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Peruvian Metals Corp. — Interim / Quarterly Report 2025
Mar 4, 2025
44739_rns_2025-03-03_e083b5cc-52a5-4e0b-87db-bc7e0d8f8b5e.pdf
Interim / Quarterly Report
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PERUVIAN METALS CORP.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED DECEMBER 31, 2024
(Unaudited)
(Expressed in Canadian dollars)
NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed consolidated interim financial statements have been prepared by and are the responsibility of management.
The Company's independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.
PERUVIAN METALS CORP.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED DECEMBER 31, 2024
(Unaudited)
(Expressed in Canadian dollars)
| INDEX | PAGE |
|---|---|
| Condensed Consolidated Interim Statements of Financial Position | 3 |
| Condensed Consolidated Interim Statements of Net Income (Loss) and Comprehensive Income (Loss) | 4 |
| Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity | 5 |
| Condensed Consolidated Interim Statements of Cash Flows | 6 |
| Notes to the Condensed Consolidated Interim Financial Statements | 7 – 18 |
PERUVIAN METALS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited– Prepared by Management)
(Expressed in Canadian dollars)
AS AT
| | December 31, 2024
$ | March 31, 2024
$ |
| --- | --- | --- |
| ASSETS | | |
| CURRENT | | |
| Cash | 77,989 | 107,199 |
| Prepaid expenses and advances | 29,078 | 42,760 |
| Amounts receivable | 45,287 | 185,086 |
| Note receivable | - | 108,400 |
| Sales tax receivable | 8,060 | 13,498 |
| Inventory (Note 6) | 24,524 | 15,079 |
| Investments (Note 5) | - | 22,793 |
| TOTAL CURRENT ASSETS | 184,938 | 494,815 |
| PROPERTY, PLANT AND EQUIPMENT (Note 9) | 1,328,443 | 1,336,068 |
| INVESTMENT IN SAN MAURIZO MINES INC. (Note 5) | 479,622 | - |
| TOTAL ASSETS | 1,993,003 | 1,830,883 |
| LIABILITIES | | |
| CURRENT | | |
| Accounts payable and accrued liabilities | 495,570 | 439,340 |
| Due to related parties (Note 8) | 27,714 | 66,096 |
| TOTAL CURRENT LIABILITIES | 523,284 | 505,436 |
| ASSET RETIREMENT AND RECLAMATION OBLIGATIONS (Note 10) | 247,274 | 238,430 |
| TOTAL LIABILITIES | 770,558 | 743,866 |
| SHAREHOLDERS' EQUITY | | |
| CAPITAL STOCK (Note 11(a)) | 54,107,756 | 53,472,540 |
| WARRANT RESERVE (Note 11(b)) | 200,144 | - |
| SHARE-BASED PAYMENT RESERVE (Note 12) | 273,750 | 273,750 |
| ACCUMULATED OTHER COMPREHENSIVE INCOME | (62,486) | 115,036 |
| ACCUMULATED DEFICIT | (53,445,860) | (52,928,398) |
| EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT | 1,073,304 | 932,928 |
| EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 149,141 | 154,089 |
| TOTAL SHAREHOLDERS' EQUITY | 1,222,445 | 1,087,017 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,993,003 | 1,830,883 |
GOING CONCERN (Note 2)
COMMITMENTS AND CONTINGENCIES (Note 18)
APPROVED ON BEHALF OF THE BOARD:
Signed "Dan Hamilton", Director
Signed "Jeffrey Reeder", Director
See accompanying notes to the condensed consolidated interim financial statements
PERUVIAN METALS CORP.
