AI assistant
Corcel Exploration Inc. — Audit Report / Information 2025
Oct 28, 2025
48201_rns_2025-10-28_bd19f742-e9e5-4c97-a6c3-ef08314433a6.pdf
Audit Report / Information
Open in viewerOpens in your device viewer
Corcel Exploration Inc.
Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
CLEARHOUSE LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of
Corcel Exploration Inc.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Corcel Exploration Inc. (the Company), which comprise the consolidated statements of financial position as at June 30, 2025 and 2024, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2025 and 2024, and its financial performance and its cash flows for the years then ended, in accordance with International Financial Reporting Standards.
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 those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Relating to Going Concern
We draw your attention to Note 1 in the consolidated financial statements, which indicates that the Company incurred a comprehensive loss of $3,143,612 for the year ended June 30, 2025. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, 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 June 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.
Aside from the matter described in the Emphasis of Matter - Material Uncertainty Related to Going Concern section of our report, we have determined the matter described below to be the key audit matter to be communicated in our report.
Acquisition of CuQuest Resources Corp. ("CuQuest")
Description of the matter
As described in Note 13 to the consolidated financial statements, on January 8, 2025, the Company acquired 100% of CuQuest by issuing 15,000,000 common shares of the Company. As of the acquisition date, CuQuest's primary asset was rights to a mineral lease with purchase option agreement, relating to certain mining claims in La Pez County, Arizona, USA.
2560 MATHESON BLVD E., SUITE 527, MISSISSAUGA, ON L4W 4Y9 | (647) 969-7382 | [email protected] | CLEARHOUSE.CA
CLEARHOUSE LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
The Company determined CuQuest did not meet the definition of a “Business” in accordance with IFRS 3, Business Combinations, and as such, accounted for the transaction as an asset acquisition.
The difference between the fair value of consideration paid, being the common shares, and net identifiable assets acquired of $1,996,881 has been presented as an “exploration property acquisition costs” in the statements of loss and comprehensive loss.
Why the matter is a key audit matter
This matter represented an area of significant risk of material misstatement given the magnitude of the transaction. In addition, Management was required to exert judgment when: determining whether CuQuest met the definition of a “Business” and whether the share-based-payment transaction was more reliably measured with reference to the net assets acquired or common shares issued as consideration. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence.
How the matter was addressed in the audit
The following were the primary procedures we performed to address this key audit matter:
- We reviewed the share exchange and other related agreements to identify and assess relevant terms and conditions;
- Tested management’s key assumptions in concluding the transaction was an asset acquisition; notably the lack of an organized workforce, grassroots nature of mining claims acquired and no substantive management or operational processes; and;
- We assessed the appropriateness and completeness of the related disclosures in the consolidated financial statements.
Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the annual management’s discussion and analysis but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information 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.
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 International Financial Reporting Standards, 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 relating to going
2560 MATHESON BLVD E., SUITE 527, MISSISSAUGA, ON L4W 4Y9 | (647) 969-7382 | [email protected] | CLEARHOUSE.CA
CLEARHOUSE LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
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 scepticism 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.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.
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.
2560 MATHESON BLVD E., SUITE 527, MISSISSAUGA, ON L4W 4Y9 | (647) 969-7382 | [email protected] | CLEARHOUSE.CA
CLEARHOUSE LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
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 of 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 Pat Kenney.
Clearhouse LLP
Chartered Professional Accountants
Licensed Public Accountants
Mississauga, Ontario
October 28, 2025
2560 MATHESON BLVD E., SUITE 527, MISSISSAUGA, ON L4W 4Y9 | (647) 969-7382 | [email protected] | CLEARHOUSE.CA
Corcel Exploration Inc.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
| As at June 30, 2025 | As at June 30, 2024 | |
|---|---|---|
| $ | $ | |
| Assets | ||
| Current Assets | ||
| Cash | 578,681 | 241,442 |
| Other receivables (Note 4) | 2,870 | 1,871 |
| Prepaid expenses | 10,852 | - |
| Total Assets | 592,403 | 243,313 |
| Liabilities | ||
| Current Liabilities | ||
| Accounts payable and accrued liabilities (Notes 5, 11) | 104,128 | 24,509 |
| Total Liabilities | 104,128 | 24,509 |
| Equity | ||
| Share capital (Note 7) | 3,248,620 | 897,839 |
| Contributed surplus (Note 8) | 356,502 | - |
| Reserve for warrants (Note 9) | 705,800 | - |
| Accumulated deficit | (3,822,647) | (679,035) |
| Total Shareholders’ Equity | 488,275 | 218,804 |
| Total Liabilities and Shareholders’ Equity | 592,403 | 243,313 |
Nature of operations and going concern (Note 1)
Contingencies (Note 18)
Approved on behalf of the Board of Directors:
"Jon Ward"
Jon Ward, Director
"Jesus Velador"
Jesus Velador, Director
The accompanying notes are an integral part of these consolidated financial statements
Corcel Exploration Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
| Year ended June 30, 2025 | Year ended June 30, 2024 | |
|---|---|---|
| $ | $ | |
| Expenses | ||
| Exploration and evaluation expenses (Note 12, 13) | 2,450,827 | 52,027 |
| Professional fees (Note 11, 16) | 307,884 | 88,585 |
| General and administrative | 19,631 | 9,638 |
| Transfer agent fees | 8,768 | 6,516 |
| Share-based payments (Note 8, 11) | 356,502 | - |
| Net Loss and Comprehensive Loss | (3,143,612) | (156,766) |
| Weighted Average Number of Outstanding Shares | ||
| - Basic and diluted (Note 10) | 32,321,616 | 22,632,514 |
| Net Loss per Share - Basic and Diluted (Note 10) | (0.097) | (0.007) |
The accompanying notes are an integral part of these consolidated financial statements
Corcel Exploration Inc.
