New Target Mining Corp. — Management Reports 2024

Feb 2, 2024

NEW TARGET MINING CORP.

Management Discussion and Analysis

FOR THE YEAR ENDED OCTOBER 31, 2023

February 1, 2024

The following discussion and analysis should be read in conjunction with the audited financial statements for the year ended October 31, 2023, and related notes included therein, prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board. All monetary amounts, unless otherwise indicated, are expressed in Canadian dollars. Additional regulatory filings for the Company can be found on the SEDAR+ website at www.sedarplus.ca.

New Target Mining Corp. (the “Company”) was incorporated under the Business Corporations Act (British Columbia) on July 28, 2020. On March 2, 2021 the Company became a reporting issuer. On April 15, 2021, the Company completed its initial public offering and was listed on the TSX Venture Exchange (TSX-V) under the symbol NEW. Effective November 3, 2023, the Company’s listing on the TSX-V was transferred to the NEX board of the TSX-V and currently trades under NEW.H. The Company is an exploration stage junior mining company currently engaged in the identification, acquisition and exploration of mineral properties in Canada.

Forward-Looking Statements

Certain statements contained in this document constitute “forward-looking statements”. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “propose”, “anticipate”, “believe”, “forecast”, “estimate”, “expect” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the Company’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements herein include, but is not limited to, statements relating to the timing, availability and amount of financings; expected use of proceeds; business objectives; the costs and timing relating to the potential acquisition of interests in mineral properties; the timing and costs of future exploration activities on the Company's future properties; success of exploration activities; permitting time lines and requirements for additional capital; and failure to maintain community acceptance (including First Nations). In making forward-looking statements herein, the Company has applied several material assumptions, including, but not limited to, any additional financing needed will be available on reasonable terms, that general business and economic conditions will not change in a materially adverse manner, and that all necessary governmental approvals for the future exploration will be obtained in a timely manner and on acceptable terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such risks and other factors include, among others, risks related to the completion of financings and the use of proceeds; operations and contractual obligations; changes in exploration programs based upon results of exploration; future prices of metals; availability of third party contractors; availability of equipment; failure of equipment to operate as anticipated; accidents, effects of weather and other natural phenomena and other risks of the mineral exploration industry; environmental risks; community relations; and delays in obtaining governmental approvals or financing.

We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

Overview and Going Concern

The Company is in the business of acquiring exploration and evaluation assets. The Company expects its current capital resources will not be sufficient to complete its business objectives through its current operating year and will be required to raise additional funds through future equity issuances. The Company’s ability to continue as a going concern is therefore dependent on its ability to raise additional funds through equity issuances. These material uncertainties may cast significant doubt on the entity’s ability to continue as a going concern.

The financial statements for the year ended October 31, 2023 were prepared in accordance with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. The continued operations of the Company are dependent on its ability to develop a sufficient financing plan, receive financial support from related parties, complete sufficient equity financings or generate profitable operations in the future. These material uncertainties may cast significant doubt on the entity’s ability to continue as a going concern. The financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue business.

Results of Operations

The results of operations reflect the overhead costs incurred by the Company to maintain an administrative infrastructure to manage the acquisition, and financing activities of the Company. General and administrative costs can be expected to increase or decrease in relation to the changes in activity required as property acquisitions continues. The Company has not recorded, since the date of its incorporation, any revenues from its mineral exploration and development activities, nor does it expect to record any revenue over the course of the next 12 months.

Mineral Properties

Scarlett Property, British Columbia

The Scarlett Gold Property consists of ten mining claims, covering approximately 1,473.23 hectares land located in the New Westminster Mining Division, Mission, British Columbia. The Scarlett Gold Property claims are located approximately 65 kilometres from Vancouver, BC.

On August 5, 2020, the Company entered into an option agreement, subsequently amended, (“Option Agreement”) with Infiniti Drilling Corporation (“Infiniti”), whereby the Company was granted an irrevocable and exclusive option to acquire a 100% interest in and to Infiniti’s nine (9) mineral claims located in New Westminster Mining Division, Mission, British Columbia (“Scarlett Property”). Subsequently one (1) additional claim was added to the option agreement pursuant to the area of interest provision. In order to earn the interest, the Company must make the following cash payments, common share issuances and exploration expenditures:

• i) pay $12,000 (paid) within 10 days of execution of the Option Agreement; ii) issue 150,000 common shares of the Company (issued); iii) pay $20,000 (paid), issue 200,000 common shares of the Company (issued) and incur $200,000 in exploration expenditures on the Scarlett Property by the 12-month anniversary of the Listing Date;