Page 4
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
FOR THE
| Three Months Ended December 31, | Nine Months Ended December 31, | |||
|---|---|---|---|---|
| 2024 $ | 2023 $ | 2024 $ | 2023 $ | |
| MINERAL PROCESSING REVENUE | 769,766 | 745,691 | 2,305,736 | 1,965,285 |
| PLANT OPERATING COSTS (Note 14) | (426,954) | (330,493) | (1,417,945) | (1,120,134) |
| INCOME FROM PROCESSING PLANT OPERATIONS | 342,812 | 415,198 | 887,791 | 845,151 |
| General and administrative (Note 15) | (166,201) | (236,366) | (474,626) | (479,851) |
| Exploration and evaluation expenditures | (59,778) | (79,485) | (626,843) | (225,055) |
| (LOSS) INCOME BEFORE THE FOLLOWING: | 116,833 | 99,347 | (213,678) | 140,245 |
| Interest income | 384 | 1,828 | 1,075 | 2,158 |
| Loss on disposal of property, plant and equipment (Note 9) | - | - | - | (14,415) |
| Accretion expense (Note 10) | (2,948) | (5,896) | (8,844) | (8,844) |
| Depreciation | (6,058) | (5,217) | (18,039) | (15,630) |
| Unrealized gain (loss) on investments (Note 5) | - | (63,675) | 205,133 | 90,100 |
| Foreign currency translation gain (loss) | 84,123 | (63,190) | 36,085 | (161,428) |
| Realized loss on sale of investments (Note 5) | - | (9,764) | (206,789) | (59,735) |
| (LOSS) INCOME BEFORE INCOME TAXES FOR THE PERIOD | 192,334 | (46,567) | (205,057) | (27,549) |
| Current income tax expense | (154,907) | (124,077) | (154,907) | (124,077) |
| NET (LOSS) INCOME FOR THE PERIOD | 37,427 | (170,644) | (359,964) | (151,626) |
| NET (LOSS) FOR THE PERIOD ATTRIBUTABLE TO: | ||||
| Non-controlling interest | 43,857 | 66,594 | 157,498 | 169,420 |
| Shareholders of the Parent | (6,430) | (234,290) | (517,462) | (321,046) |
| 37,427 | (167,696) | (359,964) | (151,626) | |
| OTHER COMPREHENSIVE (LOSS) INCOME | ||||
| Item that may be reclassified subsequently to profit and loss: | ||||
| Foreign translation differences for foreign operations - parent | (141,140) | - | (177,522) | - |
| Foreign translation differences for foreign operations - non-controlling interest | (53,926) | - | (44,831) | - |
| COMPREHENSIVE (LOSS) INCOME FOR THE PERIOD | (157,639) | (167,696) | (582,317) | (151,626) |
| Income (loss) per share - basic and diluted (Note 13) | (0.000) | (0.002) | (0.005) | (0.003) |
| Weighted average number of common shares | ||||
| Outstanding - basic and diluted | 126,171,807 | 99,742,521 | 112,353,879 | 99,742,521 |
See accompanying notes to the condensed consolidated interim financial statements
PERUVIAN METALS CORP.
Page 5
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
FOR THE NINE MONTHS ENDED DECEMBER 31, 2024
| Notes | Common Shares $ | Warrant Reserve $ | Share-based Payment Reserve $ | Accumulated Deficit $ | AOCI $ | Equity attributable to shareholders of the parent $ | Non-Controlling Interest $ | Total Shareholders' Equity $ | |
|---|---|---|---|---|---|---|---|---|---|
| Balance, March 31, 2023 | 53,472,540 | - | 270,000 | (52,709,828) | - | 1,032,712 | 359,422 | 1,392,134 | |
| Shares issued for cash - exercise of options | 11,12 | - | - | - | - | - | - | - | - |
| Shares issued for cash - exercise of warrants | 11 | - | - | - | - | - | - | - | - |
| Share issuance costs | 11 | - | - | - | - | - | - | - | - |
| Warrants expired | - | - | - | - | - | - | - | - | |
| Net (loss) income | - | - | - | (321,046) | - | (321,046) | 169,420 | (151,626) | |
| Balance, December 31, 2023 | 53,472,540 | - | 270,000 | (53,030,874) | - | 711,666 | 528,842 | 1,240,508 | |
| Options expired | - | - | (15,000) | 15,000 | - | - | - | - | |
| Share based payments | - | - | 18,750 | - | - | 18,750 | - | 18,750 | |
| Unrealized gain on translation of foreign operations | - | - | - | - | 115,036 | 115,036 | 28,759 | 143,795 | |
| Dividends paid | - | - | - | - | - | - | (440,725) | (440,725) | |
| Net (loss) income | - | - | - | 87,476 | - | 87,476 | 100,508 | 187,984 | |
| Balance, March 31, 2024 | 53,472,540 | - | 273,750 | (52,928,398) | 115,036 | 932,928 | 217,384 | 1,150,312 | |
| Shares and warrants issued for cash | 10,11 | 471,217 | 203,833 | - | - | - | 675,050 | - | 675,050 |
| Shares issued for investment | 175,000 | - | - | - | - | 175,000 | - | 175,000 | |
| Share issuance costs | 10 | (11,001) | (3,689) | - | - | - | (14,690) | - | (14,690) |
| Unrealized gain on translation of foreign operations | - | - | - | - | (177,522) | (177,522) | (44,381) | (221,903) | |
| Dividends paid | - | - | - | - | - | - | (181,360) | (181,360) | |
| Net (loss) income | - | - | - | (517,462) | - | (517,462) | 157,498 | (359,964) | |
| Balance, December 31, 2024 | 54,107,756 | 200,144 | 273,750 | (53,445,860) | (62,486) | 1,073,304 | 149,141 | 1,222,445 |
See accompanying notes to the condensed consolidated interim financial statements
PERUVIAN METALS CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
FOR THE NINE MONTHS ENDED DECEMBER 31, Page 6
| | 2024
$ | 2023
$ |
| --- | --- | --- |
