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Edgewater Exploration Ltd. — Management Reports 2025
Jan 29, 2025
46191_rns_2025-01-28_38491632-55be-4beb-985a-174b6c652a73.pdf
Management Reports
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EDGEWATER EXPLORATION LTD.
Form 51-102F1: Management’s Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in Canadian Dollars)
This Management Discussion and Analysis (“MD&A”) should be read in conjunction with the audited annual consolidated financial statements of Edgewater Exploration Ltd. (“Edgewater” or the “Company”) for the year ended December 31, 2024. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). Additional information relating to the Company including the most recent Company filings can be located on SEDAR+ at www.sedarplus.ca. This MD&A is prepared as of January 28, 2025. All dollar figures stated herein are expressed in Canadian dollars, unless otherwise specified.
This discussion includes certain statements that may be deemed “forward-looking statements.” All statements in this discussion, other than statements of historical facts, that address events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.
Business Overview and Overall Performance
Business overview
Edgewater Exploration Ltd. and its subsidiary (collectively, “Edgewater” or the “Company”) are in the mineral property exploration and development business. Edgewater Exploration Ltd., the parent, is a public company that is listed on the NEX board of the TSX Venture Exchange (symbol: EDW.H). It is incorporated in Canada and its head office is located at 1560 – 200 Burrard Street Vancouver, British Columbia, V6C 3L6.
Key Highlights for 2024:
- During 2024, the Company recorded a net loss of $152,101 compared to a net loss of $33,457 during the prior year. The higher net loss during the current year is due to fluctuation in foreign exchange rates. The higher loss during 2024 is due to the weaker Canadian dollar against the Euro and US dollar. The arbitration award is denominated in Euros and US dollars. Net loss per share for both years was $0.00.
- As at December 31, 2024, the Company had total assets of $602,023 compared to $633,115 as at December 31, 2023. Short-term investments account for the majority of the assets as at December 31, 2024.
Selected Annual Information
The following financial information is derived from the audited financial statements of the Company, which are prepared in accordance with IFRS.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Revenue | $Nil | $Nil | $Nil |
| Expenses | $174,322 | $66,055 | $212,995 |
| Net Income (Loss) | $(152,101) | $(33,457) | $935,019 |
| Comprehensive Loss | $152,101 | $33,457 | $214,289 |
| Net loss per Share – Basic and Diluted | $0.00 | $0.00 | $0.02 |
| Total Assets | $602,023 | $633,115 | $667,342 |
| Total Liabilities | $2,2,49,138 | $2,128,127 | $2,128,899 |
| Total Shareholders’ Deficit | $1,647,115 | $1,495,013 | $1,461,557 |
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EDGEWATER EXPLORATION LTD.
Form 51-102F1: Management's Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in Canadian Dollars)
Results of Operations
The following discussion and analysis of the Company’s financial results of its operations should be read in conjunction with the Company’s consolidated financial statements and related notes.
- During 2024, the Company recorded a net loss of $152,101 as compared to a net loss of $33,457 during the prior year. The net loss per share in both years was $nil.
- Foreign exchange loss was $98,715 for the year ended December 31, 2024 compared to an exchange gain of $6,345 during the prior year. The higher loss during 2024 is due to the weaker Canadian dollar against the Euro and US dollar. The arbitration award is denominated in Euros and US dollars.
- Interest and other income was $22,222 for the year ended December 31, 2024 compared to $32,598 during the prior year. The decrease in income is due to the lower interest rate earned and declining balance.
Summary of Quarterly Results
The following information is derived from the Company’s unaudited interim consolidated financial statements for the past eight quarters.
| Revenue | Net loss (income) | Loss per share | |||
|---|---|---|---|---|---|
| December 31, 2024(1) | $ | Nil | $ | 49,147 | $ 0.00 |
| September 30, 2024 | $ | Nil | $ | 44,670 | $ 0.00 |
| June 30, 2024 | $ | Nil | $ | 25,622 | $ 0.00 |
| March 31, 2024 | $ | Nil | $ | 32,663 | $ 0.00 |
| December 31, 2023 | $ | Nil | $ | (3,519) | $ 0.00 |
| September 30, 2023 | $ | Nil | $ | 20,397 | $ 0.00 |
| June 30, 2023 | $ | Nil | $ | (22,820) | $ 0.00 |
| March 31, 2023 | $ | Nil | $ | 39,399 | $ 0.00 |
(1)Refer to section “Results of Operations” for an explanation of some of the items making up the loss for the quarter.
