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Kobrea Exploration Corp. — Management Reports 2025
Jun 30, 2025
48480_rns_2025-06-30_10a3bdd3-579f-48fd-b32d-b61593b6022b.pdf
Management Reports
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Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
Dated: June 27, 2025
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
The following management's discussion and analysis ("MD&A") of Kobrea Exploration Corp. ("Kobrea" or the "Company") has been prepared as of June 27, 2025 and is related to the unaudited condensed interim consolidated financial statements of the Company for the three months ended April 30, 2025 and 2024.
This interim MD&A has been prepared in compliance with section 2.2.1 of Form 51-102F1, in accordance with National Instrument 51-102 – Continuous Disclosure Obligations. This MD&A should be read in conjunction with the Company's audited annual consolidated financial statements for the years ended January 31, 2025 and 2024, together with the notes thereto, and the unaudited condensed interim consolidated financial statements for the three months ended April 30, 2025 together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company's unaudited condensed interim consolidated financial statements and the financial information contained in this interim MD&A are prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting.
For the purposes of preparing this MD&A, management, in conjunction with the board of directors of the Company (the "Board"), considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Search's common shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management in conjunction with the Board, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.
The Company was incorporated on March 16, 2022 under the laws of the Province of British Columbia, Canada with a head office and registered and records office located at Suite 330 – 890 West Pender Street, Vancouver, British Columbia V6C 1L9. The principal business of the Company is the acquisition, exploration and evaluation of resource properties. The Company's shares are listed on the Canadian Securities Exchange ("KBX") and the Frankfurt Stock Exchange ("F3I").
Additional information relating to the Company is available at Kobrea Exploration and on SEDAR+ at www.sedarplus.ca.
Qualified Persons
Rory Ritchie, P.Geo., is the Qualified Person as defined by National Instrument 43-101 and is responsible for the technical information included in this MD&A and the supervision of exploration and development programs at the Upland Copper and Western Malargüe Copper properties.
Cautionary Note Regarding Forward-Looking Statements
This MD&A contains "forward-looking statements". Forward-looking statements reflect the Company's current views with respect to future events, are based on information currently available to the Company and are subject to certain risks, uncertainties, and assumptions, including those discussed elsewhere in this MD&A. Forward-looking statements include, but are not limited to, statements with respect to the success of mining exploration work, title disputes or claims, environmental risks, unanticipated reclamation expenses, the estimation of mineral reserves and resources and capital expenditures. In certain cases, forward-looking statements can be identified by the use of words such as "intends", "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "anticipates" or "does not anticipate", or "believes", or various of such words and phrases or state certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements expressed or implied by the forward-looking statements to differ.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
Such factors include, among others, risks related to actual results of current exploration activities, changes in project parameters as plans are refined over time, the future price of gold and other precious or base metals, possible variations in minerals resources, grade or recovery rates, accidents, labour disputes, title disputes and other risks of the mining industry, fluctuation of currency exchange rates, delays in obtaining, or inability to obtain, required governmental approvals or financing or in the completion of development or construction activities, claims limitations on insurance coverage, as well as other factors discussed under "Risk Factors".
Although the Company has attempted to identify material factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained in this MD&A are made as of the date of this MD&A. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not assume the obligations to update forward-looking statements, except as required by applicable law.
Summary of Mineral Properties
Upland Copper
The Company acquired the Upland property, located in Barriere, British Columbia, Canada consisting of eight mineral claims covering 5,300 hectares, through staking.
The deposit type of interest on the Upland Copper Project is classified as a remobilized polymetallic volcanogenic massive sulphide deposit. The Upland property is located within a belt of structurally complex low to mid-grade metamorphic rocks underlain by the Paleozoic metasedimentary and metavolcanic rocks of the Eagle Bay Assemblage. Late Devonian granitic orthogneiss locally intrudes Eagle Bay Assemblage rocks. These Paleozoic rocks are cut by mid-Cretaceous granodiorite and quartz monzonite of the Baldy batholith. Early Tertiary quartz feldspar porphyry, basalt and lamprophyre dykes also intrude the area.
