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Primary Hydrogen Corporation — Management Reports 2025
Apr 29, 2025
10222_rns_2025-04-28_37396eb0-bca5-430c-9f9c-cbffa8455585.pdf
Management Reports
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.) Management's Discussion and Analysis for the Three Months Ended February 28, 2025
This Management's Discussion and Analysis ("MD&A") for the three months ended February 28, 2025 prepared as of April 28, 2025 should be read in conjunction with the condensed interim financial statements for the three months ended February 28, 2025 of Primary Hydrogen Corp. (formerly Millbank Mining Corp.) (the "Company"), which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts included in this MD&A are expressed in Canadian dollars unless otherwise indicated.
COMPANY OVERVIEW
Primary Hydrogen Corp. (formerly Millbank Mining Corp.) was incorporated pursuant to the provisions of the Business Corporations Act of British Columbia on July 27, 2020. The Company's corporate office is located at 540 5th Avenue SW, Suite 1410, Calgary, Alberta T2P 0M2. The Company commenced trading on the TSX Venture Exchange on August 27, 2021, under the symbol "MILL". On November 13, 2024, the Company changed its name from Millbank Mining Corp. to Primary Hydrogen Corp. Subsequent to the name change, the Company shares now trade on the TSX Venture Exchange under the symbol "HDRO".
The Company's principal activity is the acquisition, exploration, and development of natural hydrogen properties.
COMPANY HIGHLIGHTS
Current highlights (including subsequent events up to April 28, 2025) include:
On December 20, 2024, the Company closed a non-brokered flow through private placement for gross proceeds of $750,000 by issuing 1,875,000 units at a price of $0.40. Each unit comprised one common share and one-half share purchase warrant. Each whole share purchase warrant is exercisable into one common share at $0.55 for eighteen months from the closing date. Pursuant to the private placement, the Company paid $12,876 in share issuance costs.
On March 12, 2025, the Company acquired the Dove Creek project, which is comprised of 744 acres of mineral claims in southwestern Colorado, USA. On March 13, 2025, the Company incorporated a wholly owned subsidiary in Delaware, USA, to expand operations with the Dove Creek project acquisition.
On March 28, 2025, the Company agreed to pay Euro Digital a fee of USD $500,000 for the extension of a strategic marketing agreement. The agreement will commence on April 7, 2025 and continue until the earlier of: (a) August 7, 2025, and exhaustion of the marketing budget.
APPOINTMENT OF MANAGEMENT AND DIRECTORS
On December 31, 2024, the Company appointed Jelena Veljovic as Chief Financial Officer, replacing Joel Leonard, who served as Chief Financial Officer since September 2020.
On February 7, 2025, the Company appointed Peter Lauder as Vice President of Exploration.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.) Management's Discussion and Analysis for the Three Months Ended February 28, 2025
EXPLORATION AND EVALUATION PROPERTIES
A continuity of the Company's exploration and evaluation properties is as follows:
| Arthur Lake | Blakelock | Other | Hopkins | Total | |
|---|---|---|---|---|---|
| $ | $ | $ | $ | $ | |
| Acquisition costs: | |||||
| Balance, November 30, 2023 | 2,415 | - | - | - | 2,415 |
| Additions | - | 132,000 | 54,358 | - | 186,358 |
| Impairment | (2,415) | - | - | - | (2,415) |
| Balance, November 30, 2024 | - | 132,000 | 54,358 | - | 186,358 |
| Additions | - | - | - | 202,875 | 202,875 |
| Balance, February 28, 2025 | - | 132,000 | 54,358 | 202,875 | 389,233 |
| Deferred exploration expenditures: | |||||
| Balance, November 30, 2023 | 198,948 | - | - | - | 198,948 |
| Field expenses and sampling | - | 720 | - | - | 720 |
| Impairment loss | (198,948) | - | - | - | (198,948) |
| Balance, November 30, 2024 | - | 720 | - | - | 720 |
| Field expenses and sampling | - | 3,525 | 2,795 | - | 6,320 |
| Balance, February 28, 2025 | - | 4,245 | 2,795 | - | 7,040 |
| Exploration and evaluation properties: | |||||
| Balance, November 30, 2024 | - | 132,720 | 54,358 | - | 187,078 |
| Balance, February 28, 2025 | - | 136,245 | 57,153 | 202,875 | 396,273 |
Arthur Lake Property
Primary Hydrogen Corp. holds a 100% interest in the Arthur Lake property (the "property") located southwest of Vanderhoof, in central British Columbia. The property is comprised of two claims totalling 543 hectares.
