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Giant Mining Corp. Management Reports 2022
47488_rns_2022-11-23_d64cb1ec-5a36-44f6-97b0-725ac1b60db2.pdf
Management Reports
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Management Discussion and Analysis For the period ended September 30, 2022
This Management's Discussion and Analysis ("MD&A") of Majuba Hill Copper Corp. (formerly Bam Bam Resources Corp.) (the "Company", "JUBA") 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 September 30 2022 This MD&A supplements the condensed interim consolidated financial statements of the Company and the notes thereto for the period ended September 30 2022. 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, 2022, which were prepared in accordance with International Financial Reporting Standards ("IFRS"). This MD&A is prepared as of November 23, 2022.
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
Majuba Hill Copper Corp. (formerly Bam Bam Resources Corp.) ("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 700-838 West Hastings Street, 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. 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.
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 September 30, 2022, the Company had cash of $955,005 compared to a June 30, 2022 cash balance of $1,044,966. The Company has not pledged any of its assets as security for debt financings and is not subject to any debt covenants.
HIGHLIGHTS
- On July 22, 2022, the Company issued 10,500,000 units at $0.20 per unit for proceeds of $2,100,000. Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $0.25 per common share expiring on July 22, 2023.
- On August 16, 2022, the Company issued 6,713,830 units at $0.20 per unit for proceeds of $1,342,766. Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $0.25 per common share expiring on August 16, 2023.
- On August 24, 2022, the Company granted an aggregate of 1,470,588 restricted share units to a consultant of the Company, valid for a one-year term.
- On September 1, 2022, the Company granted an aggregate of 2,100,000 restricted share units to consultants of the Company, valid for a one-year term.
- On September 14, 2022, the Company announced that it had engaged Creative Direct Marketing Group, Inc. to act as its agent in the procurement of tangible and intangible personal property and media in furtherance of a program of advertising for a term of up to five years, in consideration of an aggregate US$1,562,589. The Company also renewed its agreement with TD Media to provide digital marketing services for a four week term in consideration of a payment of US$150,000.
RESULTS OF OPERATIONS
| Three monthsendedSeptember30,2022$ | Three monthsendedSeptember30,2021$ | |
|---|---|---|
| Expenses | ||
| Consulting fees | 376,901 | 82,900 |
| General and administrative | 24,995 | 21,166 |
| Investor relations | 976,315 | 814,093 |
| Management fees | 155,000 | 115,500 |
| Professional fees | 10,915 | 13,342 |
| Rent | – | 7,200 |
| Share-based payments | 1,340,000 | 184,919 |
| Transfer agent and filing fees | 14,472 | 8,364 |
| Travel | 2,158 | 4,775 |
| Total expenses | 2,901,256 | 1,252,259 |
During the period ended September 30, 2022, the Company had a net loss of $2,901,256 compared to a loss of $1,252,259 for the period ended September 30, 2021. The increase in operating expenses is largely the result of an increase in share-based payments of $1,155,081 and an increase in consulting fees of $294,001, as the Company engaged in business development, financings and continued to increase market awareness.
