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ESGold Corp. Management Reports 2025
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Management Reports
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Management's Discussion and Analysis
For the three-month period ended September 30, 2024
ESGold Corp.
FORM 51-102F1
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2024
Introduction
This management’s discussion and analysis (MD&A) of ESGold Corp. is the responsibility of management and covers the three-month period ended December 31, 2024. The MD&A takes into account information available up to and including February 28, 2025 and should be read together with the consolidated audited financial statements and accompanying notes for the year ended June 30, 2024 which are available on the SEDAR website at www.sedar.com.
Throughout this document the terms we, us, our, the Company and ESGold refer to ESGold Corp. All financial information in this document is prepared in accordance with International Financial Reporting Standards (“IFRS”) and presented in Canadian dollars unless otherwise indicated.
Additional information related to the Company is available for view on SEDAR at www.sedar.com.
Forward-Looking Statements
Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements.
Forward-looking information includes disclosure regarding possible or anticipated events, conditions or results of operations which are based on assumptions about future economic conditions and courses of action, and includes future oriented financial information with respect to prospective results of operations or financial position or cash flow that is presented either as a forecast or a projection. Forward-looking information is often, but not always, identified by the use of words such as seek, anticipate, believe, plan, estimate, expect and intend; statements that an event or result is due on or may, will, should, could, or might occur or be achieved; and other similar expressions.
Reserves and Resources
National Instrument 43-101 (“43-101”) of the Canadian Securities Administrators – Standards of Disclosure for Mineral Projects – requires that each category of mineral reserves and mineral resources be reported separately. Readers should refer to ESGold’s continuous disclosure documents available at www.sedar.com for this detailed information, which is subject to the qualifications and notes therein set forth.
Description of Business
The Company is a Canadian environmentally aware resource exploration and processing company focused on building a strong asset base through exploration of undervalued projects in Canada. Management has demonstrated expertise in advancing gold exploration projects into acquisition targets, most notably in the
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
province of Quebec. ESGold’s principal restoration and recovery project is the Montauban property situated in Quebec, just 80 kilometers west of Quebec City. Recently, the Company has also entered into a joint venture agreement to determine the presence of recoverable metals in the Ottawa River, consistent with ESGold’s commitment to environmental recovery solutions. ESGold will use its expertise in early stage exploration to create shareholder value by attempting to prove out the potential resource in these assets.
The Company’s shares are currently listed on the Canadian Securities Exchange with the trading symbol CSE: ESAU.
Performance Summary and Subsequent Events
a) On December 30, 2019, the Company was the subject of a cease trade order by the British Columbia Securities Commission pending the filing of the Company’s annual Audited Financial Statement and MD&A for the 2019 fiscal year. As a consequence of the Cease Trade Order, the British Columbia Securities Commission suspended the Company from trading until lifting of the Cease Trade Order. On February 17, 2021, the British Columbia Securities Commission issued a full revocation of the Company’s failure-to-file cease trade order. The Company is in full compliance with the continuous disclosure requirements of the BCSC. On September 13, 2021, the Company’s common shares were delisted from the TSX Venture Exchange and on October 6, 2021, the Company’s shares were listed on the Canadian Securities Exchange (CSE) with the trading symbol CSE: SEK. On July 14, 2022, the Company changed its name from Secova Metals Corp. to ESGold Corp. and its shares are now listed on the CSE with the trading symbol CSE: ESAU.
b) During the year ended June 30, 2024, the Company continued to advance the Montauban project (see Exploration Summary - Montauban and Chavigny Townships, Quebec). The Company had incurred a total of $7,231,930 as at June 30, 2024 (year ended June 30, 2023: $6,702,534) which included the acquisition costs for the project, recording an asset retirement obligation, and engineering, legal, drilling programs and project management and travel costs, which will put the Montauban Project in a ready-mode to achieve management’s objectives for the project. The acquisition of Montauban Project was completed during the month of September 2021, and the Company recognized a commitment to issue 5,000,000 shares, valued at $2,500,000, to the vendor (Please refer to Note 4 in the Financial Statements). On July 24, 2023, an additional 926,210 common shares were issued for debt related to the acquisition of Montauban, valued at $0.50 per share for a total debt amount assumed of $463,105.
c) On September 20, 2021, the Company completed a non-brokered private placement of 5,000,000 units of the Company’s securities (the "Units") at a price of $0.50 per Unit for total consideration of $2,500,000 (the “Private Placement Offering”). Each Unit consists of one (1) Share and one (1) Share purchase warrant (the "Warrants"). Each Warrant will entitle the holder thereof to purchase one additional Share (the "Warrant Shares") at a price of $0.50 per Warrant Share for nine (9) months following the closing date of the Private Placement Offering (the "Closing Date"). All securities issued in the Offering are subject to a statutory hold period expiring four (4) months and one (1) day from the Closing Date. The Company paid a finder's fees or commission in connection with the Offering of $25,000. The Company intends to use the proceeds from the Offering to pay the Company’s current liabilities, complete preliminary work on the Montauban Project, begin exploration on the Eagle River Project and for general corporate and administrative purposes.
d) During the year ended June 30, 2022, the Company issued 4,085,000 common shares from the exercise of the Warrants with gross proceeds of $2,042,500.