Consolidated Statements of Changes in Shareholders' Equity
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
| Number of Shares | Share Capital | Contributed Surplus | Reserve for Warrants | Accumulated Deficit | Total | |
|---|---|---|---|---|---|---|
| # | $ | $ | $ | $ | $ | |
| Balance, June 30, 2023 | 21,750,000 | 847,839 | - | 24,155 | (546,424) | 325,570 |
| Issuance of shares for Property Acquisition (Notes 7 and 12) | 1,000,000 | 50,000 | - | - | - | 50,000 |
| Expiry of Warrants (Note 9) | - | - | - | (24,155) | 24,155 | - |
| Net Loss and Comprehensive Loss | - | - | - | - | (156,766) | (156,766) |
| Balance, June 30, 2024 | 22,750,000 | 897,839 | - | - | (679,035) | 218,804 |
| Balance, June 30, 2024 | 22,750,000 | 897,839 | - | - | (679,035) | 218,804 |
| Shares issued on acquisition of CuQuest Resources Corp. (Notes 7 and 13) | 15,000,000 | 1,650,000 | - | - | - | 1,650,000 |
| Proceeds from Private Placements (Notes 7 and 9) | 9,560,000 | 729,549 | - | 704,451 | - | 1,434,000 |
| Share issuance Costs (Notes 7 and 9) | - | (13,949) | - | (13,470) | - | (27,419) |
| Issuance of Finders' Warrants (Note 9) | - | (14,819) | - | 14,819 | - | - |
| Share-based Compensation (Note 8, 11) | - | - | 356,502 | - | - | 356,502 |
| Net Loss and Comprehensive Loss | - | - | - | - | (3,143,612) | (3,143,612) |
| Balance, June 30, 2025 | 47,310,000 | 3,248,620 | 356,502 | 705,800 | (3,822,647) | 488,275 |
The accompanying notes are an integral part of these consolidated financial statements
Corcel Exploration Inc.
Consolidated Statements of Cash Flows
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
| | Year ended
June 30, 2025 | Year ended
June 30, 2024 |
| --- | --- | --- |
| | $ | $ |
| Operating Activities | | |
| Net loss for the year | (3,143,612) | (156,766) |
| Adjustments for non-cash items: | | |
| Interest expense (Note 6) | 7,376 | - |
| Shares issued for property extension (Notes 7 and 12) | - | 50,000 |
| Share-based payments (Note 8, 11) | 356,502 | - |
| Exploration and evaluation expenses incurred on acquisition (Note 13) | 1,996,881 | |
| | (782,853) | (106,766) |
| Net change in non-cash working capital items: | | |
| Other receivables (Note 4) | (999) | (323) |
| Prepaid expenses | (8,072) | - |
| Accounts payable and accrued liabilities (Notes 5, 11) | (93,422) | 1,310 |
| Cash Flows used in Operating Activities | (885,346) | (105,779) |
| Investing Activities | | |
| Repayment of promissory notes (Note 6) | (270,574) | - |
| Net cash from acquisition (Note 13) | 86,578 | - |
| Cash flows used in Investing Activities | (183,996) | - |
| Financing Activities | | |
| Proceeds from private placements (Notes 7, 9) | 1,434,000 | - |
| Share issuance costs (Notes 7, 9) | (27,419) | - |
| Cash flows from Financing Activities | 1,406,581 | - |
| Increase (decrease) in cash and cash equivalents | 337,239 | (105,779) |
| Cash and cash equivalents, beginning of year | 241,442 | 347,221 |
| Cash and cash equivalents, end of year | 578,681 | 241,442 |
The accompanying notes are an integral part of these consolidated financial statements
7
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
1. Nature of Operations and Going Concern
Corcel Exploration Inc. (“Corcel” or the “Company”) was incorporated under the laws of the Province of British Columbia, Canada, on July 21, 2020. The Company was formed to engage in the business of acquiring, exploring, and evaluating mineral properties. On December 2, 2021, the Company completed its initial public offering (the “Offering”), and effective December 3, 2021, the Company’s common shares commenced trading under the ticker symbol “CRCL” on the Canadian Securities Exchange. The Company’s common shares are also listed in the United States (the “U.S.”) on the OTCQB® Venture Market under the ticker symbol “CRLEF”. The address of the Company’s corporate office and principal place of business is 1723-595 Burrard Street, Vancouver, British Columbia, V7X 1J1, Canada. On January 9, 2025, the Company announced that it has completed the acquisition of CuQuest Resources Corp. (“CuQuest”). CuQuest holds the right to acquire a 100% interest in the Yuma King Property located in La Paz County, Arizona (Note 12).
The Company’s mineral properties are in the exploration stage and, as a result, the Company currently has no source of operating cash flow. The exploration and development of the Company’s mineral properties depend on the ability of the Company to obtain financing.
The Company incurred a net loss of $3,143,612 for the year ended June 30, 2025 (2024 – $156,766), and as at June 30, 2025, had an accumulated deficit of $3,822,647 (2024 – $679,035). The Company’s future viability depends upon the acquisition and financing of mineral exploration or other projects. If the mineral projects are to be successful, additional funds will be required for development and, if warranted, to place them into commercial production. The expected primary source of future funds presently available to the Company is through the issuance of common shares. The ability of the Company to arrange such financing will depend, in part, on prevailing market conditions as well as the business performance of the Company. These events and conditions indicate the existence of material uncertainties that cast significant doubt on the Company’s ability to continue as a going concern. There can be no assurance that the Company will be successful in its efforts to arrange the necessary financing, if needed, on terms satisfactory to the Company. If additional financing is arranged through the issuance of shares, control of the Company may change, and shareholders may suffer significant dilution.
