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Maritime Resources Corp. Interim / Quarterly Report 2025
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Interim / Quarterly Report
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MARITIME RESOURCES
MARITIME RESOURCES CORP.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024
(Expressed in Canadian dollars)
(Unaudited)
NOTICE TO READER OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim consolidated financial statements of Maritime Resources Corp. (the "Company") have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.
MARITIME RESOURCES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| As at
(Unaudited – Prepared by Management, in Canadian dollars) | Note | March 31
2025
$ | December 31
2024
$ |
| --- | --- | --- | --- |
| ASSETS | | | |
| Current | | | |
| Cash | | 1,542,676 | 4,696,407 |
| Marketable securities | 4 | 1,687,500 | - |
| Receivables | 5 | 775,395 | 588,605 |
| Inventory | 6 | 740,939 | 331,908 |
| Prepaid expenses and deposits | 7 | 326,633 | 419,995 |
| | | 5,073,143 | 6,036,915 |
| Reclamation and other deposits | 8 | 1,982,981 | 1,982,981 |
| Property, plant and equipment | 9 | 12,212,256 | 10,267,432 |
| Exploration and evaluation assets | 10 | 38,754,397 | 38,567,491 |
| Total Assets | | 58,022,777 | 56,854,819 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Current liabilities | | | |
| Accounts payable and accrued liabilities | 11 | 2,325,585 | 1,334,035 |
| Current portion of lease liabilities | 12 | 209,720 | 131,333 |
| | | 2,535,305 | 1,465,368 |
| Deferred income tax liability | | 79,000 | 79,000 |
| Lease liabilities | 12 | 389,229 | 205,225 |
| Notes payable | 13 | 6,796,271 | 6,556,544 |
| Reclamation liability | 14 | 5,985,960 | 5,997,430 |
| Total Liabilities | | 15,785,765 | 14,303,567 |
| Shareholders' equity | | | |
| Share capital | 15 | 61,995,738 | 61,106,356 |
| Reserves | 15 | 3,467,522 | 3,396,258 |
| Royalty reserve | 15 | 210,700 | 210,700 |
| Deficit | | (23,436,948) | (22,162,062) |
| Total Shareholders' Equity | | 42,237,012 | 42,551,252 |
| Total Liabilities and Shareholders' Equity | | 58,022,777 | 56,854,819 |
Nature of operations and going concern (Note 1).
Approved and authorized on behalf of the Board of Directors:
"Allen Palmiere"
Chairman
"Tom Yip"
Director
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
MARITIME RESOURCES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
| For the three-month periods ended March 31
(Unaudited – Prepared by Management, in Canadian dollars) | Note | 2025
$ | 2024
$ |
| --- | --- | --- | --- |
| EXPENSES | | | |
| Corporate administration | 17 | 70,335 | 58,951 |
| Care and maintenance | | - | 468,369 |
| Consulting | | 19,500 | 19,515 |
| Depreciation | 9 | 72,173 | 55,404 |
| Directors’ fees and expenses | 17 | 30,120 | 30,119 |
| Financing expense and accretion | 16 | 518,835 | 462,663 |
| Interest expense on lease liability | 12 | 9,785 | 7,143 |
| Investor relations and promotion | | 60,382 | 58,219 |
| Professional fees | | 39,542 | 57,793 |
| Salaries and benefits | 17 | 279,727 | 502,995 |
| Site administration | | 177,739 | - |
| | | (1,278,138) | (1,721,171) |
| Gain on marketable securities | 10 | 125,000 | - |
| Loss on sale of exploration properties | 10 | (151,611) | - |
| Loss on foreign currency | | (922) | (94,185) |
| Interest income | | 21,191 | 24,762 |
| | | (6,342) | (69,423) |
| Loss and comprehensive loss for the period | | (1,284,480) | (1,790,594) |
| Basic and diluted loss per common share | | Nil | Nil |
| Weighted average number of common shares outstanding –
basic and diluted | | 837,043,871 | 549,008,627 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
MARITIME RESOURCES
CONDENSED INTERM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
| (Unaudited – Prepared by Management, in Canadian dollars) | Shares | Share capital | Reserves | Royalty reserve | Deficit | Total |
|---|---|---|---|---|---|---|
| # | $ | $ | $ | $ | $ | |
| Balance, December 31, 2023 | 545,666,319 | 51,977,109 | 2,505,466 | 210,700 | (15,720,746) | 38,972,529 |
| Shares and warrants issued upon private placement (Note 15) | 50,000,000 | 2,250,000 | 250,000 | - | - | 2,500,000 |
| Share issuance costs (Note 15) | - | (115,938) | - | - | - | (115,938) |
| Issued for mineral properties (Notes 10,15) | 50,000 | 2,000 | - | - | - | 2,000 |
| Reserves transferred on expired options (Note 15) | - | - | (264,605) | - | 264,605 | - |
| Loss for the period | - | - | - | - | (1,790,594) | (1,790,594) |
| Balance, March 31, 2024 | 595,716,319 | 54,113,171 | 2,490,861 | 210,700 | (17,246,735) | 39,567,997 |
| Shares issued pursuant to rights offering (Note 15) | 235,294,118 | 8,000,000 | - | - | - | 8,000,000 |
| Share issuance costs (Note 15) | - | (215,906) | - | - | - | (215,906) |
| Standby purchase warrants (Note 15) | - | (790,909) | 790,909 | - | - | - |
| Share-based payments (Note 15) | - | - | 337,849 | - | - | 337,849 |
| Reserves transferred on expired options (Note 15) | - | - | (223,361) | - | 223,361 | - |
| Loss for the period | - | - | - | - | (5,138,688) | (5,138,688) |
| Balance, December 31, 2024 | 831,010,437 | 61,106,356 | 3,396,258 | 210,700 | (22,162,062) | 42,551,252 |
| Exercise of warrants (Note 15) | 11,804,545 | 882,882 | (147,882) | - | - | 735,000 |
| Issued for mineral properties (Note 15) | 100,000 | 6,500 | - | - | - | 6,500 |
| Shares issuable to settle note interest (Note 20) | - | - | 185,262 | - | - | 185,262 |
| Share subscriptions received in advance (Note 15) | - | - | 43,478 | - | - | 43,478 |
| Reserves transferred on expired options (Note 15) | - | - | (9,594) | - | 9,594 | - |
| Loss for the period | - | - | - | - | (1,284,480) | (1,284,480) |
| Balance, March 31, 2025 | 842,914,982 | 61,995,738 | 3,467,522 | 210,700 | (23,436,948) | 42,237,012 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
MARITIME RESOURCES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the three-month periods ended March 31 | 2025 | 2024 |
|---|---|---|
| (Unaudited – Prepared by Management, in Canadian dollars) | $ | $ |
| Cash flows from operating activities | ||
| Loss for the period | (1,284,480) | (1,790,594) |
| Items not involving cash: | ||
| Accretion on reclamation liability | 48,440 | 46,511 |
| Amortization of notes payable transaction and finance costs | 238,359 | 366,759 |
| Depreciation | 72,173 | 55,404 |
| Gain on marketable securities | (125,000) | - |
| Loss on foreign currency | 1,367 | 116,886 |
| Loss on sale of exploration properties | 151,611 | - |
| Note interest payable in common shares | 185,262 | - |
| Changes in non-cash working capital items: | ||
| (Increase) decrease in receivables | (165,599) | 839,884 |
| Increase in accrued interest receivable | (21,191) | (60,136) |
| Increase in inventory | (409,031) | - |
| Decrease in prepaid expenses and deposits | 93,362 | 98,663 |
| Increase (decrease) in accounts payable and accrued liabilities | (968,062) | (332,380) |
| Net cash used in operating activities | (2,182,789) | (659,003) |
| Cash flows from investing activities | ||
