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Lancaster Resources Inc. — Management Reports 2025
Jul 30, 2025
47911_rns_2025-07-30_79ff20d9-9556-4a6d-9356-f9b0ed15dfbe.pdf
Management Reports
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LANCASTER RESOURCES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended March 31, 2025 and 2024
July 28, 2025
This Management's Discussion and Analysis ("MD&A") relates to the financial position and financial performance of Lancaster Resources Inc. ("Lancaster") for year ended March 31, 2025 and 2024. All references to "us", "we", the "Company", and "our" refer to Lancaster on a consolidated basis.
Except where otherwise indicated, the financial information contained in this MD&A was prepared in accordance with International Financial Reporting Standards ("IFRS"). This MD&A should be read in conjunction with our audited consolidated financial statements for the years ended March 31, 2025 and 2024 (the "Financial Statements").
Financial information contained in this MD&A has been prepared on the basis that we will continue as a going concern, which assumes that we will be able to realize our assets and satisfy our liabilities in the normal course of business for the foreseeable future. Management is aware, in making its going concern assessment, of material uncertainties related to events and conditions that may cast significant doubt upon our ability to continue as a going concern.
During the year ended March 31, 2025, the Company had no revenues, incurred a net loss of $1,548,884 and incurred negative cash flow from operations of $89,788. As at March 31, 2025, the Company has a working capital deficit of $1,945,213, and an accumulated deficit of $8,874,122. The continued operations of the Company are dependent on future profitable operations, management's ability to manage costs, and the future availability of equity or debt financing. Whether and when the Company can generate sufficient operating cash flows to pay for its expenditures and settle its obligations as they fall due is uncertain. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption be inappropriate. The impact of those adjustments to the consolidated financial statements could be material..
Except where otherwise indicated, all financial information is expressed in Canadian dollars.
CORPORATE OVERVIEW AND DEVELOPMENT
We were incorporated under British Columbia's provincial laws on July 12, 2019. We were initially engaged in psychedelic research projects which was discontinued in late 2022.
On December 14, 2022, we entered into a Letter Agreement for a merger with Lancaster Lithium Inc. ("Lancaster Lithium"). The merger was completed through a reverse takeover transaction on June 9, 2023. We are a mineral exploration company.
Lancaster Lithium:
- In September 2022, Lancaster Lithium identified the potential of the Alkali Flat Lithium Project. After several months of negotiations and due diligence, we entered into a definitive option agreement for the project on November 17, 2022. The Alkali Flat Lithium Project comprises 260 claims (~5200ac) with prospective lithium brine deposits in the Lordsburg area of southwestern New Mexico, USA. Subsequently, the Option Agreement was amended to extend the deadline for the initial payment, and the first option payment of USD $25,000 was made. Refer to "Mineral Properties" for further information.
- In February 2023, Lancaster Lithium closed a first tranche of private placement of $305,000 through the issuance of 1,525,000 units. Each unit consisted of one share and one warrant to purchase another share at $0.40 for 3 years. In connection with the private placement, we paid finders fees of $24,400 and issued 122,000 Broker Warrants to buy shares at $0.20 per share.
- On February 15, 2023, Lancaster Lithium entered a merger agreement with Tevera Energy Corp. ("Tevera"). The agreement was a related party agreement in that both companies had some officers, directors and shareholders in common. Subsequently, on February 28, 2023, we held our annual general meeting and a special shareholders' meeting to obtain approval for the merger with Tevera Energy. The attending shareholders unanimously voted in favour of the resolutions to approve the merger. The amalgamation with Tevera Energy was finalized on March 9, 2023.
- On April 4, 2023 a special meeting of the shareholders of Lancaster Lithium approved the merger and 100%
of the shareholders in attendance at the meeting in person or by proxy voted in favour of the merger.
- In April 2023, Lancaster Lithium discontinued two subsidiaries that were not being used that had been wholly owned subsidiaries of Tevera Energy.
On June 9, 2023, we completed a reverse takeover transaction (the "Transaction") pursuant to which it acquired all of the issued and outstanding common shares of Lancaster Lithium, a company incorporated in the province of British Columbia. On June 9, 2023, after obtaining all necessary approvals the merger with Lancaster Lithium was completed via a three-cornered amalgamation between the Company, Lancaster Lithium and the Company's wholly owned subsidiary. In this process, the Company acquired 100% of Lancaster Lithium's issued and outstanding common shares in exchange for common shares of the Company on a 1:1 basis. The Company's outstanding warrants and options were exchanged into warrants and options of Lancaster Lithium on an identical basis. Upon closing the transaction, the company resulting from the amalgamation of Lancaster Lithium and the Company's subsidiary became a wholly owned subsidiary of the Company, and the Company changed its name to Lancaster Resources Inc. and continues to advance the Lancaster Lithium exploration and development strategy.