e) On October 6, 2021, the Company granted an aggregate of 650,000 options and 700,000 restricted share units of the Company to certain directors, officers, employees and consultants of the Company. The options granted are exercisable to purchase a common share in the capital of the Company at the price of $1.50 per share. On October 6, 2021, the Company issued 700,000 common shares for the restricted shares units granted, valued at $1.15 per share. A total of 555,000 stock options and 570,000 restricted share units were issued to directors and officers of the Company.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
f) In October 2021, the Company retained Relations Publiques Paradox Inc (“Paradox”) as an investor relations consultant to provide shareholder and investor relations services to the Company. Paradox is a Montreal based full service communications firm and will help the Company with market awareness campaigns and provide valued industry exposure through its network of retail and institutional relationships. The initial term of the contract is for 12 months and may be extended for an additional 24-month term. The Company will pay a monthly retainer of $10,000 and will grant to Paradox 100,000 restricted share units which will vest and be exercisable in four equal quarterly tranches over a period of 12 months.
g) In December 2021, the Company raised gross proceeds of $2,356,923 by the issuance of 1,274,013 flow through common shares (the “Flow-Through Shares”) at a purchase price of $1.85 per Flow-Through Share. In connection with the closing of the Flow-through Shares Offering, the Company paid an aggregate finders’ fees of $141,590 in cash and issued 76,535 share purchase warrants (the “Finder’s Warrants”) to certain arms-length finders. Each Finder’s Warrant entitles the holder thereof to purchase one common share of the Company at a price of $1.85 and expires nine (9) months from the date of closing of the Flow-through Shares Offering. The Company will use the proceeds from the sale of the Flow-Through Shares to incur flow-through expenditures in the province of Quebec which qualify as 100% Canadian Exploration Expense (“CEE”) and renounced said flow-through expenditures to the investors for the taxation year ended December 31, 2021. The Company recorded a flow-through premium liability of $637,006, of which nil remains unamortized as at June 30, 2023 (2022 - $533,813).
h) On March 15, 2022, the Company granted 526,462 restricted share units of the Company to certain directors, officers, and consultants of the Company, and on the same date, issued 526,462 common shares for these restricted share units granted, valued at $0.65 per share. A total of 100,000 of these restricted share units were issued to directors and officers of the Company.
i) On April 29, 2022, the Company announced the appointment of Paul Mastantuono as the Chief Executive Officer and a director of the Company. P. Bradley Kitchen has resigned as the Chief Executive Officer but will remain as President.
j) On May 31, 2022, the Company appointed Jean-Yves Therien as the Chief Executive Officer. Paul Mastantuono resigned as Chief Executive Officer and was appointed the Chief Operating Officer of the Company.
k) On May 31, 2022, the Company granted 855,000 options and 195,000 restricted share units of the Company to certain directors, officers and consultants of the Company. The options granted are exercisable to purchase a common share in the capital of the Company at a price of $0.50 per share. On June 14, 2022 the Company issued 195,000 common shares for these restricted share units granted, valued at $0.50 per share. A total of 800,000 stock options were issued to directors and officers of the Company.
l) On May 30, 2022, the Company signed an option agreement with Nepean Bay Joint Venture Inc. (“NBJV”). Under the option agreement, NBJV grants the Company the right to earn 50% interests in the Ottawa River Project. See NBJV is the legal and beneficial owner of the land use permit of 2.6 hectares within the bed of the Ottawa River and the owner of any salable residuals from the land use permit. (Please refer to Note 4 in the Financial Statements for further information).
m) On June 15, 2022, the Company granted 100,000 options of the Company to certain members of the advisory board of the Company, exercisable at $0.50 per share.
n) On June 23, 2022, the Company granted 100,000 restricted share units of the Company to certain consultants of the Company and on the same date issued 100,000 common shares for these restricted share units granted, valued at $0.46 per share.
o) On June 27, 2022, the Company granted 150,000 restricted share units of the Company to certain consultants of the Company and on July 4, 2022 issued 150,000 common shares for these restricted share units granted, valued at $0.50 per share.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
p) On June 30, 2022, the board of directors of the Company granted 50,000 options to an officer of the Company, exercisable at $0.95 per share.
q) On July 14, 2022, the Company changed its name from Secova Metals Corp. to ESGold Corp.
r) On July 15, 2022 and July 20, 2022, the Company completed a non-brokered private placement of 3,000,000 units of the Company’s securities (the "Units") at a price of $0.50 per Unit for total consideration of $1,500,000 (the "Offering"). Each Unit consists of one (1) Share and one-half (1/2) Share purchase warrant (the "Warrants"). Each Warrant will entitle the holder thereof to purchase one additional Share (the "Warrant Shares") at a price of $1.00 per Warrant Share for twelve (12) months following the closing date of the Offering (the "Closing Date").
s) In July 2022, the Company engaged Geophysique GPR International to conduct a three-part bathymetric mapping survey of the Ottawa River project. The survey will provide detailed data relating to water depth, riverbed topography, underwater features, and the depth of the sediment above the floor of the river. The survey will take place over the three identified target zones and cover an area of approximately 90 metres by 200 meters. The underwater mapping commenced on July 11, 2022, and was completed in advance of the underwater sampling program.
t) In July 2022, the Company carried out an eight (8) day underwater sampling program on the Ottawa River Project, conducted by divers from Soderholm Maritimes Services Inc. ("SMSI").
u) On September 13, 2022, the Company granted to a new director and other consultants a total of 175,000 options, exercisable at $0.85 per share, and a total of 54,690 restricted shares units, for which shares were issued at a value of $0.80 per share.
v) In October 2022, the Company entered into a settlement agreement with a vendor whereby the Company paid cash of $100,000 and issued 120,000 common shares in the capital of the Company valued at $48,000.