| Exploration and evaluation expenditures | (181,647) | (478,595) |
| Property and equipment expenditures | (1,526,256) | - |
| Net cash used in investing activities | (1,707,903) | (478,595) |
| Cash flows from financing activities | ||
| Interest paid on notes payable | - | (192,114) |
| Proceeds from private placement subscriptions | 43,478 | - |
| Proceeds from warrant exercise | 735,000 | - |
| Proceeds from private placement | - | 2,500,000 |
| Repayment of lease liabilities | (41,517) | (27,183) |
| Share issue costs | - | (115,938) |
| Net cash provided by financing activities | 736,961 | 2,164,765 |
| Change in cash during the period | (3,153,731) | 1,027,167 |
| Cash, beginning of the period | 4,696,407 | 1,058,422 |
| Cash, end of the period | 1,542,676 | 2,085,589 |
| Supplemental disclosure | ||
| Cash paid for interest | 9,785 | 199,257 |
| Supplemental disclosure of non-cash financial and investing activities | ||
| Expiry/cancellation of stock options | - | 264,605 |
| Exploration and evaluation assets included in accounts payable and accrued liabilities | 1,381,971 | 64,747 |
| Property, plant and equipment included in accounts payable and accrued liabilities | 246,743 | - |
| Recognition of right of use asset and lease liability | 349,301 | - |
| Shares issued for property | 6,500 | 2,000 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
Maritime Resources Corp. and its subsidiary (the "Company" or "Maritime") is an exploration stage company. Maritime Resources Corp. was incorporated under the Business Corporations Act (British Columbia) on May 14, 2007. The Company is focused on re-starting the past producing Hammerdown Gold Mine ("Hammerdown") located near the Baie Verte mining district in Newfoundland and Labrador, Canada as well as exploration on its other properties in the region. The Company also holds a portfolio of mineral exploration properties in mining camps across Canada in a wholly owned subsidiary.
The Company's registered and records office is 3200 - 650 West Georgia Street, Vancouver, BC, Canada, V6B 4P7. The shares of the Company are traded on the TSX Venture Exchange ("TSX-V") under the symbol MAE.
As the Company is in the exploration stage, the recoverability of the costs incurred to date on exploration properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of its properties and upon future profitable production or proceeds from the disposition of the properties and deferred exploration expenditures.
These condensed interim consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. The Company has incurred ongoing losses. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due. Although it has been successful in raising financing in the past, there is no assurance it will be able to do so in the future.
On March 25, 2024, the Company completed a non-brokered private placement of 50,000,000 common shares of the Company and 3,648,069 common share purchase warrants to FireFly Metals Ltd. for aggregate gross proceeds of $2,500,000. On September 11, 2024, the Company closed a rights offering to the holders of its common shares, pursuant to which it issued 235,294,118 common shares for gross proceeds of $8,000,000 (Note 15). Following the rights offering, the Company commenced work on a comprehensive program of equipment repairs and inspections throughout the Pine Cove mill, focusing on all electrical and mechanical systems in preparation for re-commissioning the mill using stockpiled mineralized material from around the Point Rousse property.
On April 9, 2025, the Company closed a private placement offering and issued an aggregate of 266,700,000 Units at a price of $0.075 per unit for aggregate gross proceeds of $20,002,500. The net proceeds from the offering will be used for exploration and development, and general working capital purposes (Note 20).
The Company has incurred losses since inception and has no sources of reoccurring revenue. The Company expects to obtain additional financing during fiscal 2025, however if the Company is unable to obtain adequate additional financing, it will further curtail exploration and development activities. These events and conditions indicate a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.
These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. Such adjustments could be material.
2. STATEMENT OF COMPLIANCE AND BASIS OF PRESENTATION
These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with IFRS Standards as issued by the International Accounting Standards Board ("IASB"), on a basis consistent with
Page | 6
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
accounting policies disclosed in the audited financial statements for the fiscal year ended December 31, 2024, and should be read in conjunction with the most recently issued audited financial statements, which include information necessary or useful to understanding the Company's business and financial statement presentation. In particular, the Company's significant accounting policies which were presented in Note 3 to the audited consolidated financial statements for the year ended December 31, 2024 have been consistently applied in the preparation of the Company's condensed interim consolidated financial statements.
The condensed interim consolidated financial statements have been prepared using the historical cost basis, except for financial instruments which are stated at fair value and have been prepared using the accrual basis of accounting except for cash flow information. The condensed interim consolidated financial statements are presented in Canadian dollars unless otherwise noted.
These condensed interim consolidated financial statements comprise the financial results of Maritime Resources Corp. and its wholly owned subsidiary 2823988 Ontario Corp. All inter-company balances are eliminated on consolidation.
These condensed interim consolidated financial statements were authorized for issue by the Board of Directors on May 27, 2025.
3. MATERIAL ACCOUNTING POLICY INFORMATION
Use of estimates and judgments
The preparation of condensed interim consolidated financial statements in conformity with IFRS Accounting Standards, requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue 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.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.
Critical judgments exercised in the application of accounting policies having the most significant effects on the amounts recognized in the consolidated financial statements are as follows:
Economic recoverability and profitability of future economic benefits of exploration and evaluation assets – Management has determined that exploration, evaluation and related costs incurred which were capitalized may have future economic benefits and may be economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits, including geological and other technical information, commodity price forecasts, a history of conversion of mineral deposits with similar characteristics to its properties, evaluation of permitting and environmental issues and other such factors.