The property has been historically explored for base metals, namely copper. Historic sampling (rock-chip and grab samples) returned assays ranging from 8 ppm to 24,800 ppm copper with 10 samples assaying in excess of 2,200 ppm copper. These samples have outlined a northwest-southeast trending copper enrichment zone measuring 1,800 metres north-south by 500 metres east-west.
A fall 2020 exploration undertaken by the Company, which consisted of the collection of 679 grid-based soil samples and 5 rock samples, identified six copper or copper/multi-element soil anomalies:
- Copper Enrichment Anomaly: primarily a copper soil anomaly that coincides with, and has the same approximate dimensions as, the historic copper enrichment zone,
- Granitic Plug Anomaly: a somewhat concentric anomalous copper-silver-iron-zinc soil anomaly that measures approximately 450 metres north-south by 370 metres east-west and is centered on a small granitic plug, and
- Southwest Anomaly: a strong multi-element soil anomaly in the southwest corner of the soil grid measuring 900 metres east-west by 400 metres north-south. The anomaly is open to the south and to the west.
The exploration program was met with considerable success for a grassroots exploration program with further exploration warranted fully determine its potential to host a copper porphyry deposit. The 2021 NI 43-101 Technical Report recommended a follow-up program consisting of 570 line-kilometres of drone magnetic
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
survey and 16 line-kilometres of grid-based Induced Polarization and Resistivity surveys to evaluate the six copper/multi-element soil anomalies as follows:
- Copper Enrichment Anomaly: five 1600 metre east-west lines spaced at 200 metres at southern end, and four 1200 metre east-west lines spaced at 200 metres at the northern end,
- Granitic Plug Anomaly: the same five 1600 metre east-west lines spaced at 200 metres and two 1400 metre north-south lines at 400 metres,
- Southwest Anomaly: five 1200 metre north-south lines spaced at 200 metres.
In late 2021, the Company commenced Induced Polarization (IP) surveying. The Company contracted Peter E. Walcott & Associates to complete the field work with the objective of probing beneath the six multi-element geochemistry anomalies identified during the 2020 exploration season for resistivity and/or chargeability anomalies indicative of potential porphyry mineralization at depth, as recommended in the Arthur Lake Technical Report. A series of north-south and east-west IP lines totaling 9.6-line kms were established and read in December 2021 to test all six anomalies. While the IP survey was unable to uncover responses typically identified with porphyry copper mineralization, a number of linear, moderately- to steeply-dipping zones of high resistivity were identified in both the N-S and E-W lines which may warrant further investigation.
As at November 30, 2024, the Company determined the recoverable amount of the Arthur Lake property to be $Nil on the basis that the Company's intention is to focus its exploration activities on hydrogen properties. Accordingly, the Company recorded an impairment loss in the amount of $201,363 related to the Arthur Lake property during the year ended November 30, 2024.
Blakelock Property
On September 11, 2024, the Company entered into a mining claims purchase agreement in which the Company can obtain 100% interest in certain unpatented hydrogen mining claims in Northern Ontario for the following consideration:
- Issuance of 200,000 common shares (issued on September 24, 2024)
- Cash payment of $46,000 (paid)
There is a net smelter return ("NSR") of 1.5% pursuant to the mining claims purchase agreement. The Company may purchase 0.5% of the NSR at any time by paying $500,000.
Hopkins Hydrogen Property
On November 22, 2024, the Company entered into a mining claims purchase agreement in which the Company can obtain 100% interest in certain unpatented hydrogen mining claims in Northern Ontario for the following consideration:
- Issuance of 225,000 common shares on the closing date (issued on December 4, 2024)
- Issuance of 225,000 common shares six months following the closing date
- Cash payment of $96,000 (paid)
There is a net smelter return ("NSR") of 1.5% pursuant to the mining claims purchase agreement. The Company may purchase 0.75% of the NSR at any time by paying $750,000.
