Libra Energy Materials Inc. — Management Reports 2023

Mar 22, 2023

PowerStone Metals Corp. Management Discussion and Analysis

From the three-month period ended January 31, 2023 and from date of incorporation (December 13, 2021) to January 31, 2022

March 21, 2023

The following management discussion and analysis (“MD&A”) of the results of the operations and financial position of PowerStone Metals Corp. (the “Corporation”) for the three-month period ended January 31, 2023, and from the date of incorporation (December 13, 2021) to January 31, 2022, should be read in conjunction with the Corporation’s unaudited condensed interim financial statements for the three-month period ended January 31, 2023 and from the date of incorporation (December 13, 2021) to January 31, 2022. All figures contained in this MD&A are presented in Canadian dollars.

Forward-Looking Statements

Certain statements contained in this MD&A may constitute forward-looking statements. These statements relate to future events or the Corporation’s future performance. All statements, other than statements of historical fact, may be forward-looking statements.

Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “propose”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this MD&A and are expressly qualified, in their entirety, by this cautionary statement. The Corporation’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various risk factors.

The Corporation

PowerStone Metals Corp. (formerly Desk Holdings Ltd.) (the "Corporation") was incorporated under the Business Corporations Act (British Columbia) on December 13, 2021. On June 10, 2022, the Corporation changed its name from Desk Holdings Ltd. to PowerStone Metals Corp.

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The Corporation has not commenced commercial operations and has no assets other than cash held in trust and a 100% option interest in Chilton Cobalt claim. Given the nature of the activities, no separate segmented information is reported. The Corporation’s continuing operations, as intended, are dependent on its ability to secure equity financing with which it intends to identify and evaluate potential acquisitions of businesses, and once identified and evaluated, to negotiate an acquisition thereof or participation therein subject to receipt of regulatory and, if required, shareholders’ approval.

The address of the Corporation’s head, principal, and registered office is located at 1900 – 1040 West Georgia Street, Vancouver, British Columbia V6E 4H3.

On December 13, 2021, the Corporation issued 1 Common Share at $0.01.

On June 9, 2022, the Corporation issued 4,999,999 Common Shares in the capital of the Corporation at $0.005 per share for gross proceeds of $25,000. The Corporation also issued 2,500,000 Common Shares in the capital of the Corporation at $0.02 per share for gross proceeds of $50,000. A share-based payment of $0.015 per share for the 4,999,999 shares totalling $75,000 was recorded.

On July 21, 2022, the Corporation issued 1,000,000 Special Warrants in the capital of the Corporation at $0.02 per Special Warrant to CBLT pursuant to the Chilton Cobalt Property Option Agreement (Mineral Property Interest).

During the period ended October 31, 2022, the Corporation issued an aggregate of 7,863,333 Special Warrants at a price of $0.05 per Special Warrant and received gross proceeds of $393,167.

During the period ended October 31, 2022, the Corporation received $135,000 of subscription advances for Special Warrants issued subsequently.

Below terms apply to all special warrants issued by the Corporation. Each Special Warrant will be automatically exercised, for no additional consideration, at the option of the holder, into one Common Share of the Corporation on the date that is the earlier of: (a) the first business day following the date on which a receipt for a final prospectus has been issued to the Corporation by the securities regulatory in a Province in Canada; and (b) December 31, 2023.

In November and December 2022, the Corporation issued 3,725,000 Special Warrants of the Corporation at a price of $0.05 and 4,562,500 Special Warrants of the Corporation at a price of $0.10 for gross proceeds of $642,500 of which $135,000 was received before October 31, 2022.

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On December 1, 2022, the Corporation granted 775,000 options at an exercise price of $0.05 per option to directors, officers and consultants of the Corporation. The options will vest evenly on the first day of each month beginning on December 1, 2022. The options have a five-year expiry.

On December 15, 2022, the Corporation granted 300,000 options at an exercise price of $0.10 per option to an officer and advisors of the Corporation. The options will vest evenly on the first day of each month beginning on December 15, 2022. The options have a five-year expiry.

On February 2, 2023, the Corporation issued 3,400,000 Special Warrants of the Corporation at a price of $0.10 for gross proceeds of $340,000.

On February 7, 2023, the Corporation issued 200,000 Special Warrants of the Corporation at a price of $0.10 for gross proceeds of $20,000.