Property, plant and equipment – Management is required to assess the useful economic lives and residual values of the property, plant and equipment. Determining the useful lives required judgment based on factors such as asset maintenance, rate of technical and commercial obsolescence and asset usage. The useful lives of key assets are reviewed annually.
Acquisition accounting – The assessment of whether acquisitions are considered business combinations or asset acquisitions requires management judgement, the outcome of which may result in different accounting treatments. Judgement is also required to determine the allocation of the fair value of the purchase price of the acquisition.
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
Royalty reserve – Royalty reserve includes proceeds received from royalty units, repayable from future production. As future production is not determinable, the royalty units have been classified as capital in nature.
Going concern – The Company assesses its ability to continue as a going concern at each period end. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least twelve months from the end of the reporting period and include a detailed analysis of the Company's projected estimated capital and operating expenses and estimated financing requirements and abilities (Note 1).
The most significant accounts that require estimates as the basis for determining the stated amounts include the following:
Decommissioning and rehabilitation provision – Management’s determination of the Company’s decommissioning and rehabilitation provision is based on the reclamation and closure activities it anticipates as being required and its estimate of the probable costs and timing of such activities and measures. Accounting for reclamation obligations requires management to make estimates and judgements of the future costs the Company will incur to complete the reclamation work required to comply with existing laws and regulations at each mining operation and exploration and development property. Actual costs incurred may differ from those amounts estimated. Also, future changes to environmental laws and regulations could increase the extent of reclamation work required to be performed by the Company. Increases in future costs could materially impact the amounts charged to operations for reclamation. The provision represents management’s best estimate of the present value of the future reclamation and remediation obligation. Management engages engineering experts to review and update closure estimates for changes in laws and regulations as well as unit rates, annually (Note 14). The actual future expenditures may differ from the amounts currently provided.
Valuation of share-based payments, agent compensation and finders’ warrants – The Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments, agent compensation and finders’ warrants, which requires the input of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company’s results and equity reserves. The resulting value calculated is not necessarily the value that the holder of the option could receive in an arm’s length transaction, given that there is no market for the options and they are not transferable.
Income taxes – In assessing the probability of realizing deferred tax assets, management makes estimates related to expectation of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that the tax position taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.
While management believes that these estimates are reasonable, actual results could differ from those estimates and could impact future results of operation and cash flows.
New and amended IFRS pronouncements
IFRS 18 Presentation and Disclosures in Financial Statements
On April 9, 2024, the IASB issued IFRS 18 Presentation and Disclosures in Financial Statements (“IFRS 18”). The new standard on presentation and disclosure in financial statements focuses on updates to the statement of earnings (loss). The key new concepts introduced in IFRS 18 relate to the structure of the statement of earnings (loss), required disclosures in the financial statements for certain earnings or loss performance measures that are reported outside an entity’s financial statements and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. IFRS 18 will apply for reporting periods beginning on or after January 1, 2027,
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
and also applies to comparative information. The Company is assessing the impact of this standard on the consolidated financial statements.
Amendments to the Classification and Measurement of Financial Instruments
In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments. The key changes included clarification on the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to financial liabilities settled through electronic payment system, including an option to utilize an accounting policy for early derecognition. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. The IASB also added disclosure requirements to provide additional transparency regarding equity investments designated at fair value through other comprehensive income and financial instruments with contingent features, such as those related to ESG requirements.
The amendments are effective for annual periods beginning on or after January 1, 2026 with early application permitted. The Company is assessing the impact of these amendments on the consolidated financial statements.
As at March 31, 2025, there are no other accounting standards and interpretations with future effective dates that are expected to have a material impact on the Company.
4. MARKETABLE SECURITIES
Pursuant to the sale of its interests in the Lac Pelletier gold project to Emperor Metals Inc. ("Emperor") on March 11, 2025, the Company was issued 12,500,000 common shares in the capital of Emperor (the "Emperor Shares") which were recorded as marketable securities with a fair value of $1,562,500, using the closing share price on the transaction date (Note 10). As at March 31, 2025, the marketable securities were measured at a fair value of $1,687,500 which resulted in an unrealized gain of $125,000. The Emperor shares are classified as financial assets measured at fair value through profit or loss and are recorded at fair value using the quoted market prices as at March 31, 2025 and accordingly, are classified as Level 1 within the fair value hierarchy.
5. RECEIVABLES
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Input sales tax recoverable | 409,607 | 244,008 |
| Accrued interest | 51,463 | 30,272 |
| Accrued future payments | 250,000 | 250,000 |
| Other | 64,325 | 64,325 |
| 775,395 | 588,605 |
The Company entered into a mutual cooperation agreement with Shoreline Aggregates Inc. ("Shoreline"), an aggregate producer and export company, which has been operating on the Point Rousse site since inception. Pursuant to the agreement, Shoreline will provide Maritime with $1,500,000 of funding in stages and Maritime will provide Shoreline with continued access to the existing site facilities for processing and shipping aggregate, and transfer land for future continuance of its operations on the Point Rousse site while Maritime retains all mineral rights, at which point the $1,500,000 deferred liability will be extinguished.
As at March 31, 2025, the Company received a total of $1,250,000 with the remaining $250,000 to be received on or prior to October 1, 2025, for a total of $1,500,000. During the year ended December 31, 2024, the Company received confirmation from the Province of Newfoundland and Labrador's Ministry of Industry, Energy and Technology indicating
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
approval of the surrender of land covering Shoreline’s port and aggregates production operations within the Point Rousse property. Accordingly, the Company terminated its obligation and recorded a corresponding reduction in property, plant and equipment (Note 9).
6. INVENTORY
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| In-process precious metals | 244,583 | - |
| Stockpiled mineralized material | 363,680 | 276,858 |
| Supplies inventory | 132,676 | 55,050 |
| 740,939 | 331,908 |
7. PREPAID EXPENSES AND DEPOSITS
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Prepaid expenses | 195,284 | 310,247 |
| Deposits | 131,349 | 84,998 |
| Supplier prepayments | - | 24,750 |
| 326,633 | 419,995 |
8. RECLAMATION AND OTHER DEPOSITS
The Company is required to maintain reclamation deposits for its mineral properties in respect of its expected rehabilitation and closure obligations. The Company recorded a reclamation obligation with the Government of Newfoundland and Labrador upon the acquisition of the Point Rousse Project on August 21, 2023. The Company has a surety bonding arrangement with a Canadian insurance company (the “Surety”) with respect to its Point Rousse environmental bonds totaling $5,455,663, as at March 31, 2025. The surety arrangement required the Company to provide cash collateral of $1,910,000, equivalent to 35% of the value of the bonds, and pay an annual bond fee equal to 3% of the respective bond amount (Note 16). The Company holds an irrevocable letter of credit, with a major Canadian bank, as cash collateral to the Surety.