The closing date occurred on December 4, 2024 and the Company issued 225,000 common shares and paid cash of $96,000 pursuant to the mining claims purchase agreement.
Other Properties
During the year ended November 30, 2024, the Company acquired various hydrogen properties located in British Columbia, Quebec and Newfoundland and Labrador through direct staking.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
The properties acquired during the year ended November 30, 2024 include Mary's Harbour, Point Rosie, Gaspe Ophiolite, Coquihalla, Cogburn, and Crooked Amphibolite. The Mary's Harbour and Point Rosie properties are located in Southern Newfoundland and Labrador. The Coquihalla, Cogburn, and Crooked Amphibolite properties are located in Southern British Columbia. The Gaspe Ophiolite property is located in Southern Quebec.
SELECTED FINANCIAL INFORMATION
| For the three months ended February 28, 2025 $ | For the three months ended February 29, 2024 $ | |
|---|---|---|
| Total revenue | - | - |
| Net loss and comprehensive loss | (813,149) | (22,992) |
| Basic and diluted loss per share | (0.02) | (0.00) |
| As at February 28, 2025 $ | As at November 30, 2024 $ | |
| Total assets | 3,520,607 | 3,367,875 |
| Total non-current financial liabilities | - | - |
The Company is in its early stages of operations and does not generate any revenue yet.
The composition of net loss and comprehensive loss for the three months ended February 28, 2025 and February 29, 2024 is detailed below in "Results of Operations".
Total assets as at February 28, 2025 increased to $3,520,607 from $3,367,875 as at November 30, 2024. The increase in total assets of $152,732 is primarily attributable to a $209,195 increase in exploration and evaluation properties, which is primarily due to $202,875 of acquisition costs incurred on the Hopkins property. The increase in total assets is also due to a $200,777 increase in prepaid expenses and deposits, which is primarily due to prepaid expenses incurred for marketing contracts during the three months ended February 28, 2025. The increase in total assets is partially offset by a $271,934 decrease in cash, which primarily relates to cash spent on operations.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
RESULTS OF OPERATIONS
For the three months ended February 28, 2025, compared to the three months ended February 29, 2024
| For the three months ended February 28, 2025 ($) | For the three months ended February 29, 2024 ($) | Change ($) | Change (%) | |
|---|---|---|---|---|
| Operating expenses | ||||
| Advertising and promotion | 480,325 | - | 480,325 | 100 |
| Consulting fees | 52,667 | - | 52,667 | 100 |
| Filing and transfer agent fees | 18,039 | 3,019 | 15,020 | 498 |
| Insurance | 829 | 829 | - | - |
| Management consulting | 62,000 | 11,000 | 51,000 | 464 |
| Office and other | 2,225 | 28 | 2,197 | 7,846 |
| Professional fees | 20,535 | 3,830 | 16,705 | 436 |
| Property evaluation costs | 14,949 | - | 14,949 | 100 |
| Rent | 4,286 | 4,286 | - | - |
| Share-based payments | 148,561 | - | 148,561 | 100 |
| Travel and entertainment | 3,985 | - | 3,985 | 100 |
| Foreign exchange loss | 4,748 | - | 4,748 | 100 |
| Net loss and comprehensive loss | (813,149) | (22,992) | (790,157) | 3,437 |
For the three months ended February 28, 2025, net loss and comprehensive loss increased by $790,157 from the three months ended February 29, 2024, which is primarily due to the following reasons:
Advertising and promotion increased by $480,325, which is primarily due to a marketing campaign conducted by Euro Digital Media Inc. while no advertising and promotion expenses were incurred during the comparative period.
Share-based payments increased by $148,561, which is due to 215,000 stock options granted on December 31, 2024, 400,000 stock options granted on February 7, 2025 along with the vesting of 1,250,000 stock options granted on July 30, 2024. During the comparative period, no share-based payments were recorded as there were no stock options granted or vested during the comparative period.
Consulting fees increased by $52,667, which relates to introductory fees that facilitated valuable business introductions to the Company for hiring the Vice President of Exploration. During the comparative period no consulting fees were incurred.
