property developed in connection with tokenization will be jointly owned by the Members.
The Company shall act as the operator responsible for exploration, mine development, feasibility studies, and mining operations in situations where Arizore LLC is the operator of the projects.
Each Member will appoint an equal number of managers to the board of managers of Arizore LLC and the following matters require unanimous Board approval:
a) approval of programs and budgets;
b) entry into any long-term offtake agreement;
c) disposition of any interest in the assets;
d) incurrence of indebtedness other than funding loans;
e) amendments to the operating agreement;
f) dissolution;
g) acquisition of any new assets.
Where a matter requiring unanimous approval of the Board remains unresolved after two consecutive Board meetings, the matter shall be referred to the respective chief executive officer of the Members for resolution after a sixty-day waiting period. If the matter is still not resolved, either Member may offer a buy-sell notice to the other Member, who may or may not elect to sell its interest or buy the offeror's interest on the same terms.
It is agreed that an Arizore Ltd. board member will sit on the board of the Company and that a board member of the Company will sit on the board of Arizore Ltd.
Letter of intent/LP Associates, LLC
On July 24, 2025, the Company entered into a binding letter of intent for the proposed acquisition ("Transaction") of 100% of the rights, title and interests in the U.S. Bureau of Land Management ("BLM") placer mining claims ("Claims"). The Claims, which are comprised of 72 claims covering approximately 1,440 acres located in Pinal County, approximately 85 miles southeast of Phoenix, Arizona.
6
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
It is the intent of the Company that the Transaction would be completed by Arizore LLC which would acquire a 100% ownership interest in the Claims for US$27,500,000 ("Purchase Price").
The Transaction is subject to the following conditions:
a) the completion of satisfactory due diligence by the Company;
b) the entering into of a definitive agreement in respect of the Transaction by February 19, 2026;
c) the completion of all financing by the Company to satisfy the Purchase Price;
d) regulatory and third-party approvals, including but not limited to the TSX Venture Exchange.
Arizore LLC has received Funding Loans for US$300,000 and made an initial deposit of US$200,000, which will be applied towards the Purchase Price at closing.
- Going concern
The Company is in the exploration stage and does not generate revenue. At September 30, 2025, the Company had a working capital deficit of $685,443 (2024 - $266,362) and for the year ended September 30, 2025, Company incurred a net loss of $421,464 (2024 - $806,199) and a cashflow deficit from operations of $102,416 (2024 - $715,072). The working capital deficit, net losses and cashflow deficits limit the Company's ability to fund its operations and the acquisition, exploration and development of mineral properties. The Company will periodically have to raise funds to continue operations, and, although it has been successful thus far in doing so, there is no assurance it will be able to do so in the future. The Company estimates it will need additional capital to operate for the upcoming year.
As a result, there is material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.
These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption is inappropriate, and these adjustments could be material.
- Basis of presentation
Statement of compliance
These consolidated financial statements are prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The accounting policies applied in these consolidated financial statements are based on IFRS issued and outstanding as of September 30, 2025.
The consolidated financial statements were approved and authorized for issue by the Board of Directors on January 28, 2026.
Basis of measurement
These consolidated financial statements have been prepared on the historical cost basis. Historical costs are generally based on the fair value of consideration given in exchange for goods and services received. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information.
Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars, which is the Company's functional currency. The functional currency of the Company's subsidiaries is the US dollar.
Use of estimates and judgments
The preparation of financial statements in conformity with IFRS requires the Company's management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
7
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected if the revision impacts both current and future periods.
Information about judgments, assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are as follows:
Going concern
The Company applied judgment in assessing its ability to continue as a going concern for at least 12 months. See note 2.
Title to mineral properties
Although the Company has taken steps to verify title to the mineral properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of operations of such properties, these procedures do not guarantee the Company's title. Property title may be subject to government licensing requirements or regulations, unregistered prior agreements, unregistered claims, illegal artisanal or small-scale miners, aboriginal claims, and non-compliance with regulatory and environmental requirements. If the Company does not have title to its mineral properties, there will be adverse consequences to the Company and its business prospects.
Assessment of joint control over Arizore LLC
The Company exercised judgment in determining that it has joint control over Arizore LLC.
