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Orestone Mining Interim / Quarterly Report 2025
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Interim / Quarterly Report
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RESTONE
MINING CORP.
ORESTONE MINING CORP.
(An Exploration Stage Company)
Condensed Consolidated Interim Financial Statements
(Unaudited)
Nine months ended
October 31, 2024 and 2023
Orestone Mining Corp.
Suite 407 – 325 Howe Street
Vancouver, British Columbia, Canada V6C 1Z7
Trading Symbol: ORS
Telephone: 604-629-1929
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RESTONE
MINING CORP.
Contents
Page
Notice of No Auditor Review of Condensed Consolidated Interim Financial Statements 3
Condensed Consolidated Interim Statements of Financial Position 4
Condensed Consolidated Interim Statements of Comprehensive Loss 5
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity 6
Condensed Consolidated Interim Statements of Cash Flows 7
Notes To Condensed Consolidated Interim Financial Statements 8-16
NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
In accordance with 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 an auditor has not reviewed the financial statements.
The accompanying unaudited condensed consolidated interim financial statements of 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 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.
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ORESTONE MINING CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)
| Note | October 31, 2024 | January 31, 2024 | |
|---|---|---|---|
| (Unaudited) | (Audited) | ||
| ASSETS | |||
| Current | |||
| Cash | $ 17,253 | $ 6,140 | |
| GST receivable | 2,339 | 1,202 | |
| Prepaid expenses | 7 | 4,729 | 3,502 |
| 24,321 | 10,844 | ||
| Non-current | |||
| Exploration and evaluation assets | 4 | 3,205,288 | 3,169,175 |
| Reclamation bonds | 4 | 25,900 | 25,900 |
| 3,231,188 | 3,195,075 | ||
| $ 3,255,509 | $ 3,205,919 | ||
| LIABILITIES | |||
| Current | |||
| Trade and other payables | $ 33,015 | $ 40,096 | |
| Due to related parties | 7 | 164,020 | 124,690 |
| 197,035 | 164,786 | ||
| SHAREHOLDERS' EQUITY | |||
| Share capital | 5 | 9,548,765 | 9,408,395 |
| Reserves | 5 | 3,421,445 | 3,421,445 |
| Deficit | (9,911,736) | (9,788,707) | |
| 3,058,474 | 3,041,133 | ||
| $ 3,255,509 | $ 3,205,919 |
Nature of Operations and Going Concern (Note 1)
These consolidated financial statements are authorized for issue by the Board of Directors on December 20, 2024.
They are signed on the Company's behalf by:
"David Hottman"
David Hottman, Director
"Gary Nordin"
Gary Nordin, Director
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
ORESTONE MINING CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(Expressed in Canadian dollars; Unaudited)
| Note | Three months ended October 31, | Nine months ended October 31, | |||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||
| Expenses | |||||
| Filing fees | $ 4,511 | $ 687 | $ 16,714 | $ 16,696 | |
| Marketing | 4,256 | - | 5,286 | 28,964 | |
| Office, rent and miscellaneous | 7 | 8,604 | 9,485 | 30,010 | 31,693 |
| Professional fees | 7 | 35,847 | 7,300 | 60,272 | 51,300 |
| Salaries, benefits and consulting fees | 7 | 5,500 | 3,571 | 9,603 | 60,616 |
| Travel | 7 | 336 | - | 440 | 6,350 |
| 59,054 | 21,043 | 122,325 | 195,619 | ||
| Other items | |||||
| Foreign exchange loss (gain) | 762 | (103) | 706 | 3,637 | |
| Interest income | (1) | (1) | (2) | (4) | |
| 761 | (104) | 704 | 3,633 | ||
| Net loss before income taxes | 59,815 | 20,939 | 123,029 | 199,252 | |
| Total comprehensive loss for the period | $ 59,815 | $ 20,939 | $ 123,029 | $ 199,252 | |