The mineralization in the east – centre of the Upland property is generally consistent with the disseminated chalcopyrite and minor bornite of the metamorphically remobilized volcanogenic massive sulphide deposits known to occur elsewhere regionally in the Eagle Bay Assemblage rocks. These areas locally, include massive sulphide pods that have survived metamorphic redistribution and skarn zones in and near limestone bands of the Eagle Bay Assemblage rocks formed during metamorphism by remobilized fluids.
The Yellowhead deposit, located about 23 kilometres north of the Upland property, within the Eagle Bay Assemblage rocks on the north side of the Baldy Batholith is the deposit most similar to the target mineralization sought at the Upland property. The past drilling at the Upland property and some of the historical trenching have found mineralization consistent with this style of deposit. The past metamorphism in the Eagle Bay Assemblage rocks of the Upland property have left the massive sulphide bands and pods in the Eagle Bay Assemblage rocks metamorphically remobilized and redistributed from the original location of deposition.
There is a long history of exploration at the Upland property extending from adits and pits developed in the early 1900s, with increasingly systematic exploration commencing in 1965. Historical programs have included multiple soil geochemistry surveys, surface outcrop mapping along with ground magnetics, induced polarization, trenching and several other exploration methods. Historical drilling includes 69 holes totalling over 9,100 metres.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
Drill intercepts:
- Drill hole P-70-9: 74 m @ 0.32% Cu (entire hole)
- Drill hole EBL-69-1: 37 m @ 0.30% Cu
The Company commissioned an airborne magnetometer survey in the summer of 2022 to outline the favourable unit hosting the known copper mineralization on the property. Interpretation of the magnetic data outlined approximately seven km of surficial extent of the favourable copper hosting unit which will serve to guide exploration along strike of the historically defined copper mineralized zones.
A LiDAR (Light Detection and Ranging) survey covering the entire Upland Copper Project was also flown in the summer of 2022. The LiDAR has outlined historical trenches and workings, drill pads, drill access roads and recently constructed logging roads on the Property.
Between June and August of 2024, crews completed soil geochemical sampling, passive seismometer surveys and trench excavation and sampling within the area of historically outlined copper mineralization. The objectives of this work were to identify areas of mineralization that had significant precious metal (gold, silver) contents and to identify higher grade copper domains that could be targeted with diamond drilling.
405 soil samples were collected from an area measuring 800 metres by 1,400 metres where outcrop exposure is limited due to a veneer of glacial overburden. The survey outlined a 600 metre by 600 metre copper-in-soil anomaly in which 60 of 112 (54%) of the samples assayed greater than 500 ppm copper. Soil results also identified areas of anomalous gold with samples assaying up to 1.73 ppm gold, in an area that had seen no historical trenching or drilling.
Several mechanical trenches were designed above areas of anomalous copper and copper-gold in soils which were surveyed with a passive seismometer before excavation began to ensure overburden thicknesses did not preclude sampling of bedrock. Three trenches totaling 892 metres were excavated which were subsequently sampled by on-site geologists. A total of 434 rock chip samples were submitted for analysis. Trenching was successful in uncovering several areas of visible chalcopyrite mineralization, with anomalous intervals grading up to 0.37% copper over 54 metres and samples grading up to 0.99% copper over 2 metres.
Despite positive results from both the soil sampling and trench sampling programs, the Company decided not to proceed with diamond drilling in the 2024 exploration season.
Western Malargüe Copper Projects
The Projects lie within the Neogene Porphyry Belt, a metallogenic belt that straddles the border between central Chile and Argentina. The Late Miocene to Early Pliocene porphyry copper belt includes some of the largest copper deposits in the world, including Rio Blanco – Los Bronces (204.3 Mt Cu) and El Teniente (128.5 Mt Cu) which represent the world's largest and third largest copper deposits in terms of contained copper, respectively. To date, twelve copper ± gold porphyry prospects have been outlined on the Project. These are typified by multi-kilometre in diameter hydrothermal alteration footprints associated with phyllic and/or argillic alteration assemblages, some of which exhibit localized potassic alteration on surface. Quartz stockwork veining and hydrothermal breccias, where present, are spatially associated with porphyritic dacitic to dioritic stocks of Miocene age. Host rocks are variable over the 733 km² project though can be simplified as Jurassic to Miocene aged volcano-sedimentary formations.
