AI assistant
Route1 Inc. — Management Reports 2025
May 30, 2025
44272_rns_2025-05-29_e239d643-b5be-4fc7-ac86-f5184b82c09e.pdf
Management Reports
Open in viewerOpens in your device viewer
SILVER VALLEY METALS
SILVER VALLEY METALS CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the Nine Months Ended March 31, 2025
May 29, 2025
GENERAL
The following discussion of the financial condition and results of operations of the Company constitutes management's review of the factors that affected the Company's financial and operating performance to date and provides financial information for the nine months ended March 31, 2025. The discussion should be read in conjunction with the audited consolidated financial statements of the Company for the year ended June 30, 2024, and the unaudited consolidated interim financial statements for the nine months ended March 31, 2025, including the notes thereto.
This MD&A was approved by the board of directors on May 29, 2025.
Unless otherwise stated, all amounts discussed herein are denominated in Canadian dollars and all financial information (as derived from the Company's consolidated financial statements) has been prepared in accordance with International Financial Reporting Standards ("IFRS").
FORWARD-LOOKING INFORMATION
Certain information regarding the Company within Management's Discussion and Analysis (MD&A) may include "forward-looking statements" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this MD&A that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, goals, expansion and growth of the Company's businesses, operations, plans and other such matters are forward-looking statements. When used in this MD&A the words "estimate", "plan", "anticipate", "expect", "intend", "believe" and similar expressions are intended to identify forward-looking statements. Such statements are subject to known and unknown risks and uncertainties that may cause actual results in the future to differ materially from those anticipated in forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such 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.
SILVER VALLEY METALS
SILVER VALLEY METALS
OVERVIEW OF BUSINESS
Silver Valley Metals ("Silver Valley" or the "Company") is a brownfield exploration Company with its flagship project located in Zacatecas and San Luis Potosi, Mexico (Lithium and Sulphate of Potash), and a second project located in the Silver Valley, Idaho (silver, zinc, lead) which the company is participating in through an equity investment in Silver Dollar Resources and net smelter royalty returns from the project.
THE MEXI-CAN PROJECT – LITHIUM AND POTASSIUM
Silver Valley has a 100%-owned interest in a lithium and potassium bearing salar complex comprising 4,059 hectares on three mineral concessions (the "Mexi-Can Project") located on the Central Mexican Plateau in the states of Zacatecas, and San Luis Potosi, Mexico. The salars are named La Salada, Caliguey, and Santa Clara. The Company has identified significant potassium and lithium in both the salar sediments and near-surface brines, publishing its maiden sediment mineral resource estimate (the "MRE") December 15, 2019. Regional geophysical work has indicated that the depths of the salar basins may be much greater than previously thought, making the salars highly prospective for large brine aquifers to be discovered at depth.
The NI 43-101 inferred mineral resource contains 12.3Mt of Sulfate of Potash (SOP) and 243,000 tonnes of lithium carbonate equivalent (LCE) and remains open in all directions for expansion.
Highlights from the Maiden Mineral Resource Estimate include:
- 120 million tonnes (Mt) of Inferred Mineral Resources grading 4.6% potassium (K) and 380 ppm lithium (Li).
- A continuous high-lithium portion at La Salada salar containing 7 Mt grading 1,490 ppm Li.
- A contained 12.3 million tonnes (Mt) of Sulfate of Potash (SOP) and 243,000 tonnes of lithium carbonate equivalent (LCE);
- Sampling is restricted from surface to 5 metre depths in most areas therefore there is good exploration potential to increase the Mineral Resource at depth and extending the sampling to the edge of the salar basins where sampling has not taken place.
- Regional geophysical surveys completed suggest there is potential for additional similar layers of potassium or lithium enriched material to be found under the current pitting/drilling.
- Regional geophysical work has indicated that the depths of the salar basins may be much greater than previously thought, making the salars highly prospective for large brine aquifers to be discovered at depth. This may be a potential high impact follow-up program for the Company in the future.
- Test work for potassium in brine within 38 auger drill holes were collected returning high potassium and sulphate values; potassium peaked at 27,000 mg/l with an average of 12,718 mg/l and sulphate (SO4) peaked at 40,000 mg/l with an average of 16,594 mg/l.
- Auger hole depths ranged from 15.6 metres to 21 metres and full recharge in each of the drill holes was reported to take less than 24 hours.
2
Project History
By agreement dated July 28, 2016, and subsequently amended on April 7, 2017, the Company acquired a 100% interest in lithium, potassium and boron sediments and brine salar assets located in Zacatecas and San Luis Potosi, Mexico. The Company agreed to pay the outstanding mining taxes on the four concessions in the amount of $143,870 (paid) and pay the vender US$210,000 in cash. The Company paid the vender US$20,000 and settled the balance of US$190,000 by issuing 700,505 common shares of the Company during the year ended June 30, 2017.
In addition, the Company paid $44,587 in finder’s fees to an unrelated individual who subsequently was elected as director of the Company during the year ended June 30, 2017.
The property is subject to a total of 2.25% NSR, of which 1% can be purchased by the Company for US$250,000.
In June 2017, the Company entered into another agreement to acquire a 100% interest in 2 new salars in Mexico. In consideration, the Company issued 444,444 common shares of the Company in August 2017. The Company also agreed to pay the outstanding mining taxes on the two concessions totaling $180,998. The salars are subject to a 2.5% NSR of which the Company has the right to purchase up to 1.5% for $1,500,000.
