Questcorp Mining — Interim / Quarterly Report 2024

Dec 19, 2023

QUESTCORP MINING INC.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2023 AND 2022

(Expressed in Canadian Dollars)

(Unaudited – Prepared by Management)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

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 interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

QUESTCORP MINING INC. CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited – Prepared by Management) (Expressed in Canadian dollars) AS AT

Note	October 31, 2023	July 31, 2023
ASSETS Current Cash $ Receivables Prepaids Total current assets Non-current Exploration and evaluation assets 4 Total assets $	36,262 $ 11,026 25,000 72,288 132,904 205,192 $	64,325 7,667 25,000
		96,992 132,904
		229,896
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities 6 $ Total liabilities Shareholders' equity Share capital 5 Deficit Total shareholders' equity Total liabilities and shareholders' equity $	105,855 $ 105,855 402,750 (303,413) 99,337 205,192 $	74,491
		74,491
		402,750 (247,345)
		155,405
		229,896
Nature of operations and going concern (Note 1) Subsequent event (Note 9)

Approved and authorized for issuance by the Board of Directors on December 18, 2023:

“Satvir (Saf) Dhillon ” Director “Tim Henneberry ” Director

The accompanying notes are an integral part of these condensed interim financial statements.

3

QUESTCORP MINING INC. CONDENSED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited – Prepared by Management) (Expressed in Canadian dollars)

Note	Three months ended October 31, 2023 Three months ended October 31, 2022
EXPENSES Consulting fees 6 Legal Office and administration Rent 6 Filing fees Travel Loss and comprehensive loss for the period	$ 22,500 $ - 11,001 - 6,269 116 3,000 - 500 - 12,798 -
	$ (56,068) $ (116)
Basic and diluted loss per common share	$ (0.00) $ (0.00)
Weighted average number of common shares outstanding, basic and diluted	12,900,000 7,250,000

The accompanying notes are an integral part of these condensed interim financial statements.

QUESTCORP MINING INC. CONDENSED INTERIM STATEMENTS OF CASH FLOWS (Unaudited – Prepared by Management) (Expressed in Canadian dollars)

	Three months ended October 31, 2023	Three months ended October 31, 2022
OPERATING ACTIVITIES Net loss for the period $ Changes in non-cash working capital items: Receivables Accounts payable and accrued liabilities Cash used in operating activities FINANCING ACTIVITIES Share subscriptions received in advance Cash provided by financing activities Change in cash Cash, beginning of period Cash,end ofperiod $	(56,068) $ (3,359) 31,364 (28,063) - - (28,063) 64,325 36,262 $	(116) - -
		(116)
		10,000
		10,000
		9,884 32,998
		42,882

There were no significant non-cash transactions of the Company for the periods ended October 31, 2023 and 2022.

The accompanying notes are an integral part of these condensed interim financial statements.

QUESTCORP MINING INC.

CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited – Prepared by Management) (Expressed in Canadian dollars)

	Number of Shares Share Capital Share Subscription Received in Advance Deficit Total
Balance, July 31, 2022 Share subscriptions received Loss for the period Balance, October 31, 2022	7,250,000 $ 120,250 $ 52,000 $ (54,149) $ 118,101 - - 10,000 - 10,000 - - - (116) (116)
	7,250,000 $ 120,250 $ 62,000 $ (54,265) $ 127,985
Balance, July 31, 2023 Loss for the period Balance, October 31, 2023	12,900,000 $ 402,750 $ - $ (247,345) $ 155,405 - - - (56,068) (56,068)
	12,900,000 $ 402,750 $ - $ (303,413) $ 99,337

The accompanying notes are an integral part of these condensed interim financial statements.

6

QUESTCORP MINING INC. Notes to the Condensed Interim Financial Statements For the three months ended October 31, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

Questcorp Mining Inc. (the “Company”) was incorporated under the laws of British Columbia on April 9, 2021. The head office of the Company is located at Suite 250, 750 West Pender Street, Vancouver, British Columbia, V6C 2T7 and the registered and records office is located at Suite 2200, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8.

