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Petrolympic Ltd. — Interim / Quarterly Report 2024
Nov 30, 2024
45837_rns_2024-11-29_7ae42bf6-4e5c-43c4-bb4b-8ac2aaf72156.pdf
Interim / Quarterly Report
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PETROLYMPIC
Petrolympic Ltd.
Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended
September 30, 2024
(Expressed In Canadian Dollars)
(Unaudited)
NOTICE TO READER
The accompanying unaudited condensed interim consolidated financial statements of Petrolympic Ltd. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements as at and for the three and nine months ended September 30, 2024 have not been reviewed by the Company's auditors.
- 1 -
Petrolympic Ltd.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
(Unaudited)
| As at September 30, 2024 | As at December 31, 2023 | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents (note 3) | $ 135,462 | $ 364,603 |
| Other receivables | - | 79,708 |
| Total assets | $ 135,462 | $ 444,311 |
| SHAREHOLDERS' DEFICIENCY AND LIABILITIES | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (notes 4 and 13) | $ 1,473,281 | $ 1,718,187 |
| Advances from related party (note 5) | 326,692 | 320,085 |
| Deferred premium on flow-through liability (note 14) | 293 | 66,667 |
| Loan payable (note 6) | 5,238 | - |
| Total current liabilities | 1,805,504 | 2,104,939 |
| Non-current liabilities | ||
| Loan payable (note 6) | 21,537 | 30,000 |
| Total liabilities | 1,827,041 | 2,134,939 |
| Shareholders' deficiency | ||
| Share capital (note 7) | 10,887,234 | 10,501,562 |
| Reserves (notes 8 and 9) | 768,060 | 749,254 |
| Deficit | (13,346,873) | (12,941,444) |
| Total shareholders' deficiency | (1,691,579) | (1,690,628) |
| Total shareholders' deficiency and liabilities | $ 135,462 | $ 444,311 |
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Nature of operations and going concern (note 1)
Commitments and contingencies (note 14)
On behalf of the Board:
(Signed) Mendel Ekstein
Director
(Signed) Miles Pittman
Director
- 2 -
Petrolympic Ltd.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Operating expenses | ||||
| Exploration and evaluation expenditures (note 10) | $ 142,960 | $ 689,693 | $ 195,966 | $ 773,247 |
| General and administrative (note 12) | 46,040 | 158,228 | 333,733 | 450,088 |
| Operating loss | (189,000) | (847,921) | (529,699) | (1,223,335) |
| Other income (expenses) | ||||
| Foreign exchange loss | 4,530 | 3,889 | (5,650) | 9,176 |
| Premium on flow-through shares | 47,653 | 102,444 | 66,374 | 116,879 |
| Interest expense | (265) | - | (641) | - |
| Gain on shares issued for debt | - | 57,143 | - | 57,143 |
| Net loss and comprehensive loss for the period | $ (137,082) | $ (684,445) | $ (469,616) | $ (1,040,137) |
| Basic and diluted net loss and comprehensive loss per share (note 11) | $ (0.00) | $ (0.01) | $ (0.00) | $ (0.01) |
| Weighted average number of common shares outstanding (note 11) | 138,889,927 | 129,246,226 | 135,967,716 | 128,988,729 |
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
- 3 -
Petrolympic Ltd.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
| | Nine Months Ended
September 30, | |
| --- | --- | --- |
| | 2024 | 2023 |
| Operating activities | | |
| Net loss for the period | $ (469,616) | $ (1,040,137) |
| Adjustments for: | | |
| Share-based payments (note 8) | 82,993 | 240,893 |
| Change in unrealized foreign exchange | 6,607 | 2,450 |
| Interest on loan (note 6) | 775 | - |
| Deferred premium on Flow-through premium | (66,374) | (116,879) |
| Gain on shares issued for debt | - | (57,143) |
| Non-cash working capital items: | | |
| Other receivables and prepaid expenses | 79,708 | (2,335) |
| Accounts payable and accrued liabilities | (244,906) | 449,854 |
| Net cash and cash equivalents used in operating activities | (610,813) | (523,297) |
| Financing activities | | |
| Repayment of CEBA Loan (note 6) | (4,000) | - |
| Net proceeds from flow-through private placement (note 7(b)(v)) | 385,672 | - |
| Net cash and cash equivalents provided by financing activities | 381,672 | - |
| Net change in cash and cash equivalents | (229,141) | (523,297) |
| Cash and cash equivalents, beginning of period | 364,603 | 607,026 |
| Cash and cash equivalents, end of period (note 3) | $ 135,462 | $ 83,729 |
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
Petrolympic Ltd.
Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency
(Expressed in Canadian Dollars)
(Unaudited)
| Reserves | |||||
|---|---|---|---|---|---|
| Share capital | Contributed surplus | Warrant reserve | Deficit | Total | |
| Balance, December 31, 2022 | $ 10,331,372 | $ 713,006 | $ 406,420 | $(12,462,714) | $(1,011,916) |
| Shares issued for debt (note 7(b)) | 42,857 | - | - | - | 42,857 |
| Share-based payment (note 8(i)) | - | 240,893 | - | - | 240,893 |
| Expiry of options | - | (450,964) | - | 450,964 | - |
| Expiry of warrants | - | - | (234,286) | 234,286 | - |
| Net loss for the period | - | - | - | (1,040,137) | (1,040,137) |
| Balance, September 30, 2023 | $ 10,374,229 | $ 502,935 | $ 172,134 | $(12,817,601) | $(1,768,303) |
| Balance, December 31, 2023 | $ 10,501,562 | $ 577,120 | $ 172,134 | $(12,941,444) | $(1,690,628) |
| Flow-through Private placement (note 7) | 400,000 | - | - | - | 400,000 |
| Cost of issuance | (14,328) | - | - | - | (14,328) |
| Share-based payment (note 8) | - | 82,993 | - | - | 82,993 |
| Expiry of options | - | (64,187) | - | 64,187 | - |
| Net loss for the period | - | - | - | (469,616) | (469,616) |
| Balance, September 30, 2024 | $ 10,887,234 | $ 595,926 | $ 172,134 | $(13,346,873) | $(1,691,579) |
The notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.
- 5 -
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
- Nature of operations and going concern
Petrolympic Ltd. (the "Company" or "Petrolympic") was incorporated under the Business Corporations Act (Ontario). Petrolympic is an exploration company, engaged in the acquisition, exploration and development of gold, lithium and petroleum and natural gas properties. At the date of these unaudited condensed interim consolidated financial statements, the Company has not yet discovered any significant deposits, nor has it generated any profit from its activities. The Company's common shares are listed on the TSX Venture Exchange ("TSXV") under the symbol PCQ and on the OTCQX International under the symbol PCQRF. The primary office is located at The Canadian Venture Building, 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1. The Company's year end is December 31st.
Petrolympic is at an early stage of exploration and, as is common with many exploration companies, it raises financing for its exploration and acquisition activities in discrete tranches. The Company had a working capital deficiency of $1,670,042 at September 30, 2024 (December 31, 2023 - $1,660,628). As at September 30, 2024, the Company has a deficit of $13,346,873 (December 31, 2023 - $12,941,444). For the nine months ended September 30, 2024, the Company has a comprehensive loss of $469,616 (nine months ended September 30, 2023 - $1,040,137). For the nine months ended September 30, 2024, the Company had total cash outflows of $229,141 (nine months ended September 30, 2023 - cash outflows of $523,297). These conditions raise material uncertainties which cast significant doubt as to the Company's ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon its obtaining additional financing and eventually achieving profitable operations in the future. The Company is currently evaluating various options in order to address its financing needs. There can be no assurance that the Company's financing activities will continue to be successful or sufficient.
These unaudited condensed interim consolidated financial statements have been prepared using accounting policies applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they become due. These unaudited condensed interim consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities that would be necessary if the Company were unable to continue as a going concern and was required to realize its assets or discharge its obligations in anything other than the ordinary course of operations. These adjustments could be material.
