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Oroco Resource Corp. — Interim / Quarterly Report 2025
Apr 30, 2025
46187_rns_2025-04-29_ef66b574-7665-4a8b-80ee-c0d4edefcf82.pdf
Interim / Quarterly Report
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OROCO RESOURCE CORP.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
FEBRUARY 28, 2025
(Expressed in Canadian Dollars)
Unaudited – prepared by management
NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.
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.
The accompanying condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
OROCO RESOURCE CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian Dollars)
(Unaudited)
As at
| February 28, 2025 | May 31, 2024 | |
|---|---|---|
| ASSETS | ||
| Current | ||
| Cash | $ 1,162,204 | $ 828,999 |
| Receivables | 84,984 | 97,405 |
| Prepaid expenses and advances | 289,240 | 411,811 |
| 1,536,428 | 1,338,215 | |
| Receivables (Note 5) | 1,107,864 | 1,076,781 |
| Marketable securities (Note 4) | 240,854 | 19,604 |
| Exploration and evaluation assets (Note 6) | 83,299,331 | 79,184,224 |
| Equipment (Note 7) | 2,863,599 | 3,154,262 |
| Right-of-use-assets (Note 8) | 423,210 | - |
| $ 89,471,286 | $ 84,773,086 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current | ||
| Accounts payable and accrued liabilities (Notes 9 and 12) | $ 1,674,401 | $ 1,948,162 |
| Lease liability (Note 8) | 81,003 | - |
| Share subscriptions received in advance | - | 1,195,738 |
| 1,755,404 | 3,143,900 | |
| Lease liability (Note 8) | 355,165 | - |
| Deferred tax liability | 13,443 | 13,443 |
| 2,124,012 | 3,157,343 | |
| Shareholders' equity | ||
| Share capital (Note 10) | 105,659,069 | 98,212,123 |
| Share subscriptions receivable (Note 10) | (837,500) | - |
| Reserves (Note 10) | 18,093,833 | 16,369,510 |
| Deficit | (36,783,135) | (33,906,005) |
| Equity attributable to the Company's shareholders | 86,132,267 | 80,675,628 |
| Non-controlling interest (Note 11) | 1,215,007 | 940,115 |
| 87,347,274 | 81,615,743 | |
| $ 89,471,286 | $ 84,773,086 |
Nature of operations and going concern (Note 1)
Contingency (Note 6(a))
Subsequent events (Note 10)
Approved on behalf of the Board:
"Craig Dalziel"
Craig Dalziel – Director
"Ian Rice"
Ian Rice – Director
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
OROCO RESOURCE CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in Canadian Dollars)
(Unaudited)
| For the Three Months Ended February 28, 2025 | For the Three Months Ended February 29, 2024 | For the Nine Months Ended February 28, 2025 | For the Nine Months Ended February 29, 2024 | |
|---|---|---|---|---|
| Expenses | ||||
| Consulting fees | $ 48,051 | $ 121,225 | $ 199,263 | $ 280,138 |
| Foreign currency loss (gain) | (16,533) | 40,639 | (185,515) | 194,005 |
| Management and director fees (Note 12) | 179,347 | 180,859 | 532,921 | 525,409 |
| Office and general | 166,618 | 223,070 | 633,058 | 526,950 |
| Professional fees (Note 12) | 72,997 | 441,321 | 360,646 | 712,586 |
| Share-based payment (Notes 10 and 12) | 61,614 | 3,094 | 840,192 | 84,732 |
| Shareholder communications and investor relations | 45,080 | 5,000 | 99,956 | 63,252 |
| Transfer agent and filing fees | 11,963 | 12,926 | 52,391 | 64,591 |
| Travel | 2,443 | 17,591 | 69,326 | 36,091 |
| Operating loss | (571,580) | (1,045,725) | (2,602,238) | (2,487,754) |
| Loss for the period | (571,580) | (1,045,725) | (2,602,238) | (2,487,754) |
| Unrealized gain (loss) on fair value of marketable securities (Note 4) | 187,642 | (5,601) | 221,250 | (14,003) |
| Loss and comprehensive loss for the period | $ (383,938) | $ (1,051,326) | $ (2,380,988) | $ (2,501,757) |
| Loss and comprehensive loss attributable to: | ||||
| Equity holders of the Company | $ (323,324) | $ (1,023,498) | $ (2,655,880) | $ (2,442,961) |
| Non-controlling interest (Note 11) | (60,614) | (27,828) | 274,892 | (58,796) |
| $ (383,938) | $ (1,051,326) | $ (2,380,988) | $ (2,501,757) | |
| Basic and diluted loss per common share | $ (0.00) | $ (0.00) | $ (0.01) | $ (0.01) |
| Weighted average number of common shares outstanding - basic and diluted | 243,367,965 | 225,142,380 | 243,041,990 | 218,411,347 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
OROCO RESOURCE CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in Canadian Dollars)
(Unaudited)
| Share Capital | Reserves | Deficit | Non-controlling interest | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Number | Amount | Share subscriptions receivable | Other comprehensive income (loss) | Stock options and warrants | ||||
| $ | $ | $ | $ | $ | $ | $ | ||
| May 31, 2023 | 213,438,543 | 91,447,564 | - | (395,283) | 15,699,865 | (32,375,066) | 2,773,705 | 77,150,785 |
| Shares issued for cash | 15,627,915 | 6,831,245 | - | - | 92,999 | - | - | 6,924,244 |
| Shares issued for finders' fees | 148,000 | 61,005 | - | - | 61,005 | |||
| Share issue costs | - | (61,005) | - | - | (61,005) | |||
| Unrealized loss on fair value of marketable securities | - | - | - | (14,003) | - | - | - | (14,003) |
| Share-based payment | - | - | - | - | 84,732 | - | - | 84,732 |
