Eloro Resources Ltd. — Interim / Quarterly Report 2023

Nov 29, 2022

Eloro Resources Ltd.

Condensed Interim Consolidated Financial Statements September 30, 2022 (expressed in Canadian dollars) (unaudited)

Management’s Comments on Unaudited Condensed Interim Consolidated Financial Statements

These unaudited condensed interim consolidated financial statements of Eloro Resources Ltd. (the “Company”) have been prepared by management and approved by the Board of Directors of the Company.

These unaudited condensed interim consolidated financial statements have not been reviewed by the Company’s external auditors.

Eloro Resources Ltd. Consolidated Statements of Financial Position

(expressed in Canadian dollars)

(unaudited)

(expressed in Canadian dollars) (unaudited)
				As at	As at
				September 30,	March 31,
			Notes	2022	2022
				$	$
Assets
Current
Cash and cash equivalents				8,787,063	9,437,277
Receivables				149,027	316,437
Marketable securities				20,700	17,250
Prepaid expenses				689,466	524,725
				9,646,255	10,295,689
Right-of-use asset			3	188,487	210,663
Option payment advance			4	635,660	250,880
Exploration and evaluation			5 and 14	38,096,593	27,138,256
				48,566,995	37,895,488
Liabilities
Current
Accounts payable and accrued liabilities				2,345,555	1,021,318
Currentportion of lease liability			6	41,139	39,686
				2,386,694	1,061,004
Lease liabiity			6	155,649	176,588
				2,542,343	1,237,592
Shareholders’ equity
Share capital			7	67,196,603	57,613,920
Warrants			7	10,270,244	8,889,045
Contributed surplus			7	13,473,396	10,502,025
Foreign currency reserve				103,558	146,713
Deficit				(45,019,149)	(40,493,806)
				46,024,652	36,657,897
				48,566,995	37,895,488
Commitments and contingencies			12
Subsequent event			14
Approved by the Board:	Thomas Larsen	Francis Sauve
	Director	Director

1

See accompanying notes to consolidated financial statements

Eloro Resources Ltd. Consolidated Statements of Loss and Comprehensive Loss

(expressed in Canadian dollars)

(unaudited)

		3 months ended	3 months ended	6 months ended	6 months ended
		September 30,			September 30,
	Notes	2022	2021	2022	2021
		$	$	$	$
Expenses
Professional fees		87,639	32,870	164,566	149,802
Consulting fees	11	128,150	81,000	245,150	162,000
Financing bonus	11	150,000	-	150,000	-
Stock-based compensation	7	586,118	-	3,084,118	-
Investor relations and marketing	11	219,814	158,520	626,882	329,791
General and office		138,776	75,471	256,905	170,780
Travel		20,906	7,427	93,811	11,708
Depreciation	3	11,088	10,659	22,176	21,318
Accretion of interest	6	3,050	285	6,245	738
Foreign exchange loss (gain)		41,736	(81,031)	23,557	(34,663)
Unrealized loss (gain) on marketable securities		-	2,150	(3,450)	7,750
Impairment of exploration and evaluation	5	-	-	9,488	-
Refundable tax credit notices of assessment	8	(157,806)	15,000	(142,806)	30,000
Other income		(11,300)	(9,502)	(11,300)	(28,324)
		1,218,170	292,850	4,525,343	820,899
Loss for the period		(1,218,170)	(292,850)	(4,525,343)	(820,899)
Other comprehensive income (loss) to be reclassified to
profit or loss in subsequent years (net of tax)
Currencytranslation adjustment		(53,042)	4,330	(43,155)	20,444
Comprehensive loss for theperiod		(1,271,212)	(288,520)	(4,568,498)	(800,455)
Lossper share - basic and diluted		(0.02)	-	(0.07)	(0.01)
Weighted average number of shares outstanding -
basic and diluted		67,142,198	62,287,596	67,771,681	61,400,435

2

See accompanying notes to consolidated financial statements

Eloro Resources Ltd. Consolidated Statements of Changes in Equity

(expressed in Canadian dollars)

(unaudited)