- Material accounting policies
Statement of compliance
The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the IFRS Interpretations Committee ("Interpretations Committee"). These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by the IASB and interpretations issued by the Interpretations Committee.
The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRS's issued and outstanding as of November 29, 2024, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2023, except as noted below. Any subsequent changes to IFRS that are given effect in the Company's annual consolidated financial statements for the year ending December 31, 2024 could result in restatement of these unaudited condensed interim consolidated financial statements.
- 6 -
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
3. Cash and cash equivalents
| As at September 30, 2024 | As at December 31, 2023 | |
|---|---|---|
| Cash | $ 125,462 | $ 354,603 |
| Guaranteed investment certificates | 10,000 | 10,000 |
| Total | $ 135,462 | $ 364,603 |
4. Accounts payable and accrued liabilities
| As at September 30, 2024 | As at December 31, 2023 | |
|---|---|---|
| Trade payables | $ 234,975 | $ 561,273 |
| Accrued liabilities (note 13(b)) | 1,238,306 | 1,156,914 |
| $ 1,473,281 | $ 1,718,187 |
5. Advances from related party
As at September 30, 2024 advances of $326,692 (US$242,012) (December 31, 2023 - $320,085 (US$242,012)) were outstanding to Mendel Ekstein who is a major shareholder, officer and director of the Company. The advances are unsecured, do not bear any interest and are due on demand.
6. Loan payable
During the year ended December 31, 2020, the Company applied for the COVID-19 Relief Line of Credit as part of the Government-sponsored Canada Emergency Business Account (CEBA), with a credit limit of $40,000 and an interest rate of 0% until December 31, 2020. On January 1, 2021, the operating line of credit will be converted to a 2-year 0% interest term loan, to be repaid by December 31, 2023 of which $10,000 of the loan will be forgiven if $30,000 is repaid in full on or before December 31, 2023. On January 18, 2024, the loan was refinanced for five years with an interest rate of prime plus 2.34%.
| Balance, December 31, 2023 | $ 30,000 |
|---|---|
| Interest expense | 775 |
| Loan payments | (4,000) |
| Balance, September 30, 2024 | $ 26,775 |
| Allocated as: | |
| Current | $ 5,238 |
| Non-current | 21,537 |
| Balance, September 30, 2024 | $ 26,775 |
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Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
7. Share capital
a) Authorized share capital
At September 30, 2024, the authorized share capital consisted of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
b) Common shares issued
At September 30, 2024, the issued share capital amounted to $10,887,234.
| Number of common shares | Amount | |
|---|---|---|
| Balance, December 31, 2022 | 128,858,027 | $ 10,331,372 |
| Common shares issued for debt (i) | 1,428,571 | 42,857 |
| Balance, September 30, 2023 | 130,286,598 | $ 10,374,229 |
| Balance, December 31, 2023 | 133,739,927 | $ 10,501,562 |
| Common shares issued as flow-through shares (ii) | 5,000,000 | 400,000 |
| Costs of issuance - cash (ii) | - | (2,328) |
| Costs of issuance - shares (ii) | 150,000 | (12,000) |
| Balance, September 30, 2024 | 138,889,927 | $ 10,887,234 |
(i) On September 5, 2023, the Company issued 1,428,571 common shares to settle $100,000 debt to a director of the Company, on the date of issuance the shares had a fair value of $42,857 and the Company recorded a gain on settlement of $57,143.
(ii) On April 25, 2024, the Company closed a flow-through private placement, consisting of 5,000,000 flow through common shares ("FT Common Shares") at a price of $0.08 per FT Common Share to raise aggregate gross proceeds of $400,000.
In connection with the closing, 150,000 finders' shares with a value of $12,000 were issued and paid $2,328 in filing fees.
