Giant Mining Corp. — Management Reports 2020

Jun 17, 2020

Bam Bam Resources Corp. (formerly known as KOPR Point Ventures Inc.) Management Discussion and Analysis For the period ended March 31, 2020

This Management's Discussion and Analysis (“MD&A”) of Bam Bam Resources Corp. (the ”Company”) provides information that management believes is relevant to the assessment and understanding of the Company’s results of operations and financial condition for the period ended March 31, 2020. This MD&A supplements the audited consolidated financial statements of the Company and the notes thereto for the year ended June 30, 2019, which were prepared in accordance with International Financial Reporting Standards (“IFRS”). This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and corresponding notes for the fiscal year ended June 30, 2019 and related MD&A. This MD&A is prepared as of June 16, 2020.

Except as otherwise disclosed, all dollar figures included herein are quoted in Canadian dollars. The following discussion and analysis provides information that management believes is relevant to the assessment and understanding of the Company’s results of operations and financial condition. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com.

FORWARD-LOOKING INFORMATION

This discussion contains “forward-looking statements” that involve risks and uncertainties. Such information, although considered to be reasonable by the Company’s management at the time of preparation, may prove to be inaccurate and actual results may differ materially from those anticipated in the statements made.

This MD&A may contain forward-looking statements that reflect the Company’s current expectations and projections about its future results. When used in this MD&A, words such as “estimate”, “intend”, “expect”, “anticipate” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date otherwise specifically indicated herein.

Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this MD&A, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

COMPANY OVERVIEW

Bam Bam Resources Corp. (formerly KOPR Point Ventures Inc.) (“the Company”) was incorporated on March 10, 2017 under the laws of British Columbia. The address of the Company’s corporate office and its principal place of business is 2831 Wembley Drive, North Vancouver, BC.

The Company was listed on the Canadian Securities Exchange (“CSE”) under the symbol “NP” subsequent to the completion of its Initial Public Offering on December 19, 2017.

The Company’s principal business activities include the acquisition and exploration of mineral property assets. As at March 31, 2020, the Company had not yet determined whether the Company’s mineral property assets contain ore reserves that are economically recoverable. The recoverability of amount shown for exploration and evaluation asset is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and the future profitable production from the property or realizing proceeds from its disposition.

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These condensed interim consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at March 31, 2020, the Company has not generated any revenues, has cash flow of $24,971 from operations, has a working capital deficit of $140,616, and has an accumulated deficit of $10,105,929. The Company’s continuation as a going concern is dependent on its ability to generate future cash flows and/or obtain additional financing. Management intends to finance operating costs over the next twelve months with cash on hand, loans from directors and companies controlled by directors, and/or private placements of common shares. There is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These factors indicate the existence of a material uncertainty that may cast significant doubt on the ability of the Company to continue as a going concern. These condensed interim consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

HIGHLIGHTS

• On August 12, 2019, the Company received loan proceeds of $25,000 from a non-related party which is secured by a promissory note, non-interest bearing, and due on demand.

• On August 14, 2019, the Company received loan proceeds of $33,000 from the President of the Company which is secured by a promissory note, non-interest bearing, and due on demand.

• On September 12, 2019, the Company announced it had acquired additional public land at the Majuba Hill Property. The Company staked 35 new unpatented lode claims bringing the project to 4,821 total acres controlled by unpatented lode claims, patented lode claims, and privately owned land.

• Effective December 5, 2019 the Company changed its name from KOPR Point Ventures Inc. to Bam Bam Resources Corp. to more clearly reflect corporate direction and the Company’s exploration mandate.

• On January 14, 2020 the Company announced the appointment of Mr. Philip Kwong to the Board of Directors. The Company accepted the resignation of Mr. John Ryan, who will remain on the Advisory Board of the Company.

• On February 25, the Company closed an oversubscribed non-brokered private placement financing for total gross proceeds of $1,403,700. The Company has allotted and issued 28,074,000 units at a price of $0.05 per Unit. Each Unit is comprised of one common share and one warrant. Each Warrant will entitle the holder to purchase one additional common share for a period of eighteen months at a price of $0.08 per share, subject to accelerated expiry. In relation to the Private Placement, the Company has paid finder’s fees totaling $13,000 and issued an aggregate 260,000 finder’s warrants to arm’s-length parties, of which 232,000 are exercisable into Units at price of $0.05 per unit and 28,000 are exercisable into common shares at a price of $0.08 per share, all valid for a period of up to eighteen months. The Company will use the proceeds from the Private Placement towards general working capital. All securities issued are subject to a four-month-and-one-day hold period expiring on June 26, 2020.