				Foreign
	Share		Contributed	currency
	capital	Warrants	surplus	reserve	Deficit	Total
	$	$	$	$	$	$
	(note 7)	(note 7)	(note 7)
Balance, March 31, 2022	57,613,920	8,889,045	10,502,025	146,713	(40,493,806)	36,657,897
Bought deal financing	9,775,057	-	-	-	-	9,775,057
Fair value of warrants issued	(1,907,000)	1,907,000	-	-	-	-
Fair value of compenation warrants issued	(287,000)	287,000	-	-	-	-
Exercise of warrants	1,866,387	-	-	-	-	1,866,387
Fair value of exercised warrants	812,801	(812,801)	-	-	-	-
Exercise of stock options	170,500	-	-	-	-	170,500
Fair value of exercised stock options	112,747	-	(112,747)	-	-	-
Share issue costs	(960,809)	-	-	-	-	(960,809)
Stock-based compensation	-	-	3,084,118	-	-	3,084,118
Other comprehensive income for the period	-	-	-	(43,155)	-	(43,155)
Loss for theperiod	-	-	-	-	(4,525,343)	(4,525,343)
Balance, September 30, 2022	67,196,603	10,270,244	13,473,396	103,558	(45,019,149)	46,024,652
Balance, March 31, 2020	53,904,648	9,279,680	6,320,536	82,892	(33,387,782)	36,199,973
Exercise of warrants	680,215	-	-	-	-	680,215
Fair value of exercised warrants	197,012	(197,012)	-	-	-	-
Exercise of stock options	175,000	-	-	-	-	175,000
Fair value of exercised stock options	121,747	-	(121,747)	-	-	-
Share issue costs	(4,992)	-	-	-	-	(4,992)
Other comprehensive loss for the period	-	-	-	20,444	-	20,444
Loss for theperiod	-	-	-	-	(820,899)	(820,899)
Balance, September 30, 2021	55,073,630	9,082,668	6,198,789	103,336	(34,208,682)	36,249,741

3

See accompanying notes to consolidated financial statements

Eloro Resources Ltd. Consolidated Statements of Cash Flows

(expressed in Canadian dollars)

(unaudited)

	6 months ended	6 months ended
		September 30,
	2022	2021
	$	$
Cash provided by (used in)
Operating activities
Loss for the period	(4,525,343)	(820,899)
Items not affecting cash
Depreciation	22,175	21,318
Accretion of interest	6,246	-
Stock-based compensation	3,084,118	-
Unrealized (gain) loss on marketable securities	(3,450)	7,750
Impairment of exploration and evaluation	9,488	-
Changes in non-cash operating working capital
Receivables	167,410	(10,067)
Prepaid expenses	(164,741)	(261,135)
Accountspayable and accrued liabilities	1,324,237	(612,048)
	(79,859)	(1,675,080)
Financing activities
Repayment of lease liabilities	(25,732)	(22,440)
Bought deal financing	9,775,057	-
Share issue costs	(960,809)	(4,992)
Exercise of warrants	1,866,387	680,215
Exercise of stock options	170,500	175,000
	10,825,403	827,783
Investing activities
Option payment advance	(384,780)	(250,880)
Exploration and evaluation	(10,967,824)	(6,448,102)
	(11,352,604)	(6,698,982)
Net increase in cash and cash equivalents	(607,060)	(7,546,279)
Cash and cash equivalents, beginning of period	9,437,277	28,266,056
Currency translation adjustment	(43,155)	20,444
Cash and cash equivalents, end ofperiod	8,787,063	20,740,221

4

See accompanying notes to consolidated financial statements

Eloro Resources Ltd.

Notes to Condensed Interim Consolidated Financial Statements September 30, 2022

(expressed in Canadian dollars) (unaudited)

1. Nature of operations

Eloro Resources Ltd. (the “Company”) is a public company engaged in the exploration and development of a gold-silver property in Peru, a polymetallic property in Bolivia and base metal properties in Québec.

The Company was incorporated under the Business Corporations Act of Ontario on April 11, 1985 and its registered office is located at 20 Adelaide Street East, Suite 200, Toronto, Ontario, M5C 2T6.

2. Basis of presentation

Statement of compliance

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting , using accounting policies consistent with International Financial Reporting Standards and its interpretations adopted by the International Accounting Standards Board.

The accounting policies used in these condensed interim consolidated financial statements are consistent with those disclosed in the Company’s audited consolidated financial statements for the year ended March 31, 2022.