8. Stock options
The following table reflects the continuity of stock options for the periods presented:
| Number of stock options | Weighted average exercise price ($) | |
|---|---|---|
| Balance, December 31, 2022 | 12,650,000 | 0.10 |
| Granted (i)(ii) | 5,150,000 | 0.10 |
| Expired | (4,915,000) | 0.10 |
| Balance, September 30, 2023 | 12,885,000 | 0.10 |
- 8 -
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
8. Stock options (continued)
| Number of stock options | Weighted average exercise price ($) | |
|---|---|---|
| Balance, December 31, 2023 | 12,885,000 | 0.10 |
| Granted (iii) | 850,000 | 0.10 |
| Expired | (1,450,000) | 0.10 |
| Balance, September 30, 2024 | 12,285,000 | 0.10 |
(i) On February 6, 2023, the Company granted 500,000 stock options to consultants with an exercise price of $0.10 per share, expiring February 6, 2026. These options vest quarterly in equal amounts over 12 months from issuance and are granted under the Company's stock option plan. The fair value of these options at the date of grant was estimated using the Black-Scholes option pricing model with the following assumptions: a three year expected life; share price of $0.065; 173% volatility; risk-free interest rate of 3.64%; and a dividend yield of 0%. Volatility is calculated based on the changes in historical stock prices over the expected life of the options. The fair value assigned to these options was $27,419. During the three and nine months ended September 30, 2024, $nil and $695, respectively (three and nine months ended September 30, 2023 - $6,457 and $24,133, respectively) was included in the unaudited condensed interim consolidated statement of loss and comprehensive loss with a corresponding amount allocated to contributed surplus.
(ii) On June 12, 2023, the Company granted 4,650,000 stock options to consultants and directors of the Company with an exercise price of $0.10 per share, expiring June 12, 2028. These options vest quarterly in equal amounts over 12 months from issuance and are granted under the Company's stock option plan. The fair value of these options at the date of grant was estimated using the Black-Scholes option pricing model with the following assumptions: a five year expected life; share price of $0.035; 173% volatility; risk-free interest rate of 3.64%; and a dividend yield of 0%. Volatility is calculated based on the changes in historical stock prices over the expected life of the options. The fair value assigned to these options was $149,607. During the three and nine months ended September 30, 2024, $nil and $26,364, respectively (three and nine months ended September 30, 2023 - $70,761 and $84,424, respectively) was included in the unaudited condensed interim consolidated statement of loss and comprehensive loss with a corresponding amount allocated to contributed surplus.
(iii) On April 16, 2024, the Company granted 850,000 stock options to consultants and directors of the Company with an exercise price of $0.10 per share, expiring April 16, 2029. These options vest immediately and are granted under the Company's stock option plan. The fair value of these options at the date of grant was estimated using the Black-Scholes option pricing model with the following assumptions: a five year expected life; share price of $0.07; 171% volatility; risk-free interest rate of 3.76%; and a dividend yield of 0%. Volatility is calculated based on the changes in historical stock prices over the expected life of the options. The fair value assigned to these options was $55,934. During the three and nine months ended September 30, 2024, $55,934 (three and nine months ended September 30, 2023 - $nil) was included in the unaudited condensed interim consolidated statement of loss and comprehensive loss with a corresponding amount allocated to contributed surplus.
(iv) The portion of the estimated fair value of options granted in the prior years and vested during the three and nine months ended September 30, 2024, amounted to (three and nine months ended September 30, 2023 - $14,783 and $99,573, respectively).