| Increase in ownership of subsidiary | - | - | - | - | - | 1,755,352 | (1,755,352) | - |
| Loss for the period | - | - | - | - | - | (2,428,958) | (58,796) | (2,487,754) |
| February 29, 2024 | 229,214,458 | 98,278,809 | - | (409,286) | 15,877,596 | (33,048,672) | 959,557 | 81,658,004 |
| May 31, 2024 | 229,214,458 | 98,212,123 | - | (403,685) | 16,773,195 | (33,906,005) | 940,115 | 81,615,743 |
| Shares issued for cash | 23,265,350 | 8,064,518 | (837,500) | - | 562,045 | - | - | 7,789,063 |
| Share issue costs | - | (617,572) | - | - | 100,836 | - | - | (516,736) |
| Unrealized gain on fair value of marketable securities | - | - | - | 221,250 | - | - | - | 221,250 |
| Share-based payment | - | - | - | - | 840,192 | - | - | 840,192 |
| Loss for the period | - | - | - | - | - | (2,877,130) | 274,892 | (2,602,238) |
| February 28, 2025 | 252,479,808 | 105,659,069 | (837,500) | (182,435) | 18,276,268 | (36,783,135) | 1,215,007 | 87,347,274 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
OROCO RESOURCE CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
(Unaudited)
For the Nine Months Ended
| February 28, 2025 | February 29, 2024 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Loss for the period | $ (2,602,238) | $ (2,487,754) |
| Adjusted for items not involving cash: | ||
| Depreciation | 55,895 | - |
| Foreign exchange | (60,864) | 3,272 |
| Interest on lease liability | 26,886 | - |
| Share-based payment | 840,192 | 84,732 |
| Changes in working capital items: | ||
| Receivables | 12,421 | 34,680 |
| Prepaid expenses and advances | 122,571 | 6,018 |
| Accounts payable and accrued liabilities | (78,516) | (354,021) |
| Net cash used in operating activities | (1,683,653) | (2,713,073) |
| CASH FLOWS FROM INVESTING ACTIVITY | ||
| Exploration and evaluation expenditures | (3,990,808) | (4,477,115) |
| Net cash used in investing activity | (3,990,808) | (4,477,115) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from private placement shares issued | 6,593,325 | 6,924,244 |
| Share issue cost | (515,836) | - |
| Lease payments | (69,823) | - |
| Net cash provided by financing activities | 6,007,666 | 6,924,244 |
| Change in cash | 333,205 | (265,944) |
| Cash, beginning of period | 828,999 | 1,456,085 |
| Cash, end of period | $ 1,162,204 | $ 1,190,141 |
Supplemental cash flow information (Note 13)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
1. NATURE OF OPERATIONS AND GOING CONCERN
Oroco Resource Corp. (the "Company") was incorporated on July 7, 2006 under the Business Corporations Act of British Columbia and is an exploration stage business engaged in the acquisition and exploration of mineral properties in Mexico. The Company is listed on the TSX Venture Exchange (the "TSX-V"). The Company's head office and principal address is located at #1201 - 1166 Alberni Street, Vancouver, British Columbia, Canada, V6E 3Z3.
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. The continued operations of the Company and the recoverability of amounts shown for exploration and evaluation assets and related deferred exploration expenditures are dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of the mineral properties and upon future profitable production or proceeds from the disposition thereof. The Company has not yet determined whether its exploration and evaluation assets contain reserves that are economically recoverable. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period. Although the Company has successfully raised funds in prior and current periods, management estimates it will require additional funds to operate for the upcoming 12 months. These factors indicate the existence of material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. 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.
There are many external factors that can adversely affect general workforces, economies and financial markets globally. Examples include, but are not limited to, political conflict in other regions. It is not possible for the Company to predict the duration or magnitude of the adverse results of such conflicts and its effects on the Company's business or results of operations or its ability to raise funds.
2. BASIS OF PRESENTATION
Statement of compliance
These condensed interim consolidated financial statements have been prepared in accordance with IFRS accounting standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to interim financial reports, including International Accounting Standard 34, Interim Financial Reporting. They do not include all the information and note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the Company's consolidated financial statements for the year ended May 31, 2024, prepared in accordance with IFRS.
These condensed interim consolidated financial statements were authorized by the Audit Committee and Board of Directors of the Company on April 29, 2025.
Basis of presentation
These condensed interim consolidated financial statements have been prepared on a historical cost basis, using the accrual basis of accounting, except for cash flow information and certain financial assets that are measured at fair value.