• iv) pay $20,000, issue 200,000 common shares of the Company and incur an additional $200,000 in exploration expenditures on the Scarlett Property by the 24-month anniversary of the Listing Date;

• v) pay $25,000, issue 300,000 common shares of the Company and incur an additional $200,000 in exploration expenditures on the Scarlett Property by the 36-month anniversary of the Listing Date; and

• vi) pay $50,000, issue 500,000 common shares of the Company and incur an additional $200,000 in exploration expenditures on the Scarlett Property by the 48-month anniversary of the Listing Date.

If the Scarlett Property is acquired by the Company, then it will be required to pay a 1.0% net smelter returns royalty payable to Infiniti upon the commencement of commercial production.

On June 26, 2021, the Company had Geotronics Consulting Inc. conduct a single day drone supported UAV Magnetic field survey of the southwestern region of the Property in order to assist in mapping of the geology and structure of the area around known surface rock mineralization and soil anomalies as well as to assist in the delineation of potential future diamond drill targets.

The survey was flown at a speed of 12 meters per second with line spacings of 50 meters at an average terrain clearance of 60 meters with a reading interval of 10 readings per second. Readings were subsequently processed and corrected for diurnal variation using the base station data gathered on site. The magnetic results are shown on the accompanying color-contoured map below:

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Of the several prominent features yielded from this survey a prominent northeast-trending magnetic high with a strength of approximately 300 nT was determined. This feature has a strike length of 2 kilometers with it being open both to the northeast and to the southwest, and an average width of 300 meters. According to known geology in the area, it is underlain entirely by quartz diorite and or tonalite of the Coast Intrusions. Therefore, the interpretation of the causative source of this magnetic high may well be a result of an intrusive phase consisting of a greater amount of magnetite.

The feature of greatest economic interest determined from this UAV magnetic survey is the magnetic low located within the southeastern portion of the survey area. This magnetic low correlates directly with a copper, silver, zinc, arsenic and tellurium soil anomaly. Additional soil sampling carried out in May of this year has expanded the size of the sampled area with results pending. Mr. Afzaal Pirzada, P.Geo. had stated in the National Instrument 43-101 technical report on the Scarlett Gold Property, dated effective January 11, 2021 and filed on www.sedar.ca, that this soil anomaly may be reflecting a porphyry copper-gold deposit at depth. Mr. David G. Mark, P.Geo. and geophysicist of Geotronics Consulting Inc. states in his preliminary interpretation of the UAV magnetic survey results, “The correlating magnetic low definitely supports this possibility since the low could be caused by alteration associated with a porphyry mineral deposit. The low could also be reflecting a roof pendant of sedimentary or volcanic rocks that may be the host of the possible sulphide mineralization.”

On July 27, 2021, the Company announced that it has received the assay results of its 2021 soil and rock sampling survey program on the Company’s Scarlett Gold Property.

In May 2021, Infiniti’s geological crew conducted a soil and rock sampling program designed to expand the area sampled during the 2020 field season in order to assist in mapping of the geology and structure of the area and potentially expand the known surface rock mineralization and soil anomalies which will assist in the delineation of potential future diamond drill targets. Samples collected during this program were sent to ALS Laboratories located in North Vancouver, British Columbia, Canada for analysis.

The expanded soil survey was conducted with sample spacings of 50 meters with sampling radiating outwards for up to 250 meters away from the anomalous zone of Cu, Ag, Zn, As and Te soil sample results obtained in the southwestern portion of the property during the 2020 exploration program. This expanded area is coincident with a magnetic low feature on the property determined during the June 26, 2021 UAV Magnetic Drone survey. The results of this expanded sampling program successfully extended the previous known size of the Cu, Ag, Zn, As and Te anomaly, most notably, the extents of the copper anomaly. 6 of the 102 samples collected yielded copper assay grades higher than 154 ppm with the highest grade reporting 288 ppm copper. The soil sample copper assay results are presented in the map below and are displayed transparently over top off the UAV Magnetic survey map. The attributes shown in the map demonstrate the direct correlation of anomalous copper values with a magnetic low shown in the southern portion of the UAV Magnetic survey grid which can be characteristic of a buried, near surface porphyry system at depth.