Copper mineralization encountered on the Project to date includes high-grade hydrothermal breccias of varying compositions, skarn-type or replacement type, quartz stockwork and disseminated mineralization (porphyry-type). Significant gold values have been reported along with copper values in historical sampling of at least 3 of the known porphyry prospects.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
The most extensive historical exploration programs on the Project were completed by VALE Exploration Argentina between 2010 and 2013. This included rock chip sampling, talus sampling, alteration mapping, geological mapping and ground-based magnetometer surveys. Two Cu-Au porphyry systems were mapped by VALE over the course of the programs (El Perdido and El Destino).
The Western Malargüe Mining District (WMMD) is a tool developed by the Government of the Province of Mendoza through Impulsa Mendoza SA to respond to the challenge that the energy transition represents for the world. Impulsa Mendoza SA, a vehicle adopted by the province of Mendoza to develop a modern and sustainable mining sector, has developed a detailed environmental impact study in the entire WMMD area. It has also carried out studies of geological and infrastructure potential to shorten the times required for exploration of mining projects. The studies have made it possible to determine that the region is very suitable for mining development, as it has enormous geological potential and there is no competition for the use of land or water with any other productive activity.
Between January 8 and March 30, 2025, crews completed rock sampling, geological mapping and general reconnaissance on approximately 8 porphyry copper targets outlined by previous operators with the limits of the Project.
Several weeks were spent at El Perdido where it was necessary to ascertain where to best target the known porphyry system with a diamond drill. Geological investigations were integral to deducing the "center" of the porphyry system which will be targeted with at least 1,500 metres of drilling in the upcoming exploration season (December 2025 – April 2026).
In order to satisfy the requirements to file the Environmental Impact Statement ("EIS"), Argentinian Environmental Engineering firms were hired to complete Archaeological, Paleontological, Biological and Social studies in the general area and particularly where the proposed drill access road will be constructed. The Company is currently awaiting the approval for the EIS which will allow for diamond drilling activities in the upcoming season.
In April and May of 2025, the Company commissioned a property-wide Airborne magnetic survey and a property-wide ASTER (Advanced Spaceborne Thermal Emission and Reflection Radiometer) interpretation. Final results from both initiatives, which will help to prioritize future exploration activities on the respective exploration targets, are expected in the coming weeks.
Exploration and evaluation expenditures for the three months ended April 30, 2025 and 2024 were:
| Upland Copper | Malargüe Copper | Total | ||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
| $ | $ | $ | $ | $ | $ | |
| Field costs | - | - | 282,683 | - | 282,683 | - |
| Professional fees | - | 9,535 | - | - | - | 9,535 |
| Surveying | - | - | 134,664 | - | 134,664 | - |
| Technical report | - | - | 2,184 | - | 2,184 | - |
| - | 9,535 | 419,531 | - | 419,531 | 9,535 |
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
Results of Operations
The Company incurred a net and comprehensive loss of $1,358,408 for the three months ended April 30, 2025 (2024 - $165,239).
| | 2025
$ | 2024
$ |
| --- | --- | --- |
| Expenses | | |
| Advertising and promotion | 135,114 | 88,945 |
| Bank charges and interest | 2,855 | 493 |
| Corporate development | 31,724 | - |
| Exploration and evaluation costs | 419,531 | 9,535 |
| Insurance expense | 11,895 | 12,545 |
| Management fees | 173,179 | 9,000 |
| Office expenses | 7,677 | 286 |
| Professional fees | 32,822 | 19,040 |
| Regulatory and filing fees | 28,224 | 25,395 |
| Rent | 11,953 | - |
| Salaries and wages | 53,691 | - |
| Share-based compensation | 433,004 | - |
| Travel | 8,629 | - |
| Loss before other items | (1,350,298) | (165,239) |
Other item
| Foreign exchange gain | (8,110) | - |
|---|---|---|
| Net and comprehensive loss | (1,358,408) | (165,239) |
The increase in operating loss was mainly attributable to the following:
- Advertising expenses increased as a result of the Company entering into marketing services agreements for the current period and development of the Company's website and marketing materials.