Functional and presentation currency
These condensed interim consolidated financial statements are presented in Canadian dollars, unless otherwise noted, which is the functional currency of the parent and of its subsidiaries.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
2. BASIS OF PRESENTATION (cont'd...)
Basis of consolidation
These condensed interim consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. Subsidiaries are entities which the Company controls, either directly or indirectly, where control is defined as the power to govern an entity's financial and operating policies and generally accompanies a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. All intercompany transactions and balances have been eliminated upon consolidation. The Company's subsidiaries are as follows:
| Name of Subsidiary | Country of Incorporation | Percentage of Ownership | Principal Activity |
|---|---|---|---|
| Minera Xochipala S.A. de C.V. (“MX”) | Mexico | 100% | Exploration in Mexico |
| Xochipala Gold S.A. de C.V. (“XG”) | Mexico | 95% | Exploration in Mexico |
| 0973496 B.C. Ltd. | Canada | 100% | Holding company |
| Altamura Copper Corp. (“Altamura”) | Canada | 100% | Holding company |
| Aureum Holding Corporation | Canada | 100% | Holding company |
The Company also holds: a majority interest in Aztec Copper Inc. ("Aztec"), an inactive subsidiary incorporated in the United States and its subsidiary, Prime Aztec Mexicana, S.A. de C.V. an inactive subsidiary incorporated in Mexico; and a 100% interest in Desarrollos Copper, S.A. de C.V. ("Desarrollos"), an inactive subsidiary incorporated in Mexico.
Significant estimates
The preparation of these condensed interim consolidated financial statements requires the Company to make estimates and assumptions concerning the future. The Company's management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.
Critical accounting estimates are estimates and assumptions made by management that may result in a material adjustment to the carrying amount of assets and liabilities within the next financial year and are, but are not limited to, the following:
Share-based payment - The fair value of stock options and compensatory warrants issued are subject to the limitation of the Black-Scholes option pricing model which incorporates market data and which involves uncertainty and subjectivity in estimates used by management in the assumptions. Changes in the input assumptions can materially affect the fair value estimate of stock options and compensatory warrants.
The carrying value and the recoverability 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 geologic and other technical information, history of conversion of mineral deposits with similar characteristics to its own properties to proven and probable mineral reserves, scoping and feasibility studies, accessible facilities and existing permits.
Rehabilitation provisions - The Company's potential for rehabilitation provisions includes estimates of future costs directly attributable to remediating the liability, inflation, movements in foreign exchange rates, and assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting future cash outflows. Changes in the factors above can result in a change to the provision recognized by the Company. To the extent the carrying value of the related mining property is not increased above its recoverable amount, changes to reclamation and closure cost obligations are recorded with a corresponding change to the carrying amounts of related mining properties.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
2. BASIS OF PRESENTATION (cont'd...)
Significant estimates (cont'd...)
Equipment - The carrying amounts of equipment are depreciated to their estimated residual value over the estimated economic life of the specific assets to which they relate, using the depreciations methods and rates as indicated below. Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken into account in the determination of the remaining depreciation rate. Depreciation commences on the date the asset is available for its use as intended by management.
Significant judgments
Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in these condensed interim consolidated financial statements are, but are not limited to, the following:
Determination of functional currency - The functional currency of the Company and its subsidiaries is the currency of the primary economic environment in which each entity operates. The Company has determined the functional currency of each entity to be the Canadian dollar. Determination of the functional currency may involve certain judgments to determine the primary economic environment. The functional currency may change if there is a change in events and conditions which determines the primary economic environment.
Going concern - The Company has exercised judgment in determining whether its available funds are sufficient to continue operations for 12 months from the end of the reporting period.
3. MATERIAL ACCOUNTING POLICY INFORMATION
These condensed interim consolidated financial statements were prepared using the same accounting policies and methods of computation as in the Company's consolidated financial statements for the year ended May 31, 2024, except as noted below.
Leases
Right-of-use assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct cost incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use assets are depreciated on a straight-line basis over its lease term. Right-of-use assets are subject to evaluation of potential impairment.
Lease liabilities
At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments). The lease payments also include the exercise price of purchase options, if any, reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
3. MATERIAL ACCOUNTING POLICY INFORMATION (cont'd...)
Lease liabilities (cont'd...)
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of properties (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (i.e., below $5,000). Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.
Changes to accounting policies
The following amendments to existing standards have been adopted by the Company commencing June 1, 2024:
IAS 1, Presentation of Financial Statements
The amendments clarify the requirements for classifying liabilities as current or non-current. The amendments provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. The adoption of these amendments did not materially impact these condensed interim consolidated financial statements.