w) In December 2022, the Company raised gross proceeds of $559,500 by the issuance of 1,069,000 flow through common shares units (the "Flow-Through Units") at a purchase price of $0.50 per Flow-Through Unit, and 50,000 non flow-through units (the "Non Flow-Through Units") at a purchase price of $0.05 per Non Flow-Through Unit (the "December 2022 Offering"). Each Flow-Through Unit consists of one (1) Share and one-half (1/2) Share purchase warrant (the "Warrants") and each Non Flow-Through Units consist of one (1) Share and one Share purchase warrant. Each full Warrant will entitle the holder thereof to purchase one additional Share (the "Warrant Shares") at a price of $0.75 per Warrant Share for twelve (12) months following the closing date of the Offering (the "Closing Date"). In connection with the closing of the December 2022 Offering, the Company paid an aggregate finders' fees of $21,630 in cash and issued 36,260 share purchase warrants (the "Finder's Warrants) to certain arms-length finders. Each Finder's Warrant entitles the holder thereof to purchase one common share of the Company at a price of $0.75 and expires twelve months from the date of closing of the December 2022 Offering. The Company will use the proceeds from the sale of the Flow-Through Shares to incur flow-through expenditures in the province of Quebec which qualify as 100% Canadian Exploration Expense ("CEE") and renounced said flow-through expenditures to the investors for the taxation year ended December 31, 2022.
x) On January 13, 2023, the Company granted 760,000 restricted share units of the Company to certain consultants of the Company and on the same date issued 760,000 common shares for these restricted share units granted, valued at $0.60 per share for a total value of $456,000 recorded in stock based compensation.
y) On January 18, 2023, the Company granted 60,000 restricted share units of the Company to the directors of the Company and on the same date issued 60,000 common shares for these restricted share units granted, valued at $0.70 per share for a total value of $42,000 recorded in stock based compensation.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
z) On March 2, 2023, the Company acquired an additional 25 mining claims as part of the Montauban project in exchange for 20,000 common shares, valued at $0.50 per share for a total amount of $10,000.
aa) On March 8, 2023, the Company acquired an undivided one hundred percent interest in 25 mining claims totalling 2,360 hectares located in Notre-Dame-de-Montauban, Quebec, augmenting its holdings in the Montauban Project. The Company acquired twenty mining claims in exchange for 20,000 common shares and additionally staked 5 mining claims of open ground adjacent to its main mining claim block.
bb) On May 24, 2023, the Company issued, after all the conditions had been met in connection with the purchase agreement, 5,000,000 common shares, valued at $0.50 per share for a total amount of $2,500,000, to DNA Canada Inc. to complete the transaction. The Company had already shown the shares as committed to be issued as part of shareholders' equity.
cc) On July 7, 2023, the Company appointed Andre Gauthier to the Board of Directors.
dd) On July 24, 2023, an additional 926,210 common shares were issued for debt related to the acquisition of Montauban, valued at $0.20 per share for a total debt amount assumed of $463,105.
ee) On July 27, 2023, the Company elected to terminate the earn-in Joint Venture Agreement with Nepean Bay Joint Venture signed on May 30, 2022 for the purpose of jointly exploring and developing the Ottawa River Gold Project. As a result of the agreement termination, Nepean Bay Joint Venture will retain 100% ownership of its Ottawa River Gold property interests. Previously capitalized costs associated with the joint venture were written off at June 30, 2023, amounting to a total of $241,923.
ff) On August 29, 2023, the Company announced that the Board of Directors had approved a consolidation (the "Share Consolidation") of the common shares in the capital of the Company (the "Common Shares") at a ratio of 10 pre-Consolidation Common Shares (the "Existing Shares") for one post-Consolidation Common Share (the "Consolidated Shares"). The Share Consolidation remains subject to the approval of the Canadian Securities Exchange (the "CSE"). The Consolidated Shares will subsequently begin trading on a consolidated basis under the existing Company name and trading symbol.
As a result of the Share Consolidation, each 10 Existing Shares outstanding will automatically combine into one Consolidated Share without any action on the part of the holders, and the number of outstanding Common Shares will be reduced from approximately 315,159,762 Common Shares to approximately 31,515,976 Common Shares. The Consolidation will also apply to Common Shares issuable upon the exercise of the Company's outstanding stock options and warrants. No fractional shares will be issued as a result of the Consolidation. In the event a shareholder would otherwise be entitled to receive a fractional share from the Consolidation, the number of Consolidated Shares to be received by such shareholder shall be rounded down to the next highest whole number of Consolidated Shares.
gg) On March 6, 2024, the Company completed a non-brokered private placement of 274,074 common shares of the Company at a price of $0.135 per Unit for total consideration of $37,000.
hh) On June 18, 2024, the Company completed a non-brokered private placement of 2,154,000 common shares of the Company at a price of $0.125 per Unit for total consideration of $269,250.
ii) On January 13, 2023, the Company granted 760,000 restricted share units of the Company to certain consultants of the Company and on the same date issued 760,000 common shares for these restricted share units granted, valued at $0.60 per share for a total value of $456,000 recorded in stock based compensation.
jj) On January 18, 2023, the Company granted 60,000 restricted share units of the Company to the directors of the Company and on the same date issued 60,000 common shares for these restricted share units granted, valued at $0.70 per share for a total value of $42,000 recorded in stock based compensation.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
kk) On March 2, 2023, the Company acquired an additional 25 mining claims as part of the Montauban project in exchange for 20,000 common shares, valued at $0.50 per share for a total amount of $10,000.
ll) On May 24, 2023, the Company issued, after all the conditions had been met in connection with the purchase agreement, 5,000,000 common shares, valued at $0.50 per share for a total amount of $2,500,000, to DNA Canada Inc. to complete the transaction. The Company had already shown the shares as committed to be issued as part of shareholders' equity.
mm) On July 24, 2023, an additional 926,210 common shares were issued for debt related to the acquisition of Montauban, valued at $0.20 per share, for a total debt amount assumed of $185,242.