Although the Company has taken steps to verify title to the mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration 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, undetected defects, unregistered claims, native land claims, and non-compliance with regulatory and environmental requirements.
These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will continue in operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Realization values may be substantially different from carrying values as shown and the consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.
2. Basis of Presentation
(a) Statement of Compliance
These consolidated financial statements, including comparatives, have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS”). The accounting policies set out below were consistently applied to all periods presented unless otherwise noted.
These consolidated financial statements were reviewed, approved, and authorized for issuance by the Board of Directors (the “Board”) of the Company on October 28, 2025.
(b) Basis of Measurement
These consolidated financial statements have been prepared in accordance with IFRS, on the historical cost basis except for financial instruments which are measured at fair value, as explained the material accounting policies set out in Note 3. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
8
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
2. Basis of Presentation (continued)
(c) Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, CuQuest. Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are deconsolidated from the date control ceases. The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating inter-entity balances and transactions.
(d) Functional and Presentation Currency
These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and CuQuest. The functional currency is the currency of the primary economic environment in which the Company operates.
(e) Significant Accounting Judgments and Estimates
The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, revenue, and expenses. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, revenue, and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates under different assumptions and conditions. These estimates are reviewed periodically, and adjustments are made as appropriate in the period they become known.
Items for which actual results may differ materially from these estimates are described as follows:
Going concern
At each reporting period, management exercises judgment in assessing the Company's ability to continue as a going concern by reviewing the Company's performance, resources and future obligations. The conclusion that the Company will be able to continue as a going concern is subject to critical judgments of management with respect to assumptions surrounding the short and long-term operating budgets, expected profitability, investment and financing activities and management's strategic planning. The assumptions used in management's going concern assessment are derived from actual operating results along with industry and market trends. Management believes there is sufficient capital to meet the Company's business obligations for at least the next 12 months, after taking into account expected cash flows, capital commitments, future financing and the Company's cash position at year end.
Fair value of financial assets and financial liabilities
Fair value of financial assets and financial liabilities on the consolidated statements of financial position that cannot be derived from active markets, are determined using a variety of techniques including the use of valuation models. The inputs to these models are derived from observable market data where possible, but where observable market data are not available, judgment is required to establish fair values. The judgments include, but are not limited to, consideration of model inputs such as volatility, estimated life and discount rates.
Income taxes
Income taxes and tax exposures recognized in the consolidated financial statements reflect management's best estimate of the outcome based on facts known at the reporting date. When the Company anticipates a future income tax payment based on its estimates, it recognizes a liability. The difference between the expected amount and the final tax outcome has an impact on current and deferred taxes when the Company becomes aware of this difference.
In addition, when the Company incurs losses that cannot be associated with current or past profits, it assesses the probability of taxable profits being available in the future based on its budgeted forecasts. These forecasts are adjusted to take account of certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
2. Basis of Presentation (continued)
Business combination
In a business acquisition, substantially all identifiable assets, liabilities and contingent liabilities acquired are recorded at the acquisition date at their respective fair values. The date on which the acquirer obtains control of the acquiree is generally the date on which the acquirer legally transfers the consideration, acquires the assets and assumes the liabilities of the acquiree – the closing date. However, the acquirer might obtain control on a date that is either earlier or later than the closing date. Management exercises judgment in considering all pertinent facts and circumstances in identifying the acquisition date.
Classification of an acquisition as a business combination or an asset acquisition depends on whether the assets acquired constitute a business, which can be a complex judgment. Whether an acquisition is classified as a business combination or asset acquisition can have a significant impact on the entries made on and after acquisition. In determining the fair value of all identifiable assets, liabilities and contingent liabilities acquired, the most significant estimates relate to contingent consideration and intangible assets. Management exercises judgement in estimating the probability and timing of when earn-outs are expected to be achieved, which is used as the basis for estimating fair value. For any intangible asset identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent valuation expert or management may develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. The evaluations are linked closely to the assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied. Purchase consideration also includes consideration of any pre-existing relationships that are effectively settled as a result of the acquisition at their fair values.
Warrants and Stock Options
Management determines the costs for share-based compensation on options to purchase common shares and share purchase warrants, using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgments are used in applying the valuation techniques. These assumptions and judgments include the expected volatility of the share price, expected forfeitures, expected dividend yield, expected term of the warrants or options, and expected risk-free interest rate. Such assumptions and judgments are inherently uncertain. Changes in these assumptions can affect the fair value estimates of share-based compensation.
Provisions
The Company recognizes provisions if there is a present obligation as a result of a past event, it is probable that the Company will be required to settle the obligation and the obligation can be reliably estimated. The amount recognized as a provision reflects management's best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
Shares issued for non-cash consideration
The Company measures equity-settled share-based payment transactions based on an estimate of the fair value of goods or services received, unless that fair value cannot be estimated reliably, in which case the Company measures the fair value of the goods or services received based on the fair value of the equity instruments granted.
3. Summary of Material Accounting Policies
(a) Cash
Cash on the statements of financial position comprises bank balances held in a Canadian chartered bank, which is available on demand.
(b) Exploration and Evaluation Expenditures
The Company expenses exploration and evaluation ("E&E") expenditures as incurred. E&E expenditures include acquisition costs of mineral property rights, property option payments and E&E activities.