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RESULTS OF OPERATIONS

Comparison of results of operations of the three and nine months ended March 31, 2020 and 2019:

	Three months ended	Three months ended	Nine months ended	Nine months ended
	March 31,	March 31,	March 31,	March 31,
	2020	2019	2020	2019
	$	$	$	$
Expenses
Consulting fees	21,000	685,994	71,736	2,093,975
Foreign exchange loss	18,817	(2,197)	18,817	10,696
General and administrative	79,193	49,563	133,956	86,140
Investor relations	152,187	464,988	152,187	1,383,731
Management fees	72,600	105,000	176,600	275,000
Professional fees	1,280	16,876	4,617	172,453
Rent	-	-	-	2,000
Share-based payments	-	24,704	-	24,704
Transfer agent and filing fees	6,018	15,340	27,443	35,062
Travel	35,991	47,818	44,768	69,146
Total expenses	387,086	1,408,086	630,124	4,152,907

During the period ended March 31, 2020, the Company recorded an operating loss of $630,124, a decrease of $3,522,783, compared to the loss of $4,152,907 recorded for the period ended March 31, 2019. The increase in operating expenses is primarily the result of the decrease in business activities during the period ended March 31, 2020 compared to the period ended March 31, 2019.

SUMMARY OF QUARTERLY RESULTS

	Three months ended
	Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019
Net loss	$ (387,086) $ (136,119) $ (106,919) $ (1,911,446)
Basic and diluted lossper share	$ (0.01) $ (0.01) $ (0.01) $ (0.17)
	Three months ended
	Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018
Net loss	$ (1,408,086) $ (2,164,919) $ (1,362,462) $ (2,136,174)
Basic and diluted lossper share	$ (0.11) $ 0.38 $ (0.13) $ (1.93)

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EXPLORATION AND EVALUATION ASSETS

	Cobalt	Empire	Moosehead	Majuba Hill
	Property	Property	Property	Property	Total
	$	$	$	$	$
Acquisition costs:
Balance, June 30, 2018	167,000	609,000	–	97,262	873,262
Additions	–	–	125,750	84,305	210,055
Impairment	(167,000)	(609,000	–	–	(776,000)
Balance, June 30, 2019	–	–	125,750	181,567	307,317
Additions	–	–	–	–	–
Impairment	–	–	–	–	–
Balance,March 31,2020	–	–	125,750	181,567	307,317
Exploration costs:
Balance, June 30, 2018	–	–	–	50,247	50,247
Additions	–	6,560	23,197	194,054	223,811
Impairment	–	(6,560)	–	–	(6,560)
Balance, June 30, 2019	–	–	23,197	244,301	267,498
Additions	–	–	–	586,441	586,441
Impairment	–	–	–	–	–
Balance,March 31,2020	–	–	23,197	830,742	853,939
Carrying amounts:
Balance,June 30,2019	–	–	148,947	425,868	574,815
Balance,March 31,2020	–	–	148,947	1,012,309	1,161,256

Cobalt Property

On February 22, 2018, the Company entered into an option agreement, to acquire a 100% interest in three licences and 15 mineral claims located in the province of Newfoundland Labrador, subject to a 2% net smelter royalty. The Company paid $5,000 and issued 500,000 common shares and has agreed to issue a further 500,000 shares on or before the first anniversary date of the agreement. The Company has also issued 100,000 shares as a finders’ fee on the acquisition.

During the year ended June 30, 2019, the Company decided not to further proceed with the exploration of the property based on a mineral assessment and reassessment of corporate direction. As a result, the Company recorded a write-down of $167,000.

Empire Lithium Property

The Company acquired interest in the Empire Lithium Property through the acquisition of Goldhat and Goldhat US. The Empire Lithium Property is located in the San Emidio Desert, Nevada.

Under the long-term lease, Goldhat US will be responsible for annual lease payments of US$15,000 beginning in in year one and increasing periodically to US$50,000 per annum after the 10[th] anniversary. Mineral products from the Empire Lithium Property are subject to 2% net smelter return, which may be purchased for US$1,000,000, and a further 1% net smelter return that may not be purchased. There is also a two-year work commitment under the lease of US$75,000 per year.

During the year ended June 30, 2019, the Company decided not to further proceed with the exploration of the Empire Lithium Property based on technical advice with consultation of the Board; as a result, the Company impaired the carrying value of $615,560 and charged to the statement of loss and comprehensive loss.