On September 11, 2020, the Company announced that it was successful in challenging the Mexican Mining Authority in the Federal Court of Administrative Justice to reduce its land position focusing only on its three primary salar assets: Santa Clara, Caliguey, and La Salada and in so doing eliminating the past 3 years of back dated taxes charged by the government to the Company on its total land package. The judgment in favour resulted in the Company’s accounts payable decreasing by approximately 90% as the result of this positive ruling; a total of $1,736,062 was written off from the Company’s balance sheet.
The rest of the Company’s landholdings have been eliminated and the taxes owing related to these landholdings eliminated.
On April 20, 2022 the Mexican Government passed an Amendment to the Mining Law stating lithium is a strategic mineral. The Company actively pursued clarity and a resolution to this announcement.
Further to April 20, 2022, the Company press released on May 10, 2023, that it had been in discussions with LitioMX, (the national lithium company of Mexico). These discussions pertain to the possibility of forming a partnership to explore and ultimately produce lithium at the Mexi-Can Lithium-Potassium Project located in Zacatecas and San Luis Potosi.
The negotiation was focused on the lithium component only of the multi-commodity deposit(s). This represents an inferred resource of 243,000 tonnes of lithium carbonate equivalent (LCE) (1) defined to date at surface to an average depth of only 5 metres. The project is the second most advanced lithium project in Mexico and remains open to significant expansion through further exploration work.
The potassium sulphate (sulphate of potash) component of the deposit comprise 12.3 million tonnes (1) defined to date and has significant upside to expand from what is defined thus far from the first 5 metres of the salars. This aspect of the deposit was not affected by the April 2022 lithium legislation.
SILVER VALLEY METALS
4
Reference:
(1) To review the NI-43-101 and inferred resource referred to: in the please click: https://silvervalleymetals.com/wp-content/uploads/2022/05/kmax-ni43-101.pdf. Report title: NI43-101 Technical Report On The Organimax Salar Sediment Deposits, Mexico; Author: SRK Consulting; Date of Submission: February, 2019
Update: January 15, 2024
In response to the significant legislative development on April 20, 2022, through the "Decree amending and adding various provisions of the Mining Law," (the "Lithium Decree") Silver Valley Metals Corp.'s Mexican subsidiary ("Silver Valley Mexico") took legal measures to safeguard its interests. The Decree marked a crucial structural reform in Mexico's lithium sector, leading to the creation of the company "Lithium for Mexico" ("LitioMx") and the declaration of lithium as a public utility and national heritage restricting the granting of new concessions, licenses, contracts, permits, or authorizations in this area.
As a result of the Decree, Silver Valley Mexico filed two separate Indirect Amparos (an Amparo is defined as an extraordinary constitutional appeal, which may be filed in federal court, by Mexicans and by foreigners. It is often referred to as a "constitutional protection lawsuit") challenging specific articles of the Mining Law, as amended by the Lithium Decree, claiming violations of constitutional rights.
Silver Valley Mexico holds existing concessions in Mexico. With the recent results from the Supreme Court's decisions from the Amparos filed by Silver Valley Mexico, it is apparent that the Lithium Decree did not impact the Company's concessions. The Court ruled that the Mining Law, as amended by the Lithium Decree, has not impacted the Company.
Several Articles of the Mining Law, as outlined in the Lithium Decree, specify the responsibilities and protections regarding lithium exploration, exploitation, beneficiation, and use. Notably, the legislation did not indicate any intention to cancel, suspend, withdraw, or extinguish rights acquired by mining companies in relation to lithium prior to the Lithium Decree.
Although it is true that the Lithium Decree, at first, did not establish anything in relation to the mining concessions granted before the entry into force of the Lithium Decree and in relation to the procedures that were in process, this situation was remedied by the subsequent reforms that the Mining Law underwent; specifically another such mining reform following the reform on lithium which was dated May 8, 2023, by the enactment of the "Decree amending, adding and revoking several provisions of the Mining Law, National Waters Law, Environmental Protection and Balance Law, and Wastes Management and Prevention Law" (the "Mining Law Decree"). The Mining Law Decree, clarified that existing concessions, including those held by Silver Valley Mexico, remain unaffected until their full expiration. The Company's concessions, with validity until 2059 and 2060, are legally protected, ensuring continuity.
The amendments to the Mining Law arose from the Mining Law Decree will have no legal impact until the full expiration of Silver Valley Mexico's mining concessions, since, as for the Lithium Decree, the loss of rights or the cancellation, suspension or termination of the concession titles, or of exploration activities, was not established, including the exploitation, or use, of lithium, with respect to rights previously granted and acquired by the concessionaires.
SILVER VALLEY METALS
The current regulatory landscape indicates a dual legal regime for lithium operations in Mexico. Existing concessions are monitored by the Ministry of Economy, while post-reform exploration and exploitation will be overseen by the Mexican State through the state-owned entity "Lithium for Mexico," namely LitioMx.
Partnership Discussions with LitioMX
With a positive outcome from the recent Amparo decisions, coupled with the later enacted May 8, 2023 mining reform further supporting the Company's ownership, Silver Valley continued to actively consider a joint venture partnership with LitioMx. Silver Valley considered a partnership beneficial to all stakeholders', with the right deal in mind. However, after careful consideration, LitioMx recently decided to prioritize other Mexican projects. This decision aligns with Silver Valley's appreciation for LitioMx's focus on lithium-specific ventures, considering the Mexi-Can Project's significant sulphate of potash ("SOP") component, something that LitioMx was not going to participate in.