Stock-based compensation and fair value of warrants
The Company uses the Black-Scholes option pricing model in determining stock-based compensation and the fair value of warrants, which requires a number of assumptions to be made, including the risk-free interest rate, expected life, forfeiture rate and expected share price volatility. Consequently, the actual stock-based compensation may vary from the amount estimated. See note 7.
Deferred income taxes
Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates at the reporting date in effect for the period in which the temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized as part of the provision for income taxes in the period that includes the enactment date. The recognition of deferred income tax assets is based on the assumption that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. See note 9.
4. Material accounting policy information
The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements.
Consolidation
These consolidated financial statements include the accounts of the Company and its 99.94% (2024 - 99.94%) ownership in subsidiary, Inversiones Bocana SA ("Bocana SA") and its 100% ownership (2024 - 100%) in subsidiary, Huiracocha Internacional Service SRL ("Huiracocha"). Both subsidiaries are located in Bolivia. Bocana SA is a holding company and Huiracocha is involved in exploration in Bolivia. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has all the following:
- (a) power over the investee;
- (b) exposure, or rights, to variable returns from its involvement with the investee; and
- (c) the ability to use its power over the investee to affect the amount of the investor's returns.
All intercompany transactions and balances are eliminated on consolidation.
8
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Joint arrangements
The Company participates in arrangements over which two or more parties exercise joint control, requiring unanimous consent for decisions about relevant activities. These arrangements are classified as joint ventures, as the Group has rights to the net assets of the arrangements.
Measurement
Interests in joint ventures are accounted for using the equity method in accordance with IAS 28. The investment is initially recognized at cost and subsequently adjusted for the Company's share of profit or loss of the joint venture, the Company's share of other comprehensive income and dividends received from joint ventures.
Unrealized gains and losses on transactions with joint ventures are eliminated to the extent of the Company's interest.
Losses and negative interests
The Company discontinues recognizing its share of losses when the carrying amount of the investment is reduced to zero, unless the Company has incurred legal or constructive obligations, or made payments on behalf of the joint venture. If such obligations exist, the Company continues to recognize losses to the extent of those obligations, resulting in a negative carrying amount. When the joint venture subsequently returns to profitability, the Company resumes recognizing its share of profits only after unrecognized losses have been recovered.
Impairment
The carrying amount of the investment is assessed for impairment whenever there is an indication that the investment may be impaired. Impairment losses are recognized when the recoverable amount falls below the carrying amount.
Foreign currencies
Transactions in foreign currencies are translated to Canadian dollars at exchange rates in effect on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at the period end exchange rate. Non-monetary items denominated in a foreign currency are translated into Canadian dollars at the exchange rate in effect on the respective transaction dates. Expenses are translated at average exchange rates for the period. Foreign currency differences arising on translation are recognized in the statement of loss and comprehensive loss.
The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
i. assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
ii. income and expenses for each consolidated statement of loss and comprehensive loss and cash flows for the years presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions);
iii. components of equity are translated at the exchange rates at the dates of the relevant transactions or at average exchange rates where this is a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, and are not re-translated; and
iv. all resulting exchange differences are recognized in other comprehensive income (loss).
Financial instruments
Financial assets are required to be initially measured at fair value and subsequently classified at amortized cost or fair value on the basis of the Company's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The Company's financial assets include cash which is classified at amortized cost because the Company's business model is to hold these financial instruments to maturity to collect contractual cash flows consisting solely of payments of principal and interest on the principal amount outstanding.
Financial liabilities include accounts payable and accrued liabilities, advances from directors and due to joint venture which were initially measured at fair value and subsequently classified as amortized cost.
9
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Impairment of financial assets
The Company applies a forward-looking expected credit loss ("ECL") model on each reporting date to financial assets measured at amortized cost. The Company's only financial asset subject to impairment is receivables. The ECL model applied to financial assets requires judgment, assumptions and estimations on changes in credit risks, forecasts of future economic conditions and historical information on the credit quality of the financial asset. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses.
Impairment losses, if incurred, are recorded in profit or loss with the carrying amount of the financial asset or group of financial assets reduced through the use of impairment allowance accounts. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.
Exploration and evaluation
Direct costs relating to the acquisition, exploration and development of mineral properties, less recoveries, are expensed in the period incurred until these mineral properties are placed into commercial production, sold or abandoned.
Costs include the cash consideration and the fair market value of any shares issued for the acquisition of mineral properties. Option proceeds received are recorded in the accounts at the time of receipt. Properties acquired under option agreements or by joint ventures, whereby payments are made at the sole discretion of the Company, are recorded in the accounts at the time of payment.