nn) On December 13, 2023, the Company granted 150,000 restricted share units of the Company to an officer of the Company and on the same date issued 150,000 common shares for these restricted share units granted, valued at $0.1325 per share for a total value of $19,875 recorded in stock based compensation.
oo) On March 6, 2024, the Company completed a non-brokered private placement of 274,074 units of the Company at a price of $0.135 per unit for total consideration of $37,000. Each unit consisted of one common share and one half of one common shares purchase warrant. Each whole warrant entitles the holder to acquire one additional common shares for $0.20 per share expiring March 6, 2025. All the proceeds of the private placement were allocated to the common shares.
pp) On April 10, 2024, the Company granted 1,625,000 restricted share units of the Company to certain officers and directors of the Company and on the same date issued 1,625,000 common shares for these restricted share units granted, valued at $0.135 per share for a total value of $219,375 recorded in stock based compensation.
qq) On June 18, 2024, the Company completed a non-brokered private placement of 2,154,000 common shares of the Company at a price of $0.125 per Unit for total consideration of $269,250.
rr) On May 23, 2024, the Company entered into a settlement agreement with a vendor whereby the Company issued 1,000,000 common shares of the Company valued at $150,000.
ss) On April 10, 2024 and June 3, 2024, the Company issued a total of 2,550,000 common shares to settle consulting fees payable to officers of the Company valued at $322,926. The Company recorded a loss $5,324 on settlement of the payable amount.
tt) On September 27, 2024, the Company, pursuant to a non-brokered private placement, issued 6,109,013 units at a price of $0.10 per unit, for aggregate gross proceeds of $610,901. Each unit consisted of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one additional common share at an exercise price of $0.15 per common share for a period of twelve (12) months from the closing date, subject to an acceleration clause in the event the trading price of the shares equals or exceeds $0.25 for a period of fifteen (15) consecutive days. In connection with the private placement, the Company will pay a cash finder's fee of $28,312 and issue 283,121 finder's warrants. The finder's Warrants will be exercisable into common shares for a period of twelve (12) months at an exercise price of $0.15 per common share.
uu) On November 12, 2024, the Company, pursuant to a non-brokered private placement, issued 222,222 units at a price of $0.18 per unit, for aggregate proceeds of $40,000. Each unit consists of one common share and one-half warrant, with two half-warrants forming one whole warrant exercisable at $0.27 for 18 months. The offering had no associated finders' fees.
On December 14, 2024, 190,000 of warrants were exercised for a total amount of $31,000.
There were no other significant events during the six-month period ended December 31, 2024 or to the date of this report.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
Exploration Summary
| Ottawa River | Montauban | Eagle River | Total | |
|---|---|---|---|---|
| Balance, June 30, 2023 | $ - | $ 6,702,534 | $ 2,257,025 | $ 8,959,559 |
| Acquisition of project | - | 195,527 | - | 195,527 |
| Acquisition of claims | - | - | - | - |
| Asset retirement obligation | - | (115,000) | - | 115,000 |
| - | 80,527 | - | 80,527 | |
| Exploration and evaluation expenditures | ||||
| Project management and travel | - | 43,498 | - | 43,498 |
| Acquisition of equipment | - | - | - | - |
| Legal | - | 222 | - | 222 |
| Engineering | - | - | - | - |
| Exploration | - | 85,148 | - | 85,148 |
| - | 128,869 | - | 128,869 | |
| Write-down of Eagle River project | - | - | (2,207,025) | (2,207,025) |
| Balance, June 30, 2024 | $ - | $ 6,911,930 | $ 50,000 | $ 6,961,930 |
| Acquisition of project | - | - | - | - |
| Acquisition of claims | - | - | - | - |
| Asset retirement obligation | - | - | - | - |
| - | - | - | - | |
| Exploration and evaluation expenditures | ||||
| Project management and travel | - | 7,847 | - | 7,847 |
| Acquisition of equipment | - | - | - | - |
| Legal | - | - | - | - |
| Engineering | - | - | - | - |
| Exploration | - | - | - | - |
| - | 7,847 | - | 7,847 | |
| Balance, December 31, 2024 | $ - | $ 6,919,776 | $ 50,000 | $ 6,969,776 |
Eagle River property, Quebec
During the year ended June 30, 2017, the Company acquired 1084409 B.C. Ltd., 1106632 B.C. Ltd., 1107136 B.C. Ltd., and 1106541 B.C. Ltd. which owns the Eagle River project located in the Windfall Lake gold district, Quebec.
On December 15, 2020, the Company received an NI 43-101 Technical Report on the Eagle River Property and it is the Company's intention to execute Phase 1 of the proposed Exploration plan ("Phase 1"). The initial Phase 1 program with an expected budget of $364,590. Phase 1 is expected to consist of a basal-till sampling program, general prospecting, and a rock outcrop sampling program; up to 200 samples are expected to be collected during a five-week field program. The work would be completed by a four-person field crew based in fly-in camps; it is likely helicopter assistance would be required to access portions of the Property. All basal-till samples for Phase 1 will be collected by a worker-portable drill rig to reach the basal till layer wherever possible. In November 2021, as part of Phase 1, the Company mobilized a Quebec based drill contractor to commence additional overburden drilling, a program intended to provide a preliminary characterization of the property overburden nd test basal till for potentially gold anomalism.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
In October 2021, the Company entered into a purchase agreement with 9093-6725 Quebec Inc. and Randon Ferderber to acquire a 100% interest in 10 claims totaling 565.3 hectares for cash consideration of $25,000 and a 2% net smelter return. The Company may buy back 1% of the net smelter return for $1 million and the remaining 1% net smelter return for $2 million. The claims are adjacent to the Company’s current Eagle River property holdings and would form part of the Company’s Eagle River Property.