With the news of LitioMx voluntarily deciding to not participate in the development of the Mexi-Can Project and the positive news received from the Supreme Court of Mexico, Silver Valley is able to move the project forward free and unencumbered.
Historical Geological Information Associated with the Company's Salars:
A 1992 government study prepared by Mexico's former Mineral Resource Council, (now the Geologic Society of Mexico) located within one of the Company's concessions in San Luis Potosi, Mexico was to improve efficiency of a common salt (sodium chloride, NaCl) in production operations within the Caliguey salar. The salt production process began with pumping salar brine from a well 20 meters deep to several evaporation ponds "where it remained for several days (minimum of 90 days) to evaporate the water through the sun's energy. This process concentrates and crystallizes the sodium chloride and sulfates and, to a lesser extent, potassium. These are harvested as a solid and separated into first, second, and third quality, depending on the purity".
As part of the study, the Mineral Resource Council collected several samples, both sediments, and liquid from facility evaporation ponds and the surface lagoon adjacent to the operation and sent it for salt and lithium (Li) analyses; the results reflected that the salar at Caliguey contained high levels of lithium and potassium. Several holes (5) were subsequently drilled at Caliguey. Sampling was carried out and the presence of lithium and potassium were noted, with lithium grading significantly between 1.2% and 2.1%. These holes did not intersect the basement rocks and the depths for the holes ranged from 34 to 60 metres.
Work Program and La Salada salar Drilling Results
At the La Salada salar, two diamond drill holes were intended to determine depth to bedrock and to evaluate the geology of the salar infill material. However, due to slow drilling and poor recovery the first hole ended at a depth of 53.15 metres (m) in limestone. The second drill hole was postponed until more productive and efficient drilling equipment was available. After the successful completion of the second drill hole, a perforated PVC casing was placed throughout the entire length of the hole to monitor and sample brine horizons intersected during drilling. The conductivity of the water measured high on site, which could be indicative of the presence of brine.
SILVER VALLEY METALS
5
Thirty-eight auger holes were also completed at La Salada; both near surface brine samples and extensive sediment samples were recovered. Auger holes ranged from 4.5 to 26.0 metres depth averaging 14.4 metres. The auger holes were completed on a 150-200 metre grid covering the entire salar for a total area of some 1,800 metres by 900 metres.
Test work for potassium in brine within the 38 auger drill holes returned high potassium and sulphate values; potassium peaked at 27,000 mg/l with an average of 12,718 mg/l and sulphate (SO4) peaked at 40,000 mg/l with an average of 16,594 mg/l. For comparison purposes the potassium grade target for a primary SOP soon to be operating mine located in Utah (Sevier Playa) is 2,240 mg/L
Full recharge in each of the drill holes was reported to take less than 24 hours.
The brine results within the sediments showed high potassium, high sulphate, low calcium, low magnesium, and low lithium.
In contrast, the composite sediment samples which were taken along 1.0 to 3.0m intervals in the deep diamond drill hole, and along 1.5 metre intervals in the auger holes showed relatively high lithium and high potassium values. Assays returned significant lithium and potassium values. Lithium results ranged from 79 to 1,860 ppm, and, potassium ranged from 1.5% to 6.45%.
Summary of Brine Results within Sediments
| Hole ID | Sample ID | Potassium (mg/L) | Sulphate (mg/L) | Boron (mg/L) | Lithium (mg/L) | Calcium (mg/L) | Magnesium (mg/L) |
|---|---|---|---|---|---|---|---|
| LS17-AG002 | 547 | 3,540 | 2,800 | 46.5 | 3 | 65.7 | 62.9 |
| LS17-AG003 | 544 | 575 | 1,300 | 23.2 | 2 | 49.4 | 45.9 |
| LS17-AG004 | 549 | 7,000 | 10,000 | 134 | 4 | 15.6 | 12.6 |
| LS17-AG005 | 504 | 7,750 | 9,200 | 156 | 4 | 21.7 | 22.1 |
| LS17-AG006 | 505 | 3,970 | 4,600 | 83.0 | 2 | 19.8 | 19.4 |
| LS17-AG008 | 543 | 683 | 490 | 19.4 | 7 | 395.0 | 266.0 |
| LS17-AG009 | 523 | 2,940 | 3,100 | 55.7 | 2 | 16.8 | 8.2 |
| LS17-AG010 | 517 | 3,530 | 3,200 | 61.5 | 3 | 79.0 | 18.2 |
| LS17-AG011 | 516 | 4,970 | 3,000 | 64.4 | 3 | 3.9 | 3.6 |
| LS17-AG012 | 508 | 4,900 | 3,800 | 82.3 | 3 | 3.6 | 4.2 |
| LS17-AG014 | 522 | 12,500 | 18,000 | 249 | 4 | 3.1 | 2.0 |