A deposit of $72,981 for reclamation purposes has been made to the Government of Newfoundland and Labrador on account of the Hammerdown project as at March 31, 2025, related to its 2021 early works program.
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Cash collateral Point Rousse reclamation deposit | 1,910,000 | 1,910,000 |
| Advanced site works reclamation deposit | 72,981 | 72,981 |
| 1,982,981 | 1,982,981 |
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
9. PROPERTY, PLANT AND EQUIPMENT
| Mills and Infrastructure $ | Right of use assets $ | Furniture and Leaseholds $ | Vehicles and Equipment $ | Exploration Equipment $ | Total $ | |
|---|---|---|---|---|---|---|
| Net book value – December 31, 2023 | 10,626,528 | 337,294 | 809 | 266,790 | 30,776 | 11,262,197 |
| Additions | 668,183 | 75,886 | - | 9,178 | - | 753,247 |
| Surrender of land (Note 5) | (1,500,000) | - | - | - | - | (1,500,000) |
| Asset retirement cost decrease (Note 14) | (23,876) | - | - | - | - | (23,876) |
| Depreciation | - | (125,324) | (809) | (84,813) | (13,190) | (224,136) |
| Net book value – December 31, 2024 | 9,770,835 | 287,856 | - | 191,155 | 17,586 | 10,267,432 |
| Additions | 1,759,248 | 361,960 | - | - | - | 2,121,208 |
| Disposals | - | (44,301) | - | - | - | (44,301) |
| Asset retirement cost decrease (Note 14) | (59,910) | - | - | - | - | (59,910) |
| Depreciation | - | (47,673) | - | (21,203) | (3,297) | (72,173) |
| Net book value – March 31, 2025 | 11,470,173 | 557,842 | - | 169,952 | 14,289 | 12,212,256 |
As at March 31, 2025 and December 31, 2024, the Pine Cove mill and Nugget Pond mill are not considered available for use and accordingly are not being depreciated.
10. EXPLORATION AND EVALUATION ASSETS
Green Bay Project
The Company's Green Bay property, located in Newfoundland and Labrador, Canada hosts the past producing Hammerdown gold mine, as well as the Orion gold deposit and the historic Lochinvar lead, zinc, copper, silver and gold deposit. The property is subject to a 1% net smelter return royalty ("NSR") over the Hammerdown deposit and surrounding lands which excludes the Orion deposit. Allowed deductions in calculating the NSR include transportation costs and toll milling charges.
The Company owns a 100% interest in the Sprucy Pond property, which is contiguous to the Hammerdown project. The Sprucy Pond property is subject to a 1.0% NSR of which 50% can be purchased for $500,000.
The Company owns a 100% interest in the Inomin property consisting of certain mineral claims that extend the Green Bay property. The Inomin property is subject to a 1.0% NSR of which 100% can be purchased for $500,000. The project also has an underlying NSR of 2.5% of which 1.5% can be purchased for $1,000,000.
Whisker Valley Project
The Company owns a 100% interest in the Whisker Valley property in the Baie Verte mining district of Newfoundland and Labrador, Canada.
The Company was required to make additional payments to the optionors of $50,000 on each of the first, second and third anniversary of the Exercise Date and were made on March 2023, March 2024 and March 2025. The property is subject to a 2.5% NSR, of which 1% can be purchased for $1,000,000 on or before the end of the second anniversary of commencement of commercial production.
The Company owns a 100% interest in the El Strato and Strugglers Pond properties in Newfoundland and Labrador, Canada (contiguous to Whisker Valley). The Strugglers Pond and El Strato properties are each subject to separate 2% NSR royalties, of which 1% can be purchased for $1,000,000 on or before the end of the second anniversary of commercial production.
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
On January 31, 2023, the Company entered into an agreement to acquire a 100% interest in certain mineral property interests located on the Whisker Valley property in the Baie Verte mining district of Newfoundland and Labrador, Canada. The Company made three annual payments totaling $50,000, with the final payment of $25,000 being made on January 31, 2025. The Company has the option to buy-back one-half of the 1% NSR royalty for $500,000 on or before the end of the second anniversary of commercial production.
Gull Ridge Project
In January 2019, the Company acquired the new Gull Ridge property claims by staking. On December 21, 2021, the Company entered into an agreement to acquire a 100% interest in certain mineral property interests located on the Gull Ridge property in the Baie Verte mining district of Newfoundland and Labrador, Canada. The Company made three annual payments totaling $50,000 and 250,000 common shares, with the final payment of $20,000 and 100,000 common shares being made on January 7, 2025.
Point Rousse Project
On August 21, 2023, the Company acquired the Point Rousse Project, located within the Baie Verte Mining District, on the Point Rousse/Ming's Bight Peninsula, in the northern portion of the Baie Verte Peninsula, northeast of the Town of Baie Verte, in north central Newfoundland, in the Province of Newfoundland and Labrador. The Point Rousse Project includes the Pine Cove mill, an in-pit permitted tailings storage facility, deep water port access and mineral claims and mining leases, including the Stog'er Tight and Argyle properties.
Royalty obligations on the various Point Rousse Project mineral properties are as follows:
- A 3% NSR is payable to a third-party on gold produced from the Stog'er Tight Property.
- A $3,000,000 capped NSR on four mineral exploration licenses in the Point Rousse Project, which forms part of the Argyle property, is calculated at 3% when the average price of gold is less than US$2,000 per ounce for the calendar quarter and is 4% when the average price of gold is more than US$2,000 per ounce for the calendar quarter.
- A $3,000,000 capped NSR of 3% on a property that forms part of the Argyle Property. Once the aggregate limit has been met and 200,000 ounces of gold has been sold from the property, the NSR decreases to 1%.
- A net profits interest ("NPI") agreement over the Point Rousse Mining Leases with Royal Gold Inc. whereby the Company is required to pay a 7.5% of net profits, calculated as the gross receipts generated from the claims less all cumulative development and operating expenses.
The Company also has royalties payable to various vendors of mineral leases located outside the currently anticipated mining areas.
Lac Pelletier Project
The Company owned a 100% interest in the Lac Pelletier gold project (the "Project"), located southwest of Rouyn Noranda, Québec, Canada in the Abitibi Greenstone Belt. Lac Pelletier is subject to a 1% NSR royalty to Glencore Canada Corporation and a 1% NSR royalty to Metalla Royalty & Streaming Ltd.