These condensed interim consolidated financial statements do not include certain information and disclosures normally included in annual financial statements prepared in accordance with IFRS and should be read in conjunction with the Company’s annual financial statements for the year ended March 31, 2022.

These condensed interim consolidated financial statements were approved and authorized for issue by the Board of Directors on November 29, 2022.

3. Right-of-use asset

3. Right-of-use asset
	$
Right-of-use asset, March 31, 2022 and September 30, 2022	221,751
Accumulated depreciation, March 31, 2022	11,088
Depreciation	22,176
Accumulated depreciation, September 30, 2022	33,264
Balance, September 30, 2022	188,487

4. Option payment advance

On July 29, 2020, the Company granted a 2% interest in its wholly-owned Bolivian subsidiary, Minera Tupiza S.R.L. (“Minera Tupiza”) to an officer of Minera Tupiza. The Company has an option to increase its interest in Minera Tupiza to 99% by purchasing a 1% interest from the officer for US$3,000,000. At September 30, 2022, the Company has made installment payments of US$500,000 (December 31, 2021 - US$200,000) on account of the option.

5. Exploration and evaluation

5. Exploration and	evaluation
	March 31,	Acquisition			September 30,
	2022	cost	Exploration	Impairment	2022
	$	$	$	$	$
Property
La Victoria	6,142,164	‒	180,681	‒	6,322,846
Iska Iska	20,996,092	517,320	10,260,336	‒	31,773,747
Other	‒	‒	9,488	(9,488)	‒
	27,138,256	517,320	10,450,504	(9,488)	38,096,593

5

La Victoria, Peru

The Company owns an 82% interest in La Victoria (March 31, 2022 - 82%), a gold-silver property covering 8,933 hectares, consisting of 9 concessions covering 3,533 hectares (Ccori Orcco 1, Roberto N°1, Rufina, Rufina N° 2, San Felipe 1, San Felipe 2, San Markito, Santa Ana 1 and Victoria-APB) and 7 claims covering 5,400 hectares (Romina 01, 02, 03, 04, 05, 06 and 07) in the Huandoval District, Pallasca Province, Ancash Department, in the North-Central Mineral Belt of Peru.

Burgundy Diamond Mines Limited (“BDM”) owns an 18% interest in La Victoria and had an option to increase its interest to 25% (“Option”). In August 2021, BDM decided to maintain its interest at 18% and not to increase its interest to 25%, at which time, the Option expired and a joint venture, with the Company as operator, was formed to continue to explore and develop La Victoria.

If the Company or BDM does not fund its proportionate share of expenditures, its respective interest will be diluted and when its interest is diluted to less than 10%, the party’s interest shall be reduced to a 2% net smelter royalty on all production. The other party will have the option to reduce the royalty from 2% to 1% by making a payment of $3,000,000.

If either the Company or BDM acquires an interest in any property within 5 kilometres of La Victoria, the acquirer must offer the other party the opportunity to participate in the acquisition up to its participating interest.

In the event the Company or BDM proposes to sell any interest in La Victoria to a third party, the other party has a right of first refusal to match the terms and conditions of the proposed sale. In the event that the Company proposes to sell a majority of its interest in La Victoria to a third party, the Company must first consult with BDM about the identity of the third party and the proposed terms of sale and if the Company proceeds with the sale, BDM will be obliged to sell its interest to the third party on a pro rata basis in accordance with the terms of the sale to the third party.

La Victoria is subject to a 2% net smelter royalty (“NSR”). The Company has the option to reduce the NSR to 1% by making a payment of $3,000,000.

Iska Iska

The Company owns a 98% interest in Minera Tupiza which has an option to acquire a 99% interest in Iska Iska, a polymetallic property consisting of one mineral concession totaling 900 hectares located in Bolivia. The Company also has a option to increase its interest in Minera Tupiza to 99% (see note 4, Option payment advance ). On October 14, 2020, the Company staked 9 additional properties covering 31,175 hectares.

In order to acquire its interest in Iska Iska, the Company will conduct an exploration and development program in the 4 years ended January 6, 2024, issue common shares and make an option payment, as follows:

February 5, 2020 (issued) January 6, 2022 (Issued) January 6, 2024	Option Common shares payment Number $ US$ 250,000 100,000 ‒ 250,000 250,000 ‒ ‒ ‒ 10,000,000
	500,000 350,000 10,000,000

At September 30, 2022, the Company has made instalment payments of US$3,400,000 (December 31, 2021 US$3,000,000) on account of the Iska Iska option payment.