| LS17-AG016 | 518 | 17,800 | 18,000 | 284 | 8 | 7.6 | 10.0 |
| LS17-AG017 | 519 | 22,000 | 23,000 | 377 | 11 | 12.8 | 10.0 |
| LS17-AG018 | 521 | 23,800 | 31,000 | 465 | 13 | 68.7 | 97.0 |
6
SILVER VALLEY METALS
| LS17-AG020 | 520 | 18,700 | 16,000 | 285 | 12 | 60.1 | 89.2 |
|---|---|---|---|---|---|---|---|
| LS17-AG021 | 542 | 2,080 | 3,800 | 78.3 | <1 | 39.2 | 42.8 |
| LS17-AG022 | 525 | 8,830 | 8,100 | 135 | 6 | 4.4 | 1.6 |
| LS17-AG024 | 541 | 711 | 610 | 12.2 | 1 | 20.9 | 30.9 |
| LS17-AG025 | 550 | 16,900 | 30,000 | 431 | 14 | 441.0 | 213.0 |
| LS17-AG026 | 528 | 23,100 | 36,000 | 497 | 13 | 7.7 | 3.6 |
| LS17-AG027 | 527 | 14,200 | 17,000 | 296 | 11 | 9.7 | 2.2 |
| LS17-AG028 | 513 | 8,860 | 09,800 | 145 | 6 | 22.3 | 9.8 |
| LS17-AG029 | 530 | 22,500 | 3,6000 | 544 | 16 | 4.7 | 5.2 |
| LS17-AG030 | 531 | 24,000 | 31,000 | 431 | 13 | 20.9 | 16.0 |
| LS17-AG031 | 532 | 22,800 | 34,000 | 515 | 20 | 30.8 | 17.6 |
| LS17-AG032 | 540 | 4,820 | 4,300 | 28.9 | 2 | 10.4 | 5.3 |
| LS17-AG034 | 511 | 27,300 | 40,000 | 677 | 22 | 3.4 | 1.1 |
| LS17-AG035 | 534 | 21,500 | 27,000 | 410 | 15 | 18.8 | 9.3 |
| LS17-AG036 | 539 | 7,010 | 7,900 | 96.8 | 3 | 49.6 | 21.6 |
| LS17-AG037 | 535 | 21,700 | 34,000 | 524 | 16 | 217.0 | 44.2 |
| LS17-AG038 | 537 | 22,800 | 33,000 | 565 | 21 | 19.7 | 8.0 |
| LS17-AG039 | 536 | 23,200 | 31,000 | 481 | 16 | 85.8 | 52.2 |
| Max | 27,300 | 40,000 | 677 | 22 | 441.0 | 266.0 | |
| --- | --- | --- | --- | --- | --- | --- | |
| Average | 12,718 | 16,594 | 258 | 9 | 57.2 | 36.1 |
Emily Hanson, PGeo, Vice-President of Exploration, is the qualified person who has prepared, supervised, and approved the preparation of the scientific and technical disclosure as above.
Maiden Mineral Resource Estimate:
The Company engaged SRK Consulting to carry out a Maiden Mineral Resource Estimate and a NI 43-101 compliant technical report for the Company's three most important salars (La Salada, Caliguey and Santa Clara), and to provide recommendations for further work required to perform MREs on the Company's other salars in Zacatecas and San Luis Potosi, Mexico.
Additionally, the Company commenced further geochemical, metallurgical, and mineralogical testing of the sediment samples recovered in phase 1 to better support geochemical modelling for the MRE and to test for recovery of potassium, lithium, boron and other minerals of interest.
SILVER VALLEY METALS
The Company published the NI-43-101 report covering its three primary lithium-potassium salars on December 15, 2019. The results are for the sediments only and from surface to 5 metres depth only. Brine results were not included in the maiden resource estimate.
| Salar | Mineral Resource Category | Tonnes (Mt) | K (%) | Li (ppm) |
|---|---|---|---|---|
| La Salada | Inferred | 20 | 4.1 | 880 |
| Santa Clara | 85 | 4.8 | 264 | |
| Caliguey | 15 | 4.3 | 373 | |
| Total | 120 | 4.6 | 380 |
La Salada Mineral Resource Statement
| Domain | Tonnes (Mt) | K (%) | Li (ppm) |
|---|---|---|---|
| Potassium | 11 | 5.3 | 518 |
| High-Lithium | 7 | 2.5 | 1,488 |
| Low-Lithium | 2 | 2.3 | 782 |
| Total | 20 | 4.1 | 880 |
SRK produced the maiden Mineral Resource estimates for the La Salada, Santa Clara, and Caliguey salar sediment deposits. The resulting Mineral Resource statement delineated 120 Mt of Inferred Mineral Resources grading 4.6% potassium and 380 ppm lithium. SRK considers the material delineated to demonstrate 'reasonable prospects for eventual economic extraction' using an economic analysis based on preliminary test work undertaken to date along with operating costs from an analogous project and optimistic selling prices.
Exploration potential exists within the claim areas at the three principal salars at depth. Sampling of water within drill holes has shown potential for a potassium-brine project, but this is yet to be tested through systematic exploration.
- Mr. Martin Pittuck, CEng, MIMMM, FGS, is responsible for this Mineral Resource statement and is an "independent qualified person" as such term is defined in NI 43-101.
- Mineral Resource is reported above breakeven value of USD 37/t; estimated using potassium and lithium grades, recoveries, operating costs and selling prices on a block-by-block basis.
- Mineral Resource is considered to have reasonable prospects for eventual economic extraction by open pit surface mining.
- Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
- The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014) as required by NI 43-101.
- Effective date of 17 December 2018.
- MRE is reported on 100% basis.
- Tonnes are reported as dry and in metric units.