New standards, interpretations and amendments to existing standards not yet effective
A number of new standards and amendments to standards and interpretations have been issued by the IASB and are effective for annual periods beginning on or after June 1, 2024 which have not been applied in preparing these condensed interim consolidated financial statements as they are not yet effective. The standards and amendments to standards that would be applicable to the consolidated financial statements of the Company are the following:
IFRS 18, Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1; many of the existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its operating profit or loss. The Company is currently assessing the impact of this new accounting standard on its financial statements.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
4. MARKETABLE SECURITIES
As at February 28, 2025, the Company owned 560,125 (May 31, 2024 - 560,125) Goldgroup Mining Inc. ("Goldgroup") shares with a fair value of $240,854 (May 31, 2024 - $19,604). The change in market value of the shares resulted in the recording of other comprehensive gain (loss) of $221,250 for the nine months ended February 28, 2025 (February 29, 2024 - $(14,003)).
As at February 28, 2025, the Company owned 375,000 (May 31, 2024 - 375,000) common shares in a private British Columbia company ("BC Co.") with a fair value of $nil (May 31, 2024 - $nil).
| Goldgroup | BC Co. | Total | |||
|---|---|---|---|---|---|
| Number | Amount | Number | Amount | Amount | |
| May 31, 2023 | 560,125 | $ 28,006 | 375,000 | $ - | $ 28,006 |
| Fair value adjustment | - | (8,402) | - | - | (8,402) |
| May 31, 2024 | 560,125 | 19,604 | 375,000 | - | 19,604 |
| Fair value adjustment | - | 221,250 | - | - | 221,250 |
| February 28, 2025 | 560,125 | $ 240,854 | 375,000 | $ - | $ 240,854 |
5. CERRO PRIETO ROYALTY
Pursuant to the sale of the Company's interest in the Cerro Prieto Property to Goldgroup in fiscal 2013, Goldgroup agreed to pay to the Company a production royalty (the "Production Royalty") on each of the first 90,000 ounces of gold produced from the Property, subject to the respective monthly average of the daily PM London gold fix being is in excess of US$1,250 per ounce, to a maximum royalty of US$90 per ounce. The production of the first 90,000 ounces was achieved in August 2022. As at February 28, 2025, the Company is owed $1,107,864 (May 31, 2024 - $1,076,781) by Goldgroup in connection with the Production Royalty.
6. EXPLORATION AND EVALUATION ASSETS
| Santo Tomas Properties | Xochipala Property | Total | |
|---|---|---|---|
| May 31, 2024 | $ 78,697,061 | $ 487,163 | $ 79,184,224 |
| Deferred exploration expenditures | |||
| Camp | 124,846 | - | 124,846 |
| Community relations | 38,105 | - | 38,105 |
| Fieldwork, physical and technical | 1,773,787 | - | 1,773,787 |
| Health, safety, and risk management | 8,027 | - | 8,027 |
| Logistics and support | 706,162 | - | 706,162 |
| Property maintenance | 879,177 | 56,935 | 936,112 |
| Technical and project management | 247,863 | - | 247,863 |
| VAT | 265,420 | 14,785 | 280,205 |
| 4,043,387 | 71,720 | 4,115,107 | |
| February 28, 2025 | $ 82,740,448 | $ 558,883 | $ 83,299,331 |
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
- EXPLORATION AND EVALUATION ASSETS (cont'd...)
| Santo Tomas Properties | Xochipala Property | Total | |
|---|---|---|---|
| May 31, 2023 | $ 72,618,719 | $ 438,812 | $ 73,057,531 |
| Deferred exploration expenditures | |||
| Camp | 112,618 | - | 112,618 |
| Community relations | 34,373 | - | 34,373 |
| Fieldwork, physical and technical | 3,062,543 | - | 3,062,543 |
| Health, safety, and risk management | 200,662 | - | 200,662 |
| Laboratory | 13,333 | - | 13,333 |
| Logistics and support | 1,131,969 | - | 1,131,969 |
| Property maintenance | 1,096,683 | 40,778 | 1,137,461 |
| Technical and project management | 212,138 | - | 212,138 |
| VAT | 214,023 | 7,573 | 221,596 |
| 6,078,342 | 48,351 | 6,126,693 | |
| May 31, 2024 | $ 78,697,061 | $ 487,163 | $ 79,184,224 |
(a) Santo Tomas Properties, Sinaloa State, Mexico
Core Concessions
The Company, through XG, holds a registered 100% interest in certain mineral concessions (the "Core Concessions").
In fiscal 2020, the Company acquired Altamura and its related subsidiaries, whose main asset is its interest in the Core Concessions. The acquisition value attributed to the properties (exploration and evaluation assets) was $24,412,316.
Altamura had fee obligations, as amended, (the "Fee Agreement"), related to the Core Concessions, of US$600,000, payable within twelve months of title to the Core Concessions being registered to XG in the PRM (paid).
Altamura also has certain contingent fee obligations (the "Contingent Fee Agreement") related to the Core Concessions, payable upon the direct or indirect sale, assignment or transfer of the Core Concessions in a transaction intended to be final disposition, as follows:
(i) pay 10% of the sale price, to a maximum of US$3,600,000, (inclusive of the first US$600,000 referred to above (paid)); and
(ii) pay 1.5% of the sale price, to a maximum of US$4,100,000, of which up to $1,000,000 is payable to David Rose, an officer of the Company.