Once a project has been established as commercially viable, technically feasible and the decision to proceed with development has been approved by the Board, related development expenditures are capitalized. This includes costs incurred in preparing the site for mining operations.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
(b) Exploration and Evaluation Expenditures (continued)
Capitalization ceases when the mine is capable of commercial production. The capitalized balance, net of any impairment recognized, is then reclassified to either tangible or intangible mine development assets according to the nature of the asset.
(c) Provisions
Provisions are recorded when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be reliably estimated. If the effect is material, 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, where appropriate, the risks specific to the liability.
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
As at June 30, 2025 and 2024, the Company had no material provisions.
(d) Financial Instruments
Financial assets and financial liabilities, including derivatives, are recognized on the consolidated statements of financial position when the Company becomes a party to the financial instrument or derivative contract.
Classification
The Company classifies its financial assets and financial liabilities in the following measurement categories: (a) those to be measured subsequently at fair value through profit or loss ("FVTPL"); (b) those to be measured subsequently at fair value through other comprehensive income ("FVTOCI"); and (c) those to be measured at amortized cost. The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at FVTPL (irrevocable election at the time of recognition). For assets and liabilities measured at fair value, gains and losses are recorded in profit or loss.
The Company reclassifies financial assets when its business model for managing those assets changes. Financial liabilities are not reclassified.
Fair value through profit or loss
This category includes derivative instruments as well as quoted equity instruments which the Company has not irrevocably elected, at initial recognition or transition, to classify at FVTOCI. This category would also include debt instruments whose cash flow characteristics fail the solely principal and interest ("SPPI") criterion or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell. Financial assets in this category are recorded at fair value with changes recognized in profit or loss.
Financial assets at fair value through other comprehensive income
Equity instruments that are not held-for-trading can be irrevocably designated to have their change in FVTOCI instead of through profit or loss. This election can be made on individual instruments and is not required to be made for the entire class of instruments. Attributable transaction costs are included in the carrying value of the instruments. Financial assets at FVTOCI are initially measured at fair value and changes therein are recognized in other comprehensive income (loss) ("OCI").
Amortized cost
This category includes financial assets that are held within a business model with the objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI criterion. Financial asset classified in this category are measured at amortized cost using the effective interest method.
11
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
(d) Financial Instruments (continued)
Amortized cost (continued)
The Company’s classification of financial assets and financial liabilities under IFRS 9 – Financial Instruments (“IFRS 9”) are summarized below:
| Cash | Amortized cost |
|---|---|
| Accounts payable and accrued liabilities | Amortized cost |
| Promissory notes | Amortized cost |
Measurement
All financial instruments are required to be measured at fair value on initial recognition, plus, in the case of a financial asset or financial liability not at FVTPL, transaction costs that are directly attributable to the acquisition or issuance of the financial asset or financial liability. Transaction costs of financial assets and financial liabilities carried at FVTPL are expensed in profit or loss. Financial assets and financial liabilities with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are on the principal outstanding are generally measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any changes taken through profit and loss or OCI (irrevocable election at the time of recognition). For financial liabilities measured subsequently at FVTPL, changes in fair value due to credit risk are recorded in OCI.
Impairment of financial assets
The Company’s only financial assets subject to impairment are other accounts receivable, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure the expected credit loss (“ECL”), accounts receivable has been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.
Derecognition
Financial assets
The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the consolidated statements of loss and comprehensive loss.
Financial liabilities
The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid or payable, including any non-cash assets transferred or liabilities assumed, is recognized in the consolidated statements of loss and comprehensive loss.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
(d) Financial Instruments (continued)
Fair value hierarchy
The Company classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
- Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
As at June 30, 2025 and 2024, the Company did not have any financial instruments measured at fair value.
(e) Restoration and Environmental Obligations
The Company recognizes liabilities for statutory, contractual, constructive, or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction, development, or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to the related asset along with a corresponding increase in the restoration provision in the period incurred or expensed if it relates to E&E properties. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value.
The Company’s estimates of restoration costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to the related assets or expenses with a corresponding entry to the restoration provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates.
Changes in the net present value, excluding changes in the Company’s estimates of restoration costs, are charged to the statements of loss and comprehensive loss. No asset retirement obligation exists as of June 30, 2025 and 2024.
(f) Income Taxes
Income tax expense comprises current and deferred income tax expense. Current and deferred taxes are recognized in net loss, except to the extent that it relates to items recognized directly in equity or in OCI.
Current income taxes
Current income taxes are recognized and measured at the amount expected to be recovered from, or payable to, the taxation authorities based on the income tax rates enacted or substantively enacted at the end of the reporting period and includes any adjustment to taxes payable in respect of previous years.
Deferred income taxes
Deferred income taxes are recorded for temporary differences at the date of the statements of financial position between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of a deferred income tax asset is reviewed at the end of the reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Unrecognized deferred income tax assets are reassessed at the end of the reporting period and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period.
Deferred income tax assets and deferred income tax liabilities are offset if, and only if, they relate to income taxes levied by the same taxation authority and the Company has the legal rights and intent to offset.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
(g) Equity
Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company’s common shares are classified as equity instruments. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
(h) Loss Per Share
The basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year. The diluted loss per share reflects the potential dilution of common share equivalents, in the weighted average number of common shares outstanding during the year, if dilutive. The “treasury stock method” is used for the assumed proceeds upon the exercise of the options and warrants that are used to purchase common shares at the average market price during the year.