Subsequent to October 31, 2022, in connection with the Special Warrants issuances, the Corporation also issued 7,000 broker warrants and paid an aggregate of $700 in finder’s fees.

On January 20, 2023, the Corporation granted 175,000 stock options at an exercise price of $0.10 per option of the Corporation. The options will vest evenly on the first day of each month beginning on January 20, 2023. The options have a five-year expiry.

On March 1, 2023, The Corporation received its conditional approval to list its common shares on the Canadian Securities Exchange (the “CSE”). The final approval is subject to the Corporation fulfilling all of the requirements of the CSE.

On March 6, 2023, the Corporation received a receipt for its final prospectus from the British Columbia Securities Commission. As a result, the Corporation has become a reporting issuer in British Columbia and Alberta. The Corporation will distribute common shares upon the conversion of 20,750,833 special warrants previously issued.

Mineral Property Interest

On June 10, 2022, the Corporation entered into a property option agreement (the “Option Agreement”) with CBLT Inc. to acquire 100% interest in the Chilton Cobalt Property (“Chilton Cobalt”) in Saint-Jovite of the Province of Quebec. The following was required to exercise the option:

• Within 30 days after the execution of the Option Agreement, issue 1,000,000 common shares (or, at the option of the Company, other securities of the Company convertible into common shares of the Company without payment upon the listing of the Company’s shares on a recognized Canadian stock exchange) to the CBLT Inc.;

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(1,000,000 special warrants were issued on July 21, 2022).

• Close a financing of at least $250,000 at a price of $0.10 per share and the Company shall use its best efforts to complete aggregate equity raises of approximately $1,000,000 between the date of the Option Agreement and the Company’s listing on a recognized Canadian stock Exchange.

• Carry out work at Chilton Cobalt of at least $100,000 by September 30, 2023; and

• Carry out a further $150,000 of work at Chilton Cobalt by December 31, 2024.

The Option Agreement further provides for an additional 500,000 shares to be issued to CBLT Inc. from treasury in the event the Corporation has not listed its shares on a recognized Canadian stock exchange by September 30, 2023.

On March 21, 2023, the Board of Directors approved the unaudited condensed interim financial statements for the three-month period ended January 31, 2023 and from the date of incorporation (December 13, 2021) to January 31, 2022.

Summary of Quarterly Results

	January 31, 2023	October 31, 2022	July 31, 2022	April 30, 2022	January 31, 2022
Total Assets	$1,038,145	$439,286	$57,500	-	-
Total Revenues	Nil	Nil	Nil	-	-
Total Expenses	$242,798	$177,362	$112,500	-	-
Net Loss	($242,798)	($177,362)	($112,500)	-	-
Basic and diluted net lossper share	($0.05)	$(0.03)	$(0.06)	-	-

Results of Consolidated Operations

Three months ended January 31, 2023

The Corporation recorded a net loss of $242,798 for the three months ended January 31, 2023. The net loss for the three-month period ended January 31, 2023, consists of $136,273 in consulting and legal related expenses, $483 of incurred travel, a further $65,708 in share-based payments, $6,250 in related filing fee expenses and $34,084 of exploration expenses related to the Chilton Cobalt mineral property interest incurred in connection with the preparation of the technical report and associated sample drilling on the mineral property. The Corporation is currently an exploration stage company and accordingly has incurred and expects to incur losses

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while it conducts exploration work prior to commencing operations.

Period from the date of incorporation (December 13, 2021) to January 31, 2022

The Corporation recorded no transactions during this period as the Corporation was established on December 13, 2021.

Additional Disclosure for Venture Issuers without Significant Revenue

Since the Corporation has no revenue from operations, the following is a breakdown of the material costs incurred for the three months ended January 31, 2023, and for the period from incorporation (December 13, 2021) to January 31, 2023:

Material Costs	For the three months ended January 31, 2023	For the period from incorporation (December 13, 2021) to January 31, 2023
Professional fees	$136,273	$248,985
Exploration expenses	$34,084	$132,356
Share-basedpayments	65,708	$140,708
Travel & entertainment	$483	$4,362
Filingfees	$6,250	$6,250

Liquidity and Capital Resources

As at January 31, 2023 the Corporation had cash of $1,018,145. The Corporation had current liabilities of $5,131 and working capital of $1,013,014.