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
- Stock options (continued)
The following table reflects the actual stock options issued and outstanding as of September 30, 2024:
| Expiry date | Exercise price ($) | Weighted average remaining contractual life (years) | Number of options outstanding | Number of options vested (exercisable) |
|---|---|---|---|---|
| September 6, 2025 | 0.100 | 0.93 | 500,000 | 500,000 |
| September 16, 2025 | 0.100 | 0.96 | 2,250,000 | 2,250,000 |
| September 29, 2025 | 0.120 | 1.00 | 300,000 | 300,000 |
| February 6, 2026 | 0.100 | 1.35 | 500,000 | 500,000 |
| May 31, 2027 | 0.100 | 2.67 | 2,000,000 | 2,000,000 |
| December 8, 2027 | 0.100 | 3.19 | 1,235,000 | 1,235,000 |
| June 12, 2028 | 0.100 | 3.70 | 4,650,000 | 4,650,000 |
| April 16, 2029 | 0.100 | 4.55 | 850,000 | 850,000 |
| 2.76 | 12,285,000 | 12,285,000 |
- Warrants
The following table reflects the continuity of warrants for the periods presented:
| Number of warrants | Grant date fair value ($) | |
|---|---|---|
| Balance, December 31, 2022 | 8,510,513 | 406,420 |
| Expired | (3,743,846) | (234,286) |
| Balance, September 30, 2023 | 4,766,667 | 172,134 |
| Balance, December 31, 2023 and September 30, 2024 | 4,766,667 | 172,134 |
The following table reflects the actual warrants issued as of September 30, 2024:
| Number of warrants outstanding | Fair value ($) | Exercise price ($) | Expiry date |
|---|---|---|---|
| 1,666,667 | 87,703 | 0.10 | December 1, 2025 |
| 3,100,000 | 84,431 | 0.10 | September 8, 2025 |
| 4,766,667 | 172,134 | 0.10 |
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Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
- Exploration and evaluation expenditures
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Québec, Canada (a) | ||||
| Geological consulting and geophysics | $ 142,960 | $ 241,274 | $ 195,966 | $ 324,268 |
| Drilling | - | 445,475 | - | 445,475 |
| Permits and licenses | - | 2,944 | - | 3,504 |
| Total exploration and evaluation costs | $ 142,960 | $ 689,693 | $ 195,966 | $ 773,247 |
(a) Québec Properties, Québec (Canada)
On September 29, 2020, the Company announced that it entered into an agreement to acquire a gold property located in the east of the Val d'Or mining camp, Province of Quebec. The property consists of 31 contiguous map-designated claims (cells) covering 1,784 Ha of gold potential geology in the centre of Vauquelin township (NTS 32C03) approximately 40 km east of the town of Val d'Or, a major gold mining centre in Northwestern Quebec. On execution of the purchase agreement between the vendors, the Company paid the vendors an aggregate cash payment of $30,000 as part of the purchase price. The remainder of the purchase price was satisfied through the issuance of an aggregate of 500,000 common shares of the Company that were issued on January 6, 2021 (note 7). Upon completion of the transaction, the Company acquired 100% interest in the mineral right of the property. The vendors will also receive a 3.0% NSR ("Net Smelter Return") royalty from all eventual commercial mineral production on the project. There is no liability as of September 30, 2024.
On March 15, 2021, the Company announced that entered into an agreement to acquire a gold property located in the east of the Val d'Or mining camp, Province of Quebec. The property consists of two contiguous map-designated claims (cells) (no. 45248 & 45251) covering 285.9 Acres which are part of a group of six claims (853 total Acres) recently purchased, complementing a unifying a total of 37 contiguous map-designated claims (cells) to a grand total of 5263 Acres of gold potential geology in the centre of Vauquelin township (NTS 32C03) approximately 40 km east of the town of Val d'Or, a major gold mining centre in Northwestern Quebec.
On execution of the purchase agreement with the vendor, 1039244 BC. Ltd, the Company will pay the vendor an cash payment of $15,000 as part of the purchase price and a deferred payment of $60,000. The remainder of the purchase price will be satisfied through the issuance of an aggregate of 900,000 common shares of the Company (as of June 30, 2023, the Company has issued all 900,000 common shares) and aggregate work commitments of $750,000 over 4 years. Upon the completion of the transaction the Company will have acquired 100% interest in the mineral rights of the Property. The vendor will also receive a 1.5% NSR royalty from all eventual commercial mineral production on the project of which 0.5% can be bought back for $500,000 with the option of the Company at start of production.