On March 11, 2025, the Company announced the completion of the sale of its interests in the Project to Emperor Metals Inc. ("Emperor"), an arm's length party to Maritime. Pursuant to the purchase agreement dated January 6, 2025 (as amended on March 2025) by and among Maritime, its wholly-owned subsidiary 2823988 Ontario Corp. ("282"), and Emperor, Maritime, through 282, has sold the 25 mineral claims and one mining lease that form Maritime's interest in the Project, in exchange for an aggregate of 12,500,000 common shares in the capital of Emperor. As at March 31, 2025, the Emperor shares, which are subject to a statutory four-month and one day hold period from the date of issuance, are presented under Marketable Securities on the consolidated statement of financial position. The Company recognized a loss on sale of exploration properties of $151,611 calculated as the difference between the fair value of
Page | 12
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
the common shares received of $1,562,500 and the carrying value of the exploration assets of $1,714,111 as at the date of the completion of the sale.
Other exploration properties
The following exploration properties were acquired in April 2021 and were ascribed a nominal fair value.
Owl Creek West – The Company holds a 35% interest in the Owl Creek West joint venture with Newmont Canada Corporation who holds 65%. The property is located in Timmins, Ontario, Canada.
Wright – The Company holds a 100% interest in the Wright property, located in Temiscaming, Québec, Canada.
Expenditures incurred on the Company's exploration properties and mineral interests, follow:
| Green Bay $ | Whisker Valley $ | Gull Ridge $ | Lac Pelletier $ | Other ON & QC $ | Total $ | |
|---|---|---|---|---|---|---|
| Balance, December 31, 2023 | 28,996,307 | 5,104,753 | 1,066,378 | 1,667,548 | 3,780 | 36,838,766 |
| Acquisition costs | - | 65,000 | 10,000 | - | - | 75,000 |
| Acquisition costs – shares | - | - | 2,000 | - | - | 2,000 |
| Exploration expenses: | ||||||
| Geology | 823,638 | 93,381 | 19,690 | 39,573 | 2,392 | 978,674 |
| Property | 91,865 | 2,661 | 4,400 | 3,588 | 4,625 | 107,139 |
| Detailed engineering | 527,615 | - | - | - | - | 527,615 |
| Environmental & permitting | 50,044 | - | - | - | - | 50,044 |
| 1,493,162 | 161,042 | 36,090 | 43,161 | 7,017 | 1,740,472 | |
| Less: Recoveries | (11,747) | - | - | - | - | (11,747) |
| Net additions/disposals | 1,481,415 | 161,042 | 36,090 | 43,161 | 7,017 | 1,728,725 |
| Balance, December 31, 2024 | 30,477,722 | 5,265,795 | 1,102,468 | 1,710,709 | 10,797 | 38,567,491 |
| Acquisition costs | - | 75,000 | 20,000 | - | - | 95,000 |
| Acquisition costs – shares | - | - | 6,500 | - | - | 6,500 |
| Exploration expenses: | ||||||
| Geology | 320,222 | 19,679 | 2,484 | - | - | 342,385 |
| Grade control drilling | 1,075,621 | - | - | - | - | 1,075,621 |
| Detailed engineering | 326,297 | - | - | - | - | 326,297 |
| Environmental & permitting | 27,507 | - | - | - | - | 27,507 |
| Property | 1,100 | 23,205 | - | 3,402 | - | 27,707 |
| 1,750,747 | 117,884 | 28,984 | 3,402 | - | 1,901,017 | |
| Less: Sale of Lac Pelletier property | - | - | - | (1,714,111) | - | (1,714,111) |
| Net additions/disposals | 1,750,747 | 117,884 | 28,984 | (1,710,709) | - | 186,906 |
| Balance, March 31, 2025 | 32,228,469 | 5,383,679 | 1,131,452 | - | 10,797 | 38,754,397 |
Page | 13
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Accounts payable | 1,846,691 | 1,000,938 |
| Accrued liabilities | 433,245 | 288,628 |
| Due to related parties (Note 17) | 45,649 | 44,469 |
| 2,325,585 | 1,334,035 |
12. LEASE LIABILITIES
| Lease liability $ | |
|---|---|
| Balance – December 31, 2023 | 375,375 |
| Lease liability recognized during the year | 75,886 |
| Lease payments during the year | (140,345) |
| Interest expense on lease liability | 25,642 |
| Balance – December 31, 2024 | 336,558 |
| Lease liability recognized during the period | 349,301 |
| Lease liability derecognized during the period | (45,393) |
| Lease payments during the period | (51,302) |
| Interest expense on lease liability | 9,785 |
| Balance – March 31, 2025 | 598,949 |
| Current portion | 209,720 |
| Long term portion | 389,229 |
Lease obligations as at March 31, 2025 and December 31, 2024 relate to site vehicles and equipment and a site exploration office. As at March 31, 2025, the Company is required to pay $241,167 (December 31, 2024 – $149,473) in undiscounted lease payments within the next twelve months and $425,473 (December 31, 2024 – $214,253) over the remaining term of the leases for a total of $666,640 (December 31, 2024 – $363,726).
During the three-month period ended March 31, 2025, the Company incurred operating lease costs of $nil (2024 – $35,710) for an office lease and site equipment not included in lease liabilities.
13. NOTES PAYABLE
On August 14, 2023, the Company completed a brokered note offering consisting of the issuance of US$5,000,000 principal amount non-convertible senior secured notes (the "Notes") and 38,311,427 common share purchase warrants of the Company (the "Note Offering") maturing August 14, 2025 (the "Initial Maturity Date"). The Initial Maturity Date may be extended by the Company in certain circumstances and subject to certain conditions, to August 14, 2026 (the "Extended Maturity Date") pursuant to the terms of the note indenture (the "Note Indenture") governing the terms of the Notes dated August 14, 2023 (the "Closing Date") entered into between the Company and Computershare Trust Company of Canada (the "Trustee"), as trustee. The Company received proceeds of US$4,900,000.
The Note Offering was completed pursuant to the terms of an agency agreement entered into between the Company and SCP Resource Finance LP ("SCP") dated August 14, 2023. The Notes are subject to a 2% original issue discount on the principal amount of the Notes (the "OID"). The Notes bear interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus 6% per annum, payable quarterly in arrears. The Initial Maturity Date of the Notes can be extended to the Extended Maturity Date at the election of the Company. In the event of such an extension, the Company will pay an extension fee to noteholders equal to 3% of the aggregate principal amount of the Notes then outstanding (the "Extension Fee") and the interest rate on the Notes will increase to SOFR plus 9% until the Extended Maturity Date. The Company may elect to pay the Extension Fee by issuing common shares in the capital of the Company ("Extension
Page | 14
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
Shares") at the then market price (as defined in policies of the Exchange) on the trading day prior to the maturity date, subject to the approval of the holders ("Noteholders") of at least 65% of the principal amount of the Notes then outstanding and the approval of the Exchange.