Altamura has entered into agreements pursuant to which it granted an aggregate 15% interest in the Core Concessions (the "Contractual Interest") in consideration for: i) assistance with resolving the legal challenges to XG's acquisition of registered title to the Core Concessions; ii) assistance with regard to the Company's assembly of a controlling interest in the surrounding Papago 17, La China II, Rossy, Rossy 1, Papago Fraction 1 and AMP Santo Tomas Red 1 concessions (collectively, the "Peripheral Concessions" and together with the Core Concessions, the "Santo Tomas Properties"), including; (a) the assignment to the Company of majority interests in the Peripheral Concessions; and (b) the right to cause the assignment to the Company of majority interests in other additional related properties; and (iii) technical and geological services. The Contractual Interest is subject to dilution down to an aggregate 10% on a pro-rata basis upon the funding of up to $30,000,000 (completed) of expenditures on the combined Santo Tomas Properties.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
6. EXPLORATION AND EVALUATION ASSETS (cont'd...)
(a) Santo Tomas Properties, Sinaloa State, Mexico (cont'd...)
The Peripheral Concessions
The Company, through MX, holds an 80% interest in each of the six Peripheral Concessions, which were acquired for total cash payments of $52,247 and US$42,500, and the issuance of 2,300,000 common shares, valued at $471,000. Of the $52,247, the Company will pay $5,000 to the vendor of the interest in the Papago Fraccion 1 concession within 10 days of registration of the Company’s interest with the Mexican Public Registry of Mining. All six concessions comprising the Santo Tomas Properties are subject to an aggregate 1.5% net smelter royalty (“NSR”) payable to third parties.
In fiscal 2019, the Company entered into a purchase agreement (“Data Agreement”), as amended, pursuant to which the Company acquired geological data, analysis and models related to the Santo Tomas Properties in consideration for 500,000 common shares, valued at $137,500, and US$500,000, to be paid by way of one payment of US$50,000 at the time of signing the agreement (paid), a second payment of US$50,000 (paid) and a final payment of US$400,000. The final payment of US$400,000 payment is due upon the direct or indirect sale, assignment or transfer of the Core Concessions to a third party.
(b) Xochipala Property Guerrero State, Mexico
The Xochipala Property, located in Guerrero State, Mexico, is comprised of the contiguous 100% owned Celia Gene and Celia Generosa concessions. MX acquired the Xochipala Property in 2007.
(c) Salvador Property, Guerrero State, Mexico
The Salvador Property is a mining concession in Guerrero State, Mexico 100% owned by MX.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
- EQUIPMENT
| Camps | Transportation equipment | Machinery and equipment | Computer equipment | Leaseholds | Furniture and equipment | Total | |
|---|---|---|---|---|---|---|---|
| Cost | |||||||
| May 31, 2023 | $ 2,153,119 | $ 523,629 | $1,480,369 | $ 66,552 | $ 10,017 | $ 300,382 | $ 4,534,068 |
| Adjustment | (182,556) | - | - | - | - | - | (182,556) |
| May 31, 2024 | 1,970,563 | 523,629 | 1,480,369 | 66,552 | 10,017 | 300,382 | 4,351,512 |
| Additions | - | - | - | - | - | - | - |
| February 28, 2025 | $ 1,970,563 | $ 523,629 | $1,480,369 | $ 66,552 | $ 10,017 | $ 300,382 | $ 4,351,512 |
| Accumulated depreciation | |||||||
| May 31, 2023 | $ 155,091 | $ 272,331 | $ 228,731 | $ 43,330 | $ 10,017 | $ 55,854 | $ 765,354 |
| Depreciation | 105,439 | 129,890 | 151,105 | 13,535 | - | 31,927 | 431,896 |
| May 31, 2024 | $ 260,530 | $ 402,221 | $ 379,836 | $ 56,865 | $ 10,017 | $ 87,781 | $ 1,197,250 |
| Depreciation | 61,094 | 83,633 | 113,329 | 8,662 | - | 23,945 | 290,663 |
| February 28, 2025 | $ 321,624 | $ 485,854 | $ 493,165 | $ 65,527 | $ 10,017 | $ 111,726 | $ 1,487,913 |
| Net book value | |||||||
| May 31, 2024 | $ 1,710,033 | $ 121,408 | $ 1,100,533 | $ 9,687 | $ - | $ 212,601 | $ 3,154,262 |
| February 28, 2025 | $ 1,648,939 | $ 37,775 | $ 987,204 | $ 1,025 | $ - | $ 188,656 | $ 2,863,599 |
During the nine months ended February 28, 2025, depreciation of $290,663 (2024 - $326,523) was attributed to logistics and support within exploration and evaluation assets. The Company previously rented office space under an operating lease, included in office and general, with monthly payments of $6,100 (2024 - $6,100). During the nine months ended February 28, 2025, the Company entered into a new operating lease for its office (Note 8).