Management consulting increased by $51,000 to $62,000 during the three months ended February 28, 2025 from $11,000 during the three months ended February 29, 2024. During the three months ended February 28, 2025, management consulting fees consisted of $45,000 incurred by P.I. Holdings Ltd. for CEO services, $10,000 to Peter Lauder, Vice President of Exploration and $7,000 incurred by JCL Partners CPA for CFO services. During the comparative period, the Company incurred $6,000 of management consulting fees from P.I. Holdings Ltd. for CEO services and $5,000 for CFO services from JCL Partners CPA.
Professional fees increased by $16,705, which is primarily due to an increase in legal fees related to corporate matters and an increase in accounting fees as the Company has increased its operations from the comparative period.
Filing and transfer agent fees increased by $15,020, which relates to SEDAR filing fees and TSX Venture Exchange fees as part of maintaining the Company's regulatory compliance and continued listing on the TSX Venture Exchange.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.) Management's Discussion and Analysis for the Three Months Ended February 28, 2025
SUMMARY OF QUARTERLY RESULTS
The following is a summary of the Company's quarterly results:
| Three months ended, | February 28, 2025 | November 30, 2024 | August 31, 2024 | May 31, 2024 |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Revenues | - | - | - | - |
| Net loss and comprehensive loss | (813,149) | (618,270) | (335,465) | (27,116) |
| Basic and diluted loss per share | (0.02) | (0.03) | (0.03) | (0.00) |
| Three months ended, | February 29, 2024 | November 30, 2023 | August 31, 2023 | May 31, 2023 |
| $ | $ | $ | $ | |
| Revenues | - | - | - | - |
| Net loss and comprehensive loss | (22,992) | (32,715) | (15,948) | (28,341) |
| Basic and diluted loss per share | (0.00) | (0.00) | (0.00) | (0.00) |
The Company's net loss and comprehensive loss increased by $194,879 during the three months ended February 28, 2025, which is primarily due to a $463,993 increase in advertising and promotion related to a marketing campaign conducted by Euro Digital Media Inc. The increase in net loss and comprehensive loss is partially offset by a $201,363 decrease in impairment of exploration and evaluation properties which relates to the impairment recorded on the Arthur Lake property during the comparative period. The increase in net loss and comprehensive loss is also partially offset by a $64,768 decrease in professional fees as the Company incurred higher legal fees during the comparative period due to corporate matters.
The Company's net loss and comprehensive loss increased by $282,805 during the three months ended November 30, 2024, which is primarily due to a $201,363 impairment of exploration and evaluation properties related to the Arthur Lake property which was written down to $Nil during the period. The increase in net loss and comprehensive loss also related to a $48,401 increase in filing and transfer agent fees and a $44,000 increase in management consulting fees as the Company's operating activities increased during the period.
The Company's net loss and comprehensive loss increased by $308,349 during the three months ended August 31, 2024, which is primarily due to a $217,761 increase in share-based compensation as the Company granted 1,250,000 stock options during the period while no stock options were granted or vested during the comparative period. The increase in net loss and comprehensive loss was also due to a $46,312 increase in professional fees as the Company incurred higher legal fees related to an IPO and corporate matters.
The Company's net loss and comprehensive loss increased by $4,124 during the three months ended May 31, 2024, which is primarily due to a $7,178 increase in filing and transfer agent fees related to SEDAR filing fees and TSX Venture Exchange participation fees. The increase in net loss and comprehensive loss was partially offset by a $2,000 decrease in management consulting fees incurred for CEO and CFO services.
The Company's net loss and comprehensive loss decreased by $9,723 during the three months ended February 29, 2024, which is primarily due to a $11,969 decrease in professional fees as the Company incurred lower legal fees than the comparative period. These decrease in net loss and comprehensive loss was partially offset by a $1,246 increase in filing and transfer agent fees related to SEDAR filing fees and TSX Venture Exchange fees and a $1,000 increase in management consulting fees related to CEO and CFO services.