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Additionally, a surficial rock outcrop sampling program was conducted on the property designed to follow up on the 2020 exploration program with the gold and copper assay results presented in the accompanying map below where the sample assay results are overlaid on top of the UAV Magnetic survey results.

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Samples highlighted in green represent rock samples collected during the May 2021 program.

It is notable that the anomalous rock samples collected to date are most commonly associated with veining and or intense silicification and may explain why they appear to be coincident with the margins of several of the magnetic high and low features. Kristian Whitehead, P.Geo. and geological consultant for the Company states: “We continue to be rewarded with our exploration efforts to date at the Scarlett Property. The Property continues to yield increasing evidence it hosts a proximal near surface buried porphyry system at depth and justifies additional follow up work.”

Infiniti collected a total of 102 soil samples at a spacing of 50 m along north-south lines spaced 50 m apart using GPS for location. Infiniti’s crew extracted the samples targeting the B-Horizon and placed the soil in marked kraft bags. The samples were sorted, placed in rice bags and submitted to ALS Minerals located in North Vancouver an ISO Certified Laboratory for subsequent assay analysis for gold and multi-elements. The assay processes that were employed for each soil sample conducted by ALS Minerals included: PREP-41 - Preparation package for soils/sediments and ME-MS41L – Four acid soil package (Super Trace Lowest DL AR by ICP-MS) procedure.

Additionally, Infiniti’s geological crew collected a total of 19 surface rock samples and recorded the geological attributes and GPS locations of each sample. The rock samples were then sorted, placed in rice bags and submitted to ALS Minerals located in North Vancouver, an independent ISO Certified Laboratory for subsequent assay analysis for gold and multi-elements. The assay processes that were employed for each rock sample conducted by ALS Minerals included: a 33 element ME-ICP61 (Four acid ICP-AES) and Au-ICP21 (Au 30 gram FA ICP-AES Finish) procedure. The Company detected no significant QA/QC issues during review of the data. The Company is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the data referred to herein.

On June 26, 2021, the Company announced that it has now filed a multi-year permit application to conduct its next phases of exploration on their Scarlett Gold Property located in British Columbia, Canada. Mr. Kristian Whitehead, B.Sc., P.Geo. will continue to manage and oversee the exploration activities for the Scarlett Gold Property. The permit is subject to approval by the Ministry of Energy, Mines and Low Carbon Innovation.

On April 6, 2022, the Company announced that it has commenced its 2022 next phase of exploration on the Scarlett Property, British Columbia.

In an effort to more fully constrain and understand the full extent of the soil anomalies determined during previous programs on the Scarlett Property, the Company’s exploration team has submitted additional soil samples for analysis as well as plans to expand the current soil grid.

This work program will include assay analysis on previously drilled core samples which utilized a hand portable diamond core saw which was conducted to assist in understanding the structure of currently known surface mineralization difficult to accurately sample with hand tools.

On June 1, 2023, the Company decided not to continue with the Scarlett Property, and wrote off exploration and evaluation assets of $271,635.

Revenues

Due to the Company’s status as an exploration and development stage mineral resource company, the Company currently does not have any revenues from its operations, nor does it expect to record any revenue over the course of the next 12 months.

General and Administrative Expenses

Years Ended October 31, 2023 and 2022

The Company incurred a loss and comprehensive loss for the year ended October 31, 2023 of $439,015 (2022 – $169,917) which consists of:

• i) Filing fees and regulator fees of $17,127 (2022 – $14,876) increased due to fees paid to the TSX Venture Exchange and other filing fees the Company in the current year.

• ii) Office and miscellaneous of $15,913 (2022 – $19,190) decreased mainly due to lower insurance cost $10,250 (2022 – $13,912) during the year.

• iii) Write-off of exploration and evaluation assets of $271,635 (2022 – $Nil) due to the Company’s decision to no longer pursue with the Scarlett Property during the current year.

Three Months Ended October 31, 2023 and 2022

The Company incurred a loss and comprehensive loss for the three months ended October 31, 2023 of $36,317 (2022 – $38,895). There were no significant fluctuations during the quarter.

Selected Annual Information

The following table provides a brief summary of the Company’s financial operations. For more detailed information, refer to the financial statements.

		Year Ended		Year Ended		Year Ended
		October 31,		October 31,		October 31,
		2023		2022		2021
Net loss	$	(439,015)	$	(169,917)	$	(228,155)
Basic and diluted loss per common share		(0.04)		(0.01)		(0.02)
Total assets	$	114,496	$	475,705	$	607,367

Significant fluctuations year over year included:

• i) During the year ended October 31, 2023, the Company wrote off its mineral property resulting in an impairment of $271,635.