8
SILVER VALLEY METALS
RANGER-PAGE PROJECT – IDAHO, USA
Silver Valley announced on February 10, 2021, it entered a binding letter of intent (the "Letter of Intent") with Blackhawk Exploration L.L.C. ("Blackhawk") providing the Company with the option (the "Option") to acquire a 100% interest in the past producing Ranger-Page Project in the Silver Valley, Coeur d'Alene Mining District, Idaho, USA (the "Project"). Further to its press release dated February 10, 2021, the Company entered into a definitive agreement dated July 20, 2021 (the "Definitive Agreement") with Blackhawk for the Option to earn up to a 100% interest in the Project.
On November 17, 2021, the Company signed an option to acquire the Page Mine along with a prospective land package rich in exploration potential. The project is contiguous to the west and south of the Company's Ranger-Page Project which consolidates for the first time under one operator the western end of the Silver Valley's mining corridor. The Page Mine and area comprise 49 patented mining claims totaling 802 hectares located approximately 60 kilometers east of Coeur d'Alene, Idaho.
On July 14, 2024, the Company signed an asset purchase agreement with Silver Dollar Resources Incorporated ("Silver Dollar") whereby Silver Dollar acquired the right, title and interest in the Ranger-Page Project by taking over from Silver Valley Metals the option to earn-in agreements for both projects. Under the terms of the agreement, the Company agreed to assign to Silver Dollar Resources the Target Assets for cash consideration of CAD$300,000 and the issuance of six million (6,000,000) common shares in the capital of Silver Dollar Resources at a deemed price of CAD$0.30 per share for aggregate proceeds of CAD $2,100,000. If Silver Dollar Resources exercises its option under the Blackhawk agreement, it will grant Silver Valley Metals a royalty equal to 0.5% of net smelter returns from the project. Further, if Silver Dollar Resources exercises its option under Page Mine Agreement, it will grant Silver Valley Metals a royalty equal to 1% net smelter returns from the project.
FINANCIAL & OPERATIONAL OVERVIEW
Overall Performance
In August 2023, the Company closed its first and second tranche of non-brokered private placements and raised aggregate gross proceeds of $685,874 through issuance of an aggregate of 6,858,741 common shares of the Company at a price of $0.10 per share. In connection with closing, the Company paid finder's fees of $13,600.
The Company will need to raise additional capital from the sale of common shares or other equity or debt instruments to fund next year's operations and administration, retire its indebtedness as they come due, and conduct further due diligence on identifying and evaluating additional potential mineral interest acquisitions or other business opportunities. The sustainability of the financial markets related to the mineral exploration sector cannot be determined. This continually poses a challenge for the Company to effectively manage its capital through these volatile conditions.
SILVER VALLEY METALS
10
Financial Condition
The Company's cash and cash equivalents balance as of March 31, 2025 was $16,753 compared to $14,647 at June 30, 2024. The Company's working capital as of March 31, 2025 was $306,728 compared to $914,204 as at June 30, 2024. The decrease in working capital was predominantly attributable to a decrease in assets held for sale due to the Company closing an asset purchase agreement with Silver Dollar related to the sale of the Ranger-Page Project during the nine months ended March 31, 2025.
Results of Operations
Three months ended March 31, 2025
The net loss for the three months ended March 31, 2025 ("2025Q3") was $210,373 as compared to $104,604 in the comparative quarter of the previous year ("2024Q3"). The increase in net loss of $105,739 was mainly due to an increase in consulting fees to $45,600 (2024Q3 - $22,800) related to amounts paid/accrued to a related party, see "Related Party Transactions" section for additional information.
Furthermore, the Company's foreign exchange loss of $11,948 (2024Q3 - $23,986) – difference of $12,035 due to the conversion of foreign transactions and balances in Mexican Pesos and United States Dollars to Canadian dollars mainly related to expenditures on the Company's mineral properties, and unrealized loss on investments of $116,250 (2024Q2 - $Nil) related to the fair value adjustment of 2,250,000 shares held in Silver Dollar as at March 31, 2025.
Nine months ended March 31, 2025
The net loss for the nine months ended March 31, 2025 ("YTD-2025Q3") was $205,820 as compared to the net loss of $367,003 in the comparative period of the previous year ("YTD-2024Q3"). The decrease in net loss of $161,183 was mainly due to a gain on disposition of Ranger-Page project of $181,547 (YTD-2024Q3 - $Nil), and decreases in advertising and promotion expenses to $16,361 (YTD-2024Q3 - $89,676) and share-based payments to $1,068 (YTD-2024Q3 - $43,979) related to the vesting of stock options granted in a prior period. No salaries and wages were paid in the period, $Nil (YTD-2024Q3 - $41,800). The decrease in various expenses partially offset by an increase in consulting fees to $136,800 (YTD-2024Q3 - $38,000) as the Company started paying its employee as a consultant.
Furthermore, the Company's foreign exchange gain of $41,714 (YTD-2024Q3 - loss of $22,288) – difference of $64,002 due to the conversion of foreign transactions and balances in Mexican Pesos and United States Dollars to Canadian dollars mainly related to expenditures on the Company's mineral properties, and unrealized loss on investments of $146,250 (YTD-2024Q3 - $Nil) related to the fair value adjustment of 2,250,000 shares held in Silver Dollar as at March 31, 2025.
SILVER VALLEY METALS
Cash Flows
Cash flows used in operating activities were $210,217 during the nine months ended March 31, 2025, compared to $275,514 in the comparative period.
Cash flows from investing activities were $219,513 during the nine months ended March 31, 2025, compared to $398,464 cash flows used in the comparative period. The increase is mainly due to the cash proceeds from the disposal of Ranger-Page project and the Company incurring lower exploration and evaluation assets expenditures on the MexiCan project during the current period.