In November 2021, the Company also commissioned a revised NI 43-101 Technical Report on the Eagle River Property to update for the additional work that were completed, title changes and the new claims that were acquired in October 2021.
On June 30, 2024, the Company determined that the Eagle River property value was impaired and, as a result, was written down to its fair value of $50,000. A write-off of $2,207,025 was taken on the property at June 30, 2024.
Montauban and Chavigny Townships, Quebec
On December 12, 2019, the Company and DNA Canada Inc. (“DNA”) entered into a purchase agreement whereby the Company has agreed to acquire mining claims and concessions located in the Montauban and Chavigny townships, in the county of Portneuf, in the province of Quebec, as well as buildings, immovables, and other assets and operating permits located on, or with respect to, the property.
The consideration to be paid to DNA will consist of the issuance of common shares of the Company (the “Shares”) in three tranches:
(i) 1.5 million shares to be issued four months and one day following the closing;
(ii) 1.5 million shares to be issued eight months following the closing; and
(iii) 2.0 million shares to be issued one year following the closing of the acquisition.
The 5,000,000 shares were ultimately issued to DNA Canada Inc. in their entirety on May 24, 2023. On July 24, 2023, an additional 926,210 common shares were issued for debt related to the acquisition of Montauban, valued at $0.50 per share for a total debt amount assumed of $463,105.
As part of the purchase agreement, the Company will acquire some equipment and assumed liabilities totalling $208,290, which has been entirely settled in cash. A nil balance of is included in accounts payable and accrued liabilities as at June 30, 2023 (2022 - $22,591).
Completion of the acquisition is conditional upon, among other things, receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange. The Company submitted the acquisition to the TSX Venture Exchange for approval and the Company received approval on November 23, 2020. The transaction was completed in the month of September 2021.
In November 2021, the Company engaged JPL GeoService Inc., a Quebec based company, to produce a NI 43-101 Technical Report and Mineral Resource estimate on the Montauban project. The NI 43-101 Technical Report was completed in February 2022 and is available for view on SEDAR at www.sedar.com.
As at June 30, 2024, the Company had incurred a total of $6,911,930 (June 30, 2023 - $6,702,534) which included the acquisition costs for the project, recording an asset retirement obligation, and engineering, legal, drilling program and project management and travel costs.
Ottawa River Project, Ontario
On May 30, 2022, the Company signed an option agreement with Nepean Bay Joint Venture Inc. (“NBJV”). Under the option agreement, NBJV grants the Company the right to earn 50% interests in the Ottawa River Project. NBJV is the legal and beneficial owner of the land use permit of 2.6 hectares within the bed of the Ottawa River and the owner of any salable residuals from the land use permit. The Company is required to pay $50,000 to NBJV upon signing of the option agreement, which it made in June 2022. In order to maintain
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
in force the Option granted, and to exercise the Option, the Company must incur any and all approved expenditures for two years to achieve commercial production (defined as when a minimum of 500 ounces of gold has been smelted in a Dore bar) and pay to NBJV $100,000 during each twelve month period from the date of the option agreement for two years or until commercial production has been achieved. The parties agreed that the Company will be the operator of the Ottawa River Project.
Subsequent to the year-end, the Company announced it had elected to terminate the earn-in Joint Venture Agreement with Nepean Bay Joint Venture signed on May 30, 2022 for the purpose of jointly exploring and developing the Ottawa River Gold Project. As a result of the agreement termination, Nepean Bay Joint Venture will retain 100% ownership of its Ottawa River Gold property interests. Previously capitalized costs associated with the joint venture were written off at June 30, 2023, amounting to a total of $241,923.
FINANCIAL
The consolidated financial statements have been prepared on the assumption that the Company is a going concern that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred a net loss of $1,160,922 during the six-month period ended December 31, 2024 (2023 - $570,546). The Company has a working capital deficit of $1,212,989 at December 31, 2024 (2023 - $1,146,704). The ability of the Company to continue as a going concern is dependent on obtaining the financing necessary to continue operations and, ultimately, on attaining profitable operations. Funding for operations is raised primarily through share offerings. No provision has been made in these consolidated financial statements for any adjustments to the carrying value of exploration and evaluation and other assets should the Company not be able to continue as a going concern. Such adjustments could be material.
Although there is no certainty, management is of the opinion that additional funding for future projects and operations can be raised as needed. If the Company is unsuccessful in obtaining adequate financing in the future due to prolonged economic decline, exploration activities will be postponed until market conditions improve. The Company's continuation as a going concern is dependent upon the successful implementation of its strategy to extract gold and silver from its tailings and rock projects and its ability to attain profitable operations and generate funds from and/or raise equity capital or borrowings sufficient to meet current and future obligations and ongoing operations. These material uncertainties, circumstances and conditions may cast significant doubt about the Company's ability to continue as a going concern. There are many external factors that can adversely affect general workforces, economies and financial markets globally. It is not possible for the Company to predict the duration or magnitude of adverse results of such external factors and its effect on the Company's business or ability to raise capital.
The Company has no significant source of operating cash flow and no revenues from operations as of December 31, 2024. The Company's Montauban project currently has identified reserves. The Company has limited financial resources. Substantial expenditures are required to be made by the Company to assemble a production mill to extract gold and silver.