On June 26, 2023, Andrew Watson, P.Eng., joined us as our Vice President of Engineering and Operations. Mr. Watson brings with him 21 years of rich technical leadership, operations, corporate strategy, and commercialization experience in lithium, hydrogen, and conventional oil and gas production. As the newly appointed Vice President of Engineering and Operations, Mr. Watson will spearhead Lancaster's Alkali Flat Lithium Project exploration operations in Lordsburg, New Mexico, USA along with Trans-Taiga.
On August 29, 2023, we entered into a definitive agreement (the "Agreement") to acquire 100% of the Trans-Taiga Lithium Project (the "Property") in the Eeyou Istchee James Bay region of Quebec. The Property, hosting several historical pegmatite samples, lies ~120 km west of Patriot Battery Metals' Corvette Project, ~74 km west of Winsome Resources' Cancet Project, and a few kilometres east of Loyal Lithium's Brisk Lithium Project. With the acquisition of the Property, we have diversified our exploration projects. Our focus expands from its existing lithium brine exploration at the Alkali Flat Project in New Mexico to include hard rock lithium exploration in Quebec's James Bay region. This strategic move enhances our exploration capabilities and geographical diversity, positioning it to unlock different types of lithium resources in varied geological settings all within Tier 1 mining jurisdictions. Refer to "Mineral Properties" for further information.
On December 15, 2023, we incorporated a wholly owned subsidiary, Nelson Lake Copper Corp. ("Nelson Lake"), as a British Columbia company. On December 18, 2023, Nelson Lake Copper Corp. directly staked claims covering an area of approximately 5,746 hectares in Saskatchewan, Canada
On January 2, 2024, we entered into a spinoff agreement with our wholly owned subsidiary Nelson Lake to spin off the majority of its interest in Nelson Lake Copper to Lancaster shareholders.
In February 2024, we acquired two mineral claims, Catley Lake (3,036 hectares) and Centennial East (5,081 hectares), in the Athabasca Basin with aims to target high-grade uranium.
On April 2, 2024, we completed a transaction to spin off its wholly owned subsidiary Nelson Lake. We subscribed for 1,650,000 common shares of Nelson Lake at a price of $0.02 per common share with a payment of $33,000. On the same date, we also declared a dividend of 1,046,269 Nelson Lake shares on the basis of $0.02 common shares in Nelson Lake issued for each of the Company's common shares held by a shareholder of the Company as of the record date of February 5, 2024. On the same date, we issued 550,000 fully paid and non-assessable shares to Nelson Lake for a payment of $33,000.
On April 5, 2024, our wholly owned subsidiary 1466777 B.C. Ltd. directly staked a claim in Saskatchewan, the Piney Lake Gold Property, for staking costs of less than $10,000.
On April 10, 2024, the Company closed a non-brokered private placement of 1,000,000 units of the Company at a price of $0.05 per unit for proceeds of $30,000 and a conversion of debt of $20,000, which includes $2,560 owed to a director of the Company. Each unit consisted of one common share and one share purchase warrant; Each warrant entitles the holder to acquire one additional common share at an exercise price of $0.08 per share until April 10, 2027.
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On March 28, 2025, the Company issued 2,249,000 units of the Company at a price of $0.05 per unit for $28,000 and a conversion of an accounts payable amount of $84,450. Each unit consisted of one common share of the Company and one share purchase warrant, where in each warrant entitles the holder to acquire one additional common share of the Company for $0.05 per share until March 28, 2028.
On April 22, 2025, the Company reached an agreement to purchase 100% interest in the Lake Cargelligo Project located in New South Wales, Australia, for a total purchase price of $210,000 plus GST, payable in 10,000,000 shares of the Company at a deemed value of $0.02 per share and $10,000 cash and a net smelter royalty of 2%.
On April 25, 2025, the Company granted 1,600,000 RSUs to its directors and officers. These RSUs vested immediately after grant.
On May 1, 2025, Andrew Watson was appointed as the Chief Executive Officer of the Company.
On May 30, 2025, the Company issued 20,000,000 units of the Company at $0.02 per unit for gross proceeds of $400,000. Each unit consists of one common share of the Company and on share purchase warrant. Each warrant entitle the holder to acquire one common share in the capital of the Company at $0.05 until the date that is three years from the date of issuance.
In June 2025, the Company issued 438,000 shares through the exercise of warrants for gross proceeds of $30,660.
Acquisition of Lancaster Lithium Inc.