| Basic and diluted loss per share | 6 | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
| Weighted average number of common shares outstanding | 6 | 61,660,232 | 56,660,232 | 59,762,422 | 56,660,232 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
ORESTONE MINING CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in Canadian dollars)
| Share capital | Reserves | ||||||
|---|---|---|---|---|---|---|---|
| Number of shares | Amount | Warrants | Agent's Warrants | Share-based payments | Deficit | Total shareholders' equity | |
| Balance as at January 30, 2023 (Audited) | 56,660,232 | $9,408,395 | $2,131,096 | $98,399 | $1,191,950 | $(9,567,509) | $3,262,331 |
| Net loss and comprehensive loss | - | - | - | - | - | (199,252) | (199,252) |
| Balance as at October 31, 2023 (Unaudited) | 56,660,232 | 9,408,395 | 2,131,096 | 98,399 | 1,191,950 | (9,766,761) | 3,063,079 |
| Net loss and comprehensive loss | - | - | - | - | - | (21,946) | (21,946) |
| Balance as at January 31, 2024 (Audited) | 56,660,232 | 9,408,395 | 2,131,096 | 98,399 | 1,191,950 | (9,788,707) | 3,041,133 |
| Private placement | 5,000,000 | 150,000 | - | - | - | - | 150,000 |
| Share insurance costs | - | (9,630) | - | - | - | - | (9,630) |
| Net loss and comprehensive loss | - | - | - | - | - | (123,029) | (123,029) |
| Balance as at October 31, 2024 (Unaudited) | 61,660,232 | $9,548,765 | $2,131,096 | $98,399 | $1,191,950 | $(9,911,736) | $3,058,474 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
ORESTONE MINING CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars; Unaudited)
| | Note | Nine months ended
October 31, | |
| --- | --- | --- | --- |
| | | 2024 | 2023 |
| Cash provided by (used for): | | | |
| Operating activities | | | |
| Net loss | | $ (123,029) | $ (199,252) |
| Changes in non-cash working capital items: | | | |
| GST receivable | | (1,137) | 1,197 |
| Prepaid expenses | | (1,227) | 1,754 |
| Trade and other payables | | (7,081) | 12,457 |
| Due to related parties | | 39,330 | 44,816 |
| Cash (used in) operating activities | | (93,144) | (139,028) |
| Investing activities | | | |
| Exploration and evaluation assets | 4 | (36,113) | (4,061) |
| Cash (used in) investing activities | | (36,113) | (2,657) |
| Financing activities | | | |
| Net proceeds from the private placement | 5 | 140,370 | - |
| Cash provided by financing activities | | 140,370 | - |
| Net increase (decrease) in cash | | 11,113 | (141,685) |
| Cash - beginning of the period | | 6,140 | 151,297 |
| Cash - end of the period | | $ 17,253 | $ 9,612 |
| Supplemental disclosure with respect to cash flows: | | | |
| Exploration and evaluation assets in trade and other payables, and due to related parties | | $ 46,045 | $ 40,000 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
Orestone Mining Corp. (the "Company" or "Orestone") was incorporated under the Business Corporations Act (British Columbia) on April 30, 2007 and its principal business activity is the acquisition and exploration of mineral properties. The address of the Company's registered and head office is 19th Floor, 885 West Georgia Street, Vancouver, BC V6C 3H4. The Company's shares are listed on the TSX Venture Exchange and trade under the symbol "ORS".
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") applicable to a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the Company are dependent upon its ability to raise adequate financing to develop its exploration and evaluation assets, and to commence profitable operations in the future. To date, the Company has not generated any significant revenues and is considered to be in the exploration stage. These uncertainties may cast significant doubt about the Company's ability to continue as a going concern.