The Company's net loss and comprehensive loss increased by $16,767 during the three months ended November 30, 2023, which is primarily due to a $14,905 increase in professional fees due to an increase in legal fees related to corporate matters and a $1,038 increase in filing and transfer agent fees related to SEDAR filing fees and TSX Venture Exchange fees and a $1,000 increase in management consulting fees related to CEO and CFO services.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
The Company's net loss and comprehensive loss decreased by $12,393 during the three months ended August 31, 2023, which is primarily due to a $7,802 decrease in filing and transfer agent fees related to SEDAR filing fees and TSX Venture Exchange fees and a $2,500 decrease in management consulting fees related to CEO and CFO services.
The Company's net loss and comprehensive loss increased by $10,193 during the three months ended May 31, 2023, which is primarily due to a $7,056 increase in filing and transfer agent fees related to SEDAR filing fees and TSX Venture Exchange fees and a $2,500 increase in management consulting fees related to CEO and CFO services.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Net working capital including cash
As of February 28, 2025, the Company had $2,780,660 (November 30, 2024 - $3,052,594) in cash and working capital of $2,985,510 (November 30, 2024 - $3,003,106). The decrease in cash of $271,934 and decrease in working capital are attributable to operating expenses and mineral property expenses incurred during the three month ended February 28, 2025.
Operating activities
During the three months ended February 28, 2025, the Company used $918,926 of cash in operating activities, which consisted of a net loss of $813,149, an increase in prepaid expenses and deposits of $200,777, a decrease in accounts payable and accrued liabilities of $43,615 related to operating activities, an increase in GST receivable of $14,694. The cash used in operating activities is partially offset by $148,561 of share-based payments and an unrealized foreign exchange loss of $4,748. During the three months ended February 29, 2024, the Company used $7,866 of cash in operating activities, which consisted of a net loss of $22,992 offset by a decrease in GST receivable of $10,015, an increase in accounts payable and accrued liabilities of $4,282 and a decrease in prepaid expenses and deposits of $829.
Investing activities
During the three months ended February 28, 2025, the Company used $102,320 of cash on investing activities, which related to exploration and evaluation property expenditures. The expenditures incurred were primarily related to staking new claims for the Company's hydrogen properties acquired during the three months ended February 28, 2025. During the three months ended February 29, 2024, the Company did not incur any investing activities.
Financing activities
During the three months ended February 28, 2025, the Company raised $749,312 of cash from financing activities, which consisted of gross proceeds of $750,000 from a flow-through private placement, $12,188 from the exercise of stock options. This is partially offset by $12,876 of share issuance costs incurred on the private placement. During the three months ended February 29, 2024, the Company did not incur any financing activities.
Liquidity and capital resources
As at February 28, 2025, the Company had a working capital of $2,985,510. The Company has not yet put its exploration and evaluation properties into commercial production and as such has no operating revenues or cash flows. Accordingly, the Company is dependent on the equity markets as its sole source of operating working capital, and the Company's capital resources are largely determined by the strength of the junior resource capital markets, by the status of the Company's projects in relation to these markets, and its ability to compete for investor support of its projects. There can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms satisfactory to it.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
RELATED PARTY TRANSACTIONS
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company's Board of Directors and corporate officers, including the Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and Vice President of Exploration.
The remuneration of directors and key management personnel made during the three months ended February 28, 2025 and February 29, 2024 are as follows:
| Three months ended February 28, 2025 | Three months ended February 29, 2024 | |
|---|---|---|
| $ | $ | |
| Management fees | ||
| P.I. Holdings Ltd., an entity controlled by Benjamin Asuncion, CEO and Director | 45,000 | 6,000 |
| Peter Lauder, VP of Exploration | 10,000 | - |
| JCL Partners CPA, an entity controlled by Joel Leonard, Former CFO | 7,000 | 5,000 |
| Share-based payments | ||
| Benjamin Asuncion, CEO and Director | 43,598 | - |
| Peter Lauder, VP of Exploration | 20,722 | - |
| Joel Leonard, Former CFO | 7,624 | - |
| William Timothy Heenan, Director | 7,501 | - |
| Martin Kowcun, Director | 7,501 | - |
| Total | 148,946 | 11,000 |
The balance of amounts due to related parties is comprised of the following and are included in accounts payable:
| February 28, 2025 | November 30, 2024 | |
|---|---|---|
| $ | $ | |
| Management fees | ||
| P.I. Holdings Ltd., an entity controlled by Benjamin Asuncion, CEO and Director | 15,750 | 12,500 |
| Peter Lauder, VP of Exploration | 11,300 | - |
| JCL Partners CPA, an entity controlled by Joel Leonard, Former CFO | - | 17,850 |
| Office expenses | ||
| Benjamin Asuncion, CEO and Director | 1,219 | - |
| Total | 28,269 | 30,350 |
The amounts due to related parties are non-interest bearing, unsecured and have no set terms of repayment.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.) Management's Discussion and Analysis for the Three Months Ended February 28, 2025
PROPOSED TRANSACTIONS
As is typical of the mineral exploration and development industry, we continually review potential merger, acquisition, investment, and joint venture transactions, and opportunities that could enhance shareholder value. There is no guarantee that any contemplated transaction will be concluded.