On June 9, 2023, the Company completed a reverse takeover transaction (the "Transaction") pursuant to which it acquired all of the issued and outstanding common shares of Lancaster Lithium, a company incorporated in the province of British Columbia. Under the terms of the Transaction, the Company issued 39,476,861 common shares, 17,735,594 share purchase warrants and 3,276,000 options in exchange for the issued and outstanding common shares, warrants and options of Lancaster Lithium.
As a result of the completion of the Transaction, the former shareholders of Lancaster Lithium acquired 93% of the outstanding common shares of the Company, and, for accounting purposes, are considered to have acquired control of the Company. Accordingly, the Transaction constitutes a reverse acquisition of the Company by Lancaster Lithium and has been accounted for as a reverse acquisition transaction in accordance with the guidance provided in IFRS 2, Share-based Payment and IFRS 3, Business Combinations. As the Company did not qualify as a business prior to the closing of the transaction according to the definition in IFRS 3, this reverse acquisition did not constitute a business combination; rather, it was treated as an issuance of shares by Lancaster Lithium for the net assets of the Company. Accordingly, no goodwill was recorded with respect to the Transaction. The Transaction was measured at the fair value of the common shares that Lancaster Lithium would have had to issue to the shareholders of the Company, being 3,036,011 common shares with a fair value of $607,202, fair value of 2,060,110 warrants of $11,146 and the fair value of 47,209 stock options of the Company with a fair value of $7,166, to give the shareholders of the Company the same percentage of equity interest in the combined entity that results from the reverse acquisition had it taken the legal form of Lancaster Lithium acquiring the Company. The fair value of common shares, warrants and stock options issued were estimated based on the Company's financing event, which took place concurrently with the reverse takeover transaction at the price of $0.20 per common share. These condensed interim consolidated financial statements include the accounts of the Company as at June 9, 2023, and the historical accounts of the business of Lancaster Lithium since its incorporation on July 12, 2019.
The total consideration of the common shares and the performance shares has been allocated to the fair value of the net assets acquired and liabilities assumed, as follows:
| $ | |
|---|---|
| Fair value of 3,036,011 common shares | 607,202 |
| Fair value of 2,060,110 share purchase warrants | 11,146 |
| Fair value of 47,209 stock options | 7,166 |
| Total consideration | 625,514 |
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Net assets and liabilities acquired:
| Cash | 138,255 |
|---|---|
| Marketable securities (Note 5) | 13,636 |
| Amounts receivable | 65,267 |
| Prepaid expenses | 4,288 |
| Accounts payable and accrued liabilities | (123,676) |
| Convertible debt (Note 8) | (846,660) |
| Due to related parties | (101,966) |
| Net liabilities assumed | (850,856) |
| Excess of consideration paid on acquisition | 1,476,370 |
The fair value of warrants and stock options of the Company was calculated using the Black-Scholes option pricing model with the following assumptions in weighted average: volatility of 163%, expected life of 2 years, no dividends, no forfeitures, and a risk-free rate of 4.5%.
Spin-off
On January 29, 2024, the Company entered into a plan of arrangement with its wholly-owned subsidiary, Nelson Lake Copper Corp. ("Nelson Lake") (the "Plan of Arrangement"). The Plan of Arrangement was approved by the Company's shareholders by special resolutions at a special meeting of the shareholders on March 15, 2024 and was approved by the British Columbia Supreme Court in a final order on March 25, 2024. On April 2, 2024, The Company subscribed for 1,650,000 common shares of Nelson Lake at a price of $0.02 per common share with a payment of $33,000. On the same date, the Company issued 550,000 fully paid and non-assessable shares to Nelson Lake for proceeds of $33,000.
On April 2, 2024, the Company declared a share dividend of 1,046,269 Nelson Lake shares based on $0.01 net assets per share in Nelson Lake for each of the common shares of the Company held as of the record date of February 5, 2024 (the "Spin-Off"). Following the spin-off transaction, the Company holds 703,731 common shares of Nelson Lake, representing approximately 40% of Nelson Lake's total issued and outstanding shares. Nelson Lake continues to meet the criteria for consolidation based on IFRS 10 as it has majority interest in Nelson Lake's Board of Directors and controls the day-to-day operations of Nelson Lake, and the Company continues to present Nelson Lake's financial results on a consolidated basis.
