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Rusoro Mining Ltd. — Management Reports 2025
Jun 4, 2025
44992_rns_2025-06-04_a1661123-abed-4483-bf7f-b663258c25b1.pdf
Management Reports
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HUSORO MINING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
This Management's Discussion and Analysis ("MD&A") for Husoro Mining Ltd. ("the Company" or "Rusoro") should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements ("interim financial statements") for the three months ended March 31, 2025 and 2024 and supporting notes as well as the audited consolidated financial statements ("annual financial statements") of the Company and supporting notes and the related annual MD&A ("annual MD&A") for the year ended December 31, 2024 and 2023.
The financial information presented in this MD&A is reported in US dollars, unless otherwise indicated, and is partly derived from the Company's annual financial statements prepared consistent with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). The effective date of this MD&A is June 4, 2025. This MD&A contains "forward-looking statements" that are subject to risk factors set out in a cautionary note contained herein.
Contents of the MD&A
OVERVIEW OF THE COMPANY...2
CONSOLIDATED RESULTS OF OPERATIONS...4
SELECTED QUARTERLY INFORMATION...4
FINANCIAL POSITION...5
LIQUIDITY AND CAPITAL RESOURCES...5
OUTLOOK...6
CONTINGENCIES...6
OFF-BALANCE SHEET ARRANGEMENTS...6
RELATED PARTY TRANSACTIONS...6
DISCLOSURE OF OUTSTANDING SHARE DATA...7
FINANCIAL INSTRUMENTS...7
OTHER RISKS AND UNCERTAINTIES...8
CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING JUDGMENTS...8
PROPOSED TRANSACTIONS...9
FORWARD LOOKING STATEMENTS...9
INTERNAL AND DISCLOSURE CONTROLS OVER FINANCIAL REPORTING...10
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
Overview of the Company
The principal business activities of the Company were previously the acquisition, exploration, development and operation of gold mineral properties. Subsequent to the Nationalization (see below), the Company's main activity has been the management of its arbitration process with the Venezuelan government.
Until March 14, 2012, the Company held a 95% controlling interest in the Choco 10 mine ("the Choco Mine") and a 50% interest in the Isidora mine ("the Isidora Mine"), which the Company operated as part of a joint operation ("the Joint Operation") with the Venezuelan government. The Company also held interests in various exploration and development projects in Venezuela.
On September 16, 2011, the Venezuelan government, through publication in the Official Gazette of Venezuela, enacted a law-decree ("the Decree") reserving to the government of Venezuela exclusive rights for the extraction of gold in Venezuela ("the Nationalization"). The Decree mandated the expiration of all mining concession held by the Company and their reversal to the Venezuelan government together with all related assets and operations. The Decree permitted the Company to reach an agreement with the Venezuelan government to continue operating jointly, in the form of a mixed-interest enterprise ("the Mixed Enterprise"), the mining concessions and mining assets affected by the Nationalization and in which the Company could not own more than a 45% share participation.
The Company was unable to reach an agreement with the Venezuelan government upon the terms and conditions of the migration of its mining assets to the Mixed Enterprise within the designated time periods. Therefore, on March 14, 2012, in accordance with the procedures outlined in the Decree, all of the Company's mining concessions expired by force of the Decree and all related assets and operations reverted to the Venezuelan government who took possession and control in accordance with Venezuelan law becoming the new operator and employer.
Starting March 15, 2012, the Company was relieved of all responsibilities associated to the mining concessions, assets and operations that were subject to expropriation, including without limitation, any contractual, mining, environmental, labor or criminal liability, and for the payment of any tax, fee or contribution of any kind, including any mining or surface tax related to such mining concessions and operations.