While we remain focused on the existing exploration projects, should we ever enter into agreements in the future on new properties, we may be required to make cash payments and complete work expenditure commitments under those agreement which would change our planned expenditures.
CRITICAL ACCOUNTING ESTIMATES
When preparing the condensed interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the condensed interim financial statements, including the key sources of estimation uncertainty, were the same as those applied in the Company's audited consolidated financial statements for the year ended November 30, 2024.
CHANGES IN ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS
The accounting policies followed by the Company are set out in Note 3 of the audited financial statements for the year ended November 30, 2024, and have been consistently followed in the preparation of the condensed interim financial statements.
Accounting standards issued but not yet effective
The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective. The Company has not early adopted any new standards and determined that there are no standards that are relevant to the Company.
FINANCIAL INSTRUMENTS
The classification of the financial instruments as well as their carrying values as at February 28, 2025 is shown in the table below:
| At February 28, 2025 | Assets – Amortized cost | Liabilities – Amortized cost | Total |
|---|---|---|---|
| $ | $ | $ | |
| Financial assets | |||
| Cash | 2,780,660 | - | 2,780,660 |
| Total financial assets | 2,780,660 | - | 2,780,660 |
| Financial liabilities | |||
| Accounts payable and accrued liabilities | - | 138,824 | 138,824 |
| Total financial liabilities | - | 138,824 | 138,824 |
The fair values approximate the carrying values due to their short-term nature.
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
Financial and capital risk management
The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks include foreign currency risk, interest rate risk, credit risk, and liquidity risk. Where material, these risks are reviewed and monitored by the Board of Directors. The Board of Directors has overall responsibility for the determination of the Company's risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility. Discussions of risks associated with financial assets and liabilities are detailed below:
a) 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 risk that the Company will realize a cash loss due to the fluctuation in interest rates is limited as the Company's liabilities are non-interest bearing. The Company considers this risk to be immaterial.
b) Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Credit risk arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The Company considers credit risk with respect to its cash to be immaterial as cash is mainly held through large Canadian financial institutions.
c) Liquidity risk
Liquidity risk is the risk that the Company is not able to meet its financial obligations as they become due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows, as well as anticipated investing and financing activities. Accounts payable and accrued liabilities have contractual maturities of 30 days or are due on demand and are subject to normal trade terms. The Company has a working capital of $2,985,510 as at February 28, 2025.
d) Commodity price risk
Commodity price risk is the risk that the value of the Company's exploration and evaluation properties is related to the price of various commodities and the outlook for them. Commodity prices have historically fluctuated widely and are affected by numerous factors outside of the Company's control, including, but not limited to, industrial retail demand, central bank lending, forward sales by producers and speculators, level of worldwide production and short-term changes in supply and demand.
SECURITIES OUTSTANDING
As at February 28, 2025, there were 33,701,911 common shares, 20,976,284 warrants, 1,940,000 stock options issued and outstanding. As at the date of this MD&A, there were there were 34,151,911 common shares, 20,526,284 warrants, 1,940,000 stock options issued and outstanding.
RISKS AND UNCERTAINTIES
Financing risks
The Company has incurred losses since inception. The continued operations of the Company are dependent on its ability to generate future cash flow and obtain additional financing. The Company has financed its cash requirements through the issuance of common shares. If the Company is unable to generate cash from operations or obtain additional financing its ability to continue as a going concern could be impeded.