Mineral Properties
Alkali Flat Lithium Project
We hold an interest in the Alkali Flat Lithium Project located in New Mexico, USA. The Alkali Flat Lithium Project comprises 260 claims (~5200ac) with prospective lithium brine deposits in the Lordsburg area of southwestern New Mexico, USA. To earn its interest in the Option Agreement, the Company must pay an aggregate of US$2,975,000 to Majuba Mining Limited ("Majuba") as follows:
- US$25,000 within 18 business days of acquisition (paid);
- US$50,000 within 90 calendar days of acquisition (paid);
- US$150,000 on or before the second anniversary of the acquisition, November 17, 2024;
- US$1,000,000 on or before the third anniversary of the acquisition, November 17, 2025; and
- US$1,750,000 on or before the fourth anniversary of the acquisition, November 17, 2026.
Subsequently, the Option Agreement was amended to extend the deadline for the initial payment, and the first option payment of $25,000 and the second payment of $50,000 were made according to the amended Option Agreement.
From February 2023 and onwards, we deployed various resources to explore and evaluate this property with a total spending $237,423. During the year ended March 31, 2025, the Company determined this project no longer suite the Company's long-term objectives. The Company recorded an impairment loss of $374,453 due to management's decision to terminate the project due to declining market price of lithium.
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Trans Taiga Lithium Project
On August 29, 2023, we entered into an option purchase agreement (the "Option Agreement") for the full acquisition of the Trans Taiga Lithium Project (the "Project") situated in the James Bay region of Quebec. The Project is home to several identified pegmatite outcrops.
The Option Agreement grants the Company an exclusive option to acquire 100% ownership of the Project from a group that includes Bounty Gold Corp. and Last Resort Resources. A total purchase price of $115,000 is payable to as follows:
- $37,000 due within 10 days of entering into the long form agreement, paid through $10,000 cash plus $27,000 via the issuance of 135,000 common shares in Lancaster's stock at a deemed price of $0.20 per share;
- $26,000 due on the first anniversary date of the Option Agreement;
- $26,000 due on the second anniversary date; and
- $26,000 due on the third anniversary date.
We may, at its discretion, make 50% of each payment in common stock;
The agreement includes a 2% net smelter returns royalty, of which 1% can be bought back by the Optionors for $1,000,000.
We also agreed to make the following additional payments:
- A $50,000 fee is payable if exploration results yield a minimum of 10 contiguous meters of lithium with values of 1% or more;
- A payment of $1,000,000 is due if Lancaster publishes a 43-101 technical report for a resource of not less than 5 million tons with 1% lithium concentration.
During the year ended March 31, 2025, the Company recorded an impairment loss of $30,249 due to the option agreement being in default for non-payment. The Company is actively working on curing the default status of the agreement.
Nelson Lake Copper Project
On December 18, 2023, the Company directly staked 1 mining claim covering a contiguous block of 5,746 hectares in Saskatchewan (the "Nelson Lake Copper Property") for $3,447, which was paid to the Government of Saskatchewan, as administered through the Mineral Administration Registry Saskatchewan (MARS). The property targets sedimentary hosted copper in the Wollaston Domain copper belt.
Other claims
In February 2024, we staked two mineral claims in the world-class Athabasca Basin. The two claims are targeting high grade uranium in basement and unconformity type deposits. The two properties, called Catley Lake and Centennial East, at 3,036 hectares and 5,081 hectares respectively, provide significant exploration opportunities.
The Catley Lake & Centennial East mineral claims are located immediately adjacent to Cameco's Centennial deposit claim block in the south-central area of the Athabasca basin. The Centennial deposit, which is approximately 11km west of Lancaster's Centennial East claim, was the first significant high-concentration uranium deposit located along the Snowbird tectonic boundary. The Centennial deposit has shown assays up to 8.78% U308 over 33.9m below the Athabasca sandstone and Virgin River unconformity from a Cameco drill. Concentrations of U308 up to 25.6% were seen over 0.5m in a drillhole assay (SMDI-2758).
Approximately 24km southwest of our claims is the Cameco Dufferin deposit. Dufferin has shown assays, from drilling, up to 1.73% U308 over 6.5m. The Dufferin deposit also shows numerous intervals of uranium mineralization within the sandstone and unconformity
We acquired the Piney Lake Gold Property in April 2024. The Piney Lake Gold Property, covering an area of 2,267.8 hectares, is nestled approximately 65 kilometres east of La Ronge Provincial Park and a mere 2.5 kilometres east of North Arrow Minerals' Pikoo property. Encircled by the prolific gold claims of SGO / SSR Mining, the Piney Lake claim is in a region with a storied history of mineral discoveries. Access to the Piney Lake property is facilitated by provincial highways, placing it about 18 kilometres to the southwest of Pelican Narrows via Highway 135 and similarly accessible to Deschambault Lake via Highway 911. We acquired the property by staking claims directly in Saskatchewan, Canada.