Management's plan includes continuing to pursue additional sources of financing through equity offerings, seeking joint venture partners to fund exploration, monitoring exploration activity and reducing overhead costs. Should the Company be unable to realize on its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded on the consolidated financial statements of financial position. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that may be necessary should the Company be unable to continue in existence.
| October 31, 2024 | January 31, 2024 | |
|---|---|---|
| Deficit | $ (9,911,736) | $ (9,788,707) |
| Working capital deficiency | $ (172,714) | $ (153,942) |
2. BASIS OF PRESENTATION
(a) Statement of compliance
These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance and compliance with International Accounting Standards ("IAS") 34 "Interim Financial Reporting" ("IAS 34") using accounting policies consistent with IFRS issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").
(b) Basis of preparation
These condensed consolidated interim financial statements have been prepared on a historical cost basis except for marketable securities classified and measured at fair value through profit or loss. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
The preparation of these condensed consolidated interim financial statements in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements.
These condensed consolidated interim financial statements, including comparatives, have been prepared on the basis of IFRS standards that are published at the time of preparation.
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
3. MATERIAL ACCOUNTING POLICY INFORMATION
These unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS as issued by the IASB on a basis consistent with those followed in the Company's most recent annual financial statements for the year ended January 31, 2024.
These unaudited condensed consolidated interim financial statements do not include all note disclosures required by IFRS for annual financial statements, and therefore should be read in conjunction with the annual financial statements for the year ended January 31, 2024. In the opinion of management, all adjustments considered necessary for fair presentation of the Company's financial position, results of operations and cash flows have been included. Operating results for the nine months period ended October 31, 2024 are not necessarily indicative of the results that may be expected for the current fiscal year ending January 31, 2025.
4. EXPLORATION AND EVALUATION ASSETS
Captain Property
The Company owns a 100% interest in certain mineral claims comprising the Captain Property located near Fort St. James, British Columbia. A portion of these claims are subject to a 1% net smelter return royalty on gold produced from these claims, of which 0.5% can be purchased by the Company at any time for $500,000.
As at October 31, 2024, the Company had issued a $25,900 reclamation bond (January 31, 2024 - $25,900) to the Ministry of Energy, Mines and Petroleum Resources of British Columbia to guarantee reclamation of the environment on the Captain Property.
Las Burras Property
On September 3, 2024 the Company announced that it signed an option agreement with Cascadero Minerals Corp. ("Cascadero") to earn up to a 75% interest in the Las Burras-Incahuasi copper-gold-molybdenum-porphyry property located in Salta province, Argentina.
Terms of the option agreement:
The Company has an initial three-year option to earn a 51% interest in the Las Burras property (option A) under the following terms:
- Cash payments in the amount of US$100,000 as follows: (i) US$25,000 ($33,863) (paid) upon the fifth business day following signing of the agreement; (ii) US$25,000 on or before the first anniversary; (iii) US$25,000 on or before the second anniversary; and (iv) US$25,000 on or before the third anniversary;
- Incurring cumulative expenditures of US$1.9 million as follows: (i) US$100,000 on or before the first anniversary; (ii) US$500,000 on or before the second anniversary; (iii) US$1.3 million on or before the third anniversary.
| Date for Completion | Cash Payment US$ | Expenditures US$ |
|---|---|---|
| 5th day after receipt of regulatory approval | $ 25,000 (Paid) | Nil |
| August 30, 2025 | $ 25,000 | $ 100,000 |
| August 30, 2026 | $ 25,000 | $ 500,000 |
| August 30, 2027 | $ 25,000 | $ 1,300,000 |
| TOTAL | $ 100,000 | $ 1,900,000 |
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
4. EXPLORATION AND EVALUATION ASSETS, (Continued)
The Company may elect within 30 days after the option A exercise date to earn an additional 24% interest (option B) by incurring expenditures of US$3 million over a two-year period. The Company, at its sole discretion, may elect to form a joint venture upon the exercise of option A (the Company, 51%/Cascadero, 49%) or upon the exercise of option B (the Company, 75%/Cascadero, 25%). The Company will be the operator of all exploration.