Decommissioning liabilities
The Company's activities may give rise to dismantling, decommissioning and site disturbance remediation activities. Provision is made for the estimated cost of site restoration. Decommissioning obligations are measured at the present value of management's best estimate of expenditures required to settle the present obligation at the date of the statement of financial position. The fair value of the estimated obligation is recorded as a liability with a corresponding increase in the carrying amount of the related asset. The obligation is subsequently adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. The increase in the provision due to the passage of time is recognized as accretion costs whereas increases or decreases due to changes in the estimated future cash flows or changes in the discount rate are capitalized. Actual costs incurred upon settlement of the decommissioning obligations are charged against the provision to the extent the provision was established. As at September 30, 2025 and September 30, 2024, the Company had no decommissioning liabilities.
Share capital
Share capital is classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects.
Unit private placements
For private placements of units consisting of common shares and warrants, the Company uses the Black-Scholes option pricing model in determining the fair value of warrants. The proceeds from the issuance of units are first allocated to the warrants and the residual amount, being the difference between the proceeds from issuance and the fair value of the warrants, is allocated to common shares.
Share-based payments
The Company offers a stock option plan for its officers, directors, employees and consultants. The fair value of stock options for each vesting period is determined using the Black-Scholes option pricing model and is recorded over the vesting period as an increase to stock-based compensation and contributed surplus. A forfeiture rate is estimated on the grant date and is adjusted to reflect the actual number of options that vest. Upon the exercise of stock options, the proceeds received by the Company and the related contributed surplus are recorded as an increase to share capital. When vested stock options expire, previously recognized share-based compensation is not reversed. When stock options are forfeited, previously recognized share-based compensation associated with the unvested portion of the stock options forfeited is reversed.
10
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. No provisions were recorded as at September 30, 2025 and September 30, 2024.
Income tax
Income tax expense comprises current and deferred taxes. Current tax and deferred tax is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:
- temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
- temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Loss per share
The Company presents basic and diluted loss per share data for its common shares. Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted and warrants issued. For the years presented, there are no dilutive effects.
New accounting standards not yet adopted
The International Accounting Standards Board (IASB) has issued new standards and amendments to standards that are not yet effective for the Company's annual reporting period ended September 30, 2025 and have not been early adopted by the Company. The Company is in the process of evaluating the impact of these standards and amendments on its consolidated financial statements.
Amendments to IAS 21 — The Effects of Changes in Foreign Exchange Rates (Lack of Exchangeability)
The amendments clarify how an entity assesses whether a currency is exchangeable and how to determine the spot exchange rate when exchangeability is lacking, including related disclosure requirements. The amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early adoption permitted.
11
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Expected impact: Based on the Company's current operations and limited exposure to foreign currencies subject to exchangeability constraints, management does not expect these amendments to have a material impact on the Company's consolidated financial statements. The amendments are expected, if applicable, to primarily result in additional disclosures.
Amendments to IFRS 9 and IFRS 7 — Classification and Measurement of Financial Instruments
The amendments clarify certain aspects of the classification and measurement of financial instruments and introduce additional disclosure requirements. The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with early adoption permitted.
Expected impact: Given the Company's simple capital structure and limited financial instruments, management does not expect the amendments to have a material impact on the recognition or measurement of financial instruments. Any impact is expected to be limited to incremental disclosure enhancements.
IFRS 18 — Presentation and Disclosure in Financial Statements
IFRS 18 replaces IAS 1 and introduces new requirements to improve the presentation and disclosure of information in financial statements, including defined subtotals and enhanced guidance on aggregation and disaggregation in the statement of profit or loss. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted.
Expected impact: Management expects IFRS 18 to primarily affect the presentation and classification of information in the consolidated financial statements and not the underlying recognition or measurement of transactions. The Company does not expect adoption to require significant changes to its accounting policies, systems, or internal controls.
IFRS 19 — Subsidiaries without Public Accountability: Disclosures
IFRS 19 permits eligible subsidiaries without public accountability to apply reduced disclosure requirements while applying recognition and measurement requirements of other IFRS Accounting Standards. IFRS 19 is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted.
Expected impact: The Company will assess the applicability of IFRS 19 to its subsidiaries. If applicable, adoption may result in reduced disclosure requirements for eligible subsidiaries, with no impact on recognition or measurement.