Management cautions that mineralization hosted on adjacent and/or nearby properties is not necessarily indicative of the presence of similar mineralization or geology on our properties.
Summary of Investments in Mineral Properties
During the year ended March 31, 2025, our investments in our mineral properties are as follows:
| Alkali Flat Lithium Project $ | Trans Taiga Lithium Project $ | Nelson Lake Copper Project $ | Other Claims $ | Total $ | |
|---|---|---|---|---|---|
| Acquisition costs: | |||||
| Balance, March 31, 2023 | 137,030 | - | - | - | 137,030 |
| Additions | - | 30,250 | 3,447 | 4,870 | 38,567 |
| Balance, March 31, 2024 | 137,030 | 30,250 | 3,447 | 4,870 | 175,597 |
| Additions | - | - | - | 3,352 | 3,352 |
| Disposition | - | - | - | (565) | (565) |
| Impairment | (137,030) | (30,249) | - | - | (167,279) |
| Balance, March 31, 2025 | - | 1 | 3,447 | 7,657 | 11,105 |
| Exploration costs: | |||||
| Balance, March 31, 2023 | 109,100 | - | - | - | 109,100 |
| Claims maintenance | 57,036 | - | - | - | 57,036 |
| Consulting | 25,629 | - | - | - | 25,629 |
| Geological | 18,610 | - | 27,765 | - | 46,375 |
| Surveys | 27,048 | - | - | - | 27,048 |
| Balance, March 31, 2024 | 237,423 | - | 27,765 | - | 265,188 |
| Impairment | (237,423) | - | - | - | (237,423) |
| Balance, March 31, 2025 | - | - | 27,765 | - | 27,765 |
| Carrying values: | |||||
| March 31, 2024 | 374,453 | 30,250 | 31,212 | 4,870 | 440,785 |
| March 31, 2025 | - | 1 | 31,212 | 7,657 | 38,870 |
SELECTED ANNUAL INFORMATION
Management considers that the main indicators of our performance are the following: revenues, net income and loss, total assets, earnings or loss per share. The following information was derived from our financial statements for the years ended March 31, 2025 and 2024.
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Revenues | - | - |
| Net loss | (1,548,884) | (3,608,456) |
| Net loss per share attributable to the Company's shareholders | (1,535,100) | (3,608,456) |
| Net loss per share attributable to the non-controlling interest | (13,784) | - |
| Basic and diluted loss per shares from continuing operations | (0.03) | (0.08) |
| Total assets | 91,121 | 719,325 |
| Current liabilities | (1,997,464) | (1,332,217) |
| Dividends declared and paid out in cash | - | - |
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OVERALL PERFORMANCE
As at March 31, 2025, we did not have any revenues. For year ended March 31, 2025, we incurred a net loss of $1,548,884 as compared to $3,608,456 in the prior year. The net loss for the prior year was significantly impacted by a one-time listing cost of $1,476,370 as a result of the reverse take over transaction completed on June 9, 2024.
DISCUSSION ON OPERATIONS
EXPENSES:
Consulting fees
We are a developing business, and we engage consultants and contractors regularly to obtain expertise in various business areas without having to commit to employment costs. For year ended March 31, 2025, we incurred consulting fees of $265,838 compared to $485,366 in the prior year. The decrease in consulting fees was driven by the RTO listing process in the prior year.
Investor relations
For the year ended March 31, 2025, we incurred investor relations expenses of $104,564 as compared to $113,841 in the prior year. The decrease in investor relations expenses was driven by the RTO listing process and post-RTO capital market activities in the prior year.
Marketing, publicity and digital media
Marketing, publicity and digital media expenses included advertising media spent to promote our corporate brand. For the year ended March 31, 2025, we incurred marketing, publicity and digital media expenses of $411,819 as compared to $302,186 in the prior year. We intended to gradually reduce our capital market promotional activities following the listing in the prior year.
Office and administrative expenses
Office and administrative expenses primarily included insurance fees, broker and filing fees, interest expense and other general office expenses. For year ended March 31, 2025, we incurred office and administration expenses of $17,385 as compared to $58,441 in the prior year. The decrease in office and administrative expenses were driven efficiencies from our administrative activities.
Professional fees
Professional fees include legal, accounting, audit and taxation fees. For the year ended March 31, 2025, we incurred professional fees of $69,495 as compared to $119,113 in the prior year. The decrease in investor relations expenses was driven by the RTO listing process and post-RTO capital market activities in the prior year.
Research and development
Research and development expenses are related to our cost in the study of early-stage projects. For the year ended March 31, 2025, we incurred research and development costs of $327 as compared to $2,021 in the prior year. We intend to focus on developing existing properties and claims which will led to lower spend on research activities.