On May 11, 2021, the Company entered into an option agreement to acquire a gold property located north of the town of Val-d'Or, Province of Quebec, and announced an amendment to the agreement on July 27, 2021. The Property consists of 125 map-designated claims in 4 blocks (Belcourt North, South, Central and West blocks), all proximal to one another and covering a total of 5,479 hectares (54.79 km2, 13,539 acres).
The option payments will be satisfied through the payment of $15,000 (paid), the issuance of an aggregate of 1,050,000 common shares of the Company over 2 years (as of September 30, 2023, the Company has issued all 1,050,000 common shares) (note 7), and shall issue 350,000 common share purchase warrants (issued 350,000). Each such warrant shall be exercisable to purchase one common share of the Company at a price of $0.12 per common share for a period of 24 months from the date of the amended agreement.
- 11 -
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
10. Exploration and evaluation expenditures (continued)
(a) Québec Properties, Québec (Canada) (continued)
The seller will also receive a 2.0% net smelter returns royalty from all future commercial mineral production on the Property, of which 1.0% can be bought back for $1 million at any time.
On July 21, 2022 the Company entered into an option agreement to acquire the lithium properties located in the emerging Cadillac-Pontiac lithium camp in the Abitibi-Témiscamingue region, southwest of Val d'Or, Quebec, and announced an amendment to the agreement on September 14, 2022. The Properties consist of 123 claims covering 7,092.8 hectares and is composed of 25 claims covering 1,440.9 hectares.
On execution of the purchase agreement with vendor, Glenn Briesbach, the Company will pay the vendor a cash payment of $20,000 as part of the purchase price and a deferred payment of $15,000. The remainder of the purchase price will be satisfied through the issuance of an aggregate of 1,000,000 common shares of the Company (as of September 30, 2024, the Company has issued 400,000 common shares; during the nine months ended September 30, 2023, the Company issued 400,000 common shares) (note 7) and aggregate of 500,000 warrants. Each such warrant shall be exercisable to purchase one common share of the Company at a price of not less than $0.07 per share.
During the three and nine months ended September 30, 2024, the Company's share of exploration and evaluation expenditures on its Québec, Canada property oil and gas interests amounted to $nil (three and nine months ended September 30, 2023 - $nil). Total cumulative exploration and evaluation expenditures incurred on its Québec, Canada oil and gas property interests to September 30, 2024 amounted to $6,061,525 (December 31, 2023 - $6,061,525).
During the three and nine months ended September 30, 2024, the Company's share of exploration and evaluation expenditures on its Québec, Canada property gold interests amounted to $142,960 and $195,966, respectively (three and nine months ended September 30, 2023 - $689,693 and $773,247, respectively). Total cumulative exploration and evaluation expenditures incurred on its Québec, Canada gold property interests to September 30, 2024 amounted to $1,763,641 (December 31, 2023 - $1,567,676).
(b) Evangelic Lake Gold Property, Sudbury, Ontario (Canada)
On November 11, 2020, the Company entered into an agreement to acquire a gold property located in the south of the Sudbury mining camp, Province of Ontario (the "Property"). The Property consists of 27 maps designated mining claims (cells) covering 600 Ha property in Southwest of Espanola, Ontario, District of Sudbury approximately 70 km Southwest of the town of Sudbury, a major gold mining centre in central Ontario. The remainder of the purchase price was satisfied through the issuance of an aggregate of 500,000 common shares of the Company that were issued on January 6, 2021. Upon the completion of the transaction, the Company acquired 100% interest in the mineral rights of the Property. The vendors will also receive a 2.0% NSR royalty from all eventual commercial mineral production on the project, reserving the Company's right to buyback 1% of such NSR royalty for $1,000,000.
On November 16, 2021, the Company entered into an agreement to acquire a gold property located in the Town of McKinnon, Province of Ontario. The Property consists of three map-designated mining claims (no. 546604, 546605 & 590811).
The purchase price was satisfied through the issuance of 200,000 common shares of the Company that were issued on March 7, 2022 (during the nine months ended September 30, 2023, the Company issued 200,000 common shares) (note 7). The vendor will also receive a 2.0% NSR royalty from all eventual mineral production on the Property, of which can be with the right of the Company to buy back at 1% for $1 million for a period of seven years from the date of the agreement.