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Majuba Hill Copper Project

On May 28, 2018 (“Effective Date”), the Company entered into an Exploration Lease and Option to Purchase Agreement with Majuba Hill LLC, a Nevada limited liability company (the “Owner”), for the Majuba Hill Copper Project in Nevada, USA. The Owner has granted to the Company the exclusive option and right to acquire ownership of the property (the “Option”) for the final purchase price of US$4,000,000 due on or before May 28, 2028 and a series of minimum payments (“Minimum Payments”).

• i) Cash payments to be made:

• US$50,000 upon execution of the agreement; (paid)

• US$50,000 on or before May 28, 2019 (paid);

• US$75,000 on or before May 28, 2020; (paid)

• US$100,000 on or before May 28, 2021;

• US$125,000 on or before May 28, 2022 and each subsequent anniversary of the agreement date;

• ii) Shares to be issued:

• 25,000 upon execution of the agreement (issued);

• 25,000 on or before May 28, 2019 (issued);

• 25,000 on or before May 28, 2020; (issued)

• 25,000 on or before May 28, 2021; and

• iii) Exploration expenditures to be incurred:

• US$100,000 on or before May 28, 2019 (incurred);

• US$350,000 on or before May 28, 2020; (incurred)

The Company will also pay to the Owner a production royalty (the “Royalty”) based on the Net Smelter Returns from the production and sale of Minerals from the Property. The Royalty percentage rate applicable to the production of Precious Metals will be three percent (3%). The Royalty percentage rate applicable to the production of Minerals, except Precious Metals, shall be one percent (1%).

Moosehead Gold Project

On August 1, 2018, the Company acquired the Moosehead Gold Project located close to the town of Grand Falls-Windsor in North-Central Newfoundland. In addition, the Company also acquired claims on Thwart Island in St. John’s Bay. On August 17, 2018, in connection with the acquisition of the Moosehead Gold Project the Company made a cash payment of $90,000 and issued 65,000 common shares with a fair value of $35,750.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s activities have been funded through equity financings and the Company expects it will continue to be able to utilize this source of financing until it develops cash flow from future operations.

There can be no assurances the Company will be successful in its endeavors. If such funds are not available or other sources of finance cannot be obtained, then the Company will be forced to curtail its activities to a level for which funding is available or can be obtained.

As at March 31, 2020 the Company had cash of $39,097 compared to a June 30, 2019 cash balance of $14,126.

The Company has not pledged any of its assets as security for debt financings and is not subject to any debt covenants. As of March 31, 2020, the financial assets of the Company compared to the significant property obligations and other expenses the Company has committed to indicates the existence of a material uncertainty of the Company’s ability to continue as a going concern.

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OFF-BALANCE SHEET ARRANGEMENT

The Company has no off-balance sheet arrangements.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS
	March 31,	2020	March 31, 2019
	$		$
Management and consulting fees		176,600	275,000
			3,765
	March 31,	2020	June 30, 2019
	$		$
Due to (from) related parties		136,066	160,765

CONTRACTUAL OBLIGATIONS

As at March 31, 2020, the Company is obligated under various leases and earn-in agreements related to its exploration and evaluation assets. These obligations are more fully described in Note 6 of the consolidated financial statements for the year ended June 30, 2019.

NEW ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

A number of new standards, and amendments to standards and interpretations, are not yet effective for the period ended March 31, 2020 and have not been applied in preparing these consolidated financial statements.

New standard IFRS 16, “Leases”

The Company has not early adopted this new standard and it is not expected to have a significant impact on the Company’s consolidated financial statements.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

• (a) Fair Values

Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

As at March 31, 2020, the levels in the fair value hierarchy into which the Company's financial assets and liabilities measured and recognized in the statement of financial position at fair value are categorized are as follows:

	Level 1	Level	2	Level	3
	$	$		$
Cash	39,097		–		–

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The fair values of other financial instruments, which include GST receivable, and accounts payable and accrued liabilities, and loan payable, approximate their carrying values due to the relatively short-term maturity of these instruments.

(b) Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is in its cash and GST receivable. The risk in cash is managed through the use of a major financial institution which has a high credit quality as determined by rating agencies. GST receivable consists of GST refunds due from the Government of Canada.

(c) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not have any assets or liabilities that are affected by changes in interest rates.