Share-based compensation
Share-based compensation expenses were related to the stock options granted our directors, advisors, officers, employees and consultants. For year ended March 31, 2025, we incurred share-based compensation of $131,348 as compared to $670,634 in the prior year. We expect to continue to utilize stock options, and other forms of equity instruments, to incentivize our teams.
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Transfer agent and filing fees
Transfer agent and filing fees were related to the application and ongoing fees for the listing of our common shares on the Canadian Securities Exchanges (CSE). For the year ended March 31, 2025, we recorded listing fees of $61,589 as compared to $91,060 listing expenses in the prior year. The decrease in transfer agent and filing fees was driven by RTO activities in the prior year.
Travel and entertainment
For the year ended March 31, 2025, we incurred travel and entertainment cost of $1,719 as compared to $30,151 in the prior year. The travel expense incurred in the prior year was related to participation in industry trade show events and we have reduced such activities during the current year.
Wages
Wages for year ended March 31, 2025 were $nil as compared to $28,615 in the prior year. The decrease in wages was driven by reduction of full-time employee of the team as we increasingly used short term consulting arrangements to gain cost efficiency.
Accretion
Accretion expense was related to our convertible debentures. For the year ended March 31, 2025, we recorded accretion expense of $56,690 as compared to $110,109 in the prior year. We acquired convertible debentures through the RTO process on June 9, 2024. All convertible debentures are matured during the year ending March 31, 2025.
Excess of consideration paid on acquisition
Excess of consideration paid on acquisition represents the purchase price paid in excess of the net assets acquired for our RTO transaction (see section "Reverse Takeover Transaction" above) in the amount of $nil and $1,476,370 for the year ended March 31, 2024.
Foreign exchange
Foreign exchange income or expenses are related to transactions in foreign currencies mostly professional fees to support our projects in foreign jurisdictions. For year ended March 31, 2025, we incurred foreign exchange expense of $2,309 as compared to $5,393 in the prior year.
Impairment of mineral properties
During the year ended March 31, 2025, the Company recorded an impairment loss of $404,702 due to management's decision to terminate the Alkali Flat project due to declining market price of lithium. The Company recorded an impairment loss of $30,249 for Trans Taiga, due to the option agreement being in default for non-payment. The Company is actively working on curing the default status of the agreement. We did not incur impairment expenses during the year ended March 31, 2024.
Interest expense
Interest expense was related to our convertible debentures. For the year ended March 31, 2025, we recorded interest expense of $99,607 as compared to $nil in the prior year. We acquired convertible debentures through the RTO process on June 9, 2024. All convertible debentures are matured during the year ending March 31, 2025.
Realized loss on marketable securities
This relates to the loss on sale of shares of publicly traded companies held by the Company during the year. For the year ended March 31, 2025, we recorded realized loss on marketable securities of $24,205 as compared to $nil in the prior year.
Unrealized loss on marketable securities
As at March 31, 2025, the Company owns the following marketable securities: 240,257 (March 31, 2024 – 240,257) common shares of Komo Plant Based Foods Inc., 550,000 (March 31, 2024 – 550,000) of the Company's shares held by its subsidiary Nelson Lake Copper Corp., 61,500 (March 31, 2024 – 125,000) stock option of Greenridge Exploration Inc. The fair values and adjustments to the marketable securities are shown below:
| Common shares $ | Stock options $ | Total $ | |
|---|---|---|---|
| Fair value, March 31, 2023 | 25,000 | - | 25,000 |
| Additions | 13,636 | 78,378 | 92,014 |
| Unrealized loss | (33,831) | - | (33,831) |
| Fair value, March 31, 2024 | 4,805 | 78,378 | 83,183 |
| Additions | 33,000 | - | 33,000 |
| Cash paid for the exercise of stock options | - | 40,005 | 40,005 |
| Interest earned | - | 119 | 119 |
| Proceeds from the sale of marketable securities | - | (65,953) | (65,953) |
| Realized loss from the sale of marketable securities | - | (24,205) | (24,205) |
| Unrealized loss | (29,553) | (22,642) | (52,195) |
| Fair value, March 31, 2025 | 8,252 | 5,702 | 13,954 |
Write off of amounts receivable
Write-off of amounts receivable in the prior year was related to debt owed by Tevera Energy and Better Plant Sciences. We completed a merger transaction with Tevera Energy in March 2024 and such debt of $28,069 was written off following the merger. We previously made retainer payments to Better Plant Sciences to secure various corporate services under an operating agreement. The operating agreement was terminated in March 2024. The remaining balance of this prepayment of $40,670 was provided with a full allowance due to significant doubt in its recovery. We did not incur such costs during the year ended March 31, 2025.