5. Investment in joint venture
The Company has an investment in the following joint venture:
| Joint venture | Principal activity | Country | Ownership percentage |
|---|---|---|---|
| Arizore LLC | Mineral exploration | United States | 50% |
During the year, as the Company did not contribute any funding to Arizore LLC, the carrying amount of its investment is zero and as the Company has not incurred legal or constructive obligations or made payments on behalf of the joint venture, the Company has not recognized its share of losses of the joint venture.
Summarized financial information of Arizore LLC
| 2025 US$ | |
|---|---|
| Current assets | 250,297 |
| Non-current assets | – |
| Current liabilities | 305,000 |
| Non-current liabilities | – |
| Revenue | – |
| Net loss | 54,703 |
12
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
On behalf of Arizore LLC, the Company received loan advances of US$105,000 from Arizore Ltd. and made payments of US$64,702. The amount due to joint venture of $55,467 (2024 - $Nil) is unsecured, non-interest bearing and due on demand.
6. Advances from directors
| Balance, September 30, 2023 and 2024 | – |
|---|---|
| Advances | 51,457 |
| Interest | 2,753 |
| Foreign exchange | 434 |
| Balance, September 30, 2025 | 54,644 |
Advances from directors are unsecured, bear interest at 10% per annum and are due on demand.
7. Share capital
Authorized
An unlimited number of common shares.
An unlimited number of preferred shares issuable in series.
Issued
| Number of common shares | $ | |
|---|---|---|
| Balance, September 30, 2023 | 101,227,661 | 7,587,935 |
| Fair value of expired warrants | – | 48,000 |
| Balance, September 30, 2024 and September 30, 2025 | 101,227,661 | 7,635,935 |
There are no preferred shares outstanding.
Warrants
A continuity of the Company's outstanding common share warrants is presented below:
| Weighted-average exercise price $ | Number of warrants | |
|---|---|---|
| Balance, September 30, 2023 | 0.24 | 32,755,489 |
| Expired | 0.24 | (7,682,289) |
| Balance, September 30, 2024 and September 30, 2025 | 0.24 | 25,073,200 |
A summary of the Company's outstanding common share warrants at September 30, 2025 is presented below:
| Exercise price | Expiry date | Number of warrants |
|---|---|---|
| $0.10 (exercisable into a unit consisting of a common share and warrant) | January 3, 2026 | 132,800 |
| $0.25 | January 3, 2026 | 4,202,500 |
| $0.10 (exercisable into a unit consisting of a common share and warrant) | January 3, 2026 | 1,270,400 |
| $0.25 | January 3, 2026 | 19,467,500 |
| 25,073,200 |
13
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Stock options
The Company may grant stock options to directors, officers, employees and consultants for up to 10% of the issued and outstanding common shares. The exercise price for stock options will not be less than the market price of the common shares on the date of the grant, less any discount permissible under the rules of the TSXV. The maximum term for stock options is 5 years and stock options granted vest immediately.
A continuity of the Company's outstanding stock options is presented below:
| Weighted-average exercise price $ | Number of options | |
|---|---|---|
| Balance, September 30, 2023 | 0.10 | 2,300,000 |
| Issued | 0.10 | 2,400,000 |
| Balance, September 30, 2024 | 0.10 | 4,700,000 |
| Cancelled | 0.10 | (2,400,000) |
| Granted | ||
| Replacement | 0.10 | 2,400,000 |
| New | 0.10 | 1,800,000 |
| Balance, September 30, 2025 | 0.10 | 6,500,000 |
The weighted average exercise price of stock options is $0.10.
Cancellation and grant of stock options
TSX Venture Exchange advised that the previously issued grant of 2,400,000 stock options to directors and officers on May 24, 2024, was issued outside of the proper timeline for the Company's stock option to be effective. Therefore, on March 14, 2025, the Company cancelled the previously issued stock options and issued 2,400,000 replacement stock options:
Stock options cancelled
| Exercise price | Expiry date | Number of stock options |
|---|---|---|
| $0.10 | May 24, 2029 | 700,000 |
| $0.10 | June 30, 2029 | 850,000 |
| $0.10 | September 30, 2029 | 425,000 |
| $0.10 | December 31, 2029 | 425,000 |
| 2,400,000 |
Replacement stock options granted
| Exercise price | Expiry date | Number of stock options |
|---|---|---|
| $0.10 | May 24, 2029 | 1,800,000 |
| $0.10 | June 30, 2029 | 300,000 |
| $0.10 | September 30, 2029 | 150,000 |
| $0.10 | December 31, 2029 | 150,000 |
| 2,400,000 |
As the fair value of the replacement stock options granted approximated the fair value of the stock options cancelled, no additional stock-based compensation was recorded.