| CASH FLOWS PROVIDED BY (USED IN): | | |
| OPERATING ACTIVITIES | | |
| Net icome (loss) for the period | (359,964) | (151,626) |
| Items not requiring cash: | | |
| Depreciation | 120,190 | 157,815 |
| Accretion expense | 8,844 | 8,844 |
| Realized loss on sale of investments | 206,789 | 59,735 |
| Unrealized (gain) loss on investments (Note 5) | (205,133) | (90,100) |
| Foreign currency translation (gain) loss | (36,085) | 161,428 |
| Loss on disposal of property, plant and equipment (Note 9) | - | 14,415 |
| Changes in non-cash operating working capital: | | |
| Prepaid expenses and advances | 13,682 | 57,249 |
| Amounts receivable, notes receivable and sales tax receivable | 253,637 | 84,089 |
| Inventory | (9,445) | (1,383) |
| Accounts payable and accrued liabilities | 56,230 | (167,403) |
| Due to related parties | (38,382) | 25,798 |
| Cash flows provided by (used in) operating activities | 10,363 | 158,861 |
| INVESTING ACTIVITIES | | |
| Additions to property, plant and equipment (Note 9) | (42,112) | (83,075) |
| Proceeds on sale of investments | 72,381 | 59,515 |
| Investment in San Maurizio | (304,622) | - |
| Cash flows from investing activities | (274,353) | (23,560) |
| FINANCING ACTIVITIES | | |
| Share issue costs | (11,001) | - |
| Shares issued for cash -private placement | 675,050 | - |
| Dividends paid to non-controlling interest of subsidiary | (181,360) | - |
| Cash flows from financing activities | 482,689 | - |
| Effect of exchange rates on cash | (247,909) | (161,428) |
| Increase (decrease) in cash | (29,210) | (26,127) |
| Cash, beginning of the period | 107,199 | 169,642 |
| Cash, end of the period | 77,989 | 143,515 |
See accompanying notes to the consolidated financial statements
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
1. GENERAL INFORMATION
Peruvian Metals Corp. ("Peruvian Metals", and with its subsidiaries, the "Company") is a publicly listed company originally incorporated in British Columbia and subsequently continued federally under the Canada Business Corporations Act. Effective September 5, 2018 Peruvian Metals changed its name from Duran Ventures Inc. to Peruvian Metals Corp. Peruvian Metals' common shares have been listed on the TSX Venture Exchange ("TSXVE") since July 4, 2007, and trade under the symbol "PER". The Company is engaged in mineral processing and the exploration and development of mineral properties in Peru. The Company's principal office is located at 250 Southridge NW, Suite 300, Edmonton, AB, Canada T6H 4M9 and substantially all the Company's corporate and administrative expenses are incurred in Canada.
2. GOING CONCERN
The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining and milling operations. The recoverability of the carrying value of exploration and evaluation assets and property, plant and equipment and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write-downs of the carrying values. The Company's assets are subject to increases in taxes and royalties, renegotiation of contracts, expropriation, currency exchange fluctuations and political uncertainty.
Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to government licensing registration or regulations, unregistered prior agreements, unregistered claims, aboriginal claims and non-compliance with regulatory, social and environmental requirements.
These condensed consolidated interim financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period.
During the nine months ended December 31, 2024, the Company realized a net loss of $359,964 (2023 – $151,626), had a negative cash flow from operations of $213,678 (2023 – positive cash flow of $140,245), and had a working capital deficit of $338,886 (March 31, 2024 – $10,621) and an accumulative deficit of $53,445,760 (March 31, 2024 – $52,928,398).
Management is aware, in making its assessment, of material uncertainties related to events or conditions that could cast significant doubt upon the Company's ability to continue as a going concern. The Company's continuance as a going concern is dependent upon its ability to obtain adequate financing or to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operation. If the going concern assumption is not appropriate, material adjustments to the consolidated financial statements may be required.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
3. BASIS OF CONSOLIDATION
These condensed consolidated interim financial statements include the accounts of Peruvian Metals and its wholly owned subsidiaries, Mamaniña Exploraciones SAC (“Mamaniña Exploraciones”), Hatum Minas SAC (“Hatum Minas”), Magellan Gold Peru SAC, and it’s 80% owned subsidiary companies Minera Aguila de Ora SAC (“Madosac”) and Insumos Y Minerales del Notre SRL (“Insumos”), all of which are incorporated in Peru. Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are deconsolidated from the date control ceases.