Negative cash flows of $202,941 were recorded from operating activities during the three-month period ended January 31, 2023. This is primarily due to outflows relating to professional fees, exploration expenses, share-based compensation and travel related expenditures.

Outstanding Share Data

As at the date of the MD&A, 7,500,000 Common Shares are issued and outstanding. In addition, on March 6, 2023, the Corporation has received a receipt for its final prospectus from the British Columbia Securities Commission. As a result, the aggregate of 20,750,833 special warrants issued in the Corporation will be converted into common shares of the Corporation for no additional consideration. There are 1,250,000 stock options outstanding with an exercise price between

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$0.05 and $0.10 expiring between December 1, 2027, and January 20, 2028. There are 7,000 broker warrants outstanding with an exercise price of $0.10 expiring on December 9[th] , 2024.

Off-Balance Sheet Arrangements

The Corporation has not had any off-balance sheet arrangements from the date of its incorporation to the date of this MD&A.

Related Party Transactions

During the period ended January 31, 2023, the Corporation paid consulting fees, included in professional fees of $25,000 to a corporation controlled by the Corporation’s Chief Executive Officer.

The Corporation paid consulting fees, included in professional fees of $28,250 to a corporation controlled by the Corporation’s director.

The Corporation paid consulting fees, included in professional fees, of $5,085 to the Corporation’s Chief Financial Officer.

Capital Management

The Corporation's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The Corporation includes equity, comprised of share capital, shares to be issued and deficit in the definition of capital.

The Corporation's primary objective with respect to its capital management is to ensure that it has sufficient cash resources to fund exploration work at Chilton Cobalt and to fund the identification and evaluation of additional potential acquisitions. To secure the additional capital necessary to pursue these plans, the Corporation may attempt to raise additional funds through the issuance of equity or by securing strategic partners.

Risks and Uncertainties

The following describes certain risks, events and uncertainties that could affect the Corporation and that each reader should carefully consider.

External financing may be required to fund the Corporation’s activities primarily through the issuance of additional equity. There can be no assurance that the Corporation will be able to

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obtain adequate financing. The securities of the Corporation should be considered a highly speculative investment.

The Corporation has not generated significant revenues and does not expect to generate significant revenues in the near future. In the event that the Corporation generates significant revenues in the future, the Corporation intends to retain its earnings in order to finance further growth. Furthermore, the Corporation has not paid any dividends in the past and does not expect to pay any dividends in the foreseeable future.

The Corporation’s business financial condition and results of operations may be further negatively affected by economic and other consequences from the conflict in the Ukraine and the sanctions imposed in response to that action in late February 2022. While the Corporation expects any direct impacts of the conflict in Ukraine to the business to be limited, the indirect impacts on the economy and on the industries in general could negatively affect the business and may make it more difficult for it to raise equity or debt financing. There can be no assurance that the Corporation will not be impacted by adverse consequences that may be brought about on its business, results of operations, financial position and cash flows in the future.

The Corporation faces risks related to health epidemics, pandemics, and other outbreaks of communicable diseases, which could significantly disrupt its ability to complete its proposed listing of its common shares on the Canadian Securities Exchange on a timely basis, or at all, and adversely effect its financial conditions. The Corporation’s business could be adversely impacted by the effects of the COVID-19 pandemic or other epidemics and/or pandemics. The extent to which COVID-19 impacts the Corporation’s ability to complete its listing on a timely basis, or at all, and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic (including recommendations from public health officials). In addition, the COVID-19 pandemic represents a widespread global health crisis that could adversely affect global economies and financial markets resulting in an economic downturn that could have an adverse effect on the Corporation and its ability to complete its IPO in a timely manner, or at all.

Risk Disclosures and Fair Values

The Corporation's financial instruments, consisting of cash and accrued liabilities approximate fair value due to the relatively short-term maturity of the instruments. It is management’s opinion that the Corporation is not exposed to significant interest, currency or credit risks arising from these financial instruments.

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Critical Accounting Estimates

The Corporation’s significant accounting policies are summarized in Note 2 of the audited financial statements for the period from the date of incorporation (December 13, 2021) to October 31, 2022.

Additional Information

For further detail, see the Corporation’s unaudited condensed interim financial statements for the three-month period ended January 31, 2023, and from incorporation (December 13, 2021) to January 31, 2022. Additional information about the Corporation can also be found on SEDAR.