• ii) During the year ended October 31, 2022, the Company reduced professional fees by $18,741 and filing and regulatory fees by $69,220.

Summary of Quarterly Results

The following is a summary of the Company’s financial results for the eight most recently completed quarters which have been prepared using accounting policies consistent with IFRS:

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Three months Three months Three months Three months
ended October 31, ended July 31, ended April 30, ended January 31,
2023 2023 2023 2023
Interest Income $ - $ - $ - $ -
Exploration and
Evaluation Assets - - - 280,708
Deficit 850,127 813,810 782,691 448,274
Net Loss (36,317) (31,119) (334,417) (37,162)
Basic and Diluted
Loss Per Share (0.00) (0.00) (0.03) (0.00)
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Three months Three months Three months Three months
ended October 31, ended July 31, ended April 30, ended January 31,
2022 2022 2022 2022
Interest Income $ - $ - $ - $ -
Exploration and
Evaluation Assets 280,708 244,494 250,983 197,780
Deficit 411,112 372,217 335,735 277,712
Net Loss (38,895) (36,482) (58,023) (36,517)
Basic and Diluted
Loss Per Share (0.00) (0.00) (0.00) (0.00)
----- End of picture text -----

During the quarter ended October 31, 2023, net loss increased to $36,317 compared to $31,119 for the quarter ended July 31, 2023. The increase was mainly due to office and miscellaneous incurred during the quarter.

During the quarter ended July 31, 2023, net loss decreased to $31,119 compared to $334,417 for the quarter ended April 30, 2023. The decrease was mainly due to write-off of exploration and evaluation assets related to the Scarlett Property during the comparative quarter.

During the quarter ended April 30, 2023, net loss increased to $334,417 compared to $37,162 for the quarter ended

January 31, 2023. The increase was mainly due to write-off of exploration and evaluation assets related to the Scarlett Property during the quarter.

During the quarter ended January 31, 2023, net loss decreased to $37,162 compared to $38,895 for the quarter ended October 31, 2022. There was minimal change in expenditure between the quarters.

During the quarters ended October 31, 2022 and July 31, 2022, exploration and evaluation assets increased due to additional exploration expenditures incurred.

During the quarter ended April 30, 2022, exploration and evaluation assets increased to $250,983 compared to $197,780 for the quarter ended January 31, 2022. The increase was mainly due to the Company issuing shares worth $30,000 and a $20,000 cash payment related to the acquisition of the Scarlett Property during the current quarter.

During the quarter ended April 30, 2022, net loss increased to $58,023 compared to $36,517 for the quarter ended January 31, 2022. The increase was primarily due to timing of accounting fees during the quarter.

Liquidity and Capital Resources

At October 31, 2023, the Company had cash of $107,007 (2022 - $185,191) and a working deficit of $59,318 (2022 – working capital of $98,989).

The Company expects its current capital resources will not be sufficient to meet its business objectives or day-to-day operations through its next quarter or current operating year, and that its continuation as a going concern will be dependent on its ability to raise additional funds through equity issuances. There is no guarantee the Company will be successful in that regard. See “Overview and Going Concern” above.

During the year ended October 31, 2023, the Company had the following cash flows:

• i) Net cash used in operating activities of $87,257 (2022 - $156,126) which consists of the cash paid for expenses on the statement of loss and comprehensive loss.

• ii) Net cash provided by (used in) investing activities of $9,073 (2022 - $(56,307)) which consists of cash paid for acquisition, exploration and evaluation of its mineral property.

During the year ended October 31, 2023, the Company had no share activity.

Risks and Uncertainties

The Company is in the mineral exploration and development business and, as such, is exposed to a number of risks and uncertainties that are not uncommon to other companies in the same business. Some of the possible risks include the following:

• a) The industry is capital intensive and subject to fluctuations in metal prices, market sentiment, foreign exchange and interest rates. The recovery of the Company’s investment in exploration and evaluation assets and the attainment of profitable operations are dependent upon the discovery and development of economic ore reserves and the ability to arrange sufficient financing to bring the ore reserves into production.

• b) The most likely sources of future funds for further acquisitions and exploration programs undertaken by the Company are the sale of equity capital and the offering by the Company of an interest in its properties to be earned by another interested party carrying out further exploration or development. If such exploration programs are successful, the development of economic ore bodies and commencement of commercial production may require future equity financings by the Company, which are likely to result in substantial dilution to the holdings of existing shareholders.