Exploration and development
Resource exploration is a speculative business and involves a high degree of risk. There is no known body of commercial ore on the Company's exploration and evaluation properties and there is no certainty that the expenditures made by the Company in the exploration of its exploration and evaluation properties or otherwise will result in discoveries of commercially recoverable quantities of minerals. The exploration for and
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
development of mineral deposits involves significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. Although the discovery of an ore body may result in substantial rewards, few properties explored are ultimately developed into producing mines. It is impossible to ensure that the current exploration programs planned by the Company will result in a profitable commercial mining operation.
There is no assurance that the Company's exploration and evaluation properties possess commercially mineable bodies of ore. The Company's exploration and evaluation properties are in the exploration stage as opposed to the development stage and has no known body of economic mineralization. The known mineralization of the properties has not been determined to be economic ore and there can be no assurance that a commercially mineable ore body exists on the properties. Such assurance will require completion of final comprehensive feasibility studies and, possibly, further associated exploration and other work that concludes a potential mine is likely to be economic. In order to carry out exploration and development programs of any economic ore body and place it into commercial production, the Company may be required to raise substantial additional funding.
Title of exploration and evaluation properties
There is no assurance that the Company's title to its properties will not be challenged. Title to and the area of exploration and evaluation properties may be disputed. While the Company has diligently investigated title to its properties, it may be subject to prior unregistered agreements or transfers or indigenous land claims to which title may be affected. Consequently, the boundaries may be disputed.
Unknown environmental risks for past activities
Exploration and mining operations involve a potential risk of releases to soil, surface water and groundwater of metals, chemicals, fuels, liquids having acidic properties and other contaminants. In recent periods, regulatory requirements and improved technology have significantly reduced those risks. However, those risks have not been eliminated and the risk of environmental contamination from present and past exploration or mining activities exists for mining companies. Companies may be liable for environmental contamination and natural resource damages relating to properties that they currently own or operate or at which environmental contamination occurred while or before they owned or operated the properties. However, no assurance can be given that potential liabilities for such contamination or damages caused by past activities at these properties do not exist.
Political regulatory risks
Any changes in government policy may result in changes to laws affecting ownership of assets, mining policies, monetary policies, taxation, rates of exchange, environmental regulations, labour relations, repatriation of income and return of capital. This may affect both the Company's ability to undertake exploration and development activities in respect of present and future properties in the manner currently contemplated, as well as its ability to continue to explore, develop and operate those properties in which it has an interest or in respect of which it has obtained exploration and development rights to date. The possibility that future governments may adopt substantially different policies, which might extend to expropriation of assets, cannot be ruled out.
FORWARD-LOOKING INFORMATION
The Company's condensed interim financial statements for the three month ended February 28, 2025, and this accompanying MD&A, contain statements that constitute "forward-looking statements" within the meaning of National Instrument 51-102, Continuous Disclosure Obligations of the Canadian Securities Administrators. It is important to note that, unless otherwise indicated, forward-looking statements in this MD&A describe the Company's expectations up to the date of the MD&A.
Forward-looking statements often, but not always, are identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "targeting" and "intend" and statements that an event or result "may", "will", "should", "could", or "might" occur or be achieved and other similar expressions. Forward-looking statements in this MD&A include statements regarding the Company's future plans and expenditures,
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Primary Hydrogen Corp. (formerly Millbank Mining Corp.)
Management's Discussion and Analysis for the Three Months Ended February 28, 2025
the satisfaction of rights and performance of obligations under agreements to which the Company is a part, the ability of the Company to hire and retain employees and consultants and estimated administrative assessment and other expenses. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause the actual results to differ include market prices, continued availability of capital and financing, inability to obtain required regulatory approvals and general market conditions. These statements are based on a number of assumptions, including assumptions regarding general market conditions, the timing and receipt of regulatory approvals, the ability of the Company and other relevant parties to satisfy regulatory requirements, the availability of financing for proposed transactions and programs on reasonable terms acceptable to the Company and the ability of third-party service providers to deliver services in a timely manner. Some of these risks and uncertainties are identified under the heading "RISKS AND UNCERTAINTIES" as disclosed elsewhere in this MD&A. Additional information regarding these factors and other important factors that could cause results to differ materially may be referred to as part of particular forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise except as required by securities law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
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