All inter-company balances and transactions have been eliminated. The condensed consolidated interim financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company after eliminating inter-entity balances and transactions.
For non-wholly owned, controlled subsidiaries, the net assets attributable to outside equity shareholders are presented as “non-controlling interests” in the equity section of the condensed consolidated interim statements of financial position.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Statement of compliance
These condensed consolidated interim financial statements of the Company were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
The Company has consistently applied the accounting policies used in preparation of these condensed consolidated interim financial statements throughout all the periods presented. Significant accounting judgements and estimates used by management in the preparation of these condensed consolidated interim financial statements are presented in Note 5 of the Company’s consolidated financial statements as at and for the fifteen months ended March 31, 2024.
The policies applied in these consolidated financial statements are based on the IFRS issued and effective as of December 31, 2024. These consolidated financial statements were approved and authorized for issue by the Board of Directors on March 3, 2025.
(b) Basis of preparation
The consolidated financial statements are presented in Canadian dollars. The financial statements are prepared on the historical cost basis except for marketable securities which are measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
5. INVESTMENTS
Shares in International Metals Mining Corp. ("IMMC")
As at March 31, 2024, the Company held 506,500 shares in International Metals Mining Corp. ("IMMC"), classified as financial assets at FVTPL, carried at a fair value, with unrealized gains/losses recognized in operations.
During the nine months ended December 31, 2024, the Company sold 506,000 common shares of IMMC for net proceeds of $21,136 and recorded a realized loss of on sale of investments of $206,789 (December 31, 2023 - $59,735).
As at December 31, 2024 the Company has fully sold all its previously held shares in IMMC.
Investment in San Maurizio Mines Inc. ("San Maurizio")
On April 11, 2024, the Company signed a definitive agreement to acquire a 50% interest in San Maurizio, a private Manitoba-based company (the "Transaction"). Upon completion of the Transaction, San Maurizio will hold an exclusive 100% direct interest in the Mercedes gold-silver-lead-zinc-copper property ("Mercedes" or the "Property"), situated in central Peru via its wholly owned Peruvian subsidiary, Basic Minerals SAC ("Basic Minerals").
Peruvian Metals is set to acquire a 50% stake in San Maurizio by purchasing half of the outstanding shares currently owned by its sole shareholder, Hudson Heartland Ltd. ("Hudson"). The project is subject to a 20% Net Profit Interest ("NPI") which will be eliminated once US$5 million has been paid to the NPI holder. Afterwards, a 1.5% Net Smelter Royalty ("NSR") will be paid to the NPI holder. San Maurizio retains the right to buyout the NSR for US$1.5 million.
Peruvian Metals is set to acquire a 50% ownership stake in San Maurizio through the issuance of 2.5 million common shares to Hudson at a deemed issuance price of C$0.07 per common share. The Transaction establishes Peruvian Metals and Hudson as the exclusive shareholders of San Maurizio. In addition, both entities have formalized their collaboration through comprehensive shareholders' and operating agreements, outlining their joint commitment to explore and develop the Property.
Up to the present date, the Company has contributed $479,622 towards this collaborative venture.
6. INVENTORY
The Company's inventory at December 31, 2024 is comprised of plant consumables with a value of $24,524 (March 31, 2024 - $15,079).
7. EXPLORATION AND EVALUATION PROPERTY INTERESTS
Palta Dorado Property, Peru
During the fifteen months ended March 31, 2024, the Company purchased Rio Silver's 50% interest in the Palta Dorada gold-silver-copper property located in northern Peru, resulting in 100% ownership. To acquire Rio Silver's remaining 50% interest, Peruvian Metals paid US$250,000. Rio Silver has retained a 3% net smelter return which is capped at US$2 million. Peruvian Metals must also ensure that the royalty will pay a minimum of US$50,000 per year for a period of five years.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
Panteria Project
On April 21, 2022, the Company completed the sale of mineral concessions belonging to the Panteria Project (the "Mineral Concessions") to IMMC. The total consideration for the sale of the Panteria Project was $256,540 ($200,000 US) cash and $417,376 shares (9,275,000 shares) for aggregate proceeds of $673,916 to be paid in two equal installments. In addition to the cash and shares, a 1% NSR has been granted to the Company.