- Corporate development expenses were incurred as a result of the addition of strategic advisors to the Company.
- Exploration and evaluation costs increased as a result of development programs on Western Malargüe including field costs, surveying and technical reports - refer to Summary of Mineral Properties.
- Management fees were incurred to the Company's Chief Financial Officer and VP Exploration and for fees to manage the affairs of Kobrea Exploration Corp. and Kobrea Exploraciones Argentina S.A.
- Professional fees increased in relation to increased general business activities.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
- Regulatory and filing fees are fees to maintain the current listing on the Canadian Securities Exchange.
- Rent expense is recognized with respect to a month-to-month office space.
- Salaries and wages include salaries payable to the Company's Chief Executive Officer and Chief Geologist.
- Share-based compensation was recognized as a result of vesting stock options granted.
- Foreign exchange gains and losses fluctuate based the extent of transactions and balances denominated in US dollars and Argentinian Pesos. A foreign exchange loss of $8,110 was recognized during the three months ended April 30, 2025.
Summary of Quarterly Results
The following financial data was derived from the Company's financial statements for the last eight quarters:
| Three months ended | July 31, 2023 $ | Oct 31, 2023 $ | Jan 31, 2024 $ | April 30, 2024 $ | July 31, 2024 $ | Oct 31, 2024 $ | Jan 31, 2025 $ | Apr 30, 2025 $ |
|---|---|---|---|---|---|---|---|---|
| Total revenues | nil | nil | nil | nil | nil | nil | Nil | Nil |
| Net loss | 11,927 | 74,981 | 113,440 | 165,239 | 447,361 | 461,806 | 998,882 | 1,358,408 |
| Net loss per share | - | - | 0.01 | 0.01 | 0.02 | 0.03 | 0.09 | 0.04 |
Due to the nature of its current operations, the Company earned no revenue during the periods presented.
The net loss for the quarter ended July 31, 2023, was mainly a result of $7,500 in management fees and $4,000 related to audit fees.
The net loss for the quarter ended October 31, 2023 was mainly a result of $37,350 related to regulatory and filing fees in connection with the Company's public market listing, $28,170 related to legal fees for advisory services related to capital markets, management fees of $7,500, and $1,543 of exploration and evaluation expenditures related to the Upland property.
The net loss for the quarter ended January 31, 2024 was mainly a result of $55,817 related to regulatory and filing fees in connection with the companies public market listing, $23,268 related to legal fees for advisory services related to capital markets, $35,939 related to accounting and audit fees, management fees of $7,500, $2,240 of advertising and promotion expenses related to the Company's website development and branding, and $525 of exploration and evaluation expenditures related to the Upland property.
The net loss for the quarter ended April 30, 2024 was mainly a result of $88,945 related to advertising and marketing fees as the Company entered into an agreement with MIC Market Information & Content Publishing GmbH for a 6-month marketing engagement, $25,396 related to regulatory and filing fees in connection with the companies public market listing and warrant exercises, $19,040 related to legal fees for advisory services related to capital markets, management fees of $9,000, and $9,535 of exploration and evaluation expenditures related to the Upland property.
The net loss for the quarter ended July 31, 2024 was mainly a result of $301,047 related to advertising and marketing fees as the Company entered into marketing agreements and engaged a vendor for website development and marketing materials, $7,235 related to regulatory and filing fees in connection with the companies public market listing and warrant exercises, $39,017 related to legal fees for advisory services related to capital markets, travel expenses of $17,929 related to due diligence procedures on the Argentina mineral claims, management fees of $12,000, and $67,516 of exploration and evaluation expenditures related to the Upland property.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
The net loss for the quarter ended October 31, 2024 was mainly a result of $22,124 related to advertising and marketing fees for the Company's previously entered marketing agreements, $5,198 related to regulatory and filing fees in connection with the companies warrant exercises, $96,029 related to legal fees for advisory services related to capital markets and property acquisition agreement, travel expenses of $15,402 related to due diligence procedures on the Argentina mineral claims, management fees of $12,000, $146,875 in share-based compensation due to stock options granted to certain advisors of the Company in the current period that vested immediately, and $161,344 of exploration and evaluation expenditures related to the Upland property.