In August 2023, the Company closed its first and second tranche of non-brokered private placements and raised aggregate gross proceeds of $685,874 through issuance of an aggregate of 6,858,741 common shares of the Company at a price of $0.10 per share. In connection with closing, the Company paid finder's fees of $7,000.
EXPLORATION AND EVALUATION ASSETS
Mineral property acquisition, exploration and development expenditures are deferred until the properties are placed into production, sold, impaired, or abandoned. These deferred costs will be amortized over the estimated useful life of the properties following commencement of production or written down if the properties are allowed to lapse, are impaired, or are abandoned. The deferred costs associated with each property for the nine months ended March 31, 2025 and the year ended June 30, 2024 are summarized in the tables below:
| Lithium Salars | |
|---|---|
| $ | |
| Acquisition costs | |
| Balance, June 30, 2024 and March 31, 2025 | 1,656,217 |
| Exploration and evaluation costs | |
| Balance, June 30, 2024 | 1,208,586 |
| Depreciation | 129 |
| Legal and administration | 1,809 |
| Permitting and prospecting | 78,649 |
| Taxes and duties | 34,448 |
| Travel and accommodation | 29 |
| Balance, March 31, 2025 | 1,323,650 |
| Balance, March 31, 2025 | 2,979,867 |
SILVER VALLEY METALS
| Lithium Salars $ | Ranger- Page | Total $ | |
|---|---|---|---|
| Acquisition costs | |||
| Balance, June 30, 2023 | 1,656,217 | 512,828 | 2,169,045 |
| Acquisition | - | 175,012 | 175,012 |
| Transfer to held for sale | -(687,840) | 687,840 | |
| Balance, June 30, 2024 | 1,656,217 | - | 1,656,217 |
| Exploration and evaluation costs | |||
| Balance, June 30, 2023 | 960,807 | 878,523 | 1,839,330 |
| Assays and analysis | - | 15,197 | 15,197 |
| Depreciation | 244 | - | 244 |
| Field supplies and miscellaneous | 81,878 | 81,878 | |
| Geological consultants | 1,771 | 25,823 | 27,594 |
| Geophysics | 1,341 | 1,341 | |
| Legal and administration | 102,600 | 102,600 | |
| Taxes and duties | 245,764 | 458 | 245,764 |
| Travel and accommodation | 458 | 458 | |
| Share-based payments | 12,543 | 12,543 | |
| Transfer to held for sale | -(1,118,363) | 1,118,363 | |
| Balance, June 30, 2024 | 1,208,586 | - | 1,208,586 |
| Balance, June 30, 2024 | 2,864,803 | - | 2,864,803 |
For details of the exploration evaluation costs, please see note 6 of the condensed consolidated interim financial statements for the nine months ended March 31, 2025.
SILVER VALLEY METALS
SILVER VALLEY METALS
SUMMARY OF QUARTERLY RESULTS
| Three Month Period Ending | Net Earnings / (Loss) | Net Earnings / (Loss) per Share Basic and Diluted (1) (2) |
|---|---|---|
| $ | $ | |
| March 31, 2025 | (210,373) | (0.00) |
| December 31, 2024 | (208,837) | (0.00) |
| September 30, 2024 | 213,390 | 0.00 |
| June 30, 2024 | (16,181) | (0.00) |
| March 31, 2024 | (104,604) | (0.00) |
| December 31, 2023 | (133,341) | (0.00) |
| September 30, 2023 | (129,058) | (0.00) |
| June 30, 2023 | (151,044) | (0.00) |
- Basic per share calculations are made using the weighted-average number of shares outstanding during the period.
- Earnings (loss) per share on a diluted basis is the same as the basic calculation per share as all factors are anti-dilutive.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents, amounts receivable, shares receivable, accounts payable and accrued liabilities, and loan payable.
The Company's financial instruments are exposed to certain risks, including credit risk, interest rate risk, liquidity risk, currency risk and market risk.
(a) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that potentially subject the Company to credit risk consist of cash. The Company's cash are held through a large Canadian financial institution. Management believes the risk of loss to be remote.
(b) 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. In management's opinion, the Company is not exposed to significant interest rate risk.
13
(c) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company monitors and reviews current and future cash requirements and matches the maturity profile of financial assets and liabilities. This is generally accomplished by ensuring that cash is always available to settle financial liabilities. As of March 31, 2025, the Company had cash and cash equivalent on hand of $16,753 (June 30, 2024 - $14,647) available to settle current liabilities of $1,060,743 (June 30, 2024 - $965,462). Accounts payable and accrued liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. Loan payables have contractual maturities of greater than 12 months.
(d) Currency risk
The Company's functional currency is the Canadian dollar. The Company is primarily exposed to currency fluctuations related to accounts payable and accrued liabilities and payment obligations for exploration and evaluation that are denominated in Mexican Pesos and US dollars. As of March 31, 2025, the Company had net current liabilities of $791,464 (June 30, 2024 - $726,821) denominated in Mexican Pesos and net current liabilities of $7,847 (June 30, 2024 - $2,580) denominated in US dollars, translated at 0.0704 pesos to $1 (June 30, 2024 - 0.07484) and 1.4376 US to $1 (June 30, 2024 - $1.3687), respectively. The Company does not actively manage this risk.