During the nine months ended December 31, 2024, the second cash payment of $100,000 US was received.
Additional bonus/milestone payments by IMMC include $750,000 (not received) on or before the completion date of 10,000 metres of drilling on the Panteria Project, and additional $750,000 (not received) on or before the completion date of 20,000 metres of drilling on the Panteria Project. At the sole election of IMMC, these payments can be made in cash or by the issuance of common shares of IMMC at their market value at the time of issuance, provided that such issuance is not to result in the Company holding 10% or more of the issued and outstanding shares of IMMC following such issuance.
8. RELATED PARTY TRANSACTIONS
Related parties include officers of the Company, the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including the directors of the Company. The remuneration of key management personnel of the Company for the nine months ended December 31, 2024 and 2023 were as follows:
| Three months ended December 31, | Nine months ended December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| $ | $ | $ | $ | |
| Aggregate compensation | 117,500 | 154,000 | 253,500 | 325,000 |
As at December 31, 2024, a balance of $27,714 (2023 - $102,576) was due to certain officers and directors of the Company relating to unpaid compensation. Amounts payable are unsecured, non-interest bearing and due on demand.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
9. PROPERTY, PLANT AND EQUIPMENT
All of the Company's property, plant and equipment at December 31, 2024 and March 31, 2024, was located in Peru.
| Cost | Office furniture and equipment | Computer equipment | Vehicles and field equipment | Plant | Total |
|---|---|---|---|---|---|
| $ | $ | $ | $ | $ | |
| Balance at December 31, 2022 | 20,841 | 4,623 | 115,282 | 2,178,712 | 2,319,458 |
| Additions | 754 | - | 6,024 | 80,419 | 87,197 |
| Disposals | (728) | (966) | (21,914) | - | (23,608) |
| Foreign currency translation | - | - | - | 32,018 | 32,018 |
| Balance at March 31, 2024 | 20,867 | 3,657 | 99,392 | 2,291,149 | 2,415,065 |
| Additions | 320 | - | 1,377 | 40,415 | 42,112 |
| Disposals | - | - | (7,637) | (262) | (7,899) |
| Foreign currency translation | - | - | - | 117,915 | 117,915 |
| Balance at December 31, 2024 | 21,187 | 3,657 | 93,132 | 2,449,217 | 2,567,193 |
| Amortization and impairment | Office furniture and equipment | Computer equipment | Vehicles and field equipment | Plant | Total |
| $ | $ | $ | $ | $ | |
| Balance at December 31, 2022 | 4,310 | 2,472 | 28,393 | 838,722 | 873,897 |
| Additions | 2,045 | 1,067 | 23,515 | 178,444 | 205,071 |
| Disposals | (728) | (965) | (8,074) | - | (9,767) |
| Foreign currency translation | - | - | - | 9,796 | 9,796 |
| Balance at March 31, 2024 | 5,627 | 2,574 | 43,834 | 1,026,962 | 1,078,997 |
| Additions | 3,896 | 686 | 13,457 | 102,151 | 120,190 |
| Disposals | - | - | (7,636) | (2) | (7,638) |
| Foreign currency translation | - | - | - | 47,201 | 47,201 |
| Balance at December 31, 2024 | 9,523 | 3,260 | 49,655 | 1,176,312 | 1,238,750 |
| Carrying amounts | Office furniture and equipment | Computer equipment | Field equipment | Plant | Total |
| $ | $ | $ | $ | $ | |
| At March 31, 2024 | 15,240 | 1,083 | 55,558 | 1,264,187 | 1,336,068 |
| At December 31, 2024 | 11,664 | 397 | 43,477 | 1,272,905 | 1,328,443 |
10. ASSET RETIREMENT AND RECLAMATION OBLIGATIONS
The Company's operations are governed by laws and regulations covering the protection of the environment. The Company intends to implement progressive measures for rehabilitation work to be carried out during the operation, closing and follow-up work upon closing of the Aguila Norte processing plant; consequently, the Company has accounted for its asset retirement obligations for the plant using best estimates of future costs, based on information available at the reporting date. These estimates are subject to change following modifications to laws and regulations or as new information becomes available.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
The Company received its final environmental permit for the Aguila Norte Plant in February 2018 and set up a provision for the asset retirement and reclamation obligations. As at December 31, 2024, the estimated undiscounted cash flow required to settle the asset retirement obligation for Aguila Norte Plant and its related tailings pond is $247,274 and is projected to be disbursed no earlier than end of 2025 (March 31, 2024 – 2024). A -5% (March 31, 2024 – 5%) discount rate and 2% (March 31, 2024 – 2%) inflation rate were used to evaluate this provision.