(i) Related Party Transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
(j) Share-Based Payment Transactions
The Company operates a stock option plan (the “Option Plan”). Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received, or at the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. The fair value of options is determined based on the application of the Black-Scholes valuation model (“Black-Scholes”). The fair value of equity-settled stock-based compensation transactions is recognized as an expense with a corresponding increase in the share-based payments reserve.
If share-settled awards are modified, as a minimum an expense is recognized as if the modification has not been made. An additional expense is recognized, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.
Amounts recorded for cancelled or expired unexercised options are transferred to accumulated deficit in the period of which the cancellation or expiry occurs.
(k) Warrants
Share purchase warrants (each a “Warrant”) are classified as a component of equity. In situations where the Company issues units, the value of units is bifurcated and the value of warrants is included as a separate reserve for warrants of the Company’s equity. The proceeds from the issuance of units are allocated between common shares and warrants on a pro-rated basis using the relative fair value method. The fair value of the common shares is determined using the share price at the date of issuance of the units. The fair value of the warrants is determined using Black-Scholes.
Warrants issued for broker/financing compensation, are recognized at the fair value using Black-Scholes at the date of issuance. Warrants are initially recorded as a part of the reserves in warrant in equity at the recognized fair value.
Upon exercise of the Warrants, the previously recognized fair value of the Warrants exercised is reallocated to share capital from warrants reserve. Proceeds generated from the payment of the exercise price are also allocated to share capital. Amounts recorded for expired unexercised warrants are transferred to accumulated deficit in the period of which the expiry occurs.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
(1) Foreign Currency Translation
Monetary assets and liabilities denominated in currencies other than CAD are translated into CAD at the rate of exchange in effect at the consolidated statements of financial position date. Non-monetary assets and liabilities are translated at the historical rates. Revenues and expenses are translated at the transaction date’s exchange rate. Foreign currency gains or loss resulting from translation are reflected in net comprehensive loss for the period.
4. Other Receivables
The Company’s other receivables balance represents amounts due from government taxation authorities in respect of the Goods and Services Tax/Harmonized Sales Tax. The Company anticipates full recovery of these amounts and therefore no expected credit losses have been recorded against these receivables, which are due in less than one year.
5. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities of the Company are principally comprised of amounts outstanding for trade purchases incurred in the normal course of business.
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| $ | $ | |
| Accounts payable | 35,378 | 7,019 |
| Accrued liabilities | 68,750 | 17,490 |
| 104,128 | 24,509 |
The Company’s standard term for trade payables is 30 to 60 days.
6. Promissory Notes
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| $ | $ | |
| Principal | 240,000 | - |
| Accrued Interest | 30,574 | - |
| Repayment | (270,574) | - |
The Company assumed promissory notes as part of the acquisition of CuQuest (see Note 13 for more details). The promissory notes are payable on demand and accrue interest at 12% per annum, calculated annually on December 31. Any payments made will first be applied to accrued and unpaid interest, with the remainder applied to the principal. During the year ended June 30, 2025, the Company accrued interest charges of $7,376 (2024 - $nil) on the promissory notes which is included in General and Administrative expenses on the consolidated statements of loss and comprehensive loss. As at June 30, 2025, the promissory notes were repaid in full.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
7. Share Capital
Authorized share capital
The Company is authorized to issue an unlimited number of common shares without par value. Common shares issued and outstanding as at June 30, 2025 and 2024 are as follows:
| Number of common shares | Amount | |
|---|---|---|
| # | $ | |
| Balance, June 30, 2023 | 21,750,000 | 847,839 |
| Issuance of shares for property acquisition | 1,000,000 | 50,000 |
| Balance, June 30, 2024 | 22,750,000 | 897,839 |
| Shares issued on acquisition of CuQuest Resources Corp. | 15,000,000 | 1,650,000 |
| Proceeds from Private Placements | 9,560,000 | 729,549 |
| Share issuance costs | - | (13,949) |
| Issuance of Finders’ Warrants | - | (14,819) |
| Balance, June 30, 2025 | 47,310,000 | 3,248,620 |
Share capital transactions for the year ended June 30, 2025
On January 8, 2025, the Company issued 15,000,000 common shares on closing of the CuQuest acquisition. The common shares were valued at $1,650,000 based on the share price of $0.11 on the date of issuance. For more details please see Note 13.
On March 28, 2025, the Company completed a private placement offering (the "Private Placement") of 9,560,000 units of the Company ("Units") at a price of $0.15 per Unit, for aggregate gross proceeds of $1,434,000. Each Unit consists of one common share and one Warrant, with each Warrant entitling the holder to purchase one common share at an exercise price of $0.30 for a period of 24 months from the date of issuance. The fair value of these warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $0.165; expected dividend yield of 0%; risk-free interest rate of 2.49%; volatility of 314.19% and an expected life of 2 years.
An aggregate of $27,419 was paid to certain finders and an aggregate of 182,790 Finders' Warrants were issued to certain finders in connection with the Private Placement. Each Finders' Warrant entitles the finder to acquire one common share at a price of $0.30 for a period of 24 months from the date of issuance. The fair value of these Finders' Warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $0.165; expected dividend yield of 0%; risk-free interest rate of 2.49%; volatility of 314.19% and an expected life of 2 years. The estimated total fair value of the Finders' Warrants was $29,123 and was treated as a share-issuance cost.
The Company recorded $700,781 for the issuance of shares, and $705,800 for the issuance of warrants based on a relative fair value calculation.