Net and comprehensive loss
We incurred a net loss of $1,548,884 for the year ended March 31, 2025 as compared to $3,608,456 in the prior year.
Loss per share from continuing operations on basic and fully diluted basis was $0.03 for the year ended March 31, 2025, compared to $0.08 in the prior year.
Dividends
On April 2, 2024, we declared a dividend of 1,046,269 Nelson Lake shares ("Dividend Shares") on a basis of 0.02 common shares of Nelson Lake for each common shares of the Company as of the record date of February 5, 2024. The Dividend Shares represented 59.8% of the total issued and outstanding shares of Nelson Lake. We did not declare or pay any dividends in the prior year.
SUMMARY OF QUARTERLY RESULTS
The summary of our quarterly results are as follows:
For the quarters ended:
| | Mar.31, 2025
$ | Dec.31, 2024
$ | Sep.30, 2024
$ | Jun.30, 2024
$ |
| --- | --- | --- | --- | --- |
| Operating Expenses | 480,590 | 183,837 | 100,328 | 299,329 |
| Net Loss | (826,874) | (214,913) | (218,564) | (288,533) |
| Basic and diluted loss per share | (0.02) | (0.00) | (0.00) | (0.01) |
| Weighted average shares outstanding | 56,745,505 | 55,703,872 | 55,703,872 | 54,633,323 |
| | Mar. 31, 2024
$ | Dec. 31, 2023
$ | Sep. 30, 2023
$ | Jun. 30, 2023
$ |
| --- | --- | --- | --- | --- |
| Operating Expenses | 448,283 | 388,060 | 309,417 | 755,668 |
| Net Loss | (412,489) | (450,984) | (438,092) | (2,306,891) |
| Basic and diluted loss per share | (0.00) | (0.01) | (0.01) | (0.06) |
| Weighted average shares outstanding | 45,074,151 | 46,609,318 | 42,956,894 | 40,194,622 |
LIQUIDITY
| March 31, 2025 | March 31, 2024 | |
|---|---|---|
| Current ratio(1) | 0.01 | 0.2 |
| Cash | $ 27 | $ 52,219 |
| Working capital deficit (2) | ($ 1,945,213) | ($ 1,053,677) |
| Debt (3) | $ 1,193,446 | $ 1,037,150 |
| Total shareholders’ deficit | ($ 1,906,343) | ($ 612,892) |
(1) Current ratio is current assets divided by current liabilities.
(2) Working capital is current assets minus current liabilities
(3) Debt refers to commercial loans and convertible debentures
Cash Position
As at March 31, 2025, we had $27 in cash. Subsequent to year ended March 31, 2025, the Company raised $430,660 by issuing new shares through non-brokered private placements and exercise of warrants.
During year ended March 31, 2025, we spent $89,788 of cash in operating activities, to finance operating expenses, wages, and consulting fees, as compared to $1,131,160 in the prior year. Cash generated in investing activities for year ended March 31, 2025 was $37,596 from sale of marketable securities and sale of mineral property. Cash provided by financing activities was $nil for the year ended March 31, 2025, as compared to $627,930 in the prior year, which was primarily from proceeds received from the issuance of common shares and exercise of warrants and stock options.
We aim to issue more common shares through private placements and listing processes to obtain funding needed for the future development of our business.
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Working Capital
We had a working capital deficit of $1,945,213 as at March 31, 2025, which primarily consists of cash, marketable securities and prepaid expense and deposits offset by accounts payable and accrued liabilities, flow-through premium, and convertible debentures, as compared to working capital deficit of $1,053,677 as at March 31, 2025. The decrease in the working capital was due to the fact that we had a higher rate of use of cash for our operations relative to the cash flows we received from financing activities to support our operations during the year.
CAPITAL RESOURCES AND MANAGEMENT
We are authorized to issue an unlimited number of common shares. As at March 31, 2025, there were 59,402,872 common shares issued and outstanding. We had 29,841,991 share purchase warrants outstanding with a weighted average exercise price of $0.29. We had 7,210,000 stock options outstanding with a weighted average exercise price of $0.15 per share of which 6,725,000 are exercisable with a weighted average exercise price of $0.15 per share.
Our principal business is to acquire, explore, and develop mineral properties and ultimately seek earnings by exploiting mineral claims. Currently, we are evaluating and reviewing potential resource properties and other business opportunities as possible options or joint ventures. Once we acquire an interest in a resource property or other business opportunity, we anticipate that we will require more funds to further our business.
OFF-BALANCE SHEET ARRANGEMENTS
As at March 31, 2025 and 2024, we had no off-balance sheet arrangements.