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
8. RIGHT-OF-USE ASSETS AND LEASE LIABILITY
Set out below are the carrying amounts of the Company's right-of-use assets and lease liabilities and the movements.
| Right-of-use assets | Lease liabilities | |
|---|---|---|
| May 31, 2023 and May 31, 2024 | $ - | $ - |
| Additions | 479,105 | 479,105 |
| Depreciation expense | (55,895) | - |
| Interest expense | - | 26,886 |
| Payments | - | (69,823) |
| February 28, 2025 | $ 423,210 | $ 436,168 |
As at February 28, 2025, the current portion of the lease liabilities was $81,003 (May 31, 2024 - $nil) and the long-term portion was $355,165 (May 31, 2024 - $nil). Depreciation of right-of-use and interest expense related to lease liabilities is included in office and general.
9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are comprised of the following:
| February 28, 2025 | May 31, 2024 | |
|---|---|---|
| Accounts payable | $ 1,491,558 | $ 1,600,213 |
| Accrued liabilities | 182,843 | 347,949 |
| $ 1,674,401 | $ 1,948,162 |
10. SHARE CAPITAL AND RESERVES
Authorized
An unlimited number of common shares without par value.
Issued share capital
During the nine months ended February 28, 2025, the Company issued:
i. 14,051,127 units at a price of $0.45 per unit by way of a brokered private placement for total proceeds of $6,323,007, of which $1,195,738 was received in fiscal 2024. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.65 per common share for a period of 24 months from the date of issue. The 7,025,561 warrants were valued at $562,045, calculated using the residual value method. The Company paid cash finders' and other fees of $515,836 and issued 703,399 finders' warrants. Each finder's warrant will entitle the holder to acquire an additional common share at a price of $0.45 per common share for a period of 24 months from the date of issue. The finders' warrants were valued at $100,418, calculated using the Black-Scholes option pricing model assuming a life expectancy of two years, a risk-free interest rate of 3.93%, a dividend rate of nil%, a forfeiture rate of nil% and volatility of 65%.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
10. SHARE CAPITAL AND RESERVES (cont'd...)
Issued share capital (cont'd...)
ii. 9,214,223 units at a price of $0.25 per unit by way of a brokered private placement for total proceeds of $2,303,556, of which $837,500 was received subsequent to period end. Each unit consists of one common share and one common share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.40 per common share for a period of 24 months from the date of issue. The 9,214,223 warrants were valued at $nil, calculated using the residual value method. The Company paid cash finder's fees of $900 and issued 3,600 finders' warrants. Each finder's warrant will entitle the holder to acquire an additional common share at a price of $0.25 per common share for a period of 24 months from the date of issue. The finder's warrants were valued at $418, calculated using the Black-Scholes option pricing model assuming a life expectancy of two years, a risk-free interest rate of 2.57%, a dividend rate of nil%, a forfeiture rate of nil% and volatility of 64%.
During the nine months ended February 29, 2024, the Company issued:
i. 2,692,308 units at a price of $0.65 per unit by way of a non-brokered private placement for total proceeds of $1,750,000, with each unit consisting of one common share and one common share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.90 per common share, for a period of 24 months from the date of issue. The 2,692,308 warrants were valued at $nil, calculated using the residual value method;
ii. 6,729,850 units at a price of $0.40 per unit by way of a non-brokered private placement for total proceeds of $2,691,940, with each unit consisting of one common share and one common share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.65 per common share, for a period of 18 months from the date of issue. The 6,729,850 warrants were valued at $67,298, calculated using the residual value method;
iii. 3,635,757 units at a price of $0.40 per unit by way of a non-brokered private placement for total proceeds of $1,454,304, with each unit consisting of one common share and one common share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.65 per common share for a period of 18 months from the date of issue. The 3,635,757 warrants were valued at $nil, calculated using the residual value method. The Company issued 73,000 common shares, valued at $31,755 for finder's fees; and
iv. 2,570,000 units at a price of $0.40 per unit by way of a non-brokered private placement for total proceeds of $1,028,000, with each unit consisting of one common share and one common share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire an additional common share at a price of $0.65 per common share for a period of 18 months from the date of issue. The 2,570,000 warrants were valued at $25,701, calculated using the residual value method. The Company issued 75,000 common shares, valued at $29,250 for finder's fees.
Warrants
Warrant transactions are summarized as follows:
| Number of warrants | Weighted average exercise price | |
|---|---|---|
| Balance, outstanding as at May 31, 2023 | 14,156,574 | $ 2.09 |
| Issued | 15,627,915 | 0.69 |
| Expired | (10,924,111) | 2.39 |
| Balance, outstanding as at May 31, 2024 | 18,860,378 | 0.75 |
| Issued | 16,946,783 | 0.51 |
| Balance, outstanding as at February 28, 2025 | 35,807,161 | $ 0.64 |
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
10. SHARE CAPITAL AND RESERVES (cont'd...)
Warrants (cont'd...)