If a joint venture participant's interest is diluted to less than 10%, its interest will be converted to a net smelter return ("NSR") royalty. For the purposes of calculating the applicable NSR, a feasibility study shall include a calculation of the percentage of gold and silver comprising the gross value. For deposits where, at the time the production decision is made, the gross value of gold and silver in the ore are: (a) greater than 50%, a 1% NSR will be reserved; or (b) less than 50% in the ore, a 0.25% NSR will be reserved.
| Captain Property (Canada) | Las Burras Property (Argentina) | Total | |
|---|---|---|---|
| Property acquisition costs | |||
| Balance, January 31, 2024 | $ 330,390 | $ - | $ 330,390 |
| Acquisition during the period | - | 33,863 | 33,863 |
| Balance, October 31, 2024 | 330,390 | 33,863 | 364,253 |
| Deferred exploration costs | |||
| Balance, January 31, 2024 | 3,200,565 | - | 3,200,565 |
| Maps, drafting, reproductions | 2,250 | - | 2,250 |
| Balance, October 31, 2024 | 3,202,815 | - | 3,202,815 |
| Mining exploration tax credit | |||
| Balance, January 31, 2024 | (361,780) | - | (361,780) |
| Balance, October 31, 2024 | (361,780) | - | (361,780) |
| Total | $ 3,171,425 | $ 33,863 | $ 3,205,288 |
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
- EXPLORATION AND EVALUATION ASSETS, (Continued)
| Captain Property | |
|---|---|
| Property acquisition costs | |
| Balance, January 31, 2023 | $ 329,683 |
| Permitting and licensing | 707 |
| Balance, January 31, 2024 | 330,390 |
| Deferred exploration costs | |
| Balance, January 31, 2023 | 3,192,161 |
| Assays | 921 |
| Maps, drafting, reproductions | 5,050 |
| Travel and accommodation | 2,433 |
| Balance, January 31, 2024 | 3,200,565 |
| Mining exploration tax credit | |
| Balance, January 31, 2023 | (360,376) |
| Additions | (1,404) |
| Balance, January 31, 2024 | (361,780) |
| Total | $ 3,169,175 |
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
5. SHARE CAPITAL
a. Authorized
There are an unlimited number of common shares without par value.
b. Share issuance
On May 15, 2024, the Company completed a non-brokered private placement, whereby the Company issued a total of 5,000,000 common shares at a price of $0.03 per share for gross proceeds of $150,000. Finders' fees amounting to $5,130 were paid in connection with the offering. The Company incurred another $4,500 share issue costs.
There was no share issuance during the fiscal year 2024.
c. Share purchase option compensation plan
The Company has adopted an incentive share option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX Venture Exchange requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the common shares to be outstanding at closing. Such options will be exercisable for a period of up to 5 years from the date of grant. In connection with the foregoing, the number of common shares reserved for issuance to any individual director or officer will not exceed 5% of the issued and outstanding common shares and the number of common shares reserved for issuance to all technical consultants will not exceed 2% of the issued and outstanding common shares.
The continuity of options is as follows:
| Expiry date | Exercise price ($) | January 31, 2023 | Issued | Expired / cancelled | January 31, 2024 | Issued | Expired / cancelled | October 31, 2024 |
|---|---|---|---|---|---|---|---|---|
| April 28, 2023 | 0.15 | 400,000 | - | (400,000) | - | - | - | - |
| October 4, 2023 | 0.15 | 150,000 | - | (150,000) | - | - | - | - |
| June 3, 2024 | 0.15 | 915,000 | - | - | 915,000 | - | (915,000) | - |
| August 29, 2024 | 0.20 | 290,000 | - | (10,000) | 280,000 | - | (280,000) | - |
| June 8, 2025 | 0.12 | 1,150,000 | - | - | 1,150,000 | - | - | 1,150,000 |
| April 1, 2026 | 0.12 | 1,615,000 | - | - | 1,615,000 | - | - | 1,615,000 |
| Options outstanding | 4,520,000 | - | (560,000) | 3,960,000 | - | (1,195,000) | 2,765,000 | |
| Options exercisable | 4,520,000 | - | (560,000) | 3,960,000 | - | (1,195,000) | 2,765,000 | |
| Weighted average exercise price ($) | $ 0.13 | $Nil | $ 0.15 | $ 0.13 | $Nil | $ 0.16 | $ 0.12 |
At October 31, 2024, the weighted average remaining life of the outstanding and exercisable options is 1.08 years (January 31, 2024 – 1.40 years).
Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Company's share purchase options.
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ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
5. SHARE CAPITAL, (Continued)
d. Reserves
The reserves account records items recognized as share-based payments expense and other share-based payments. When stock options are exercised, the corresponding amount will be transferred to share capital. Amounts recorded for forfeited or expired unexercised options remain in the reserves account. Amounts recorded for exercised, cancelled or expired warrants remain in the reserves account.
6. LOSS PER SHARE
Basic and diluted loss per share
The calculation of basic and diluted loss per share for the nine months ended October 31, 2024 was based on the loss attributable to common shareholders of $123,029 (October 31, 2023 – $199,252) and a weighted average number of common shares outstanding of 59,762,422 (October 31, 2023 – 56,660,232).
Diluted loss per share did not include the effect of 2,765,000 stock options (October 31, 2023 – 3,970,000 stock options) since they were anti-dilutive.
7. RELATED PARTY TRANSACTIONS
The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:
For the nine months ended October 31, 2024:
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Share-based payments | Total | |
|---|---|---|---|---|---|---|
| David Hottman | ||||||
| Chief Executive Officer, Director | $ 1,000 | $Nil | $Nil | $Nil | $Nil | $ 1,000 |
| Mark T. Brown | ||||||
| Chief Financial Officer(a) | $ 51,865 | $Nil | $Nil | $Nil | $Nil | $ 51,865 |
| Bruce Winfield | ||||||
| President, Director(a) | $ 4,500 | $Nil | $Nil | $Nil | $Nil | $ 4,500 |
| Gary D. Nordin | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
| John Kanderka | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
| James Anderson | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
| Patrick Daniels | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
(a) Mark T. Brown and Bruce Winfield receive payments for their services through private companies they control. Please refer to the table on the next page.
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
7. RELATED PARTY TRANSACTIONS, (Continued)
For the nine months ended October 31, 2023:
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Share-based payments | Total | |
|---|---|---|---|---|---|---|
| David Hottman | ||||||
| Chief Executive Officer, Director | $ 30,000 | $Nil | $Nil | $Nil | $Nil | $ 30,000 |
| Mark T. Brown | ||||||
| Chief Financial Officer(a) | $ 54,050 | $Nil | $Nil | $Nil | $Nil | $ 54,050 |
| Bruce Winfield | ||||||
| President, Director(a) | $ 20,750 | $Nil | $Nil | $Nil | $Nil | $ 20,750 |
| Gary D. Nordin | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
| John Kanderka | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
| James Anderson | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
| Patrick Daniels | ||||||
| Director | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil |
(a) Mark T. Brown and Bruce Winfield receive payments for their services through private companies they control. Please refer to the table below.