Future revenue could be generated by the internal development of one or more of the projects, should this prove feasible. In the meantime, the Company intends to continue to rely upon the issuance of securities to finance its future activities. Still, there can be no assurance that such financing will be available on a timely basis or on terms acceptable to the Company.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
Results of Operations
Summary of Quarterly Results
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |
|---|---|---|---|---|
| Total assets | 7,052,377 | 7,603,036 | 7,114,533 | 9,567,679 |
| Working capital (deficiency) | (1,212,989) | (712,701) | (1,012,257) | (1,315,374) |
| Shareholders' equity | 3,236,388 | 3,730,230 | 3,427,673 | 5,586,007 |
| Loss and comprehensive loss | (749,525) | (411,396) | (2,914,823) | (202,134) |
| Loss per share | (0.16) | (0.01) | (0.09) | (0.01) |
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |
| --- | --- | --- | --- | --- |
| Total assets | 9,562,621 | 9,623,456 | 9,104,932 | 9,392,156 |
| Working capital (deficiency) | (1,146,704) | (893,734) | (611,055) | (391,470) |
| Shareholders' equity | 5,751,617 | 5,998,833 | 5,711,504 | 7,324,376 |
| Comprehensive (loss) | (320,467) | (250,079) | (1,864,400) | (1,028,607) |
| Loss per share | (0.01) | (0.01) | (0.07) | (0.04) |
Three-month period ended December 31, 2024 compared to December 31, 2023:
The Company had a net loss and comprehensive loss of $749,525 versus $320,467 in the comparative period, representing an increase of $34,387 or 135.6%. During the three-month period ended December 31, 2024, the Company had increases in Consulting fees of $50,390, Marketing expenses of $249,518 and Share-based payments of $125,931.
The following expenses increased during the six-month period ended December 31, 2024: Consulting fees (2024: $178,256, 2023: $127,866), Marketing expenses (2024: $249,964, 2023: $446), Office and sundry (2024: $14,200, 2023: $15,829) Filing fees and transfer agent (2024: $39,261, 2023:11,911) and Share=based payments (2024: $199,704, 2023: $73,773).
The following expenses decreased during the six-month period ended December 31, 2024: Insurance expenses (2024: $14,200, 2023: $15,829), and Professional fees (2024: $40,566, 2023: $84,168).
Six-month period ended December 31, 2024 compared to December 31, 2023:
The Company had a net loss and comprehensive loss of $1,160,922 versus $570,546 in the comparative period, representing an increase of $590,376 or 103.5%. During the six-month period ended December 31, 2024, the Company had increases in Consulting fees of $125,746 and Marketing expenses of $356,204.
The following expenses increased during the six-month period ended December 31, 2024: Consulting fees (2024: $383,949, 2023: $258,203), Marketing expenses (2024: $358,764, 2023: $2,560), Office and sundry (2024: $43,272, 2023: $5,026) and Share-based payments (2024: $199,704, 2023: $149,434).
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
The following expenses decreased during the six-month period ended December 31, 2024: Insurance expenses (2024: $24,504, 2023: $25,259) and Professional fees (2024: $73,260, 2023: $99,483).
Other than noted above, there were no other significant transactions during the six-month period ended December 31, 2024.
Selected Annual Information
The financial information as at and for the years ended June 30, 2024, June 30, 2023 and June 30, 2022 have been prepared in accordance with IFRS.
| Year Ended | ||||
|---|---|---|---|---|
| June 30, 2024 | June 30, 2023 | June 30, 2022 | ||
| Total income | - | - | - | |
| Loss and comprehensive loss for the year | (3,687,503) | (3,710,234) | (4,824,835) | |
| Basic and diluted loss per share | (0.11) | (0.15) | (0.32) | |
| Total assets | 7,114,533 | 9,104,932 | 8,765,711 | |
| Working capital (deficiency) | (1,012,257) | (611,055) | (659,542) |
Year ended June 30, 2024 compared to June 30, 2023
The Company had a net loss and comprehensive loss of $3,687,503 versus $3,710,234 in the comparative year, representing a decrease of $22,731 or 0.6%. The decrease in the net loss and comprehensive loss during the year ended June 30, 2024 is mainly attributable to lower consulting fees, lower share-based payments expense, lower professional fees expenses, higher exploration expenses, lower Indemnity and Part XII.6 taxes on flow-through expenses and a decrease in the amortization of the flow-through premium liability, offset by higher marketing expenses, insurance costs and interest expense.
The following expenses increased during the year ended June 30, 2024: Exploration expenses (2024 - $2,207,025 vs. 2023 - $246,928), Marketing expenses (2024 - $242,917 vs. 2023 - $96,561), Insurance costs (2024 - $64,308 vs. 2023 - $23,808), Interest expense (2024 - $22,182 vs. 2023 - $141) and Loss on settlement of accounts payable (2024 - $5,324 vs. 2023 - $nil).
The following expenses decreased during the year ended June 30, 2024: Consulting fees (2024 - $516,405 vs. 2023 - $875,754), Filing fees and transfer agent (2024 - $34,336 vs. 2023 - $49,296), Investor relations (2024 - ($137) vs. 2023 - $30,000), Loss on write-off loans receivable (2024 - $nil vs. 2023 - $184,955), Professional fees (2024 - $147,658 vs. 2023 - $186,796), Office and sundry (2024 - $7,094 vs. 2023 - $8,581), Travel (2024 - $1,211 vs. 2023 - $5,429), Share-based payments (2024 - 437,470 vs. 2023 - $1,179,408) Indemnity and Part XII.6 taxes on flow-through expenses (2024 - $nil vs. 2023 - $929,782) and Amortization of flow-through premium liability (2024 - $nil vs. 2023 - ($112,797)).
Other than as noted above, there were no other significant transactions during the year ended June 30, 2024.
Liquidity and Capital Resources
ESGold's exploration and evaluation asset activities do not provide a source of income and the Company therefore has a history of losses and an accumulated deficit. However, given the nature of our business, the
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
results of operations as reflected in the net losses and losses per share do not provide meaningful interpretation of our valuation.
The Company has financed its operations to date primarily through the issuance of common shares. The Company will continue to seek capital through the issuance of common shares.