Warrants outstanding as at February 28, 2025 are as follows:
| Number of warrants | Exercise price | Weighted average remaining life (years) | Expiry date |
|---|---|---|---|
| 3,222,463 | $ 1.05 | 0.05 | March 17, 2025(1) |
| 10,000 | $ 0.75 | 0.05 | March 17, 2025(1) |
| 6,729,850 | $ 0.65 | 0.25 | May 31, 2025 |
| 3,635,757 | $ 0.65 | 0.38 | July 15, 2025 |
| 2,570,000 | $ 0.65 | 0.46 | August 15, 2025 |
| 2,692,308 | $ 0.90 | 0.46 | August 15, 2025 |
| 7,025,561 | $ 0.65 | 1.27 | June 6, 2026 |
| 703,399 | $ 0.45 | 1.27 | June 6, 2026 |
| 9,214,223 | $ 0.40 | 2.00 | February 28, 2027 |
| 3,600 | $ 0.25 | 2.00 | February 28, 2027 |
| 35,807,161 |
(1) expired, unexercised subsequent to period end
Stock options
The Company has a rolling stock option plan, whereby from time to time, at the direction of the Board of Directors, stock options may be granted to employees, consultants, directors and officers. The number of shares reserved for issuance under the plan shall not exceed $10\%$ of the issued and outstanding common shares of the Company. The exercise price of each option is based on the market price of the Company's common stock at the date of the grant. Options may be granted for a maximum of 10 years and vesting is determined by the Board of Directors.
During the nine months ended February 28, 2025, the Company recognized $840,192 (2024 - $84,732) as share-based payment for the fair value of the stock options.
Option transactions are summarized as follows:
| Number of options | Weighted average exercise price | |
|---|---|---|
| Balance, outstanding as at May 31, 2023 | 10,192,000 | $ 1.66 |
| Granted | 6,385,000 | 0.75 |
| Expired/forfeited | (2,742,000) | 0.80 |
| Balance, outstanding as at May 31, 2024 and February 28, 2025 | 13,835,000 | $ 1.41 |
| Balance, exercisable as at February 28, 2025 | 13,835,000 | $ 1.41 |
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
10. SHARE CAPITAL AND RESERVES (cont'd...)
Options (cont'd...)
Options outstanding as at February 28, 2025 are as follows:
| Number of options | Number of exercisable options | Exercise price | Weighted average remaining life (years) | Expiry date |
|---|---|---|---|---|
| 300,000 | 300,000 | $ 2.05 | 0.01 | March 1, 2025(1) |
| 600,000 | 600,000 | $ 2.05 | 0.08 | March 29, 2025(1) |
| 5,950,000 | 5,950,000 | $ 2.05 | 0.17 | May 2, 2025 |
| 150,000 | 150,000 | $ 1.10 | 0.96 | February 12, 2026 |
| 450,000 | 450,000 | $ 1.10 | 1.09 | April 3, 2026 |
| 6,235,000 | 6,235,000 | $ 0.75 | 2.11 | April 8, 2027(2) |
| 150,000 | 150,000 | $ 0.75 | 2.11 | April 10, 2027(3) |
| 13,835,000 | 13,835,000 | 1.10 |
(1) expired, unexercised subsequent to period end
(2) 630,000 were cancelled, unexercised subsequent to period end
(3) cancelled, unexercised subsequent to period end
11. NON-CONTROLLING INTEREST
On March 2, 2020, the Company acquired 100 shares (67%) of XG, through the acquisition of Altamura. In fiscal 2020, 2021 and 2024, the Company acquired an additional 375 shares (25 in fiscal 2020, 30 in fiscal 2021 and 320 in fiscal 2024) for total ownership as at February 28, 2025 of 475 of 500 shares, representing 95% of XG's equity (May 31, 2024 - 95%).
As at February 28, 2025, the equity attributable to the 5% (May 31, 2024 - 5%) non-controlling interest in XG is as follows:
| Total | |
|---|---|
| May 31, 2023 | $ 2,773,705 |
| 9% interest acquired | (1,755,352) |
| Share of loss for the year | (78,238) |
| May 31, 2024 | 940,115 |
| Share of gain for the period | 274,892 |
| February 28, 2025 | $ 1,215,007 |
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
11. NON-CONTROLLING INTEREST (cont'd...)
As at February 28, 2025 and May 31, 2024 and for the periods ended February 28, 2025 and May 31, 2024, summarized financial information about XG is as follows:
| February 28, 2025 | May 31, 2024 | |
|---|---|---|
| Current assets | $ 225,779 | $ 317,433 |
| Non-current assets | 71,077,803 | 68,526,493 |
| Current liabilities | (1,006,096) | (829,377) |
| Non-current liabilities | (45,997,344) | (49,212,255) |
| Gain (loss) and comprehensive gain (loss) for the period | $ 5,497,848 | $ (1,168,382) |
The gain (loss) and comprehensive gain (loss) of XG for the nine months ended February 28, 2025 was $5,497,848 (2024 -$ 779,535). The gain (loss) allocated to non-controlling interest based on an interest of 5% (2024 - 5%) for the nine months ended February 28, 2025 was$ 274,892 (2024 - $58,796).