| $ | |
|---|---|
| Balance December 31, 2022 | 223,690 |
| Accretion | 14,740 |
| Balance, March 31, 2024 | 238,430 |
| Accretion | 8,844 |
| Balance, December 31, 2024 | 247,274 |
11. CAPITAL STOCK AND WARRANT RESERVE
a) Authorized, Issued and Outstanding shares
Authorized - unlimited number of common shares with no par value,
- 100,000,000 preferred shares with no par value
| Common Shares # | Amount $ | |
|---|---|---|
| Balance, December 31, 2022 | 99,058,521 | 53,373,066 |
| Exercise of stock options | 400,000 | 40,000 |
| Allocation from share-based payment reserve | - | 28,541 |
| Exercise of warrants | 284,000 | 28,400 |
| Allocation from warrant reserve | - | 2,840 |
| Share issuance costs | - | (307) |
| Balance, March 31, 2024 | 99,742,521 | 53,472,540 |
| Shares issued for cash | 23,929,286 | 471,217 |
| Shares issued for San Maurizio investment (Note 5) | 2,500,000 | 175,000 |
| Share issuance costs | - | (11,001) |
| Balance, December 31, 2024 | 126,171,807 | 54,107,756 |
A summary of common shares outstanding as at December 31, 2024 and changes during the nine month period then ended are presented below:
(i) During the nine months ended December 31, 2024, the Company issued a total of 3,929,286 common shares via a non-brokered private placement at a price of $0.07 per Unit. Each Unit included one common share and one-half share-purchase warrant ("Warrant"). Each Warrant is exercisable to acquire one additional common share for two years at a price of $0.10 per Warrant.
(ii) During the nine months ended December 31, 2024, the Company issued a total of 20,000,000 common shares via a non-brokered private placement at a price of $0.02 per Unit. Each Unit included one common share and one-half share-purchase warrant ("Warrant"). Each Warrant is exercisable to acquire one additional common share for one year at a price of $0.05 per Warrant.
(iii) During the nine months ended December 31, 2024, the Company issued a total of 2,500,000 common shares at a deemed price of $0.07 per share as part of the Transaction with Hudson (see Note 5).
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
b) Share Purchase Warrants
A summary of warrants outstanding as at December 31, 2024 and changes during the nine month period then ended are presented below:
| Warrants | Amount | Weighted average exercise price | |
|---|---|---|---|
| # | $ | $ | |
| Balance, December 31, 2022 | 2,334,000 | 23,340 | 0.10 |
| Expired | (2,050,000) | (20,500) | 0.10 |
| Exercised | (284,000) | (2,840) | 0.10 |
| Balance, March 31, 2024 | - | - | - |
| Issued | 12,096,643 | 200,144 | 0.06 |
| Balance, December 31, 2024 | 12,096,643 | 200,144 | 0.06 |
Warrants outstanding as at December 31, 2024:
| Expiry date | Number of warrants outstanding # | Exercise price $ | Weighted average remaining contractual life (years) |
|---|---|---|---|
| April 26, 2026 | 1,607,143 | 0.10 | 1.32 |
| May 28, 2026 | 357,500 | 0.10 | 1.41 |
| September 27, 2025 | 10,000,000 | 0.05 | 0.74 |
| September 27, 2025 | 132,000 | 0.05 | 0.74 |
| 12,096,643 | 0.06 | 0.84 |
12. SHARE-BASED PAYMENTS – EMPLOYEE SHARE OPTION PLAN
The Company has adopted a share option plan (the "Plan") for its directors, officers, employees and consultants to acquire common shares of the Company at a price determined by the fair market value of the shares at the date immediately preceding the date on which the option is granted. The terms and conditions of the options are determined by the Board of Directors.
The aggregate number of share options may not exceed 10% of the issued and outstanding common shares of the Company, and if any option granted under the Plan expires or terminates for any reason in accordance with the terms of the Plan without being exercised, that option would again be available for the purpose of the Plan. In addition, the exercise price of options granted under the Plan may not be lower than the exercise price permitted by the TSXVE, and all options granted under the plan may have a term not to exceed five years after issuance. All options currently issued and outstanding vested 100% on the date of grant.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
A summary of the status of the Plan as at December 31, 2024 and March 31, 2024, and changes during the fifteen month period ended on those dates are presented below:
| | Number of options
| Weighted
average
exercise price
$ |
| --- | --- | --- |
| Balance, December 31, 2022 | 2,725,000 | 0.18 |
| Exercised* | (400,000) | 0.10 |
| Expired | (200,000) | 0.15 |
| Issued | 375,000 | 0.08 |
| Balance, March 31, 2024 | 2,500,000 | 0.18 |
| Expired | (2,125,000) | 0.18 |
| Balance, December 31, 2024 | 375,000 | 0.08 |
- The weighted average share price, at the date of exercise of options was $0.10.