| SUMMARYOF QUARTERLY RESULTS | |
|---|---|
| --------------------------------- | -- |
| Threemonthsended | ||||||||
|---|---|---|---|---|---|---|---|---|
| Sep30, 2022 | Jun30, 2022 | Mar31, 2022 | Dec31, 2021 | |||||
| Net loss | $ | (2,901,256) | $ | (1,094,554) | $ | (2,968,101) | $ | (2,572,651) |
| Basic and dilutedlossper share | $ | (0.09) | $ | (0.06) | $ | (0.02) | $ | (0.02) |
| Threemonths ended | ||||||||
| Sep30, 2021 | Jun | 30, 2021 | Mar | 31, 2021 | Dec | 31, 2020 | ||
| Netloss | $ | (1,252,259) | $ | (3,815,783) | $ | (4,161,443) | $ | (1,380,634) |
EXPLORATION AND EVALUATION ASSETS
| Majuba Hill Property | |
|---|---|
| $ | |
| Acquisition costs: | |
| Balance, June 30, 2021 | 405,493 |
| Additions | 159,472 |
| Balance, June 30, 2022 | 564,965 |
| Additions | – |
| Balance, September30, 2022 | 564,965 |
| Exploration costs: | |
| Balance, June 30, 2021 | 1,893,272 |
| Assay and analysis | 316,052 |
| Camp and crew costs | 54,255 |
| Drilling | 1,158,045 |
| Geological consulting | 360,792 |
| Transportation | 37,755 |
| Other expenses | 378,347 |
| Balance, June 30, 2022 | 4,198,518 |
| Assay and analysis | 50,318 |
| Camp and crew costs | 23,657 |
| Drilling | 1,418,727 |
| Geological consulting | 123,231 |
| Transportation | 28,311 |
| Other expenses | 122,933 |
| Balance, September30, 2022 | 5,965,695 |
| Carrying amounts: | |
| Balance, June 30, 2022 | 4,763,483 |
| Balance, September30, 2022 | 6,530,660 |
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 (paid);
- US$125,000 on or before May 28, 2022 and each subsequent anniversary of the agreement date;
- ii) Shares to be issued:
- 7,500 upon execution of the agreement (issued);
- 7,500 on or before May 28, 2019 (issued);
- 7,500 on or before May 28, 2020 (issued);
- 7,500 on or before May 28, 2021 (issued); 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%).
The Company continued with their on-going, exploration and drilling programs at the Majuba Hill Copper Porphyry Project in Pershing County, Nevada. The 2021 exploration programs were based on the previous year's work by Bam Bam combined with the historic database.
In May 2021 Zonge International completed a 49.5 line km Induced Polarization/Resistivity (IP) program to expand and extend the existing deep IP coverage. James Wright, a highly respected consulting geophysicist in Nevada, provided technical oversight and interpretation. In June 2021 Wright reported that the IP survey had identified a large, oval-shaped resistivity response on lines L7 to L9 northeast of the known oxide mineralization. This "789 Zone" has a 1500 m diameter and the eastern side of the 789 Zone is coincident with the north trending granodiorite/remanent magnetic zone.
Wright commented: "The resistivity annulus suggests some form of intrusive with a surrounding resistivity alteration rim. Deep chargeability anomalies coincident with the rim indicate an increased sulfide association relative to the center." He concluded: "Associated with this feature are both shallow and deep resistivity/chargeability anomalies consistent with a variant of the classic Guilbert and Lowell (1974) porphyry model."
In October 2021 the Company received assay results for 997 soil samples collected to expand the historic and the 2020 results. Three coincident zones of anomalous copper, silver, and gold were identified at the DeSoto Copper Oxide Target, the newly identified Copper-Gold Target, and the newly identified Covered/Exotic(?) Copper Target. Each of these three zones are over 1 km long. The zones were outlined based on multiple sample sites (77 to 311 samples) with anomalous copper, silver, and gold geochemical values that are strongly coincident with each other. Each zone correlates with classic porphyry-copper alteration and mineralization indicators.
In August and September October 2021 Bam Bam collected samples from previously unsampled core at the DeSoto Copper Oxide Target. These historic core holes contained several near-surface copper oxide/enriched intervals with azurite, malachite, chalcocite, and chrysocolla. A prominent northwest-trending magnetic linear occurs very close to the historic holes:
- MM-18: 105.7 ft (32.3 m) @ 0.62% Cu and 25.16 g/t Ag from 72 to 177.7 ft (21.9-54.2 m)
- MM-19: 22.6 ft (6.8 m) @ 0.26% Cu and 7.74 g/t Ag from 2.4 to 25 ft (0.8-7.6 m)
- DSM-02: 25.5 ft (7.8 m) @ 0.57% Cu and 28.09 g/t Ag from 152.5 to 178 ft (46.5-54.3 m)
- DSM-06: 25 ft (7.6 m) @ 0.64% Cu and 34.66 g/t Ag from 60 to 85 ft (18.3-25.9 m).
Assay results for ten (10) elements were summarized from the combined data and the compilation showed a distinct zoning of lead and zinc outward from the highest copper grades. This zoning suggests a significant likelihood of intersecting the favorable porphyry at depths of 30 meters (100 ft) to 300 meters (1000 ft).