Pursuant to certain conditions set out in the Note Indenture, including the approval of Noteholders holding at least 65% of the principal amount of the Notes then outstanding, the Company has the option to satisfy interest payments under the Notes by issuing Shares ("Interest Shares") having a deemed value equal to 90% of the Market Price as of the date of a news release announcing the Company's intention to issue the Interest Shares, subject to the approval of the Exchange.
The Note Indenture also sets out certain financial covenants including a minimum cash balance of US$228,015 and a positive working capital balance, with the amount of outstanding Notes being excluded from the calculation.
The indebtedness under the Notes may be redeemed in whole or in part at the option of the Company for cash consideration equal to 113% of the aggregate amount of indebtedness if the Notes are redeemed on or prior to the first anniversary of the Closing Date, or 100% of the aggregate amount of indebtedness if redeemed after the first anniversary of the Closing Date. The Notes are secured by a general security interest over the Company and rank senior to all existing and future indebtedness of the Company.
Each Note Warrant is exercisable into one common share (each, a "Note Warrant Share") in the capital of the Company at a price of $0.07 per Note Warrant Share up until August 14, 2025, subject to the extension in the event that the Initial Maturity Date of the Notes is extended to the Extended Maturity Date.
In connection with the closing of the Note Offering, the Company paid SCP a US$117,600 cash commission and issued SCP broker warrants of the Company exercisable at any time prior to the applicable maturity date to acquire up to 1,877,260 common shares at $0.07 per common share.
The Company deducted a total of $1,624,656 in transaction costs, including the issuance of warrants, with an aggregate value of $723,660, and financing fees, including the OID, from the carrying value of the Notes, which will be amortized over the term of the Note Indenture. The Company recognized $185,262 of interest during the three-month period ended March 31, 2025 (2024 - $192,114) which was subsequently settled on April 2, 2025 through the issuance of 2,573,090 common shares with a deemed value of $0.072 per share. The Company also recognized finance expenses of $422,959 (2024 - $378,612) for the amortization of transaction and financing costs and an unrealized loss due to changes in foreign exchange rates of $2,030 (2024 - $105,033) during the three-month period ended March 31, 2025.
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Opening Balance | 6,556,544 | 5,269,193 |
| Interest and amortization of transaction costs (Note 16) | 422,959 | 1,552,628 |
| Interest paid or payable | (185,262) | (756,854) |
| Effect of changes in foreign exchange rate | 2,030 | 491,577 |
| 6,796,271 | 6,556,544 |
Page | 15
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
14. RECLAMATION LIABILITY
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Opening balance | 5,997,430 | 5,841,746 |
| Effect of change in estimates | (59,910) | 172,617 |
| Effect of change in discount rate | - | (196,493) |
| Interest accretion (Note 16) | 48,440 | 179,560 |
| 5,985,960 | 5,997,430 |
The Company's estimates of future decommissioning and restoration for reclamation and closure costs for its Nugget Pond gold plant milling assets and the newly acquired Point Rousse Project are based on reclamation and closure plans submitted to the Government of Newfoundland and Labrador. Elements of uncertainty in estimating these amounts include potential changes in regulatory requirements, reclamation plans and cost estimates, discount rates and timing of expected expenditures.
The undiscounted amount of estimated cash flows required to settle the decommissioning and reclamation costs related to the Nugget Pond gold circuit assets was estimated at $718,750 as at March 31, 2025 and December 31, 2024. Accretion on the liability, at this time, is nominal due to offsetting inflation and risk-free interest rates. The Company has recorded the undiscounted amount of estimated reclamation costs and will re-evaluate the estimated timing and value of outflows annually and will revise its estimate if necessary.
The Company established a surety bonding arrangement with respect to its Point Rousse environmental bonds totaling $5,455,663 at March 31, 2025 in favour of the Government of Newfoundland and Labrador (Note 8). During the three-month period ended March 31, 2025, a review was undertaken to update the timing of estimated reclamation liability cash flows resulting in a decrease of $59,910. At March 31, 2025, the estimated undiscounted future cash flows of $6,098,017 have been discounted using a risk-free rate of 3.23% (December 31, 2024 – 3.23%) and a long-term inflation rate of 2% (December 31, 2024 – 2%) and resulted in an increase in the liability of $48,440.
15. SHARE CAPITAL
Authorized
Unlimited number of common shares without par value.
Issued
During the three-month period ended March 31, 2025
Exercise of warrants
On February 13, 2025, the Company issued 11,804,545 common shares for gross proceeds of $735,000 pursuant to Dundee Corporation's exercise of 11,136,364 warrants, consisting of 7,662,285 Note Warrants and 3,474,079 Unit Warrants, both with exercise price of $0.066 and an exchange basis of 1.06 common shares for each warrant exercised.
Exploration and evaluation assets (Note 10)
- The Company issued 100,000 common shares valued at $6,500 in connection with the Gull Ridge property.
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
Payment of Note Interest in Common Shares
The Company issued 2,573,090 common shares (the "Interest Shares") in full satisfaction of the interest payable to the holders of the US$5 million non-convertible senior secured notes (Note 13) as of March 31, 2025 in the aggregate amount of US$129,500 (the "Interest Payment"). In accordance with the terms of the Notes, the Company issued the Interest Shares on or about March 31, 2025 at a deemed price of $0.072 per Interest Share. In connection with the Interest Payment, the Company issued an aggregate of 514,618 Interest Shares to Dundee.
During the year ended December 31, 2024
Backstopped Rights Offering and Share Issuance
On September 11, 2024, the Company announced the closing of a rights offering ("Rights Offering"), pursuant to which the Company issued rights (the "Rights") to the holders of its common shares at the close of business on August 13, 2024. Each Right entitled the holder to purchase one common share at a price of $0.034 per share.
The Company received subscriptions for and issued 235,294,118 common shares, resulting in aggregate gross proceeds of $8,000,000. In connection with the Rights Offering, the Company entered into a standby commitment and investor rights agreement ("Standby Commitment Agreement") dated August 6, 2024 with Dundee Resources Limited ("Dundee") pursuant to which it agreed to backstop the Rights Offering. Pursuant to the Standby Commitment Agreement, of the total issued, Dundee acquired 132,694,992 common shares for aggregate gross proceeds of $4,511,630.
As consideration for the commitments contained in the Standby Commitment Agreement, the Company issued to Dundee 33,173,748 non-transferable compensation warrants ("Standby Purchase Warrants"). Each Standby Purchase Warrant entitles Dundee to purchase one common share at a price of $0.05 per share for a period of 36 months from the date of issuance.