(e) Market risk
Market risk is the risk of loss that may arise from changes in market factors such as market prices, foreign exchange rates and interest rates. In management's opinion, the Company is not exposed to significant market risk.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2025, the Company has a net working capital of $306,728 (June 30, 2024 - $914,204), cash on hand of $16,753 (June 30, 2024 - $14,647), and a deficit of $14,442,548 (June 30, 2024 - $14,236,728).
The Company's consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of business. The appropriateness of the going concern assumption is dependent upon the Company's ability to generate future profitable operations and/or generate continued financial support in the form of equity financings. These material uncertainties cast significant doubt regarding the Company's ability to continue as a going concern. Management feels that sufficient working capital will be obtained from public share offerings to meet the Company's liabilities and commitments as they come due. The consolidated financial statements do not reflect any adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classification that would be necessary if the going concern assumption were not appropriate and such adjustments could be material.
The recovery of amounts shown as exploration and evaluation assets is dependent upon the discovery of economically recoverable resources, the ability of the Company to obtain adequate financing to complete development, and upon future profitable operations from the properties or proceeds from the dispositions thereof.
SILVER VALLEY METALS
14
The Company currently has no operations that generate cash flow, and its long-term financial success is contingent upon management's ability to locate economically recoverable resources. This process can take many years to complete, cannot be guaranteed of success, and is also subject to factors beyond the control of management. Factors such as commodity prices, the health of the equity markets and the track record and experience of management all impact the Company's ability to raise funds to complete exploration and development programs.
CAPITAL MANAGEMENT
The Company's objectives when managing capital are as follows:
i. To safeguard the Company's ability to continue as a going concern;
ii. To raise sufficient capital to finance its exploration and development activities on its mineral exploration properties;
iii. To raise sufficient capital to meet its general and administrative expenditures.
The Company manages its capital structure and adjusts it based on the general economic conditions, its short-term working capital requirements, and its planned exploration and development program expenditure requirement. The capital structure of the Company is composed of working capital (deficiency) and shareholders' equity. The Company may manage its capital by issuing flow through or common shares, or by obtaining additional financing.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the consolidated financial statements for the year ended June 30, 2024, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated 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 the revision affects both current and future periods.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at the date of the statement of financial position that could result in a material adjustment to the carrying amounts of assets and liabilities, if actual results differ from assumptions made, relate to, but are not limited to, the following:
i. the recoverability of amounts receivable which are included in the consolidated statements of financial position;
ii. the carrying amount and recoverability of exploration and evaluation expenditures requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after costs are capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off to profit or loss in the period the new information becomes available;
iii. the Company assesses its mineral properties' rehabilitation provision at each reporting date or when new material information becomes available; and
iv. management uses valuation techniques in measuring the fair value of share options granted.
SILVER VALLEY METALS
15
16
Critical accounting judgments
The following accounting policies involve judgments or assessments made by management:
- The determination of when an exploration and evaluation asset move from the exploration stage to the development stage;
- Going concern assumption; and
- Deferred income taxes.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has not participated in any off-balance sheet or income statement arrangements.
RELATED PARTY TRANSACTIONS
The Company paid or accrued the following amounts to related parties during the nine months ended March 31, 2025 and 2024:
| Payee | Description of Relationship | Nature of Transaction | 2025 | 2024 |
|---|---|---|---|---|
| $ | $ | |||
| Brandon Rook | CEO and director | Consulting fees, salaries and wages, rent fees; | 145,800 | 168,600 |
| Gordon J. Fretwell Law Corporation | Company controlled by Gordon Fretwell, officer and former director | Legal fees | - | 4,106 |
| Golden Tree Capital Corp. | Company controlled by Dong Shim, CFO | Accounting fees | 27,000 | 27,000 |
| SHIM & Associates LLP | Company controlled by Dong Shim, CFO | Accounting fees | 9,000 | 9,000 |
| Management and Directors | Share-based payments | 478 | 22,656 | |
| 182,278 | 231,362 |
The services provided by and fees charged by the related parties are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
SILVER VALLEY METALS
Amounts due to related parties as at March 31, 2025 and June 30, 2024 were as follows:
| Payee | Description of Relationship | March 31, 2025 | June 30, 2024 |
|---|---|---|---|
| $ | $ | ||
| Albert Wu & Associates Ltd. | Company controlled by Albert Wu, former CFO | 4,620 | 4,620 |
| Allan Laboucan | Former president, former CEO, and a former director | 36 | 36 |
| Brandon Rook | CEO | 185,628 | 102,600 |
| Golden Tree Capital Corp. | Company controlled by Dong Shim, CFO | 11,025 | 20,200 |
| Gordon J. Fretwell Law Corporation | Company controlled by Corporate Secretary | - | 5,106 |
| SHIM & Associates LLP | Company controlled by Dong Shim, CFO | 2,625 | 8,400 |
| 203,934 | 140,962 |
The amounts due to related parties are included in accounts payable and accrued liabilities and are non-interest bearing, unsecured, and have repayment terms like other non-related party trade payables. The Company has identified its directors and senior officers as its key management personnel. No post-employment benefits, other long-terms benefits and termination benefits were made during the nine months ended March 31, 2025 and 2024.
RISKS AND UNCERTAINTIES
Nature of Mineral Exploration and Mining
At the present time, the Company does not hold any interest in a mining property in production. The Company's viability and potential success lie in its ability to discover, develop, exploit, and generate revenue out of mineral deposits. The exploration and development of mineral deposits involve significant financial risks over a significant period which even a combination of careful evaluation, experience and knowledge may not eliminate. While discovery of a mine may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a site. It is impossible to ensure that the current or proposed exploration programs on exploration properties in which the Company has an interest will result in a profitable commercial mining operation.