Liquidity and Capital Resources
The Company has financed the majority of its operations and work programs to date through equity issuances. There can be no assurance of continued access to sufficient equity funding. Management believes it will be able to raise equity capital as required in the long term but recognizes there will be risks involved that may be beyond their control. The Company has no outstanding debt facility upon which to draw. Cash is invested in business accounts with large financial institutions and is available on demand for the Company’s operations. During the year ended December 31, 2024, cash outflows from operations totaled $41,117 (2023 - $58,605).
The Company did not complete any financings during 2024. As of December 31, 2024, the Company had a working capital deficit of $1,647,115, as a result of the arbitration award costs in the Company’s Panamanian subsidiary. Management considers that the Company has sufficient available cash and cash equivalents to be able to continue in operations for at least the next twelve months. With regards to the arbitration settlement liability, management’s view is that this award of costs relates solely to Corcoesto S.A. and accordingly, Spain has no recourse against Edgewater.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
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EDGEWATER EXPLORATION LTD.
Form 51-102F1: Management’s Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in Canadian Dollars)
Fourth Quarter
During Q4 2024, the Company recorded a net loss of $49,147 compared to a net income of $3,519 during the same period in the prior year.
During Q4 2024, the Company recorded a foreign exchange loss of $42,186 compared to $10,044 during the same period in the prior year. The higher loss is due to the weaker Canadian dollar against the Euro and US dollar.
Proposed Transactions
None.
Critical Accounting Estimates and Judgements
The preparation of the 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, and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.
Financial Instruments and Other Instruments
The Company’s financial instruments consist of cash, receivables, short-term investment, and trade and other payables. All of the financial instruments are measured at amortized cost. Financial assets and liabilities at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment.
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. 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 and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the consolidated statements of loss and comprehensive loss.
The Company does not use derivative instruments or hedges to manage various risks because the Company’s exposure to credit risk, liquidity risk, and market risks (including interest rate risk and currency risk) is relatively low. Cash is held through large financial institutions. Additional disclosures relating to the Company’s financial instruments can be found in Note 7 of the consolidated financial statements.
Other MD&A Requirements
Additional information relating to the Company, including the most recent Company filings, can be located on the SEDAR+ website at www.sedarplus.ca.
Additional Disclosure for Venture Issuers Without Significant Revenue
See Results of Operations section of the MD&A.
EDGEWATER EXPLORATION LTD.
Form 51-102F1: Management's Discussion and Analysis
For the Year Ended December 31, 2024
(Expressed in Canadian Dollars)
Disclosure of Outstanding Share Data
The following describes the outstanding share data of the Company as at January 28, 2025:
| Number Outstanding | |
|---|---|
| Common shares | 38,923,609 |
Additional Disclosure for Reporting Issuers with Significant Equity Investees
Not applicable.
Risk Factors
The operations of the Company are speculative due to the high-risk nature of its business, which includes the acquisition, financing, exploration, development, and operation of mining properties. These risk factors could materially affect the Company's future operations and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.
Competition
There is aggressive competition within the mining industry for the discovery and acquisition of properties considered to have commercial potential. The Company competes with other exploration and mining companies, many of which have greater financial resources than the Company, for the acquisition of mineral claims, leases, and other mineral interests as well as for the recruitment and retention of qualified employees and other personnel.
Funding Requirements
Mining exploration and development involves financial risk and capital investment. The continuance of the Company's development and exploration activities and its growth through the acquisition of exploration, development or production assets depend upon the Company's ability to generate positive cash flows, private and public equity financing, debt, and/or other means. There is no assurance that the Company will be successful in obtaining additional financing on a timely basis or generate positive cash flows.
Internal Controls and Disclosure Controls over Financial Reporting
On November 23, 2007, the British Columbia Securities Commission in which the Company is registered exempted Venture Issuers from certifying disclosure controls and procedures, as well as Internal Controls over Financial Reporting as of December 31, 2007, and thereafter. Since the Company is a Venture Issuer, it is now required to file basic certificates, which it has done for the year ended December 31, 2024. The Company makes no assessment relating to establishment and maintenance of disclosure controls and procedures as defined under National Instrument 52-109 as at December 31, 2024.
Outlook
The Company continues to look for project acquisition and/or development opportunities.
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