Subsequent to October 31, 2023, the Company completed its initial public offering (Note 9) and its common shares were listed on the Canadian Securities Exchange on December 11, 2023, under the trading symbol QQQ.

These condensed interim financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since its inception and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and to develop profitable operations. As at October 31, 2023, the Company had a working capital deficiency of $33,567 (July 31, 2023 – working capital of $22,501) and an accumulated deficit of $303,413 (July 31, 2023 - $247,345). These factors cast a significant doubt on the Company’s ability to continue as a going concern. The condensed interim financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations.

2. BASIS OF PREPARATION

These condensed interim financial statements of the Company for the periods ended October 31, 2023 and 2022 have been prepared using accounting policies consistent with International Accounting Standard (“IAS”) 34, Interim Financial Reporting.

The condensed interim financial statements are presented in Canadian dollars, which is the Company’s

functional currency.

These condensed interim financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss, which are stated at their fair value. In addition, these condensed interim financial statements have been prepared using the accrual basis of accounting except for cash flow information.

The preparation of these condensed interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed interim financial statements and reported amounts of expenses during the period. Actual results could differ from these estimates.

These condensed interim financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the condensed interim financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

QUESTCORP MINING INC. Notes to the Condensed Interim Financial Statements For the three months ended October 31, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICIES

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Company as at and for the year ended July 31, 2023.

4. EXPLORATION AND EVALUATION ASSETS

		North Island,
		BC, Canada		Total
ACQUISITION
Balance, July 31, 2022, 2023 and	$	10,000	$	10,000
October 31, 2023
EXPLORATION
Balance, July 31, 2022	$	106,754	$	106,754
Technical reporting		16,150		16,150
Balance, July 31, 2023 and	$	122,904	$	122,904
October 31, 2023
CARRYING VALUE
July 31, 2022	$	116,754	$	116,754
July 31, 2023 and October 31,	$	132,904	$	132,904
2023

North Island Copper Property, BC, Canada

On October 4, 2021, the Company entered into an option agreement to acquire a 100% interest in the North Island Copper Property (the “Property”) with a third party. Following the exercise of the option, the Property will remain subject to a 3% net smelter return royalty (“NSR”). The Company may purchase the first 1% of the NSR for $750,000 and may purchase the remaining 2% of the NSR for an additional $1,000,000.

Pursuant to the option agreement, the Company is required to complete the following:

• (1) to acquire a 51% interest in the Property, the Company shall pay $10,000 to the vendor upon the effective date of the Option Agreement (paid);

• (2) to acquire an additional 49% interest in the Property, the Company shall: (i) pay a total of $85,000 to the vendor; (ii) issue a total of 2,200,000 common shares; and (iii) spend a total of $500,000 on exploration expenditures on the Property as set out below:

• (a) the Company shall issue the common shares as follows:

  • (i) 2,000,000 common shares upon the date listed on a Canadian exchange (“Listing Date”) (issued subsequent to October 31, 2023);

  • (ii) 100,000 common shares within the first anniversary of the Listing Date;

  • (iii) 50,000 common shares within the second anniversary of the Listing Date; and

  • (iv) 50,000 common shares within third anniversary of the Listing Date,

QUESTCORP MINING INC. Notes to the Condensed Interim Financial Statements For the three months ended October 31, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

4. EXPLORATION AND EVALUATION ASSETS (continued)

• (b) the Company shall pay the cash portion as follows:

• (i) $10,000 upon the Listing Date (paid subsequent to October 31, 2023);

• (ii) $10,000 on or before the first anniversary of the Listing Date;

• (iii) $5,000 on or before the second anniversary of the Listing Date; and

• (iv) $60,000 on or before the third anniversary of the Listing Date,

• (c) the Company shall make the exploration expenditures on the Property according to the following schedule:

• (i) $80,000 on or before the first anniversary of the Listing Date;

• (ii) $100,000 on or before the second anniversary of the Listing Date; and

• (iii) $320,000 on or before the third anniversary of the Listing Date.