• c) The Company’s capital resources are largely determined by the strength of the resource markets and the status of the Company’s projects in relation to these markets, and its ability to compete for the investor support of its projects.

• d) The prices of metals greatly affect the value and potential value of its exploration and evaluation assets. This, in turn, greatly affects its ability to raise equity capital, negotiate option agreements and form joint ventures.

• e) The Company must comply with health, safety, and environmental regulations governing air and water quality and land disturbances and provide for mine reclamation and closure costs. The Company’s permission to operate could be withdrawn temporarily where there is evidence of serious breaches of such regulations, or even permanently in the case of extreme breaches. Significant liabilities could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous owners of acquired properties or noncompliance with environmental laws or regulations.

• f) The operations of the Company will require various licenses and permits from various governmental authorities. There is no assurance that the Company will be successful in obtaining the necessary licenses and permits to continue exploration and development activities in the future.

• g) Although the Company has taken steps to verify title to exploration and evaluation assets in which it has an interest, these procedures do not guarantee the Company’s title. Such assets may be subject to prior agreements or transfers and title may be affected by such undetected defects.

Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those described in any forward looking statement. The development and exploration activities of the Company are subject to various laws governing exploration, development, and labour standards which may affect the operations of the Company as these laws and regulations set various standards regulating certain aspects of health and environmental quality. They provide for penalties and other liabilities for the violation of such standards and establish, in certain circumstances, obligations to rehabilitate current and former facilities and locations where operations are, or were conducted.

Financial Risk Factors

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities. The fair value of these financial instruments, other than cash, approximates their carrying values due to the short-term nature of these instruments. Cash is measured at fair value using level 1 inputs.

The Company is exposed to a variety of financial risks by virtue of its activities including currency, credit, interest rate, liquidity and commodity price risk.

• a) Foreign currency risk

As at October 31, 2023, the Company was not exposed to foreign currency risk.

• b) Credit risk

Credit risk is the risk of loss associated with the counterparty’s inability to fulfill its payment obligations. As at October 31, 2023, the Company had a $3,139 (2022 - $3,906) receivable from government authorities in Canada. The Company believes it has no significant credit risk.

c) Interest rate risk

The Company has cash balances. The Company is satisfied with the credit ratings of its bank. As of October 31, 2023, the Company did not hold any investments. The Company believes it has no significant interest rate risk.

d) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they come due. At October 31, 2023, the Company had cash of $107,007 (2022 - $185,191) and current liabilities of $173,814 (2022 - $96,008). This emphasizes that the Company’s ability to continue as a going concern is dependent on management’s ability to raise the required capital through future equity or debt issuances. See “Liquidity and Capital Resources” above. There is no guarantee that the Company will be able to raise capital. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the directors are actively involved in the review, planning, and approval of significant expenditures and commitments.

e) Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices of gold and other precious and base metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company. Fluctuations may be significant. Much of this is out of the control of management and will be dealt with based on circumstances at any given time.

Related Party Transactions

Transactions with related parties and key management personnel are as follows:

Nature of transactions	Year ended October 31, 2023 2022
Paid or accrued to the CEO and director Management fees Paid or accrued to a partnership in which the CFO has an interest Professional fees Total	$ 72,000 $ 72,000 36,000 36,000
	$ 108,000 $ 108,000

The amounts due to other related parties and key management personnel included in accounts payable and accrued liabilities are as follows:

		As at		As at
		October 31,		October 31,
		2023		2022
Due to the CEO and director	$	108,229	$	53,550
Due to a partnership in which the CFO has an interest		47,250		23,625
	$	155,479	$	77,175

The amounts due to related parties are unsecured, non-interest bearing and are due on demand.

Off Balance Sheet Arrangements

The Company is not a party to any off balance sheet arrangements or transactions.

Changes in Accounting Policies and Future Accounting Pronouncements

Please refer to the financial statements for the year ended October 31, 2023 located on www.sedarplus.ca

Contingencies

There are no contingent liabilities.

Management’s Responsibility for Financial Statements

The information provided in this report, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgements and have been properly reflected in the financial statements.

Change in director

On May 10, 2023, the Company announced that Mr. Adrian Lamoureux has been appointed as a director of the Company, effectively immediately. Effective the same date, Mike Petrina resigned from the board.

Share capital – Outstanding at February 1, 2024

Common shares – 11,986,344 outstanding