Results for surface rock chip samples collected from areas of new drill road construction and outcrop sampling from areas with geophysical anomalies were received in September and late October 2021. The results are very encouraging with six (6) samples from the new road cuts in the known oxide area returning greater than 2,000 ppm (0.2%) copper and five (5) samples along this road returning good gold assays with a high of 0.638 g/t Au.
In total 98 samples were collected with copper ranging from 18 to 24,900 ppm (0.002% to 2.50% Cu), gold ranging from less than detection to 0.728 g/t, and silver ranging from less than detection to 1,425 g/t.
Bam Bam's 2021 drilling program was launched in September with over 4,500 meters of reverse-circulation ("RC") and core holes planned. RC holes will test the Majuba Known Copper Oxide mineralization. RC holes will also test the DeSoto area. Core holes will test the Copper-Gold Target.
Initial visual observation of core in the Copper-Gold target area indicates that Bam Bam intersected more than 350 meters of intrusive diorite and has discovered a new Copper/Gold/Silver porphyry at Majuba Hill.
2021-2022 Highlights
2021-Reverse Circulation (RC) drilling
12,080 feet (3682 m) of RC drilling was completed in 15 holes to test the Majuba Target and DeSoto target areas. Results showed strong continuity for the copper mineralized envelopes and expanded the mineralization. Significant highlights are:
- MHB-10: 540 feet (164.6 m) from 215 to 755 feet@ 0.456% CuEQ
- MHB-21: 320 feet (97.5 m) from 975 1225 feet @ 0.371% CuEQ
- MHB-23: 130 feet (39.6 m) at the end of the hole from 870 to 1000 feet @ 0.356% CuEQ
2021-Core
2,820 feet (859 m) of core drilling was completed in 2 holes in the Copper-Gold Target area. Results were very significant for expanding the porphyry copper mineralization at Majuba Hill. Significant highlights are:
- Intersected diorite/granodiorite intrusive which we believe to be widespread with classic porphyry alteration that was previously unknown. The diorite appears to underlie the rhyolite intrusive.
- MHB-22 intersected significant intervals with potassic alteration were associated with increasing (but low) values of copper and molybdenum
- MHB-22 had magnetite in quartz veining
Evaluate Copper Equivalent Values for all Drill Holes
CuEQ values were calculated by combining the assay values for copper, silver, gold, molybdenum, lead, and zinc across the significant copper drill intercepts for intervals composited to 0.16% Cu and 0.06% Cu. The Ag, Au, Mo, Pb, and Zn included for each significant copper intercepts were combined using an interval-weighted calculation based on metal prices taken from Kitco.com and DailyMetalPrice.com on July 27, 2022.