Operating activities: The Company does not generate any revenues and generally does not receive any cash from operating activities. Net cash used from operating activities during the six-month period ended December 31, 2024 was $816,403 compared to net cash provided from operating activities of $231,187 during the comparative year ended December 31, 2023. The increase in cash used in operating activities is primarily due to a higher loss for the six-month period and a decrease in working capital from sales tax receivable and prepaid expenses.
Investing activities: Net cash used in investing activities during the six-month period ended December 310, 2023 was $45,338 compared to $10,944 during the comparative six-month period ended December 31, 2023. This is entirely due to lower exploration costs incurred on the Company’s mineral projects.
Financing activities: Cash inflow from financing activities during the six-month period ended December 31, 2024 was $759,932 compared to a cash inflow of $163,120 during the comparative six-month period ended December 31, 2023. The cash received during the six-month period ended December 31, 2024 was mainly from net proceeds from a non-brokered private placement of $791,651.
The consolidated financial statements do not reflect adjustments, which could be material, to the carrying value of assets and liabilities, which may be required should the Company be unable to continue as a going concern.
Stock Options
Stock option transactions are summarized as follows:
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
| Number | Weighted Average Exercise Price | |
|---|---|---|
| Outstanding as at June 30, 2022 | 1,655,000 | 0.91 |
| Granted, September 13, 2022 | 175,000 | 0.85 |
| Granted, January 13, 2023 | 200,000 | 0.60 |
| Granted, January 18, 2023 | 290,000 | 0.70 |
| Expired/Forfeited | (330,000) | (1.42) |
| Outstanding as at June 30, 2023 | 1,990,000 | 0.76 |
| Granted | 560,000 | 0.17 |
| Expired/Forfeited | (70,000) | 1.50 |
| Outstanding as at June 30, 2024 | 2,480,000 | 0.60 |
| Granted | 2,200,000 | 0.16 |
| Expired/Forfeited | (1,160,000) | (0.42) |
| Outstanding as at December 31, 2024 | 3,520,000 | 0.29 |
There were 3,520,000 stock options outstanding as at December 31, 2024 (2023 - 2,030,000). A total of 3,520,000 stock options are exercisable as at December 31, 2024 (2023 - 1,957,500). The details are summarized as follows:
| Number of Shares | Number of Shares | Expiry Date | |
|---|---|---|---|
| Exercisable | Exercise Price | ||
| 1,550,000 | 1,550,000 | 0.125 | October 15, 2025 |
| 400,000 | 400,000 | 0.24 | November 21, 2025 |
| 250,000 | 250,000 | 0.24 | May 26, 2026 |
| 150,000 | 150,000 | 1.50 | October 5, 2026 |
| 60,000 | 60,000 | 0.50 | May 3, 2027 |
| 330,000 | 330,000 | 0.50 | May 30, 2027 |
| 200,000 | 200,000 | 0.60 | January 12, 2026 |
| 80,000 | 80,000 | 0.70 | January 17, 2028 |
| 500,000 | 500,000 | 0.135 | March 1, 2026 |
| 3,520,000 | 3,520,000 | 0.29 |
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
Warrants
Warrant transactions are summarized as follows:
| Number | Weighted Average Exercise Price | |
|---|---|---|
| Outstanding at June 30, 2023 | 2,204,060 | 0.93 |
| Granted, March 2024 - Private Placement Warrants | 137,037 | 0.20 |
| Expired | (2,204,060) | 0.93 |
| Outstanding at June 30, 2024 | 137,037 | 0.20 |
| Granted, September 2024 - Private Placement Warrants | 6,304,134 | 0.15 |
| Granted, November 2024 - Private Placement Warrants | 111,111 | 0.27 |
| Exercised | (190,000) | (0.16) |
| Outstanding at December 31, 2024 | 6,362,282 | 0.15 |
A total of 6,167,161 share purchase warrants were outstanding at December 31, 2024 (2023 - 620,760). 137,037 warrants were issued on March 6, 2024 as part of a private placement financing, and expire on March 6, 2025. 6,304,134 warrants were issued on September 27, 2024 as part of a non-brokered private placement financing, which included 195,121 of broker warrants, and expire on September 27, 2025. 111,111 warrants were issued on November 6, 2024 as part of a private placement financing, and expire on May 6, 2026.
Details of share purchase warrants outstanding at December 31, 2024:
| Number of warrants | Exercise price | Expiry date | Remaining life (Years) |
|---|---|---|---|
| 87,037 | 0.20 | March 6, 2025 | 0.18 |
| 6,164,134 | 0.15 | September 27, 2025 | 0.74 |
| 111,111 | 0.27 | May 6, 2026 | 1.35 |
| 6,362,282 | 111,111.00 | 0.74 |
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
Contractual Obligations
Except as described herein or in the Company’s consolidated financial statements as at December 31, 2024, the Company had no material financial commitments.
Off Statement of Financial Position Arrangements
At December 31, 2024, the Company had no material off statement of financial position arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to the Company.
Capital Resources
The Company will continue to seek capital through public markets by issuing common shares pursuant to private placements. The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to externally imposed capital requirements.
Outstanding Share Data
As at the date of this report, the Company had 54,393,247 common shares issued and outstanding, 6,362,282 Share Purchase Warrants, 3,520,000 share options and nil restricted shares units that are convertible into common shares. See Note 5 Share Capital and Reserves in the Consolidated Financial Statements.
Related Party Transactions
Key management personnel comprise of the Chief Executive Officer, the President, the Chief Financial Officer and the Directors of the Company.