The net loss for the quarter ended January 31, 2025 was mainly a result of $221,830 related to exploration and evaluation costs related to the Upland and Western Malargüe properties, $64,749 related to consulting fees for advisory services related to capital markets and financing, $417,381 in share-based compensation due to stock options granted to certain advisors of the Company in the previous period that vested during the quarter, $118,108 related to legal fees for advisory services related to capital markets, $40,235 related to salaries and wages to employees of the Company, travel expenses of $35,100 related to due diligence procedures on the Argentina mineral claims and $114,019 related to management fees and decrease of $10,869 related to advertising and marketing fees for the Company's previously entered marketing agreements.
The net loss for the quarter ended April 30, 2025 was mainly the result of $419,531 related to exploration and evaluation costs at the Western Malargüe property, management fees of $173,179 and share-based compensation of $433,004.
Financial Condition, Liquidity and Capital Resources
During the three months ended April 30, 2025, the Company completed the following transactions:
i) On February 12, 2025, pursuant to the Option Agreement, the Company issued 70,000 common shares to the optionors of the Western Malargüe Copper Projects measured at fair value of $0.64 per share for a total of $44,800.
ii) During the three months ended April 30, 2025, the Company issued 12,000 common shares for the exercise of share purchase warrants for total proceeds of $2,400. There were also 1,104 common shares issued for the exercise of finders warrants for total proceeds of $552.
During the three months ended April 30, 2024, the Company completed the following transactions:
i) On April 5, 2024, the Company closed a non-brokered private placement ("The April Offering") of 3,784,000 units at $0.25 per unit and 833,333 flow-through shares at $0.33 per flow-through share for total gross proceeds of $1,221,000. Each unit consists of one common share and one half of one share purchase warrant. Each whole warrant entitles the holder to purchase one common share at a price of $0.50 per share until April 5, 2026. Full proceeds were allocated to share capital under residual value method. In connection with the April Offering, the Company paid aggregate finder's fees of $48,630 and issued 176,570 share purchase warrants valued at $55,926 to the finders. Each finder's warrant is exercisable to acquire one common share at an exercise price of $0.50 for a period of 24 months.
ii) During the three months ended April 30, 2024, the Company issued 34,250 common shares for the exercise of share purchase warrants for total proceeds of $5,800.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
The Company does not generate any revenue from operations and does not have sufficient capital to meet the requirements for its administrative overhead and maintaining its mineral interests. For the foreseeable future, the Company will need to rely on raising capital in the equity markets and/or enter into joint venture agreements with third parties to provide working capital and to finance its mineral property activities.
Although the Company has been successful in raising financing in the past, there can be no assurance that the Company will be able to obtain adequate future financing. Failure to do so could result in delay or indefinite postponement of further exploration and reduction or termination of operations.
Related Party Transactions
Related party transactions are in the normal course of operations and have been measured at the exchange amount of consideration agreed between the related parties. Except as disclosed elsewhere, the Company entered into the following related party transactions with amounts due to related parties being unsecured, non-interest-bearing, and with no formal terms of repayment:
- Gross salary of $50,001 (2024 - $nil) was paid to James Hedalen, a director and officer of the Company, for services as Chief Executive Officer and included in salaries and wages.
- Fees in the amount of $12,000 (2024 - $9,000) were charged by Meetul Patel, a director and officer of the Company, for services as Chief Financial Officer and included in management fees.
- Fees in the amount of $52,590 (2024 - $nil) were charged by Rory Ritchie, a director and officer of the Company, for services as VP Exploration and included in management fees.
Key management personnel are the persons responsible for planning, directing, and controlling the activities of an entity, and include the Chief Executive Officer, Chief Financial Officer, and directors. The Company has no long-term employee or post-employment benefits. A summary of compensation awarded to key management during the three months ended April 30, 2025 and 2024, was as follows:
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Management fees | 64,590 | 9,000 |
| Salaries and wages | 50,001 | - |
| 114,591 | 9,000 |
The employment and consulting agreements for the Chief Executive Officer and VP Exploration, respectively, include a change of control provision, whereby they are entitled to certain payouts, including 2.5 times the base amounts, and all unvested options, RSUs and any other equity-based compensation shall vest upon the effective date of termination.