See note 14, Subsequent event, Iska Iska option payment .

6. Lease liabilities

6. Lease liabilities
	$
Balance, March 31, 2022	216,274
Accretion of interest	6,246
Lease payments	(25,732)
Balance, September 30, 2022	196,788
Current portion of lease liabilities	41,139
Long-term lease liabilities	155,649
	196,788

6

The lease for premises is a joint and several commitment with Cartier Iron Corporation, a company which owns 2,175,000 common shares of the Company and has three directors who are also directors of the Company.

The remaining lease term is 4.25 years.

7. Share capital

Authorized

An unlimited number of common shares without par value.

An unlimited number of redeemable, voting, non-participating special shares without par value.

Outstanding

Outstanding
		Number
	of common		Amount
		shares	$
Balance, March 31, 2022	63,805,807		57,613,920
Bought deal financing		3,007,710	9,775,057
Fair value of warrants issued
Unit		–	(1,907,000)
Compensation		–	(287,000)
Share issue costs		–	(960,809)
Exercise of warrants		2,700,448	1,866,387
Fair value of exercised warrants		–	812,801
Exercise of stock options		365,000	170,500
Fair value of exercised stock options		–	112,747
Balance, September30,2022	69,878,965		67,196,603

Bought deal financing

On May 19, 2022, the Company completed a bought deal financing of 3,007,710 units of at a price of $3.25 per unit for gross proceeds of $9,775,057. Each unit consisted of one common share one-half of one warrant, with each of the 1,503,855 whole warrants entitling the holder to purchase one common share for $4.75 until May 19, 2024. In connection with the financing, the Company paid a cash commission of $586,503 (representing 6% of the gross proceeds of the financing), issued 180,462 compensation warrants (representing 6% of the number of units issued pursuant to the financing) entitling the holder to purchase one common share for $3.25 until May 19, 2024.

The fair value of the unit warrants and compensation warrants was calculated using the Black-Scholes option pricing model with the following assumptions:

with the following assumptions:
		Compensation
	Unit warrants	warrants
Issue date	May 19, 2022	May 19, 2022
Expiry date	May 19, 2024	May 19, 2024
Warrants issued	1,503,855	180,462
Exercise price	$4.75	$3.25
Share price	$3.25	$3.25
Risk-free interest rate	2.7%	2.7%
Expected volatility based on historical volatility	90%	90%
Expected life of warrants	2 years	2 years
Expected dividend yield	0%	0%
Fair value	$1,907,000	$287,000
Fair value per warrant	$1.27	$1.59

7

Warrants

A summary of the Company’s common share warrants outstanding at September 30, 2022 is presented below:

	Weighted-average	Number of
	exercise price	warrants
	$
Balance, March 31, 2022	3.07	7,464,441
Issued	4.59	1,684,317
Exercised	0.68	(2,700,448)
Balance, September30,2022	4.45	6,448,310

A summary of the Company’s common share warrants outstanding at September 30, 2022 is presented below:

		Number of
Exercise price	Expiry date	warrants
$2.00	January 5, 2023	968,470
$1.55	January 5, 2023	62,548
$5.25	March 26, 2023	3,335,000
$3.75	March 26, 2023	397,975
$4.75	May 19, 2024	1,503,855
$3.25	May 19, 2024	180,462
		6,448,310

Stock options

The shareholders of the Company approved a new Long-term Incentive Plan (the “Plan”) at an annual and special meeting held on September 27, 2022. The Plan is currently awaiting TSX Venture Exchange approval. Upon the implementation of the Plan, all previously issued stock options and restricted share unit awards, which were granted pursuant to the Company’s stock option plan and Restricted Share Unit Plan respectively, will be governed by the Plan. The Plan permits the Board to make awards of stock options, restricted share units, performance share units and deferred share units. The maximum number of common shares for issuance under the Plan for stock options will not exceed 10% of the Company’s then issued and outstanding shares. The maximum number of common shares for issuance under the Plan for all other awards other than stock options will not exceed 10% of the Company’s issued and outstanding shares at the time of shareholder approval of the Plan.