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
- Net loss per share
The calculation of basic and diluted loss per share for the three and nine months ended September 30, 2024 was based on the loss attributable to common shareholders of $137,082 and $469,616, respectively (three and nine months ended September 30, 2023 - $684,445 and $1,040,137, respectively) and the weighted average number of common shares outstanding of 138,889,927 and 135,967,716, respectively (three and nine months ended September 30, 2023 - 129,246,226 and 128,988,729, respectively). Diluted loss per share did not include the effect of 12,285,000 stock options outstanding (September 30, 2023 - 12,885,000 stock options outstanding) and 4,766,667 warrants outstanding (September 30, 2023 - 4,766,667 warrants outstanding) as they are anti-dilutive.
- General and administrative
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Share-based payment (notes 8) | $ - | $ 94,140 | $ 82,993 | $ 240,893 |
| Professional fees | 14,559 | 16,118 | 71,392 | 65,273 |
| Management fees (note 13) | 27,619 | 35,440 | 138,554 | 96,488 |
| Administrative and general | 3,091 | 12,442 | 24,445 | 25,946 |
| Investor relations and promotion | - | - | 240 | 328 |
| Reporting issuer costs | 771 | 88 | 16,109 | 21,160 |
| $ 46,040 | $ 158,228 | $ 333,733 | $ 450,088 |
- Related party balances and transactions
Related parties include the Board of Directors, officers, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions.
As at September 30, 2024, Mendel Ekstein, an officer and director of the Company, controls or indirectly controls 26,753,736 common shares of the Company, or approximately 20.76% of the total common shares outstanding. As at September 30, 2024, Andreas Jacob, a director of the Company, controls or indirectly controls 13,396,196 common shares of the Company, or approximately 10.4% of the total common shares outstanding. As at September 30, 2024, the remaining directors and/or officers of the Company collectively control 220,874 common shares of the Company or less than 1% of the total common shares outstanding. To the knowledge of directors and officers of Petrolympic, the remainder of the Company's outstanding common shares are widely held. These holdings can change at any time at the discretion of the owner.
(a) Petrolympic entered into the following transactions with related parties. The Company defines key management as its Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and Board of Directors:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||
| Marrelli Support Services Inc. ("Marrelli Support") (i) | $ 6,350 | $ 6,503 | $ 34,149 | $ 33,769 | |
| DSA Corporate Services Inc. ("DSA Corp") (ii) | $ 1,800 | $ 1,800 | $ 5,421 | $ 8,105 | |
| DSA Filing Services Limited ("DSA Filing") (iii) | $ 3,143 | $ 315 | $ 8,737 | $ 5,711 | |
| Fogler Rubinoff LLP ("Fogler") | $ - | $ - | $ - | $ 1,421 | |
| Marrelli Trust Company Limited ("Marrelli Trust") (iv) | $ 1,178 | $ 322 | $ 1,863 | $ 867 | |
| Marrelli Press Release Services Ltd. (v) | $ 448 | $ 181 | $ 1,376 | $ 5,264 |
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Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
13. Related party balances and transactions (continued)
(i) For the three and nine months ended September 30, 2024, the Company expensed $6,350 and $34,149, respectively (three and nine months ended September 30, 2023 - $6,503 and $33,769, respectively) to Marrelli Support for the services of Carmelo Marrelli to act as CFO of the Company. In addition, Marrelli Support also provides bookkeeping services to the Company. Carmelo Marrelli is the Managing Director of Marrelli Support. As at September 30, 2024, Marrelli Support was owed $2,228 (December 31, 2023 - $4,126) and this amount was included in accounts payable and accrued liabilities.
(ii) For the three and nine months ended September 30, 2024, the Company expensed $1,800 and $5,421, respectively (three and nine months ended September 30, 2023 - $1,800 and $8,105, respectively) to DSA Corp for corporate secretarial services. DSA Corp is affiliated with Marrelli Support through common ownership. As at September 30, 2024, DSA Corp was owed $678 (December 31, 2023 - $678) and this amount was included in accounts payable and accrued liabilities.