A total of $370,000 was included in the financial statements as earned by the Chief Executive Officer, the President and the Chief Financial Officer during the six-month period ended December 31, 2024 (2023 - $252,500). Amounts included in accounts payable from these officers at December 31, 2024 was $Nil (2023 - $149,269).
Financial Risk Factors
The Company is exposed to varying degrees to a variety of financial instrument related risks:
Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to cash, receivables and advances. The Company’s cash is held at a large Canadian financial institution in interest bearing accounts for which management believes the risk of loss to be minimal. Receivables consist of GST receivable from the government of Canada.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach at managing liquidity risk is have sufficient liquidity to meet liabilities when due.
As at December 31, 2024, the Company had a working capital deficit of $1,212,989 (2023 - $1,146,704) and current liabilities of $1,293,990 (2023 - $1,174,004). While the Company has been successful in obtaining its required funding in the past there is no assurance that this financing will be extended or that
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
any additional future financing will be available. The Company continues to investigate financing options, including private placements.
The Company manages liquidity risk through its capital management as outlined below. Accounts payable and accrued liabilities are due within one year.
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates and commodity and equity prices.
a) 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.
b) Price risk
The Company is exposed to price risk with respect to commodity prices. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.
c) Foreign currency risk
The Company’s foreign exchange risk arises from transactions denominated in other currencies, primarily through the Company’s subsidiary located in the USA. Through this, the Company is exposed to foreign currency risk on fluctuations related to cash, accounts payable and accrued liabilities that are denominated in U.S. dollars. The Company does not use derivative instruments to reduce its exposure to foreign currency risk nor has it entered into foreign exchange contracts to hedge against gains or losses from foreign exchange fluctuations.
Risk Factors
Companies in the exploration stage face a variety of risks and, while unable to eliminate all of them, the Company aims at managing and reducing such risks as much as possible. The Company faces a variety of risk factors such as project feasibility and practically, risks related to determining the validity of mineral property title claims, commodities prices and environmental laws and regulations. Management monitors its activities and those factors that could impact them in order to manage risk and make timely decisions.
Amendments to existing standards and new amendments not yet effective
The Company adopted the following amendments to accounting standards, which are effective for annual reporting periods beginning on or after January 1, 2023:
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) – the amendments require that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policy.
The amendment was applied effective July 1, 2023 and did not have a material impact on the Company's consolidated financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements – IFRS 18 will replace IAS 1, Presentation of Financial Statements which aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from 1 January 2027. Companies are permitted to apply IFRS 18 before that date.
The Company is not yet able to determine the impact to the consolidated financial statements from the adoption of this standard.
Certain pronouncements were issued by the IASB but are not yet effective as at December 31, 2024. The Company intends to adopt these standards when they become effective but does not expect these amendments to have a material effect on the consolidated financial statements of the Company.
Critical Accounting Policies and Estimates
The Company's accounting policies are described in Notes 2 and 3 of its consolidated financial statements for the year ended June 30, 2024. Management considers the following policies to be the most critical in understanding the judgments that are involved in the preparation of the consolidated financial statements and the uncertainties that could impact its results of operations, financial condition and cash flows:
Use of estimates and significant judgments
The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported expenses during the year. Actual results could differ from these estimates.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to:
The Company uses significant judgement in assessing for signs of impairment on the exploration and evaluation assets. Management has determined that exploration, evaluation and related costs incurred which were capitalized may have future economic benefits and may be economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geologic and other technical information, history of conversion of mineral deposits with similar characteristics to its own properties to proven and probable mineral reserves, scoping and feasibility studies, accessible facilities and existing permits.
The valuation of shares issued in non-cash transactions. Generally, the valuation of non-cash transactions is based on the value of the good or services received. When this cannot be determined, it is based on the fair value of the non-cash consideration. When non-cash transactions are entered into with employees and those providing similar services, the non-cash transactions are measured at the fair value of the consideration given up using market prices.
The determination of deferred income tax assets and liabilities is inherently complex and requires making certain estimates and assumptions about future events. While income tax filings are subject to audits and reassessments, the Company has adequately provided for all income tax obligations. However, changes in facts and circumstances as a result of income tax audits, reassessments, jurisprudence and any new legislation may result in an increase or decrease in our provision for income taxes.
Share-based payments is subject to estimation of the value of the award at the date of grant using pricing models such as the Black-Scholes option valuation model. The option valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Because the Company's stock options have characteristics significantly different from those of traded options and because the subjective input assumptions can materially affect the calculated fair value, such value is subject to measurement uncertainty.
ESCold Corp.
Management's Discussion and Analysis
For the three-month period ended September 30, 2024
The Company utilizes significant judgement in assessing its compliance with relevant flow through financing tax requirements including the determination of qualified eligible expenditures to reduce flow through spending obligations.
Share-based payments
The Company grants stock options to acquire common shares of the Company to directors, officers, employees and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes, or provides services similar to those performed by an employee.
The fair value of stock options is measured on the date of grant, using the Black-Scholes option pricing model, and is recognized over the vesting period. Consideration paid for the shares on the exercise of stock options is credited to share capital. Upon expiry or forfeiture, the recorded value is transferred to deficit.
In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of goods or services received.
Subsequent events
The following events occurred subsequent to December 31, 2024:
a) On January 14, 2025 and February 7, 2025, the Company issued 5,714,013 common shares pursuant to the exercise of share purchase warrants for a total amount of $857,102.
b) On February 20, 2025, the Company issued 50,000 common shares pursuant to the exercise of stock options for a total amount of $6,250.
c) On February 25, 2025, the Company completed a private placement of 1,000,000 Quebec critical mineral flow-through shares at $0.30 per flow-through share for gross proceeds of $300,000. The Company will pay cash finders' fees of $18,000 in connection with the offering.
ESCold Corp.