Share capital transactions for the year ended June 30, 2024
On August 2, 2023, pursuant to the Amending Agreement (defined hereafter) and in consideration of extending and amending the terms of the Option Agreement (defined hereafter), the Company issued an aggregate of 1,000,000 common shares to the Optionors (defined hereafter). The common shares were measured at a fair value of $50,000 based on the closing share price on the date of issuance.
8. Stock Options
The Company maintains the Option Plan whereby certain key employees, officers, directors and consultants may be granted stock options for the common shares of the Company. The Option Plan provides that the aggregate number of securities reserved for issuance will be up to 10% of the number of common shares issued and outstanding. Under the Option Plan, the exercise price of each option may not be lower than the closing price of the Company's shares on the trading day prior to the grant date or the grant date itself, whichever is higher. Vesting of options is determined at the discretion of the Board. As at June 30, 2025, the Company had 1,281,000 common shares available for issuance under the Option Plan.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
8. Stock Options (continued)
The following summarizes the stock option activity for the years ended June 30, 2025 and 2024:
| 2025 | 2024 | |||
|---|---|---|---|---|
| Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | |
| # | $ | # | $ | |
| Outstanding, beginning of year | - | - | - | - |
| Granted | 2,700,000 | 0.120 | - | - |
| Granted | 200,000 | 0.115 | ||
| Granted | 550,000 | 0.230 | ||
| Outstanding, end of year | 3,450,000 | 0.137 | - | - |
Option activities for year ended June 30, 2025
On April 7, 2025, the Company granted 2,700,000 options to certain directors, officers, and consultants of the Company. The options are exercisable at a price of $0.12 per common share for a period of five years. The options vest immediately on the date of grant and were valued using Black Scholes with the following assumptions: expected volatility of 267.25%, expected dividend yield of 0%, risk-free interest rate of 2.64% and an expected life of five years. The grant date fair value attributable to these options was $323,148.
On April 22, 2025, the Company granted 200,000 options to a director of the Company. The options are exercisable at a price of $0.115 per common share for a period of five years. The options vest immediately on the date of grant and were valued using Black Scholes with the following assumptions: expected volatility of 264.86%, expected dividend yield of 0%, risk-free interest rate of 2.76% and an expected life of five years. The grant date fair value attributable to these options was $31,923.
On June 23, 2025, the Company granted 250,000 options to an officer of the Company. The options are exercisable at a price of $0.23 per common share for a period of five years. The options vest on the second anniversary of the date of grant and were valued using Black Scholes with the following assumptions: expected volatility of 260.97%, expected dividend yield of 0%, risk-free interest rate of 2.85% and an expected life of five years. The grant date fair value attributable to these options was $44,833 and the Company recorded share-based compensation of $430 during the year ended June 30, 2025.
On June 23, 2025, the Company granted 300,000 options to a consultant of the Company. The options are exercisable at a price of $0.23 per common share for a period of two years. The options vest on the first anniversary of the date of grant and were valued using Black Scholes with the following assumptions: expected volatility of 307.08%, expected dividend yield of 0%, risk-free interest rate of 2.61% and an expected life of two years. The grant date fair value attributable to these options was $52,223 and the Company recorded share-based compensation of $1,001 during the year ended June 30, 2025.
Option activities for year ended June 30, 2024
The Company did not have any option activity during the year ended June 30, 2024.
The following table summarizes information of stock options outstanding and exercisable as at June 30, 2025:
| Date of expiry | Number of options outstanding | Number of options exercisable | Exercise price | Weighted average remaining contractual life |
|---|---|---|---|---|
| # | # | $ | Years | |
| June 23, 2027 | 300,000 | - | 0.230 | 1.98 |
| April 7, 2030 | 2,700,000 | 2,700,000 | 0.120 | 4.77 |
| April 22, 2030 | 200,000 | 200,000 | 0.115 | 4.81 |
| June 23, 2030 | 250,000 | - | 0.230 | 4.98 |
| 3,450,000 | 2,900,000 | 0.137 | 4.54 |
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
9. Warrants Reserve
The following summarizes the warrant activity for the years ended June 30, 2025 and 2024:
| 2025 | 2024 | |||
|---|---|---|---|---|
| Number of warrants | Weighted average exercise price | Number of warrants | Weighted average exercise price | |
| # | $ | # | $ | |
| Outstanding, beginning of year | - | - | 460,000 | 0.10 |
| Granted | 9,560,000 | 0.30 | - | - |
| Granted | 182,790 | 0.30 | - | - |
| Expired | - | - | (460,000) | 0.10 |
| Outstanding, end of year | 9,742,790 | 0.30 | - | - |
Warrant activities for year ended June 30, 2025
On March 28, 2025, the Company issued 9,560,000 Warrants and 182,790 Finders’ Warrants in connection with the closing of the Private Placement, as disclosed in Note 7.
Warrant activities for year ended June 30, 2024
On December 2, 2023, 460,000 Agent’s Warrants expired unexercised. Upon expiry, the cost of the Agent’s Warrants of $24,155 was allocated from warrants reserve to accumulated deficit.
The following table summarizes information of warrants outstanding:
| Date of expiry | Number of warrants outstanding | Exercise price | Weighted average remaining contractual life |
|---|---|---|---|
| # | $ | Years | |
| March 28, 2027 | 9,742,790 | 0.30 | 1.74 |
| 9,742,790 | 0.30 | 1.74 |
10. Loss per Share
Basic and diluted loss per share for the year ended June 30, 2025, is calculated by dividing the net loss of $3,143,612 (2024 - $156,766) by the weighted average number of common shares outstanding of 32,321,616 (2024 – 22,632,514).
For the year ended June 30, 2025, the basic and diluted loss per share was $0.097 (2024 - $0.007).