In connection with the closing of the Rights Offering, the Company recognized a total of $1,002,777 in share issue costs, including the Standby Purchase Warrants issued to Dundee as described above. The Standby Purchase Warrants were valued at $790,909, using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 2.95%, expected life of 3 years, expected volatility of 101.73% and dividend yield of 0%. Legal, regulatory and other cash costs associated with the Rights Offering totaled $211,868.
Non-Brokered Private Placement
On March 25, 2024, the Company completed a non-brokered private placement of 50,000,000 of its common shares at a price of $0.05 per common share and 3,648,069 common share purchase warrants to FireFly Metals Ltd ("FireFly") for aggregate gross proceeds of $2,500,000. Of the total proceeds, $250,000 was attributed to the common share purchase warrants, calculated as the difference between the price of the private placement and the market value of the common shares issued. Each warrant entitles the holder to acquire one common share at a price of $0.05 per share for 60 months from the date of issuance. The Company paid SCP Resource Finance LP, in its capacity as financial advisor to the Company, a cash fee of $75,000 equal to 3% of the gross proceeds of the offering. Legal and regulatory expenses associated with the unit offering totalled $42,438.
Exploration and evaluation assets (Note 10)
- The Company issued 50,000 common shares valued at $2,000 in connection with the Gull Ridge property.
Page | 16
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
Share subscriptions received in advance
As at March 31, 2025, the Company received $43,478 in unit subscriptions relating to the brokered private placement offering completed on April 9, 2025 (Note 20).
Royalty units
During fiscal 2016 the Company issued Royalty Units with a price of $0.01 per Royalty Unit, and, subject to written consent of the Company, may be assigned or transferred in their entirety only. The proceeds of $210,700 received in relation to the Royalty Units has been recorded as a Royalty Reserve within Equity.
Royalty Units will return 100% of the original investment made by the purchasers and is to be paid out of production from the Company's Green Bay project ("Project"). The likelihood of the Project going into production cannot be determined at this time. Total royalties payable from the Royalty Units ("Royalty Payment") are capped at $3,440,500 being the price for which the Equity Units (comprised of common shares and common share warrants) and Royalty Units were purchased. Royalty Payments will be made annually beginning on the first anniversary of the date of commencement of commercial production for the Project. Royalty Payments will be funded solely from 10% of annual net cash flow from the Project, with net cash flow representing net production revenues realized from the Project after deduction of all Project operating and debt servicing costs. At the option of the Company, Royalty Payments will be paid either in cash or in gold.
Stock options
The Company has a "rolling" stock option plan for its directors, officers, employees and consultants. The terms of the plan provide for options to be granted to a maximum of 10% of the issued and outstanding common shares of the Company at the time of grant of the stock options, subject to receipt of annual shareholder approval. The exercise price of each option shall not be less than the minimum price permitted by the policies of the TSX-V, and the options may be granted for a maximum term of ten years from the date of grant. The Company records the fair value of all options granted using the Black-Scholes model as share-based payment expense over the vesting period of the options. Vesting terms are determined by the Board of Directors.
A summary of the Company's stock options follows:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Options Outstanding # | Weighted Average Exercise Price $ | Options Outstanding # | Weighted Average Exercise Price $ | |
| Balance, beginning of period | 21,900,000 | 0.10 | 22,200,000 | 0.11 |
| Granted | - | - | 6,700,000 | 0.06 |
| Expired/cancelled | (150,000) | - | (6,800,000) | (0.10) |
| Balance, end of period | 21,750,000 | 0.10 | 21,900,000 | 0.10 |
During the three-month period ended March 31, 2025, the Company granted nil (year ended December 31, 2024 – 6,700,000) stock options to directors, officers, consultants and employees of the Company. All stock options granted have vested. No share-based expenses were recognized during the three-month periods ended March 31, 2025 and 2024.
During the three-month period ended March 31, 2025, 150,000 (year ended December 31, 2024 – 6,800,000) stock options were forfeited, cancelled or expired resulting in a reversal of $9,594 (year ended December 31, 2024 – $487,966)
Page | 17
Page | 18
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
from reserves to deficit. The Company has estimated the forfeiture rate to be nil%. Expected volatility was determined based on the historical movements in the closing price of the Company's shares for a length of time equal to the expected life of each option.
The following table sets out the weighted-average assumptions used for the Black-Scholes valuation for stock options granted during the year ended December 31, 2024.
| Weighted average share price | Risk-free rate | Expected dividend yield | Expected stock price volatility | Expected life of options | Weighted average fair value |
|---|---|---|---|---|---|
| $0.05 | 3.25% | 0% | 94.22% | 5 years | $0.04 |
As at March 31, 2025, the Company had outstanding stock options, enabling the holders to acquire further common shares as follows:
| Options Outstanding # | Options Exercisable # | Exercise Price $ | Remaining Contractual Life years | Expiry |
|---|---|---|---|---|
| 4,100,000 | 4,100,000 | 0.085 | 0.14 | 20-May-25 |
| 600,000 | 600,000 | 0.17 | 0.45 | 10-Sep-25 |
| 4,000,000 | 4,000,000 | 0.18 | 1.23 | 24-Jun-26 |
| 2,000,000 | 2,000,000 | 0.18 | 1.33 | 29-Jul-26 |
| 4,350,000 | 4,350,000 | 0.05 | 2.92 | 28-Feb-28 |
| 5,450,000 | 5,450,000 | 0.06 | 4.22 | 18-Jun-29 |
| 1,250,000 | 1,250,000 | 0.05 | 4.64 | 18-Nov-29 |
| 21,750,000 | 21,750,000 | 0.10 | 2.33 |
On May 20, 2025, a total of 3,350,000 stock options were exercised resulting in the issuance of 3,350,000 common shares. The stock options were exercised at a price of $0.085 per share, generating gross proceeds of $284,750. 750,000 stock options expired unexercised.
Warrants
Share purchase warrant transactions were as follows:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Warrants Outstanding # | Weighted Average Exercise Price $ | Warrants Outstanding # | Weighted Average Exercise Price $ | |
| Balance, beginning of period | 127,061,254 | 0.06 | 90,239,437 | 0.07 |
| Granted | - | - | 36,821,817 | 0.05 |
| Exercised | (11,136,364) | 0.07 | - | - |
| Balance, end of period | 115,924,890 | 0.06 | 127,061,254 | 0.06 |
Subsequent to March 31, 2025, 3,700,000 Unit Warrants with exercise price of $0.066 and an exchange basis of 1.06 common shares for each warrant were exercised, resulting in the issuance of 3,922,000 common shares for gross proceeds of $244,200.