12. RELATED PARTY TRANSACTIONS
The Company considers key management personnel to consist of directors and officers. The following expenses were incurred with key management personnel:
| For the nine months ended February 28, 2025 | For the nine months ended February 29, 2024 | |
|---|---|---|
| Management and director fees | $ 532,921 | $ 525,409 |
| Professional fees | 103,500 | 103,500 |
| Share-based payment | 404,658 | 67,825 |
| Total | $ 1,041,079 | $ 696,734 |
As at February 28, 2025 included in share subscriptions receivable was $750,000 (May 31, 2024 -$nil) owing from a company controlled by a director. As at February 28, 2025 included in accounts payable and accrued liabilities was $434,907 (May 31, 2024 -$452,962) owing to officers and directors. The amounts owing are unsecured, non-interest bearing and have no fixed repayment terms.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
13. SUPPLEMENTAL CASH FLOW INFORMATION
| For the nine months ended February 28, 2025 | For the nine months ended February 29, 2024 | |
|---|---|---|
| Non-cash transactions not included in investing or financing activities | ||
| Exploration and evaluation assets included in accounts payable | $ 1,027,435 | $ 1,811,382 |
| Share issues costs included in accounts payable | $ 900 | $ - |
| Common shares issued for finders’ fees | $ - | $ 61,005 |
| Royalty receivable settled with accounts payable | $ 29,781 | $ - |
| Recognition of right-of-use asset and lease liability | $ 479,105 | $ - |
| Allocation of share subscriptions received in advance to share capital | $ 1,195,738 | $ - |
| Share subscriptions receivable | $ 837,500 | $ - |
| Finders’ warrants issued included in share issue costs | $ 100,836 | $ - |
| Residual value of warrants in private placements | $ 562,045 | $ 92,999 |
| Depreciation on equipment included in exploration and evaluation assets | $ 290,663 | $ 326,523 |
| Unrealized change on fair value of marketable securities | $ 221,250 | $ 14,003 |
14. SEGMENTED INFORMATION
The Company operates in one segment, being the acquisition and exploration of exploration and evaluation assets located in Mexico. Geographic information is as follows:
As at February 28, 2025
| Canada | Mexico | Total | |
|---|---|---|---|
| Equipment | $ - | $ 2,863,599 | $ 2,863,599 |
| Exploration and evaluation assets | - | 83,299,331 | 83,299,331 |
| Other assets | 3,045,653 | 262,703 | 3,308,356 |
| Total assets | $ 3,045,653 | $ 86,425,633 | $ 89,471,286 |
As at May 31, 2024
| Canada | Mexico | Total | |
|---|---|---|---|
| Equipment | $ - | $ 3,154,262 | $ 3,154,262 |
| Exploration and evaluation assets | - | 79,184,224 | 79,184,224 |
| Other assets | 2,073,990 | 360,610 | 2,434,600 |
| Total assets | $ 2,073,990 | $ 82,669,096 | $ 84,773,086 |
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
15. FINANCIAL INSTRUMENT RISK AND CAPITAL MANAGEMENT
The Company's objectives when managing capital are to identify, pursue and complete the exploration and development of mineral properties, to maintain financial strength, to protect its ability to meet its on-going liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for shareholders over the long term. The Company does not have any externally imposed capital requirements to which it is subject. Capital of the Company comprises shareholders' equity. There has been no significant change in the Company's objectives, policies and processes for managing its capital during the nine months ended February 28, 2025.
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares. The Company's investment policy is to invest its cash in financial instruments in high credit quality financial institutions with terms to maturity selected with regards to the expected timing of expenditures from continuing operations.
Fair value hierarchy
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 marketplace.
Level 3 - Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.
The carrying value of cash, receivables, and accounts payable and accrued liabilities approximated their fair value because of the short-term nature of these instruments. The Goldgroup shares, recorded in marketable securities, are measured using level 1 of the fair value hierarchy. The BC Co., shares recorded in marketable securities, are measured using level 3 of the fair value hierarchy. Investments classified within level 3 have significant unobservable inputs. As observable prices are not available for these securities, the Company has used valuation techniques to derive the fair value.
The Company's financial instruments are exposed to certain financial risks, which include credit risk, liquidity risk, and market risk.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company's primary exposure to credit risk is on its bank accounts and receivables. The bank accounts are mainly held with a major Canadian bank and this minimizes the risk to the Company. Receivables are due primarily from Goldgroup.
Liquidity Risk
Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due. The Company manages liquidity risk through the management of its capital structure and financial leverage as outlined above. The Company monitors its ability to meet its short-term expenditures by raising additional funds through share issuance when required. All of the Company's financial liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms.
OROCO RESOURCE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(Unaudited)
February 28, 2025
15. FINANCIAL INSTRUMENT RISK AND CAPITAL MANAGEMENT (cont'd...)
Foreign Exchange Risk
The Company’s property interests in Mexico make it subject to foreign currency fluctuations, which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian dollar and foreign currencies. The effect of a 10% change in the foreign exchange rate on the monetary balances held in foreign currencies as at February 28, 2025 is approximately $8,000.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk.
Management of Industry Risk
The Company is engaged in mineral exploration and manages related industry risk issues directly. The Company may be at risk for environmental issues and fluctuations in commodity pricing as well as changes in foreign government policy. Management is not aware of and does not anticipate any significant environmental remediation costs or liabilities in respect of its current operations; however, it is not possible to be certain that all aspects of environmental issues affecting the Company, if any, have been fully determined or resolved.