CuEQ Table of Drill Hole Intercepts for 0.06% Cu Composite Model
| Hole | Fromft | To ft | Intervalft | CuEQ % | Cu % | Significant CuEQ% |
|---|---|---|---|---|---|---|
| MHB-1 | 179.0 | 311.5 | 132.5 | 0.278 | 0.219 132.5 ft (40.4 m) @ 0.28% CuEQ from 179 to 311.5 ft | |
| MHB-2 | 0.0 | 199.0 | 199.0 | 1.391 | 1.042 | 199 ft (60.7 m) @ 1.39% CuEQ from 0 to 199 ft |
| 271.0 | 296.5 | 25.5 | 0.126 | 0.062 25.5 ft (7.8 m) @ 0.13% CuEQ from 271 to 296.5 ft | ||
| MHB-3 | 125.0 | 580.0 | 455.0 | 0.380 | 0.295 455 ft (138.7 m) @ 0.38% CuEQ from 125 to 580 ft | |
| MHB-4 | 215.0 | 250.0 | 35.0 | 0.406 | 0.065 | 35 ft (10.7 m) @ 0.41% CuEQ from 215 to 250 ft |
| 550.0 | 565.0 | 15.0 | 0.279 | 0.071 | 15 ft (4.6 m) @ 0.28% CuEQ from 550 to 565 ft | |
| 660.0 | 685.0 | 25.0 | 1.325 | 0.060 | 25 ft (7.6 m) @ 1.33% CuEQ from 660 to 685 ft | |
| 760.0 | 820.0 | 60.0 | 0.773 | 0.344 | 60 ft (18.3 m) @ 0.77% CuEQ from 760 to 820 ft | |
| MHB-5 | 45.0 | 800.0 | 755.0 | 0.300 | 0.135 | 755 ft (230.1 m) @ 0.3% CuEQ from 45 to 800 ft |
| MHB-6 | 315.0 | 800.0 | 485.0 | 0.297 | 0.148 | 485 ft (147.8 m) @ 0.3% CuEQ from 315 to 800 ft |
| MHB-8 | 90.0 | 158.0 | 68.0 | 0.083 | 0.064 | 68 ft (20.7 m) @ 0.08% CuEQ from 90 to 158 ft |
| 163.0 | 238.0 | 75.0 | 0.076 | 0.063 | 75 ft (22.9 m) @ 0.08% CuEQ from 163 to 238 ft | |
| 525.0 | 570.0 | 45.0 | 0.124 | 0.063 | 45 ft (13.7 m) @ 0.12% CuEQ from 525 to 570 ft | |
| 685.0 | 705.0 | 20.0 | 0.099 | 0.069 | 20 ft (6.1 m) @ 0.1% CuEQ from 685 to 705 ft | |
| 730.0 | 780.0 | 50.0 | 0.073 | 0.064 | 50 ft (15.2 m) @ 0.07% CuEQ from 730 to 780 ft | |
| 830.0 | 1075.0 | 245.0 | 0.262 | 0.170 | 245 ft (74.7 m) @ 0.26% CuEQ from 830 to 1075 ft | |
| 1230.0 1245.0 | 15.0 | 0.074 | 0.064 | 15 ft (4.6 m) @ 0.07% CuEQ from 1230 to 1245 ft | ||
| 1285.0 1305.0 | 20.0 | 0.075 | 0.063 | 20 ft (6.1 m) @ 0.07% CuEQ from 1285 to 1305 ft | ||
| 1551.0 1573.0 | 22.0 | 0.076 | 0.064 | 22 ft (6.7 m) @ 0.08% CuEQ from 1551 to 1573 ft | ||
| MHB-9 | 631.0 | 703.0 | 72.0 | 0.122 | 0.090 | 72 ft (21.9 m) @ 0.12% CuEQ from 631 to 703 ft |
| 835.0 | 1016.0 | 181.0 | 0.205 | 0.142 | 181 ft (55.2 m) @ 0.2% CuEQ from 835 to 1016 ft | |
| 1020.0 1043.5 | 23.5 | 0.101 | 0.064 23.5 ft (7.2 m) @ 0.1% CuEQ from 1020 to 1043.5 ft | |||
| 1309.0 1388.0 | 79.0 | 0.157 | 0.063 | 79 ft (24.1 m) @ 0.16% CuEQ from 1309 to 1388 ft | ||
| 1660.0 1675.0 | 15.0 | 0.180 | 0.068 | 15 ft (4.6 m) @ 0.18% CuEQ from 1660 to 1675 ft | ||
| 1695.0 1730.0 | 35.0 | 0.303 | 0.066 | 35 ft (10.7 m) @ 0.3% CuEQ from 1695 to 1730 ft | ||
| MHB-10 | 0.0 | 205.0 | 205.0 | 0.999 | 0.062 | 205 ft (62.5 m) @ 1% CuEQ from 0 to 205 ft |
| 215.0 | 755.0 | 540.0 | 0.456 | 0.112 | 540 ft (164.6 m) @ 0.46% CuEQ from 215 to 755 ft | |