As at December 31, 2024, the Company had outstanding share options issued to directors, officers, employees and consultants of the Company as follows:
| Date of Grant | Options outstanding
| Options vested
| Exercise price
$ | Expiry date |
| --- | --- | --- | --- | --- |
| December 14, 2023 | 375,000 | 375,000 | 0.08 | December 14, 2028 |
| | 375,000 | 375,000 | | |
The weighted average remaining contractual life of options issued and outstanding as at December 31, 2024 was 3.96 years (March 31, 2024 – 1.32 years).
The grant date fair value of the options granted was estimated using the Black-Scholes option pricing model, using the following weighted average assumptions:
| 2024 | |
|---|---|
| Risk-free interest rate | 3.24% |
| Expected life (years) | 5.0 |
| Expected volatility | 133% |
| Expected rate of forfeiture | nil |
| Expected dividend yield | nil |
| Share price | $0.06 |
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
13. LOSS PER SHARE
a) Basic
Basic loss per share is calculated by dividing the net loss by the weighted average number of common shares in issue during the nine month period.
| Three months ended December 31, | Nine months ended December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Net income (loss) for the period | $ (6,430) | $ (234,290) | $ (517,462) | $ (321,046) |
| Weighted average number of common shares outstanding | 126,171,807 | 99,742,521 | 112,353,879 | 99,742,521 |
| Loss per share | $ (0.000) | $ (0.002) | $ (0.005) | $ (0.003) |
b) Diluted
Diluted loss per common share is equal to the basic loss per common share for the nine months ended December 31, 2024 and the fifteen months ended March 31, 2024 as all of the stock options and warrants outstanding are anti-dilutive.
14. PLANT OPERATING EXPENSES
| Three months ended December 31, | Nine months ended December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| $ | $ | $ | $ | |
| Processing costs | 187,719 | 99,987 | 768,764 | 502,411 |
| Salaries and management fees | 145,123 | 113,934 | 404,566 | 332,918 |
| Depreciation | 36,725 | 36,679 | 102,151 | 107,096 |
| Office and general | 20,978 | 26,663 | 29,349 | 75,391 |
| Vehicles and equipment rentals | 17,881 | 21,930 | 71,910 | 48,321 |
| Professional fees | 8,851 | 20,656 | 15,326 | 29,251 |
| Security | 9,677 | 10,644 | 25,879 | 24,746 |
| 426,954 | 330,493 | 1,417,945 | 1,120,134 |
15. GENERAL AND ADMINISTRATIVE
| Three months ended December 31, | Nine months ended December 31, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| $ | $ | $ | $ | |
| Management and consulting fees | 93,860 | 131,707 | 186,292 | 201,915 |
| Shareholder relations and filing fees | 23,918 | 42,894 | 91,036 | 132,291 |
| Accounting and administration | 18,243 | 6,866 | 42,497 | 52,186 |
| Professional fees | 7,250 | 35,267 | 94,067 | 43,765 |
| Rent | 5,250 | 5,250 | 15,750 | 15,750 |
| Insurance | 3,758 | 4,077 | 11,594 | 12,070 |
| Travel | 13,507 | 9,948 | 31,094 | 20,714 |
| Telephone and communication | 415 | 357 | 2,296 | 1,160 |
| 166,201 | 236,366 | 474,626 | 479,851 |
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
16. FINANCIAL INSTRUMENT RISK FACTORS
The Company may be exposed to risks of varying degrees of significance that could affect its ability to achieve its strategic objectives. The main objectives of the Company's risk management process are to ensure that risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below. There have been no significant changes in the risks, objectives, policies and procedures from the previous year.
a) Credit risk management
Credit risk relating to cash and amounts receivable arises from the possibility that any counterparty to an instrument fails to perform. The Company does not feel there is significant counterparty risk that could have an impact on the fair value of cash and receivables. The Company applies the simplified approach to providing for expected credit losses ("ECL") prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade and other receivables. The provision for ECL at December 31, 2024 and March 31, 2024 was $Nil. As at December 31, 2024, the Company's cash is comprised of $31,778 held in a Canadian financial institution and $46,211 held in Peruvian financial institutions.
b) Liquidity risk
The Company has in place a planning and budgeting process to help determine the funds required to support the Company's normal operating requirements on an ongoing basis and its capital, development and exploration expenditures. The Company ensures that there are sufficient funds to meet its short-term requirements, taking into account its anticipated cash flows from operations and its holdings of cash.