Page | 19
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
16. FINANCE EXPENSE
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Accretion on reclamation liability (Note 14) | 48,440 | 46,511 |
| Accretion on Notes payable (Note 13) | 422,959 | 366,760 |
| Reclamation bond fee | 47,436 | 49,392 |
| 518,835 | 462,663 |
17. RELATED PARTY TRANSACTIONS
(a) Services
Effective February 1, 2019, the Company entered into a sublease for office space in Toronto, with a corporation that is related by virtue of having certain directors and officers in common. The office lease ended on May 31, 2024.
For the three-month periods ended March 31, the Company was charged the following:
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Rent | - | 18,455 |
| Office administration | 796 | 1,110 |
| 796 | 19,565 |
(b) Compensation of key management personnel
Key management personnel consist of the directors and executive officers of the Company. Compensation to key management personnel for services rendered were as follows for the three-month periods ended March 31:
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Salaries | 193,550 | 193,239 |
| Directors’ fees | 27,500 | 27,500 |
| 221,050 | 220,739 |
At March 31, 2025, related party balances included in accounts payable and accrued liabilities of $45,649 (2024 – $33,986), comprised of $27,500 for directors’ fees payable to the members of the board of directors of the Company, and $18,149, payable to the Chief Executive Officer, the Chief Financial Officer and the VP, Environment & Sustainability for conference and travel-related expenses. Amounts due to related parties (Note 11) are non-interest bearing with no specific terms of repayment.
18. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company’s financial instruments consist of cash, receivables, deposits, accounts payable and accrued liabilities, lease liabilities, deferred liabilities and notes payable. The fair values of cash, receivables, accounts payable and accrued liabilities and deferred liabilities approximate their book carrying values because of the short-term nature of these instruments. The carrying value of the Company’s lease liabilities and notes payable is measured at the present value of the discounted future cash flows. The fair values of the notes payable are approximated by their carrying values as the interest rates are comparable to market interest rates.
(a) Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge its contractual obligations. The Company is exposed to credit risk with respect to its cash and receivables and its reclamation deposits. The maximum exposure to loss arising from receivables is equal to their carrying amounts. The Company
MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
manages credit risk with respect to its cash by maintaining demand deposits with a major Canadian financial institution; however, this exposes the Company's cash to concentration of credit risk as all amounts are held at a single institution. Receivables were due from a merchant bank and a government agency.
(b) Liquidity risk - Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. See going concern Note 1. At March 31, 2025, the Company had a cash balance of $1,542,676 to settle current liabilities of $2,535,305.
The following table summarizes the maturity profile of the Company's financial liabilities at March 31, 2025. The amounts presented represent the future undiscounted principal and interest cash flows, and therefore, do not equate to the carrying amounts on the consolidated statements of financial position.
| Current within 1 year $ | Non-current year 2 - 5 $ | Non-current year 6 onwards $ | |
|---|---|---|---|
| Accounts payable and accrued | 2,325,585 | - | - |
| Lease liabilities | 241,167 | 425,473 | - |
| Notes payable | - | 6,796,271 | - |
| Reclamation Liability | - | 2,645,663 | 3,452,354 |
(c) Market risk - Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.
(d) Interest rate risk - Interest rate risk consists of two components:
i) To the extent that payments made or received on the Company's monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk; and
ii) To the extent that changes in prevailing market rates differ from the interest rate in the Company's monetary assets and liabilities, the Company is exposed to interest rate price risk.
The Company is exposed to interest rate risk through its US$5,000,000 Note Offering which bears interest at a rate equal to the SOFR plus 6% per annum and the Company may elect to extend the maturity date by one year, at which time the interest rate on the Notes would increase to SOFR plus 9%. Pursuant to certain conditions, the Company has the option to satisfy interest payments under the Note Offering by issuing common shares (Note 13). A 10% increase or decrease in the SOFR would have resulted in an increase or decrease of $7,841 in the Company's loss for the three-month period ended March 31, 2025 (2024 - $9,020).
(e) Foreign currency risk - Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates.
The Company is exposed to foreign currency risk through its US$5,000,000 Note Offering which matures August 14, 2025 and is extendable by one year (Note 13). All other monetary assets and liabilities are denominated in Canadian dollars. A 10% appreciation or depreciation of the value of the US dollar relative to the Canadian dollar would result in an increase or decrease of $18,632 in the Company's loss for the three-month period ended March 31, 2025 (2024 - $19,175).
The Company maintains cash accounts denominated in US dollars to complete foreign currency and considers this practice adequate to mitigate significant foreign currency fluctuations for US dollar transactions. The Company does not currently engage in hedging contracts to manage exposure to foreign exchange risk but may in the future.
(f) Other price risk - Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.
The Company monitors metal prices in determining its long-term business plans.
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MARITIME RESOURCES
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month periods ended March 31, 2025 and 2024 (Unaudited, expressed in Canadian dollars)
There were no changes in the Company's approach to managing the above risks.
19. CAPITAL MANAGEMENT
The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital that it manages as equity, consisting of common shares, stock options and warrants.
The Company is dependent upon external financing to fund activities. In order to carry out any exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it believes there is sufficient geologic or economic potential and if it has adequate financial resources to do so.
The Company is required to maintain a minimum cash balance of US$228,015 pursuant to the Note Offering and a positive working capital balance, with the amount of outstanding Notes being excluded from the calculation. The Company was in compliance with the requirement as at March 31, 2025.
20. SUBSEQUENT EVENTS
On April 9, 2025, the Company announced the closing of a brokered private placement offering (the "Offering") of units of the Company ("Units") for aggregate gross proceeds of $20,002,500. Pursuant to the Offering, the Company issued an aggregate of 266,700,000 Units at a price of $0.075 per Unit (the "Unit Price"). Each unit is comprised of one common share (each, a "Unit Share") and one half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant is exercisable to acquire one common share in the capital of the Company (each, a "Warrant Share") for a period of 24 months from April 9, 2025 (the "Closing Date") at an exercise price of $0.12 per Warrant Share. All Unit Shares and Warrants issued in connection with the Offering are subject to a four month plus one day hold period in accordance with Canadian securities laws. The net proceeds from the Offering will be used for exploration and development, and general working capital purposes.
In connection with the closing of the Offering, the Company paid the agents a cash commission and corporate finance fee totaling $1,172,925 and issued the Agents compensation options exercisable for a period of 24 months following the Closing Date to acquire up to 15,638,964 Common Shares at the Unit Price.
Certain directors, officers and 10% shareholders of the Company participated in the Offering and subscribed for an aggregate of 118,261,000 Units for gross proceeds of $8,869,575.
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