5. SHARE CAPITAL

The authorized share capital of the Company consists of an unlimited number of common shares without par value. At October 31, 2023, there were 12,900,000 (July 31, 2023 - 12,900,000) common shares outstanding of which 7,910,000 are held in escrow.

There were no share transactions during the period ended October 31, 2023.

During the year ended July 31, 2023, the Company:

• a) Issued 5,650,000 common shares at a price of $0.05 per share for gross proceeds of $282,500, of which $52,000 was received during the year ended July 31, 2022.

Warrants

As at October 31, 2023 there were 3,000,000 (July 31, 2023 - 3,000,000) share purchase warrants held in escrow.

The following table summarizes the continuity of share purchase warrants:

								Weighted
								average
								exercise
							Number of	price
							warrants	$
Balance, July	31,	2022,	2023	and October	31,	2023	5,000,000	0.05

QUESTCORP MINING INC. Notes to the Condensed Interim Financial Statements For the three months ended October 31, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

5. SHARE CAPITAL (continued)

As at October 31, 2023, the following share purchase warrants were outstanding:

Number of	Exercise
warrants	price
outstanding	$	Expiry date
5,000,000	0.05	November 5, 2026
5,000,000

No stock options were outstanding as at or during the periods ended October 31, 2023 and the year ended July 31, 2023.

6. RELATED PARTY TRANSACTIONS

Key management personnel are the persons responsible for the planning, directing and controlling the activities of the Company and include both executive and non-executive directors, and entities controlled by such persons. The Company considers all Directors and Officers of the Company to be key management personnel.

During the period ended October 31, 2023, the Company incurred $22,500 (2022 - $nil) in consulting fees and $3,000 (2022 - $nil) in rent to a company controlled by a director of the Company. As at October 31, 2023, there was $17,850 (July 31, 2023 - $nil) owing to this company for consulting fees and rent, included in accounts payable and accrued liabilities. These amounts are non-interest bearing with no stated terms of payment.

7.

FINANCIAL INSTRUMENTS AND RISKS

The Company is exposed to various financial instrument risks and assesses the impact and likelihood of this exposure. These risks include liquidity risk, credit risk, currency risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.

(a) Capital management

The Company manages its capital to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide adequate returns to shareholders and benefits to other stakeholders, and to have sufficient funds on hand for business opportunities as they arise.

The Company considers the items included in shareholders’ equity as capital. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through short-term prospectuses, private placements, sell assets, incur debt, or return capital to shareholders. As at October 31, 2023, the Company is not subject to externally imposed capital requirements.

(b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. As at October 31, 2023, the Company had a cash balance of $36,262. The Company’s cash is invested in business accounts with quality financial institutions, is available on demand for the Company’s programs, and is not invested in any asset-backed commercial paper.

QUESTCORP MINING INC. Notes to the Condensed Interim Financial Statements For the three months ended October 31, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

7. FINANCIAL INSTRUMENTS AND RISKS (continued)

• (c) Credit risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets including cash and receivables. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash with high-credit quality financial institutions. The Company’s cash is held with a major Canadian based financial institution. The carrying amount of financial assets represents the maximum credit exposure.

• (d) Currency risk

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company is not exposed to foreign currency risk.

• (e) Interest rate risk

The Company is not exposed to interest rate risk.

• (f) Fair values

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

The fair value of cash is measured based on level 1 inputs of the fair value hierarchy.

The estimated fair values of other financial instruments, including receivables and accounts payable and accrued liabilities, are equal to their carrying values due to the short-term nature of these instruments.

8. SEGMENTED INFORMATION

The Company primarily operates in one reportable operating segment, being the acquisition and development of exploration and evaluation assets in Canada.

9. SUBSEQUENT EVENTS

Subsequent to October 31, 2023, the Company completed its initial public offering by issuing 5,000,000 common shares at $0.10 per share for gross proceeds of $500,000. The agent received a cash commission $50,000 and corporate finance fees of $25,000 in cash and 100,000 common shares at $0.10 per share. In addition, the Company issued 500,000 agent warrants, with each agent warrant exercisable for one common share at a price of $0.10 until December 12, 2025.