Related party transactions and balances:
| Amounts due to related parties: | Services for: | Nine months ended | As at October 31, January 31, | ||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2024 | ||
| David Hottman | Salaries and benefits | $ 1,000 | $ 30,000 | $ - | $ - |
| Gary Nordin | Geological consulting | - | - | 40,000 | 40,000 |
| Gary Nordin | Expenses Reimbursement | - | - | 6,045 | 6,045 |
| Bruce Winfield | Expenses Reimbursement | - | - | 422 | - |
| A private company with an officer in common with the Company | Accounting, management, financing and rent services | 51,865 | 54,050 | 101,278 | 67,095 |
| A private company controlled by President of the Company | Management services | 4,500 | 20,750 | 16,275 | 11,550 |
| Total | $ 57,365 | $ 104,800 | $ 164,020 | $ 124,690 | |
| Amounts in prepaid expenses: | Services for: | ||||
| --- | --- | --- | --- | --- | |
| Bruce Winfield | Funds advanced | $ | - | $ 23 | |
| David Hottman | Funds advanced | $ | 3,479 | $ 3,479 | |
| Total | $ | 3,479 | $ 3,502 |
Amounts owing to/from related parties are non-interest bearing, unsecured, and have no fixed terms of repayment. The changes during the period were measured by the exchange amount, which is the amount agreed upon by the transacting parties.
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
8. FINANCIAL INSTRUMENTS
The fair value of the Company's cash, receivables and trade and other payables, and due to related parties approximate their carrying values.
The Company's financial instruments recorded at fair value require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy:
Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis.
Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the market place.
Level 3 – Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.
Cash is measured using level 1 inputs. There were no transfers between levels 1, 2 and 3.
The Company's financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, interest risk and market risk.
(a) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to fulfil an obligation causing the other party to incur a financial loss. The Company is exposed to credit risks arising from its cash holdings, reclamation bonds and receivables (excluding GST). The Company manages credit risk by placing cash with major Canadian financial institutions. Management believes that credit risk related to these amounts is low.
(b) Liquidity risk
Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due. To manage liquidity risk, the Company reviews additional sources of capital to continue its operations and discharge its commitments as they become due.
Historically, the Company's sole source of funding has been the issuance of equity securities for cash and cash equivalents, primarily through private placements. The Company's access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. Liquidity risk is assessed as high.
(c) Interest rate risk
Interest rate risk is the risk that an investment's value will change due to a change in the level of interest rates. The Company's exposure to interest rate risk is minimal.
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and price risk. The Company is not subject to currency risk as the functional currency is the Canadian dollar. The Company does not use any form of derivative or hedging instruments to reduce its foreign currency risk. The Company is not affected by price risk.
Page 15
ORESTONE MINING CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended October 31, 2024 and 2023
(Unaudited: expressed in Canadian dollars)
8. FINANCIAL INSTRUMENTS, (Continued)
(e) Management of industry risk
The Company is engaged primarily in the mineral exploration field and manages related industry risk issues directly. The Company is potentially at risk for environmental reclamation and fluctuations in commodity based market prices associated with resource property interests. Management is of the opinion that the Company addresses environmental risk and compliance in accordance with industry standards and specific project environmental requirements.
(f) Currency risk
The Company is affected by changes in exchange rates between the Canadian Dollar and foreign currency. The Company does not invest in foreign currency contracts to mitigate the risks. The Company has net monetary assets of $7,064 dominated in US dollars.
9. CAPITAL MANAGEMENT
The Company considers its capital structure to be shareholders' equity represented by assets over liabilities. The Company manages its capital structure based on the funds available to the Company, in order to support acquisition, maintenance, exploration, and development of exploration and evaluation assets.
The Board of Directors has not established any quantitative return on capital criteria for management, instead relying on the expertise of the Company's management to sustain future development of the business.
The properties in which the Company currently has interests are in the exploration stage so the Company is dependent on external financing to fund its activities. In order to carry out activities and administration, the Company will spend its existing working capital and raise additional amounts as needed.
The Company is not subject to externally imposed capital restrictions.
10. SEGMENTED FINANCIAL INFORMATION
The Company operates in one industry segment, being the acquisition, exploration and development of mineral property interests. Geographic information is as follows:
| October 31, 2024 | January 31, 2024 | |
|---|---|---|
| Non-current assets | ||
| Canada | $ 3,197,325 | $ 3,195,075 |
| Argentina | 33,863 | - |
| $ 3,231,188 | $ 3,195,075 |