(d) Foreign Exchange Rate Risk

Foreign exchange risk is the risk that the Company’s financial instruments will fluctuate in value as a result of movements in foreign exchange rates. A portion of the Company’s cash and accounts payable and accrued liabilities is denominated in U.S. dollars. The Company has not entered into foreign exchange rate contracts to mitigate this risk. As at March 31, 2020, the Company is not exposed to any significant foreign exchange rate risk.

(e) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company requires funds to finance its business development activities. In addition, the Company needs to raise equity financing to carry out its exploration programs. There is no assurance that financing will be available or, if available, that such financing will be on terms acceptable to the Company.

(f) Price Risk

The Company is exposed to price risk with respect to commodity prices. The Company’s ability to raise capital to fund exploration and development activities is subject to risks associated with fluctuations in the market price of commodities.

OUTSTANDING SHARE DATA

Common Shares

As at June 16, 2020, the Company had 52,241,510 common shares issued and outstanding.

Share Purchase Warrants

As at June 16, 2020, the following share purchase warrants were outstanding:

Number of	Exercise
warrants	price
outstanding	$	Expiry date
10,300,000	0.25	March 30, 2020
667,300	0.85	August 17, 2020
28,102,000	0.08	August 25, 2021
232,000	0.05	August 25, 2021*
39,301,300

*Exercisable into units

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Stock Options

As at June 16, 2020, the following stock options were outstanding:

Number of	Exercise
options	price
outstanding	$	Expiry date
480,000	0.10	October 8, 2020
500,000	0.06	April 15, 2021
390,000	0.07	April 23, 2021
3,500,000	0.16	May 25, 2021
4,870,000

SUBSEQUENT EVENTS

• On April 14 Daniel-Carl Eigenmann agreed to join the Company’s Board of Advisors. Mr. Eigenmann is a founder and the President of the Board of Directors for Iko Capital AG, a leading Wealth Management firm based in Zug, Switzerland. In his role at Iko Capital AG, Mr. Eigenmann is responsible for compliance with FINMA, the Swiss Financial Market Supervisory Authority, as well as regular review of their portfolio for money laundering and compliance within the investment guidelines of managed accounts for ultra-high net worth individuals (UHNWI).

• On April 15, the Company issued 2.5 million incentive stock options at a strike price of $0.06 per share to insiders and consultants of the Company. The options are valid for a one year term and are governed by the terms of the Company’s stock option plan

• On April 27, after reassessment of historic drilling and exploration, the geological team at Majuba Hill are pleased to report that they have outlined three gold zones associated with the Majuba Hill copper (gold) porphyry project.. The ongoing, historical data review highlighted significant gold values associated with the copper in historic drill holes, surface rock chips, and soil sampling. This data suggests that Majuba Hill is best classified as a copper-gold porphyry.

• On April 27, the Company issued 1,890,000 incentive stock options at a strike price of $0.07 per share to consultants of the Company. The options are valid for a one-year term and are governed by the terms of the Company’s stock option plan.

• On May 4, Mr. John Percival has agreed to join the Company's Board of Advisors. Mr. Percival is an accomplished entrepreneur and board member of several private and public mining companies in Australia, Canada and the United States. Previously as General Manager of Investments with Barclays Bank New Zealand Ltd., he was a successful fund manager where he managed over $450-million. Recently, he has played an integral role in raising over $100- million for resource investments in both Australia and New Zealand.

• On May 19, the Company announced that completed the first core hole for the 2020 Phase 1 drilling program at the Majuba Hill Property. The hole was designed to expand the copper, gold, and silver mineralization identified in the historic drill data. The hole was halted after intersecting historic workings. Hole MHB-1 is a vertical core hole drilled to 311.5 feet (94.9 M).

• On May 25, the Company announced that it had completed the second core hole ("MHB-02") of the 2020 Phase 1 drilling program at the Majuba Hill Property. The hole was designed to expand the copper, gold, and silver mineralization identified in the historic drill data. Hole MHB-02 was drilled at a -45° inclination on an 045 azimuth to 474.5 feet.

• On May 25, the Company issued an aggregate of 3,500,000 incentive stock options to officers, directors and consultants of the Company. The Options are exercisable at $0.16 per share for a period of one year from the date of grant. The Options have been granted under and are governed by the terms of the Company's incentive stock option plan.

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• On May 28, announced that the Majuba Hill Property, has been chosen as one of three new theses to be prepared under supervision at the University of Nevada's ("UNR") Ralph J. Roberts Center for Research in Economic Geology ("CREG").

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