The number of the common shares subject to each stock option grant, exercise price, vesting, expiry date and other terms and conditions are determined by the Board. The exercise price shall in no event be lower than the market price of the common shares on the grant date. Stock options shall be for a fixed term, not exceeding five years and unless otherwise specified, each stock option shall vest as to one third on each of the first through third anniversaries of the grant date

The number of the common shares subject to each stock option grant, exercise price, vesting, expiry date and other terms and conditions are determined by the Board. The exercise price shall in no event be lower than the market price of the common shares on the grant date. Stock options shall be for a fixed term, not exceeding five years and unless otherwise specified, each stock option shall vest as to one third on each of the first through third anniversaries of the grant date	The number of the common shares subject to each stock option grant, exercise price, vesting, expiry date and other terms and conditions are determined by the Board. The exercise price shall in no event be lower than the market price of the common shares on the grant date. Stock options shall be for a fixed term, not exceeding five years and unless otherwise specified, each stock option shall vest as to one third on each of the first through third anniversaries of the grant date	The number of the common shares subject to each stock option grant, exercise price, vesting, expiry date and other terms and conditions are determined by the Board. The exercise price shall in no event be lower than the market price of the common shares on the grant date. Stock options shall be for a fixed term, not exceeding five years and unless otherwise specified, each stock option shall vest as to one third on each of the first through third anniversaries of the grant date
A summary of the Company’s stock options outstanding and exercisable at September 30, 2022 is presented below:
		Number of
	Weighted-average	stock options
	exercise price	outstanding and
	$	exercisable
Balance, March 31, 2022	2.57	5,015,000
Granted	3.68	1,000,000
Exercised	0.47	(365,000)
Balance, September 30, 2022	2.90	5,650,000

The common share price when the stock options were exercised was in the range of $4.49 - $4.71.

8

A summary of the Company’s stock options outstanding at September 30, 2022 is presented below:

		Number of
		stock options
		outstanding
		and
Exercise price	Expiry date	exercisable
$0.87	November 30, 2022	100,000
$0.70	June 12, 2023	35,000
$0.40	February 18, 2025	1,305,000
$0.60	June 9, 2025	655,000
$4.45	February 1, 2026	1,030,000
$4.65	March 3, 2027	1,525,000
$3.42	May 30, 2027	100,000
$3.59	June 6, 2027	750,000
$4.32	August 3, 2022	150,000
		5,650,000

Grant of stock options

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 30, 2022	June 6, 2022	August 3, 2022
Expiry date	May 30, 2027	June 6, 2027	August 3, 2027
Stock options granted	100,000	750,000	150,000
Exercise price	$3.42	$3.59	$4.32
Share price	$3.42	$3.59	$4.32
Risk-free interest rate	2.66%	3.09%	2.85%
Expected volatility based on historical volatility	86%	74%	87%
Expected life of stock options	5 years	5 years	5 years
Expected dividend yield	0%	0%	0%
Forfeiture rate	0%	0%	0%
Vesting	On date of grant	On date of grant	On date of grant
Fair value	$234,000	$1,853,000	$449,000
Fair value per stock option	$2.34	$2.47	$2.99

Restricted share units

The Company may grant 3,200,000 restricted share units and in combination with all share compensation arrangements, including the Company’s stock option plan, will not exceed 20% of the issued and outstanding common shares in the capital of the Company.

of the Company.	of the Company.
A summary of the number of the Company’s restricted share units outstanding at September		30, 2022 is	presented below:
	Vested	Unvested	Total
Balance, March 31, 2022	–	2,350,000	2,350,000
Granted	–	750,000	750,000
Balance, September30,2022	–	3,100,000	3,100,000

On January 19, 2022, the Company granted 2,350,000 restricted share units to officers and consultants. The restricted share units have a redemption date of December 31, 2025 and vest as follows: (a) one-third on the date of filing of a National Instrument 43-101 (“NI 43-101”) compliant technical report in connection with the measurement of at least 300 million tonnes of inferred resources at Iska Iska; (b) one-third on the date of filing of a NI 43-101 compliant technical report in connection with the measurement of at least 500 million tonnes of inferred resources at Iska Iska; and (c) one-third on the date of filing of a NI 43-01 compliant technical report in connection with the completion of a positive prefeasibility study for Iska Iska. The fair value of the restricted share units granted was $7,919,500. No expense has been recognized as of September 30, 2022 due to inability to assess likelihood of vesting.