As at April 30, 2025, there was $168 (January 31, 2025 - $168) due from related parties included in tax and other receivables.
As at April 30, 2024, there was $17,500 (January 31, 2025 - $nil) due to related parties included in accounts payable and accrued liabilities.
Management fees of $58,588 (2025 - $nil) were also incurred for fees to manage the affairs of Kobrea Exploraciones Argentina S.A. These fees were not payable to key management personnel.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
Outstanding Share Data
The Company has authorized share capital consisting of common shares without par value. The number of shares authorized is unlimited. The Company has a stock option plan and has issued warrants for the purchase of common shares. The table below summarizes the Company's common shares, warrants, finders' warrant and stock options that are convertible into common shares at April 30, 2025 and June 27, 2025, the date of MD&A:
| January 31, 2025 | Date of MD&A | |
|---|---|---|
| Common Shares | 35,517,640 | 35,517,640 |
| Warrants | 23,010,403 | 23,010,403 |
| Finder's Warrants | 227,366 | 227,366 |
| Options | 2,900,000 | 2,900,000 |
Financial Instruments
The Company's consolidated financial instruments include cash and other receivables which are classified as financial assets measured at amortized cost, and accounts payable and accrued liabilities, including amounts due to related parties, which are classified as financial liabilities measured at amortized cost. All these instruments approximate their fair values due to the short period to maturity.
The Company is not exposed to any material financial risk, liquidity risk, currency risk, credit risk, interest rate risk, or other price risk.
Events After the Reporting Period and Outlook
There are no other material events subsequent to the date of this document.
The Company is confident that its current properties have potential warranting continued exploration and activities over the ensuing year will focus on a developing these properties and / or collaborating with experienced mining companies to develop them to production.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements and does not contemplate entering into any such arrangements in the near future.
Disclosure Controls and Procedures
The Board of Directors, through its Audit Committee, is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Audit Committee is composed of three independent directors, one of whom is independent, who meet at least quarterly with management and at least annually with the external auditors to review accounting, internal control, financial reporting, and audit matters. There have been no significant changes to the Company's internal control over financial reporting that occurred during the period that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Being a venture issuer, the Company is exempt from the certification on Disclosure Controls and Procedures and Internal Control Over Financial Reporting. The Company is required to file Form 52-109FV1 for annual reporting and Form 52-109FV2 for interim reporting.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
New and amended standards adopted by the Company
None.
Recent Accounting Pronouncements
In April 2024, the IASB issued IFRS 18 – Presentation and Disclosure in Financial Statements ("IFRS 18") to replace IAS 1. This standard focuses on updates to the statement of profit or loss, including: (a) the structure of the statement of profit or loss; (b) required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements (that is, management-defined performance measures); and (c) enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. It will be effective for the Company for the annual period beginning February 1, 2027, and will be required to be applied retrospectively. The Company is currently assessing the effect of this new standard on its consolidated financial statements.
Risks and Uncertainties
The principal business of the Company is the acquisition, exploration, and development of mineral properties. Given the nature of the mining business, the limited extent of the Company's assets and the present stage of development, the following risk factors, among others, should be considered:
Exploration Stage Company
The Company does not hold any known mineral reserves of any kind and does not generate any revenue from production. The Company's success will depend upon its ability to locate commercially productive mineral reserves.
Mineral exploration is highly speculative in nature, involves many risks and frequently is nonproductive. There is no assurance that exploration efforts will be successful. Success in establishing reserves is a result of a number of factors, including the quality of management, the level of geological and technical expertise, and the quality of property available for exploration.
Once mineralization is discovered, it may take several years in the initial phases of drilling until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish proven and probable reserves through drilling and bulk sampling, to determine the optimal metallurgical process to extract the metals from the ore and, in the case of new properties, to construct mining and processing facilities.
Because of these uncertainties, no assurance can be given that exploration programs will result in the establishment or expansion of resources or reserves.
Competition
The resource industry is intensively competitive in all of its phases, and the Company competes with many other companies possessing much greater financial and technical resources.