| 760.0 | 845.0 | 85.0 | 0.316 | 0.138 | 85 ft (25.9 m) @ 0.32% CuEQ from 760 to 845 ft | |
| MHB-12 665.0 | 680.0 | 15.0 | 0.164 | 0.074 | 15 ft (4.6 m) @ 0.16% CuEQ from 665 to 680 ft | |
| MHB-13 435.0 | 510.0 | 75.0 | 0.142 | 0.063 | 75 ft (22.9 m) @ 0.14% CuEQ from 435 to 510 ft | |
| MHB-14 640.0 | 785.0 | 145.0 | 0.334 | 0.275 | 145 ft (44.2 m) @ 0.33% CuEQ from 640 to 785 ft | |
| 805.0 | 825.0 | 20.0 | 0.532 | 0.068 | 20 ft (6.1 m) @ 0.53% CuEQ from 805 to 825 ft | |
| 850.0 | 910.0 | 60.0 | 0.242 | 0.063 | 60 ft (18.3 m) @ 0.24% CuEQ from 850 to 910 ft | |
| 925.0 | 1160.0 | 235.0 | 0.344 | 0.111 | 235 ft (71.6 m) @ 0.34% CuEQ from 925 to 1160 ft | |
| MHB-15 380.0 | 405.0 | 25.0 | 0.110 | 0.061 | 25 ft (7.6 m) @ 0.11% CuEQ from 380 to 405 ft | |
| 815.0 | 1000.0 | 185.0 | 0.303 | 0.123 | 185 ft (56.4 m) @ 0.3% CuEQ from 815 to 1000 ft | |
| MHB-16 445.0 | 520.0 | 75.0 | 0.125 | 0.061 | 75 ft (22.9 m) @ 0.12% CuEQ from 445 to 520 ft | |
| MHB-17 | 25.0 | 40.0 | 15.0 | 0.148 | 0.066 | 15 ft (4.6 m) @ 0.15% CuEQ from 25 to 40 ft |
| 60.0 | 215.0 | 155.0 | 0.153 | 0.076 | 155 ft (47.2 m) @ 0.15% CuEQ from 60 to 215 ft | |
| 220.0 | 630.0 | 410.0 | 0.179 | 0.067 | 410 ft (125 m) @ 0.18% CuEQ from 220 to 630 ft | |
| 670.0 | 700.0 | 30.0 | 0.115 | 0.067 | 30 ft (9.1 m) @ 0.11% CuEQ from 670 to 700 ft | |
| MHB-18 515.0 | 710.0 | 195.0 | 0.227 | 0.081 | 195 ft (59.4 m) @ 0.23% CuEQ from 515 to 710 ft | |
| 750.0 | 785.0 | 35.0 | 0.281 | 0.066 | 35 ft (10.7 m) @ 0.28% CuEQ from 750 to 785 ft | |
| MHB-19 | 0.0 | 75.0 | 75.0 | 0.190 | 0.106 | 75 ft (22.9 m) @ 0.19% CuEQ from 0 to 75 ft |
| MHB-21 | 0.0 | 90.0 | 90.0 | 0.114 | 0.066 | 90 ft (27.4 m) @ 0.114% CuEQ from 0 to 90 ft |
| 145.0 | 235.0 | 90.0 | 0.157 | 0.074 | 90 ft (27.4 m) @ 0.157% CuEQ from 145 to 235 ft | |
| 325.0 | 535.0 | 210.0 | 0.143 | 0.060 | 210 ft (64 m) @ 0.14% CuEQ from 325 to 535 ft | |
| 585.0 | 685.0 | 100.0 | 0.144 | 0.078 | 100 ft (30.5 m) @ 0.14% CuEQ from 585 to 685 ft | |
| 730.0 | 765.0 | 35.0 | 0.235 | 0.064 | 35 ft (10.7 m) @ 0.23% CuEQ from 730 to 765 ft | |
| 775.0 | 815.0 | 40.0 | 0.172 | 0.066 | 40 ft (12.2 m) @ 0.17% CuEQ from 775 to 815 ft | |
| 845.0 | 875.0 | 30.0 | 0.139 | 0.064 | 30 ft (9.1 m) @ 0.14% CuEQ from 845 to 875 ft | |
| 905.0 | 970.0 | 65.0 | 0.161 | 0.073 | 65 ft (19.8 m) @ 0.16% CuEQ from 905 to 970 ft | |
| 975.0 | 1295.0 | 320.0 | 0.371 | 0.262 | 320 ft (97.5 m) @ 0.37% CuEQ from 975 to 1295 ft | |
| 1355.0 1375.0 | 20.0 | 0.166 | 0.068 | 20 ft (6.1 m) @ 0.17% CuEQ from 1355 to 1375 ft | ||
| MHB-23 305.0 | 350.0 | 45.0 | 0.154 | 0.063 | 45 ft (13.7 m) @ 0.15% CuEQ from 305 to 350 ft | |
| 385.0 | 415.0 | 30.0 | 0.183 | 0.065 | 30 ft (9.1 m) @ 0.18% CuEQ from 385 to 415 ft | |
| 545.0 | 600.0 | 55.0 | 0.169 | 0.062 | 55 ft (16.8 m) @ 0.17% CuEQ from 545 to 600 ft | |