On June 6, 2022, the Company granted 750,000 restricted share units to a consultant. The restricted share units have a redemption date of June 6, 2025 and vest in 3 annual instalments. The fair value of the restricted share units granted was $2,692,500, which will be expensed over the 3-year vesting period. For the 6 months ended September 30, 2022, stockbased compensation is $548,472.

9

8. Income taxes

Refundable tax credit notices of assessment

On July 26, 2017, the Company received refundable tax credit notices of assessments from Revenu Québec for the repayment of $367,360 (“Notices”) for the return of refunds of $280,961, $25,217 and $7,766 received by the Company for the refundable tax credit on eligible exploration expenditures incurred in Québec in respect of 2013, 2014 and 2016, respectively and interest thereon of $53,416.

The Company filed notices of objection with respect to the Notices and pending resolution of the Notices, the Company made payments of $5,000 per month to Revenu Quebéc which were recorded in the consolidated statement of loss and comprehensive loss.

On August 5, 2022, the Company received notices of reassessment from Revenu Québec with respect to the Notices which reduced the amounts required to be repaid to $20,856 and resulted in the Company receiving a refund of $156,747.

9. 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.

Accounts payable and accrued liabilities

The fair value of accounts payable and accrued liabilities approximates its carrying value 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.

Marketable securities are measured at fair value at Level 1 of the fair value hierarchy.

10. Financial risk management

The Company's activities expose it to a variety of financial risks that arise as a result of its exploration, development, production 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 consolidated 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. Credit risk arises principally from the Company’s cash balances. The maximum exposure to credit risk is equal to the balance of cash.

The Company’s limits its exposure to credit risk on its cash by holding its cash in 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. The amounts for accounts payable and accrued liabilities are subject to normal trade terms.

10

The Company has no revenues and relies on financing primarily through the issuance of equity to finance its on-going and planned exploration activities and to cover administrative costs.

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. The Company is exposed to equity price risk with respect to marketable securities. The Company’s approach to managing equity price risk is to optimize the return from its marketable securities within acceptable parameters for equity price risk. The Company estimates that if the fair value of its marketable securities as at September 30, 2022 had changed by 10%, with all other variables held constant, the unrealized gain (loss) would have decreased or increased by $2,070.

Interest rate risk

The Company’s exposure to interest rate risk is limited due to the short-term nature of its financial instruments and the Company has no interest-bearing debt.

Capital management

Capital of the Company consists of share capital, warrants, 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.

The Company’s principal source of capital is from the issue of common shares. 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.

11. 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:

personnel are set out as follows:
			Outstanding at	Outstanding at
	6 months ended	September 30,	September 30,	March 31,
	2022	2021	2022	2022
	$	$	$	$
Exploration and evaluation	80,000	60,000	‒	12,636
Consulting fees	214,500	162,000	‒	‒
Financing bonus	145,000	‒	‒	‒
Investor relations	72,500	48,000	‒	12,660
	512,000	270,000	‒	25,296

See note 6 for other related party transactions.

12. Commitments and contingencies

Value-added tax

In Peru, the Company has paid a value added tax, Impuesto General a las Ventas (“IGV”), on the purchase of goods and services which may be recovered against IGV collected on sales by the Company. The Company has paid IGV of US$451,556, of which, the Company is obligated to pay US$363,280 to BDM upon recovery. The remaining IGV of US$88,276 has been included in exploration and evaluation.

13. Segment information

The Company operates in one reportable segment being mineral exploration.

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As the Company is focused on exploration, the Board monitors the Company based on actual versus budgeted exploration expenditure incurred by project. The internal reporting framework is the most relevant to assist the Board with making decisions regarding this Company and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date.

The Company operates in Peru and Bolivia:

The Company operates in Peru and Bolivia:
Location of non-current assets	$
Peru	6,322,846
Bolivia	31,773,747
	38,096,593

14. Subsequent event

Iska Iska option payment

On November 19, 2022, the Company made an instalment of US$1,000,000 on account of the Iska Iska option payment.

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