Cash includes cash on hand and balances with banks. The deposits are held in Canadian and Peruvian chartered banks, or a financial institution controlled by Canadian and Peruvian chartered banks.
As of December 31, 2024, the Company had a cash balance of $77,989 (March 31, 2024 - $107,199) to settle current liabilities of $523,284 (March 31, 2024 - $505,436). The Company's other current assets consist of amounts receivable of $45,287 (March 31, 2024 - $185,086) sales tax receivable of $8,060 (March 31, 2024 - $13,498), an investment of $Nil (March 31, 2024 - $22,793) and notes receivable of $Nil (March 31, 2024 - $108,400).
c) Market risk
At the present time, the Company does not hold any interest in a mining property that is in production. The Company's viability and potential success depends on its ability to source mineral for processing profitably and develop, exploit, and generate revenue from the development of mineral deposits. Revenue, cash flow, and profits from any future milling and mining operations in which the Company is involved will be influenced by precious and/or base metal prices and by the relationship of such prices to production costs. Such prices can fluctuate widely and are affected by numerous factors beyond the Company's control.
The Company is exposed to price risk associated with the change in the market value of its investment in IMMC. The Company closely monitors equity prices to determine the appropriate course of action to take. A 1% change in the market price of the investment would not have resulted in a significant change to the Company's net loss for the nine months ended December 31, 2024.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
d) Foreign exchange risk
The Company's financings are in Canadian dollars. Certain of the Company's transactions are incurred in foreign currencies and are therefore subject to gains or losses due to fluctuations in exchange rates.
The objective of the Company's foreign exchange risk management activities is to minimize transaction exposure associated with the Company's foreign currency-denominated cash balances.
The Company utilizes foreign exchange forward contracts to manage foreign exchange risks from time to time, at the determination of management.
e) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The majority of the Company's cash balances earn interest at fixed rates over the next three to twelve months. It is management's opinion that the Company is not exposed to significant interest rate risk.
A sensitivity analysis has determined that an interest rate fluctuation of 1% would not have resulted in significant fluctuation in the interest expense during the nine months ended December 31, 2024.
f) Fair value of financial assets and liabilities
The carrying values of the cash, amounts receivable, investments, accounts payable and accrued liabilities, and due to related parties approximate their respective fair values due to the short-term nature of these instruments.
- CAPITAL RISK MANAGEMENT
The Company defines capital as shareholders' equity which at December 31, 2024 was $1,222,445 (March 31, 2024 - $1,087,017). The Company manages its capital structure and makes adjustments to it, in order to have the funds available to support its exploration, development and operation activities.
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to fund operations at the Aguila Norte Plant, pursue the exploration of its mineral properties, and maximize shareholder returns. The Company satisfies its capital requirements through careful management of its cash resources and by utilizing bank indebtedness or equity issues, as necessary, based on the prevalent economic conditions of both the industry and the capital markets and the underlying risk characteristics of the related assets. As at December 31, 2024 and March 31, 2024, the Company had no bank debt.
Management reviews its capital management approach on an ongoing basis. There were no significant changes in the Company's approach to capital management during the nine months ended December 31, 2024 and the fifteen months ended March 31, 2024. The Company and its subsidiaries are not subject to externally imposed capital requirements other than Policy 2.5 of the TSXVE, which requires adequate working capital or financial resources to maintain operations and cover general and administrative expenses for a period of 6 months. As of December 31, 2024, the Company may not be compliant with Policy 2.5 of the TSXVE. The impact of this violation is not known and is ultimately dependent on the direction of the TSXVE.
PERUVIAN METALS CORP.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)
18. COMMITMENTS AND CONTINGENCIES
Lease agreements
The Company's subsidiary, Madosac, has annual office rental obligations of $21,138 (US$15,600) due during the twelve months ending March 31, 2025.
Management compensation
The Company has agreed to pay management compensation of a minimum total in annual payments of $180,000.
Environmental matters
The Company's exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.
Legal proceedings
The Company is, from time to time, involved in various claims and legal proceedings. The Company cannot reasonably predict the likelihood or outcome of these activities. The Company does not believe that adverse decisions in any pending or threatened proceedings related to any matter, or any amount which may be required to be paid by reasons thereof, will have a material effect on the financial condition or future results of operations. As at December 31, 2024 and March 31, 2024, no amounts have been accrued related to such matters.