RELATED PARTY TRANSACTIONS
During the years ended March 31, 2025 and 2024, compensation of key management personnel were as follows:
| | 2025
$ | 2024
$ |
| --- | --- | --- |
| Consulting fees | 244,838 | 330,650 |
| Share-based compensation | 95,872 | 154,794 |
| Wages and benefits | - | 26,495 |
| | 340,710 | 511,939 |
As at March 31, 2025, the Company owed $120,273 (2024 – $3,954) to a director of the Company, of which $105,299 (2024 – $nil) is included in accounts payable and $14,973 (2024 – $3,954) in due to related parties. These amounts are unsecured, non-interest-bearing and due on demand.
As at March 31, 2025, the Company owed $44,376 (2024 -$8,806) to the CEO of the Company, which is recorded in accounts payable. The amounts owed are unsecured, non-interest bearing and due on demand.
As at March 31, 2025, the Company owed $54,275 (2024 -$nil) to the CFO of the Company, which is recorded in accounts payable. The amounts owed are unsecured, non-interest bearing and due on demand.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Significant areas requiring the use of estimates include the carrying value of marketable securities, fair value of convertible debenture and share-based compensation, and measurement of unrecognized deferred income tax assets.
Judgments made by management in the application of IFRS that have a significant effect on the consolidated financial statements include:
- the factors that are used in determining whether we have significant influence over another entity, and the application of the going concern assumption which requires management to consider all available information about the future, which is at least but not limited to 12 months from the end of the reporting period;
- the determination of whether a set of assets acquired and liabilities assumed in an acquisition constitutes a business may require the Company to make certain judgments, considering all facts and circumstances. A business is presumed to be an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or economic benefits; and
- judgment in determining whether it is likely that the future economic benefits are likely either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The deferral policy requires management to make certain estimates and assumptions about future events or circumstances, in particular, whether an economically viable extraction operation can be established. Estimates and assumptions made may change if new information becomes available.
CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION
Certain pronouncements have been issued by the IASB or the IFRS Interpretations Committee that are not mandatory for the current period and have not been early adopted. Management has assessed that there are no future accounting pronouncements that are expected to have a material impact on the Company in the current or future reporting periods.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Fair Values
Assets and liabilities measured at fair value on a recurring basis were presented on the consolidated statement of financial position as at March 31, 2025 and 2024, as follows:
| Fair Value Measurements Using | Balance, March 31, 2025 | |||
|---|---|---|---|---|
| Quoted prices in active markets for identical instruments (Level 1) $ | Significant other observable inputs (Level 2) $ | Significant unobservable inputs (Level 3) $ | ||
| Marketable securities | 8,252 | - | 5,702 | 13,954 |
| Fair Value Measurements Using | Balance, March 31, 2024 | |||
| Quoted prices in active markets for identical instruments (Level 1) $ | Significant other observable inputs (Level 2) $ | Significant unobservable inputs (Level 3) $ | ||
| Marketable securities: | 4,805 | - | 78,378 | 83,183 |
The fair values of other financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, amounts due to related parties, and convertible debentures approximate their carrying values due to the relatively short-term maturity of these instruments.
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Credit Risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counter-party default on its obligation. The Company's credit risk is primarily attributable to cash and cash equivalents. The Company minimizes its credit risk associated with its cash and cash equivalents balance by dealing with major financial institutions in Canada and has no other significant concentration of credit risk arising from operations. The carrying amount of financial assets represents the maximum credit exposure.
Foreign Exchange Rate and Interest Rate Risk
The Company is not exposed to any significant foreign exchange rate or interest rate risk.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to a shortage of funds. All of the Company's obligations are due within one year. The Company manages liquidity risk by maintaining sufficient cash balances and adjusting its operating budget and expenditure. Liquidity requirements are managed based on expected cash flows to ensure that there are sufficient funds to meet short-term and specific obligations.
Price Risk
The Company is exposed to price risk with respect to commodity prices and publicly traded market prices for marketable securities. 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.
QUALIFIED PERSON
Andrew Watson, P. Eng., who is a Qualified Person as defined by NI 43-101, and member in good standing with the Association of Professional Engineers and Geoscientists of Alberta (member number 75486) has reviewed and approved the technical information in this MD&A. Mr. Watson is the Vice President, Engineering and Operations for the Company. Mr. Watson holds stock options in the Company. Mr. Watson consents to the inclusion in this MD&A of the matters based on his information in the form and context in which it appears.
ADDITIONAL INFORMATION
Additional information can be found on the Company's website at https://lancaster-resources.com and on the Company's profile on SEDAR+ at www.sedarplus.ca.