11. Related Party Transactions
In accordance with IAS 24 – Related Party Disclosures, key management personnel, including companies controlled by them, are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company. The remuneration of members of key management personnel during the year ended June 30, 2025 and 2024 were as follows:
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| $ | $ | |
| Professional fees | 61,000 | 36,000 |
| 61,000 | 36,000 |
During the year ended June 30, 2025, Branson Corporate Services Ltd. (“Branson”), where the Company’s Chief Financial Officer (“CFO”) is employed, charged fees of $36,000 (2024 - $36,000) for CFO services provided to the Company, as well as other accounting and administrative services, which are included in professional fees. As at June 30, 2025, a balance of $3,150 (June 30, 2024 – $3,150) was owed to Branson and is included in accounts payable and accrued liabilities. The amount outstanding is unsecured, non-interest bearing and due on demand.
18
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
11. Related Party Transactions (continued)
During the year ended June 30, 2025, the Company incurred management fees of $25,000, with 15237785 Canada Inc., a company owned by the CEO of the Company (2024 - $nil)). As at June 30, 2025, $25,000 is included in accounts payable and accrued liabilities related to these management fees (June 30, 2024 - $nil). The amount outstanding is unsecured, non-interest bearing and due on demand.
Stock-based compensation
During the year ended June 30, 2025, the Company recorded stock-based compensation of $222,558 in connection with the vesting of certain options previously granted to officers and directors (2024 – $nil).
Other related party transactions
On March 28, 2024, the Company announced the completion of the Private Placement. Insiders of the Company participated, subscribing for in aggregate 164,234 Units for gross proceeds of $24,635.
During the year ended June 30, 2024, pursuant to the Amending Agreement and in consideration of extending and amending the terms of the Option Agreement, the Company issued an aggregate of 1,000,000 common shares to the Optionors, of which 500,000 common shares were issued to a director of Corcel.
12. Exploration and Evaluation Expenditures
Peak Property
On August 4, 2020, the Company entered into the Option Agreement with the Optionors to acquire a 100% interest in the Peak Mineral Property located in the Province of British Columbia, in exchange for 1,000,000 common shares of the Company with a fair value of $20,000 based on the price of the most recent private placement financing at the time.
Pursuant to the Option Agreement, the Company is required to spend $250,000 in exploration on the Peak Property:
(i) $100,000 by December 31, 2020 (completed); and
(ii) $150,000 by July 20, 2023.
On July 20, 2023, the Company reached a binding agreement (the "Amending Agreement") with the Optionors, to extend and amend the terms of the Option Agreement relating to the Peak Property, to provide that the Company may complete the exercise of the option by incurring the exploration expenses required for the second milestone before July 20, 2024. On August 2, 2023, pursuant to the Amending Agreement and in consideration of extending and amending the terms of the Option Agreement, the Company issued an aggregate of 1,000,000 common shares to the Optionors.
During the year ended June 30, 2025, the Company defaulted on the option agreement and will not be pursuing the option agreement going forward.
Willow Property
On June 21, 2024, the Company acquired the Willow Copper Property located in the Province of British Columbia through direct staking by the Company. The property consists of a single, fully contiguous claim block totaling approximately 1,160 hectares.
During the year ended June 30, 2025, the Company made the decision that it will not be exploring the Willow Copper Property going forward.
Yuma King Property
On January 8, 2025, the Company completed an acquisition of 100% of the issued and outstanding shares of CuQuest pursuant to the terms of a share exchange agreement (Note 13). CuQuest holds the right to acquire a 100% interest in the Yuma King Property located in La Paz County, Arizona.
On March 12, 2024, CuQuest entered into a definitive mining lease with purchase option agreement ("Mining Lease Agreement"), leasing all of the property's 495 unpatented mining claims and related rights. The annual lease payment to the lessor is US$155,000, due on March 26. The Company has paid the first and second year annual lease payments which were due on March 26, 2024 and 2025.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
12. Exploration and Evaluation Expenditures (continued)
Yuma King Property (continued)
The Mining Lease Agreement grants the Company the option to purchase a 100% undivided interest in the property by paying a total of US$6,000,000 to the lessor before the sixth anniversary, minus any annual lease payments made up to that point.
On April 12, 2024, the Company accepted the lessor’s proposal to include an additional 20 additional claims in the Mining Lease Agreement for a total cost of US$15,200 (paid). Certain of the unpatented lode mining claims comprising the Yuma King Property are subject to a 1% net smelter returns royalty.
The Company’s E&E expenditure was comprised of the following:
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Acquisitions (Note 13) | 1,996,881 | - |
| Property acquisition costs | - | 50,000 |
| Data compilation | - | 2,027 |
| Property maintenance fees | 222,792 | - |
| Geochemical analysis | 105,945 | - |
| Field exploration costs | 71,988 | - |
| Project management | 7,645 | - |
| Acquisition costs | 45,576 | - |
| Total E&E Expenditure | 2,450,827 | 52,027 |
13. Acquisition of CuQuest Resources Corp.
On January 8, 2025, the Company completed an acquisition of 100% of the issued and outstanding shares of CuQuest Resources Corp. (“CuQuest”). The former shareholders of CuQuest received 15,000,000 common shares in the capital of the Company. The total fair value of the consideration is $1,650,000. CuQuest holds the right to acquire a 100% interest in the Yuma King Property located in La Paz County, Arizona (Note 12).