Competition is particularly intense with respect to the acquisition of desirable undeveloped properties. The principal competitive factors in the acquisition of prospective properties include the staff and data necessary to identify and investigate such properties, and the financial resources necessary to acquire and develop the projects. Competition could adversely affect the Company's ability to acquire suitable prospects for exploration.
Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
Operating History and Availability of Financial Resources
The Company currently has no operating revenues and, therefore, may not have sufficient financial resources to undertake by itself all of its planned mineral property acquisition and exploration activities.
Until the Company begins generating positive cash flow, operations will continue to be financed primarily through the issuance of securities and such reliance on the issuance of securities for future financing may result in dilution to existing shareholders.
Furthermore, the amount of additional funds required may not be available under favourable terms, if at all. Failure to obtain additional funding on a timely basis could result in delay or indefinite postponement of further exploration and development and could cause the Company to forfeit its interest in some or all of its properties or to reduce or discontinue its operations.
Price Volatility and Lack of Active Market
For some time, the securities markets in Canada and elsewhere have experienced an elevated level of price and volume volatility, and the market prices of securities of many public companies have experienced significant fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies.
It may be anticipated that any quoted market for the Company's securities will be subject to such market trends and that the value of such securities may be affected accordingly. If an active market does not develop, the liquidity of the investment may be limited, and the market price of such securities may decline below the subscription price.
Dependence on Key Personnel
The Company is dependent on a small number of key directors, officers, and senior personnel. The loss of any one of those people could have an adverse effect on the Company. The Company does not currently maintain "key-man" insurance in respect of any of its management.
Title to Property
Although the Company has exercised the usual due diligence with respect to title to properties in which it has a material interest, there is no guarantee that title to the properties will not be challenged or impugned. The Company's mineral property interests may be subject to prior unregistered agreements or transfers, Aboriginal land claims, government expropriation and title may be affected by undetected defects.
Licenses and Permits
The operations of the Company require licenses and permits from various government authorities.
The Company believes that it holds all necessary licenses and permits under applicable laws and regulations for work in progress and believes it is presently complying in all material respects with the terms of such licenses and permits. However, such licenses and permits are subject to change in various circumstances. There can be no guarantee that the Company will be able to obtain or maintain all necessary licenses and permits that may be required to explore and develop its properties, commence construction or operation of mining facilities or to maintain continued operations that economically justify the cost.
Government Regulations and Environmental Risks and Hazards
The Company is subject to various federal, provincial, state laws, rules, and regulations. The Company has adopted environmental practices designed to ensure that it continues to comply with environmental
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Kobrea Exploration Corp.
(An Exploration Stage Company)
Management's Discussion and Analysis
For The Three Months Ended April 30, 2025
regulations currently applicable to it. All of the Company's activities comply in all material respects with applicable environmental legislation.
Environmental hazards may exist on the Company's properties, which are unknown to the Company at present, which have been caused by previous or existing owners or operators of the properties. The Company is not aware of any existing environmental hazards related to any of its current or former property interests that may result in material liability to the Company.
Environmental legislation is becoming increasingly stringent, and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company's operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the resource property interests, the potential for production on the property may be diminished or negated.
Cybersecurity
Companies in all industries, including the mining industry, are susceptible to cyber risk. The Company's primary operational exposure to cyber risk is with respect to proprietary geological, geochemical and exploration data and related models. The Company, similar to companies in all industries, is exposed to common place cyber risks such as, but not necessarily limited to, phishing, spam, fraudulent attacks, denial of service attacks, data loss, data theft, data corruption. The Company outsources its IT management to IT professionals who implement, among other controls and mitigation strategies, system access and authentication controls, transactional authentication, system activity logging, audit trails, "exception" handling, on-prem and off-prem backup and storage of the Company's data.
Other
The economic uncertainties around persistent inflation pressure and geopolitical events have the potential to slow growth in the global economy. Future developments in these challenging areas could impact on the Company's results and financial condition and the full extent of that impact remains unknown.
Proposed Transactions
Other than normal course review of prospective property transactions and on-going plans to raise equity finance, there are no transactions pending as at the date of this report.
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