| 630.0 | 690.0 | 60.0 | 0.150 | 0.062 | 60 ft (18.3 m) @ 0.15% CuEQ from 630 to 690 ft | |
| 800.0 | 840.0 | 40.0 | 0.129 | 0.060 | 40 ft (12.2 m) @ 0.13% CuEQ from 800 to 840 ft | |
| 870.0 | 1000.0 | 130.0 | 0.356 | 0.178 | 130 ft (39.6 m) @ 0.36% CuEQ from 870 to 1000 ft | |
| MHB-24 110.0 | 180.0 | 70.0 | 0.274 | 0.061 | 70 ft (21.3 m) @ 0.27% CuEQ from 110 to 180 ft | |
| 400.0 | 800.0 | 400.0 | 0.204 | 0.119 | 400 ft (121.9 m) @ 0.2% CuEQ from 400 to 800 ft | |
| MHB-25 | 15.0 | 30.0 | 15.0 | 0.084 | 0.067 | 15 ft (4.6 m) @ 0.08% CuEQ from 15 to 30 ft |
| MHB-26 | 0.0 | 90.0 | 90.0 | 0.143 | 0.094 | 90 ft (27.4 m) @ 0.14% CuEQ from 0 to 90 ft |
| 215.0 | 240.0 | 25.0 | 0.093 | 0.067 | 25 ft (7.6 m) @ 0.09% CuEQ from 215 to 240 ft | |
| 585.0 | 605.0 | 20.0 | 0.134 | 0.079 | 20 ft (6.1 m) @ 0.13% CuEQ from 585 to 605 ft |
2022 Drilling
A deep core drilling program was started with plans to drill up to 12,500 feet (3810 m)in 3 to 5 holes with depths ranging from 2500 feet (762 m) to 3500 feet (1067 m).
Geochemical Sampling-Collected Additional 1022 Soil Samples
The very large, multi-point copper/silver anomaly at the DeSoto Target was extended an additional 900 feet (274 meters) northward and to the west.
The Copper-Gold Target Zone was expanded to over 5,200 feet (1,600 meters) across.
RELATED PARTY TRANSACTIONS
- (a) As at September 30, 2022, the amount of $nil (June 30, 2022 $153,000) is owed to a company controlled by the President and Chief Executive Officer of the Company, which is unsecured, noninterest bearing, and due on demand. The amount is included in accounts payable and accrued liabilities. During the period ended September 30, 2022, the Company incurred management fees of $60,000 (2021 - $60,000) to a company controlled by the President and Chief Executive Officer of the Company.
- (b) As at September 30, 2022, the amount of $5,089 (June 30, 2022 $nil) is owed to the President and Chief Executive Officer of the Company, which is unsecured, non-interest bearing, and due on demand. The amount is included in accounts payable and accrued liabilities.
- (c) During the period ended September 30, 2022, the Company incurred management fees of $40,000 (2021 - $30,000) to a company controlled by the Chief Financial Officer of the Company.
- (d) As at September 30, 2022, the amount of $3,477 (June 30, 2022 $nil) is owed to the Chief Financial Officer of the Company, which is unsecured, non-interest bearing, and due on demand. The amount is included in accounts payable and accrued liabilities.
- (e) During the period ended September 30, 2022, the Company incurred management fees of $17,500 (2021 – $7,500) to a company controlled by the Corporate Secretary of the Company.