(iii) For the three and nine months ended September 30, 2024, the Company expensed $3,143 and $8,737, respectively (three and nine months ended September 30, 2023 - $315 and $5,711, respectively) to DSA Filing for corporate filing services. DSA Filing is affiliated with Marrelli Support through common ownership. As at September 30, 2024, DSA Filing was owed $85 (December 31, 2023 - $976) and this amount was included in accounts payable and accrued liabilities.
(iv) For the three and nine months ended September 30, 2024, the Company expensed $1,178 and $1,863, respectively (three and nine months ended September 30, 2023 - $322 and $867, respectively) to Marrelli Trust. Marrelli Trust is affiliated with Marrelli Support through common ownership. As at September 30, 2024, Marrelli Trust was owed $68 (December 31, 2023 - $1,194) and this amount was included in accounts payable and accrued liabilities.
(v) For the three and nine months ended September 30, 2024, the Company expensed $448 and $1,376, respectively (three and nine months ended September 30, 2023 - $181 and $5,264, respectively) to Marrelli Press Release. Marrelli Press Release is affiliated with Marrelli Support through common ownership. As at September 30, 2024, Marrelli Press Release was owed $398 (December 31, 2023 - $687) and this amount was included in accounts payable and accrued liabilities.
(vi) Advances from related parties are discussed in note 5.
(vii) Refer to note 8.
(b) Remuneration of directors and key management personnel of the Company was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Salaries and benefits | $ 27,619 | $ 35,345 | $ 138,554 | $ 96,393 |
| Share-based payment (note 8(i)(ii)(iii)) | - | 85,544 | 82,298 | 199,340 |
| Total remuneration | $ 27,619 | $ 120,889 | $ 220,852 | $ 295,733 |
Payments to directors and key management personnel of the Company include certain transactions with related parties in (a) above, and (b) remuneration to directors and key management personnel of the Company. As at September 30, 2024, directors and key management personnel of the Company were owed $965,179 (USD$715,000) (December 31, 2023 - $826,625 (USD$625,000)) for remuneration and reimbursable expenses, excluding amounts disclosed in (a) above.
Petrolympic Ltd.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended September 30, 2024
(Expressed in Canadian Dollars)
(Unaudited)
13. Related party balances and transactions (continued)
Included in accounts payable and accrued liabilities is an amount of $200,000 bonus payment to management, payable in common shares of the Company at $0.105 per share for a total of 952,381 common shares to each officer, or 1,904,762 common shares in aggregate, subject to regulatory approval.
14. Commitments and contingencies
The Company's operations are subject to government environmental protection legislation. Environmental consequences are difficult to identify in terms of results, timetable and impact.
At this time, to management's best knowledge, the Company's operations are in compliance with current laws and regulations.
Flow-through commitment
The Company is obligated to spend $200,000 by December 31, 2024 as part of the flow-through funding agreement for shares issued on December 28, 2023. The flow-through agreements require the Company to renounce certain tax deductions for Canadian exploration expenditures incurred on the Company's mineral properties to flow-through participants. If the Company does not incur the required qualifying expenditures, it will be required to indemnify the holders of the flow-through shares for any related tax amounts that become payable by them as a result of the Company not meeting its expenditure commitments.
The Company is obligated to spend $400,000 by December 31, 2025 as part of the flow-through funding agreement for shares issued on April 25, 2024. The flow-through agreements require the Company to renounce certain tax deductions for Canadian exploration expenditures incurred on the Company's mineral properties to flow-through participants. If the Company does not incur the required qualifying expenditures, it will be required to indemnify the holders of the flow-through shares for any related tax amounts that become payable by them as a result of the Company not meeting its expenditure commitments.
As of September 30, 2024, the Company has incurred $178,609 in eligible exploration expenditures to meet its flow-through commitment due on December 31, 2024.
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