The operations of the Company are subject to all the hazards and risks normally incidental to exploration and development of mineral properties, any of which could result in damage to life or property, environmental damage, and possible legal liability for any or all damage. The activities of the Company may be subject to prolonged disruptions due to weather conditions depending on the location of operations in which the Company has interests. Hazards, such unusual or unexpected formation, rock bursts, pressures, cave-ins, flooding, or other conditions may be encountered in the drilling and removal of material. While the Company may obtain insurance against certain risks in such amounts as it considers adequate, the nature of these risks is such that liabilities could exceed policy limits or could be excluded from coverage. There are also risks against which the Company cannot insure or against which it may elect not to insure. The potential costs which could be associated with any liabilities not covered by insurance or more than insurance coverage or compliance with applicable laws and regulations may cause substantial
SILVER VALLEY METALS
17
delays and require significant capital outlays, adversely affecting the future earnings and competitive position of the Company and, potentially, its financial position.
Whether a mineral deposit will be commercially viable depends on several factors, some of which are the attributes of the deposit, such as its size and grade, proximity to infrastructure, financing costs and governmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use, importing and exporting and environmental protection. The effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.
Fluctuating Prices
Factors beyond the control of the Company may affect the marketability of any copper, nickel, gold, platinum, or any other minerals discovered. Resource prices have fluctuated widely and are affected by numerous factors beyond the Company's control. The effect of these factors cannot accurately be predicted.
Competition
The mineral exploration and mining business is competitive in all its phases. The Company competes with numerous other companies and individuals, including competitors with greater financial, technical, and other resources than the Company, in the search for and acquisition of attractive mineral properties. The ability of the Company to acquire properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable properties or prospects for mineral exploration. There is no assurance that the Company will continue to be able to compete successfully with its competitors in acquiring such properties or prospects.
Financing Risks
The Company has limited financial resources and no current revenues. There is no assurance that additional funding will be available to it for further exploration and development of its projects or to fulfill its obligations under applicable agreements. Although the Company has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of the property interests of the Company with the possible dilution or loss of such interests.
Permits and Licenses
The operations of the Company may require licenses and permits from various governmental authorities. The Company believes that it presently holds all necessary licenses and permits required carrying on with activities which it is currently conducting under applicable laws and regulations and the Company believes it is presently complying in all material respects with the terms of such laws and regulations. However, such laws and regulations are subject to change. There can be no assurance that the Company will be able to obtain all necessary licenses and permits required to carry out exploration, development, and mining operations at its projects.
SILVER VALLEY METALS
18
No Assurance of Titles
The acquisition of titles to mineral projects is a very detailed and time-consuming process. Although the Company has taken precautions to ensure that legal title to its property interests is properly recorded in the name of the Company where possible, there can be no assurance that such title will ultimately be secured. Furthermore, there is no assurance that the interest of the Company in any of its properties may not be challenged or impugned.
Environmental Regulations
The operations of the Company are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mineral exploration and mining operations, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards, and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and their directors, officers, and employees. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations.
Conflicts of Interest
The directors and officers of the Company may serve as directors or officers of other public resource companies or have significant shareholdings in other public resource companies. Situations may arise in connection with potential acquisitions and investments where the other interests of these directors and officers may conflict with the interest of the Company. If such a conflict of interest arises at a meeting of the directors of the Company, a director is required by the Business Corporations Act (Ontario) to disclose the conflict of interest and to abstain from voting on the matter.
From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In determining whether the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.
SILVER VALLEY METALS
19
20
MANAGEMENT
The Company is dependent on a relatively small number of key people, the loss of any of whom could have an adverse effect on its operations. Any key person insurance which the Company may have on these individuals may not adequately compensate for the loss of the value of their services. Changes in management since the beginning of the period are summarized as follows:
| Current directors: | Timothy Mosey | Director | Appointed August 22, 2018 |
|---|---|---|---|
| Miroslav Reba | Director | Appointed November 17, 2023 | |
| Brandon Rook | Director | Appointed April 15, 2019 | |
| Darrell Podowski | Director | Appointed April 6, 2021 | |
| Current officers: | Brandon Rook | CEO | Appointed April 15, 2019 |
| --- | --- | --- | --- |
| Dong H. Shim | CFO | Appointed April 25, 2018 |
ADDITIONAL INFORMATION
Additional information relating to the Company is available on SEDAR+ at www.sedarplus.ca.
LATEST OUTSTANDING SHARE DATA
Authorized:
- Class A common - unlimited
- Class B common - unlimited
- Common shares - unlimited
Common shares - The Company has the following common shares issued and outstanding:
| Common Shares | Number of Shares |
|---|---|
| Balance, March 31, 2025 | 57,872,306 |
| Balance, as at the date of this report | 57,872,306 |
SILVER VALLEY METALS
Options outstanding and exercisable at date of this report, post share consolidation, are as follows:
| Expiry Date | Exercise Price | Number of Options |
|---|---|---|
| February 10, 2026 | $ 0.20 | 1,520,000 |
| April 6, 2026 | $ 0.25 | 300,000 |
| July 20, 2026 | $ 0.20 | 120,000 |
| June 21, 2027 | $ 0.20 | 500,000 |
| January 13, 2028 | $ 0.15 | 700,000 |
| Balance, date of this report | 3,140,000 |
21
SILVER VALLEY
METALS