14
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
A summary of the Company's outstanding stock options at September 30, 2025 is presented below:
| Exercise price | Expiry date | Number of stock options | |
|---|---|---|---|
| Outstanding | Exercisable | ||
| $0.10 | March 27, 2028 | 1,600,000 | 1,600,000 |
| $0.10 | May 26, 2028 | 700,000 | 700,000 |
| $0.10 | May 24, 2029 | 1,800,000 | 1,800,000 |
| $0.10 | June 30, 2029 | 300,000 | 300,000 |
| $0.10 | September 30, 2029 | 150,000 | 150,000 |
| $0.10 | December 31, 2029 | 150,000 | 150,000 |
| $0.10 | January 30, 2030 | 1,200,000 | 1,200,000 |
| $0.10 | March 31, 2030 | 150,000 | 150,000 |
| $0.10 | June 30, 2030 | 150,000 | 150,000 |
| $0.10 | September 30, 2030 | 150,000 | 150,000 |
| $0.10 | December 31, 2030 | 150,000 | – |
| 6,500,000 | 6,350,000 |
The weighted average remaining contractual life of outstanding stock options is 3.5 years.
Grant of stock options
On January 30, 2025, the Company granted stock options to directors and officers. A summary of the stock options granted and the assumptions for the calculation of the fair value of those stock options using the Black-Scholes option pricing model is presented below:
| Date of grant | January 30, 2025 |
|---|---|
| Number of stock options granted | 1,800,000 |
| Number of stock options by expiry date | |
| January 30, 2030 | 1,200,000 |
| March 31, 2030 | 150,000 |
| June 30, 2030 | 150,000 |
| September 30, 2030 | 150,000 |
| December 31, 2030 | 150,000 |
| Exercise price | $0.10 |
| Share price | $0.005 |
| Risk-free interest rate | 2.79% |
| Expected volatility based on historical volatility | 100% |
| Expected life of stock options | 5 years |
| Expected dividend yield | 0% |
| Forfeiture rate | 0% |
| Number of stock options by vesting date | |
| January 30, 2025 | 1,200,000 |
| March 31, 2025 | 150,000 |
| June 30, 2025 | 150,000 |
| September 30, 2025 | 150,000 |
| December 31, 2025 | 150,000 |
| Fair value of stock options by vesting date | |
| January 30, 2025 | $1,800 |
| March 31, 2025 | $200 |
| June 30, 2025 | $200 |
| September 30, 2025 | $200 |
| December 31, 2025 | $200 |
| Fair value per stock option | $0.0015 |
15
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
On May 24, 2024, the Company granted stock options to directors and officers. A summary of the stock options granted and the assumptions for the calculation of the fair value of those stock options using the Black-Scholes option pricing model is presented below:
| Date of grant | May 24, 2024 |
|---|---|
| Number of stock options granted | 2,400,000 |
| Number of stock options by expiry date | |
| May 24, 2029 | 700,000 |
| June 30, 2029 | 850,000 |
| September 30, 2029 | 425,000 |
| December 31, 2029 | 425,000 |
| Exercise price | $0.10 |
| Share price | $0.01 |
| Risk-free interest rate | 3.68% |
| Expected volatility based on historical volatility | 100% |
| Expected life of stock options | 5 years |
| Expected dividend yield | 0% |
| Forfeiture rate | 0% |
| Number of stock options by vesting date | |
| May 24, 2024 | 700,000 |
| June 30, 2024 | 850,000 |
| September 30, 2024 | 425,000 |
| December 31, 2024 | 425,000 |
| Fair value of stock options by vesting date | |
| May 24, 2024 | $2,844 |
| June 30, 2024 | $3,453 |
| September 30, 2024 | $1,727 |
| December 31, 2024 | $1,726 |
| Fair value per stock option | $0.004 |
See note 13, Subsequent events, Exercise, expiry and cancellation of warrants and stock options.