The acquisition did not meet the definition of a business under IFRS 3 – Business Combinations and has been accounted for as an asset acquisition. As such, the total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values. Transaction costs associated with the acquisition were included as part of the cost of the assets. The following table includes all net assets acquired and all consideration paid at their respective fair value.
| CuQuest | |
|---|---|
| $ | |
| Cash | 86,578 |
| Prepaid expenses | 2,780 |
| Accounts payable and accrued liabilities (Notes 5, 10) | (173,041) |
| Promissory notes (Note 6) | (263,198) |
| Exploration and evaluation expenditures | 1,996,881 |
| Net assets acquired | 1,650,000 |
| Consideration paid in shares | 1,650,000 |
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
14. Capital Management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maintain optimal returns to shareholders and benefits for its stakeholders. While the Company does not yet have any revenues, management monitors its capital structure and makes adjustments according to market conditions to meet its objectives given the current outlook of the business and industry in general. The Board of the Company does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the management team to sustain the future development of the business.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company’s capital management objectives, policies and processes have remained unchanged since the Company’s most recent financial reporting period.
The Company is not subject to any externally imposed capital requirements.
15. Financial Instruments
The Company’s financial instruments consist primarily of cash, accounts payable and accrued liabilities, and promissory notes. The Company is exposed to various risks as it relates to these financial instruments. Management, under oversight of the Board, mitigates these risks by assessing and monitoring the Company’s risk management processes. There have not been any changes in the nature of these risks or the process of managing these risks from the previous reporting periods.
Credit risk
Credit risk is the risk of potential loss associated with a counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash. Cash is held with a reputable Canadian chartered bank, which is closely monitored by management. Management believes that the credit risk concentration with respect to financial instruments included in cash is minimal.
Liquidity risk
Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company manages its liquidity risk by reviewing its capital requirements on an ongoing basis. The Company’s liquidity and operating results may be adversely affected if the Company’s access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or related to matters specific to the Company. The Company generates cash flow primarily from its financing activities. As at June 30, 2025, the Company had a cash balance of $578,681 (June 30, 2024 – $241,442) to settle current liabilities of $104,128 (June 30, 2024 – $24,509).
The following table summarizes the carrying amount and the contractual maturities of both the interest and principal portion of significant financial liabilities as at June 30, 2025:
| Carrying amount | Year 1 | Year 2 to 3 | Year 4 to 5 | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Accounts payable and accrued liabilities | 104,128 | 104,128 | - | - |
The Company manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring anticipated cash flows to identify financial requirements. Where insufficient liquidity may exist, the Company may pursue various debt and equity instruments for short or long-term financing of its operations.
Management believes there is sufficient capital to meet short-term business obligations, after taking into account cash flow requirements from operations and the Company’s cash position as at June 30, 2025.
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. As at June 30, 2025, the Company had no variable interest rate financial instruments and had no hedging agreements in place with respect to floating interest rates. Management believes that the interest rate risk concentration with respect to financial instruments is minimal.
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
15. Financial Instruments (continued)
Foreign exchange risk
Foreign exchange risk is the risk that the Company will be subject to foreign currency fluctuations in satisfying obligations related to its foreign activities. The Company’s operations are based in Canada and the United States, but may have, from time to time, transactions denominated in foreign currencies. The Company’s primary exposure to foreign exchange risk is that transactions denominated in foreign currency may expose the Company to the risk of exchange rate fluctuations. Based on its current operations, management does not anticipate a high volume of transactions to be denominated in foreign currencies and believes that the foreign exchange risk remains minimal.
Fair value
Fair value estimates of financial instruments are made at a specific point in time based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
The Company classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
- Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
During the year ended June 30, 2025, the Company’s financial instruments consisted of cash, accounts payable and accrued liabilities, and promissory notes. The fair value of cash, accounts payables and accrued liabilities, and promissory notes, are approximately equal to their carrying value due to their short-term nature.
16. Professional Fees
During the year ended June 30, 2025, the Company’s professional fees are comprised of the following:
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| $ | $ | |
| Audit and accounting expenses | 83,116 | 57,476 |
| Consulting fees | 147,726 | - |
| Legal fees | 37,655 | 17,023 |
| Listing and filing fees | 14,387 | 14,086 |
| Director and management fees | 25,000 | - |
| Total Professional Fees | 307,884 | 88,585 |
22
Corcel Exploration Inc.
Notes to the Consolidated Financial Statements
For the Years ended June 30, 2025 and 2024
(Expressed in Canadian Dollars)
17. Income Taxes
Provision for income taxes
The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% to the effective tax rate is as follows:
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| Loss before income taxes | $ (3,143,612) | $ (156,766) |
| Combined statutory income tax rate | 27.0% | 26.5% |
| Expected income tax recovery based on statutory rate | (848,775) | (41,543) |
| Adjustment to expected income tax recovery | ||
| Permanent differences and other | 729,112 | (17,933) |
| Change in unrecorded deferred tax asset not recognized | 119,663 | 59,476 |
| Income tax expense | - | - |
Deferred income tax
Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying values of assets and liabilities. Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:
| June 30, 2025 | June 30, 2024 | |
|---|---|---|
| Non-capital losses carried forward | 947,162 | 584,086 |
| Exploration and evaluation assets | 2,744,629 | 293,034 |
| Deferred tax asset | 3,691,791 | 877,120 |
| Less: Deferred tax assets not recognized | (3,691,791) | (877,120) |
| Deferred tax asset (liability) | - | - |
The tax losses of $755,699 fully expire in 2045. The other temporary differences do not expire under current legislation.
Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.
18. Contingencies
The Company's E&E activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. As at the date hereof, the Company believes its operations are materially in compliance with all applicable laws and regulations. The Company expects to make future expenditures to comply with such laws and regulations.