- (f) As at September 30, 2022, the amount of $5,502 (June 30, 2022 owed $21,325) is due from a director of the Company, which is unsecured, non-interest bearing, and due on demand. During the period ended September 30, 2022, the Company incurred consulting fees of $10,000 (2021 - $nil) to a director of the Company.
All related party transactions are in the normal course of operations and have been measured at the agreed to amounts, which is the amount of consideration established and agreed to by the related parties.
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).
The fair values of financial instruments, which include cash, and accounts payable and accrued liabilities, and loans payable, approximate their carrying values due to the relatively short-term maturity of these instruments. Cash is carried at fair value using a level 1 fair value measurement.
(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. 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.
(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. As at September 30, 2022, the Company has no significant financial instruments denominated in a foreign currency; however, the Company has exploration and evaluation assets in the U.S. with mineral property option agreement obligations denominated in U.S. dollars. The Company has not entered into foreign exchange rate contracts to mitigate this risk. As at September 30, 2022, 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.
COMMITMENTS AND CONTINGENCIES
On September 17, 2021, the Executive Director of the BC Securities Commission (the "ED") issued a Notice of Hearing alleging that the Company issued news releases and filed material change reports relating to two financings undertaken by the Company in 2018, that contained misrepresentations contrary to the Securities Act (the "Act"). On May 27, 2022, the ED and the Company entered into an agreement whereby the Company agreed to admit by way of agreed statement of facts, that the Company made the contraventions of the Act. In exchange, the ED agreed to submit to the BC Securities Commission (the "BCSC") that no sanctions should be made against the Company. The final submissions on liability are scheduled for November, 2022. The outcome of this proceeding is uncertain. It appears likely that the Company will be found to have committed the contraventions of the Act, but no sanctions will be made against the Company as a result.
On July 11, 2019, a Notice of Civil Claim was filed with the Supreme Court of British Columbia seeking certification for a class action against the Company (the "Action"). The proposed class action includes allegations that the Company made misrepresentations in its public disclosure. On November 22, 2021, the plaintiffs were granted leave to proceed with the Action under the Act, and this decision was affirmed on September 13, 2022. The hearing for certification of the Action is scheduled for August, 2023. No settlement has been made and the eventual outcome is not determinable.
OUTSTANDING SHARE DATA
Common Shares
As at November 23, 2022, the Company had 41,123,298 common shares issued and outstanding.
Share Purchase Warrants
As at November 23, 2022, the following share purchase warrants were outstanding:
| Number of | Exercise | |
|---|---|---|
| warrants | price | |
| outstanding | $ | Expiry date |
| 2,350,359 | 1.25 | September 7, 2023 |
| 1,166,600 | 0.85 | September 14, 2023 |
| 1,520,280 | 2.70 | November 16, 2023 |
| 5,018,615 | 0.90 | December 24, 2024 |
| 10,500,000 | 0.25 | July 22, 2023 |
| 6,713,830 | 0.25 | August 16, 2023 |
27,269,684
Stock Options
As at November 23, 2022, there were no stock options outstanding.
Restricted Share Units
As at November 23, 2022, the Company had 100,000 restricted share units outstanding.
OFF-BALANCE SHEET ARRANGEMENT
The Company has no off-balance sheet arrangements.
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE
An analysis of the material components of the Company's general and administrative expenses is disclosed in the condensed interim consolidated financial statements for the period ended September 30 2022.
CORONAVIRUS PANDEMIC
The current outbreak of COVID-19 and any future emergence and spread of similar pathogens could have an adverse impact on global economic conditions, which may adversely impact the Company's operations, and the operations of its suppliers, contractors, and service providers, the ability to obtain financing and maintain necessary liquidity. The outbreak of COVID-19 and political upheavals in various countries have caused significant volatility in commodity prices. While these effects are expected to be temporary, the duration of the business disruptions internationally and related financial impact cannot be reasonably estimated at this time. Similarly, the Company cannot estimate whether or to what extent this outbreak and the potential financial impact may extend to countries outside of those currently impacted. Travel bans and other government restrictions may also adversely impact the Company's operations.