8. Exploration and evaluation
The Company, through its subsidiary, Huiracocha, holds a 100% working interest in a mineral property known as the Escala Project. The Escala Project is located approximately 125 kilometers southwest of the town of Uyuni, in Municipality San Pablo de Lipez of the Province of Sud Lipez in the Department of Potosi, in southwestern Bolivia. The Escala Project consists of 4 exploration concessions (for a total of 4,000 hectares), held pursuant to a Mining Production Contract ("MPC") with Corporación Mineral de Bolivia ("COMIBOL").
The MPC was executed on November 18, 2019, with a term of 15 years computable from the next business day of its registration in the Mining Registry, and is renewable for an additional 15 years thereafter. The MPC has not yet been registered in the Mining Registry. Once the MPC is registered, the MPC includes three stages of development: 1) 5 years for exploration, environmental studies and estimation of reserves, 2) mine preparation and plant installation, and 3) operation and marketing. In stage 1, the Company would be required to expend US$25,290,089. In stage 2, work to be completed will include carrying out a prefeasibility study, engineering study of the project design, construction of the concentration plant and construction of the tails ditch, to be carried out in parallel between the first and second year. In stage 3, once the commercial production level has been reached, the Company will be obligated to pay a royalty of 6.7% of the gross value of sales to COMIBOL.
Although the Company has taken steps to verify title to the mineral properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of operations of such properties, these procedures do not guarantee the Company's title. Property title may be subject to government licensing requirements or regulations, unregistered prior agreements, unregistered claims, illegal artisanal or small-scale miners, aboriginal claims, and non-compliance with regulatory and environmental requirements. If the Company does not have title to its mineral properties, there will be adverse consequences to the Company and its business prospects.
16
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
- Income taxes
The Company's effective income tax rate differs from the amount that would be computed by applying the combined federal and provincial statutory rate of 23% (2024 - 23%) to the net loss for the year. The reasons for the difference are as follows:
Provision for income taxes
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Expected income tax (recovery) based on statutory rate | (96,937) | (185,427) |
| Increase (decrease) resulting from: | ||
| Stock-based compensation | 598 | 2,243 |
| Share issue costs | (8,194) | – |
| Exploration and evaluation | 1,924 | – |
| Effect of foreign tax rates and expired losses | 31,505 | 18,184 |
| Change in deferred tax assets not recorded | 71,104 | 165,000 |
| Deferred income tax recovery | – | – |
Deferred income tax balances
The Company's deferred income tax assets are as follows:
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Non-capital loss carryforward | 674,000 | 622,000 |
| Exploration and development costs | 80,000 | 79,000 |
| Share issue costs | 9,000 | 17,000 |
| 763,000 | 718,000 | |
| Benefit of deferred tax assets not recorded | (763,000) | (718,000) |
| – | – |
Due to losses incurred in the current year and expected future operating results, management determined that it is unlikely that the deferred income tax assets will be realized. Accordingly, the future income tax assets have not been recorded.
Losses carried forward
At September 30, 2025, the Company had non-capital loss carryforwards in Canada which expire as follows:
| $ | |
|---|---|
| 2038 | 41,000 |
| 2039 | 471,000 |
| 2040 | 93,000 |
| 2041 | 157,000 |
| 2042 | 128,000 |
| 2043 | 426,000 |
| 2044 | 345,000 |
| 2045 | 363,000 |
| 2,024,000 |
At September 30, 2025, the Company had non-capital loss carryforwards in Bolivia which expire as follows:
| $ | |
|---|---|
| 2026 | 120,000 |
| 2027 | 211,000 |
| 2028 | 147,000 |
| 2029 | 343,000 |
| 2030 | 82,000 |
| 903,000 |
17
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
10. Determination of fair values
A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Cash, accounts payable and accrued liabilities, advances from directors and due to joint venture
The fair values of cash, accounts payable and accrued liabilities, advances from directors and due to joint venture at September 30, 2024 and September 30, 2025 and approximated their respective carrying values due to their short term to maturity.
Classification of fair value of financial instruments
The Company classified the fair value of its financial instruments measured at fair value according to the following hierarchy based on the amount of observable inputs used to value the instrument:
- Level 1: quoted prices in active markets for identical assets and liabilities;
- Level 2: inputs, other than the quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly;
- Level 3: inputs for the asset or liability that are not based on observable market data
There are no financial instruments measured at fair value.
11. Financial risk management
The Company's activities expose it to a variety of financial risks that arise as a result of its exploration and financing activities, including credit risk, liquidity risk and market risk.
This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are included throughout these financial statements.
The Board of Directors oversees management's establishment and execution of the Company's risk management framework. Management has implemented and monitors compliance with risk management policies. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to market conditions and the Company's activities.
Credit risk
Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company's maximum exposure to credit risk is equal to the Company's cash. The Company limits its exposure to credit risk on its cash by holding deposits with a Canadian chartered bank.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial liabilities that are settled in cash or other financial assets. The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as they come due, other than amounts owing to related parties. The continued operation of the Company is dependent upon the Company's ability to secure equity financing to meet its existing obligations and finance the acquisition, exploration and development of mineral properties. Accounts payable and accrued liabilities are subject to normal trade terms.
Current liabilities of $807,918 (2024 - $370,622) include accounts payable and accrued liabilities of $697,807 (2024 - $370,622), which have contractual maturities less than 30 days and are subject to normal trade terms and advances from directors of $54,644 (2024 - $Nil) and due to joint venture of $55,467 (2024 - $Nil), which are due on demand.
Market risk
Market risk is the risk that changes in market prices, such as equity prices, foreign exchange rates, and interest rates will affect the Company's income or the value of its financial instruments.
18
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
Foreign exchange risk
Foreign exchange risk is the risk of financial loss to the Company due to a change in foreign exchange rates. The majority of the Company's cash is held in Canadian dollars. Foreign exchange risk arises as the Company makes expenditures denominated in US dollars and holds assets and liabilities in US dollars. At September 30, 2025, the Company had cash of US$23,129 (2024 - US$4,758) and accounts payable of US$347,465 (2024 - US$169,026), due to directors of US$30,350 (2024 - US$Nil) and due to joint venture of US$40,297 (2024 - US$Nil). If the foreign exchange related to the Company's US dollar balances increased or decreased by 10%, with all other variables held constant, the currency translation adjustment would have increased or decreased by $54,986 (2024 - $22,174).
The Company does not use derivative instruments to hedge exposure to foreign exchange rate risk. However, management of the Company believes there is no significant exposure to foreign currency fluctuations due to the limited number of transactions conducted in US dollars.
Capital management
Capital of the Company consists of share capital, common shares to be issued, contributed surplus, foreign currency reserve and deficit. The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern so that it can acquire, explore and develop mineral resource properties for the benefit of its shareholders. The Company manages its capital structure and makes adjustments based on the funds available to the Company in light of changes in economic conditions. The Board of Directors has not established quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain the future development of the Company. In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that consider various factors, including successful capital deployment and general industry conditions. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
As the Company is an exploration-stage company and has no revenues, its principal source of capital is from the issuance of common shares or advances from related parties. In order to achieve its objectives, the Company intends to raise additional funds as required.
The Company is not subject to externally imposed capital requirements and there were no changes to the Company's approach to capital management during the year.
12. Related party transactions
Compensation of key management personnel
The Company considers its directors and officers to be key management personnel. Transactions with key management personnel are set out as follows:
| Years ended September 30, | Outstanding at September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| $ | $ | $ | $ | |
| Consulting fees | 213,933 | 208,665 | 531,490 | 306,238 |
| Exploration and evaluation | 50,188 | 48,596 | 45,939 | - |
| Legal fees (note) | 42,389 | - | 32,482 | - |
| Stock-based compensation | 2,600 | 9,750 | - | - |
| Interest | 2,753 | - | 2,753 | - |
| 311,863 | 267,011 | 612,664 | 306,238 |
Note
Legal fees includes $32,842 charged to the joint venture and outstanding amount includes $32,842 payable by the Company on behalf of the joint venture.
See note 6, Advances from directors; note 6, Due to joint venture and note7, Share capital, Grant of stock options.
19
Bocana Resources Corp.
Notes to Consolidated Financial Statements
Years ended September 30, 2025 and 2024
(expressed in Canadian dollars)
- Subsequent events
Exercise, expiry and cancellation of warrants and stock options
Subsequent to September 30, 2025, the Company received $230,960 upon the exercise of 1,634,600 warrants and on January 3, 2026, all outstanding warrants expired. The Company also received $25,000 upon the exercise of 250,000 stock options and 300,000 stock options were cancelled.