In accordance with Venezuelan Labor Law and the Decree, beginning March 15, 2012, the Venezuelan government became the sole and exclusive employer for the workers and employees who provide services for the operations of the mining concessions. The Company is not responsible for the actions or omissions of those workers and employees, by the damages that they may cause or suffer in the exercise of their functions or for the payment of their salaries, bonuses, benefits or any other compensation or benefit generated from the above-mentioned date, as all the workers and employees, starting March 15, 2012, provide their services and run their work daily activities under the exclusive direction, supervision and responsibility of the Venezuelan government.
In June 2012, the Company entered into a Creditors and Shareholders Agreement (the "CSA") with significant equity holders and creditors who agreed not to take any steps or actions to exercise their rights and remedies against the Company until the expiration of a standstill period, subject to various clauses.
Also in June 2012, the Company entered into a litigation funding agreement (the "Litigation Funding Agreement") with a subsidiary (the "Funder"), of the Calunius Litigation Risk Fund LP (the "Fund"). Calunius Capital LLP is the exclusive investment advisor to the Fund, which specializes in funding commercial litigation and arbitration claims. Under the terms of the Litigation Funding Agreement, the Funder agreed to assist in the funding of Rusoro's legal costs in relation to the international arbitration proceedings against the Republic of Venezuela (the "Respondent" or "Venezuela") on a non-recourse basis. Rusoro continued to have complete control over the conduct of the international arbitration proceedings, insofar as the proceedings related to the Company's claims, and continued to have the right to settle with the Respondent, discontinue proceedings, pursue the proceedings to trial and take any action Rusoro considers appropriate to enforce judgment.
In July 2012, the Company filed a Request for Arbitration under the Additional Facility Rules of the World Bank's International Centre for Settlement of Investment Disputes ("ICSID") against Venezuela pursuant to the Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments (the "Treaty").
In March 2013, the Company filed a Statement of Claim in its arbitration against Venezuela, in accordance with the provisions of the Canada-Venezuela Bilateral Investment Treaty. Based on a March 2013, valuation performed by an independent expert, the Company was seeking fair-value compensation of $3.03 billion for all its losses caused by the Nationalization.
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
On August 22, 2016, the Arbitral Tribunal ("Tribunal") operating under the ICSID Additional Facility Rules, awarded ("the Award") the Company compensation of $967.77 million plus pre and post award interest which combined equates to in excess of $1.87 billion as of December 31, 2023. No value has been accrued for the Award as at December 31, 2023, as the ultimate receipt, final settlement amount and the timing of the receipt of the Award is uncertain.
In its Award, the Tribunal upheld the Company's claims that Venezuela breached its obligations under the Treaty by unlawfully expropriating the Company's investments without paying compensation and by imposing certain restrictions on the export of gold. As a result of these breaches, the Tribunal ordered Venezuela to pay compensation of $967.77 million as of the date of the expropriation (September 16, 2011), together with interest accrued between that date and the date of actual payment, calculated at a rate p.a. equal to US$ Libor for one year deposits, plus a margin of 4%, to be compounded annually. The amounts awarded must be paid net of any taxes imposed by Venezuela. The Tribunal also ordered Venezuela to contribute $3.3 million towards Rusoro's costs in the arbitration.
In October 2016, Rusoro received notice that the Bolivarian Republic of Venezuela ("Venezuela") had brought an application before the Paris Court of Appeals to set aside ("recours en annulation") the Award, which was filed by Venezuela in 2017. Rusoro had instructed Freshfields Bruckhaus Deringer and Teynier Pic to represent it in these proceedings, with the support of a special correspondent.
In December 2017, the Company amended its Litigation Funding Agreement and was provided with additional litigation funding of up to $7 million, which is intended to continue the Company's efforts to enforce the Award.
In October 2018, the Company executed a settlement agreement ("Settlement Agreement") with the Venezuelan government whereby the parties agreed that the Company would receive over $1.28 billion in monthly instalments through 2024 in exchange for the Company's mining data and full release of the Award. Under the Settlement Agreement, the Venezuelan government agreed to pay an initial payment of $100 million in November 2018, and upon completion of this initial payment, the Company would suspend legal enforcement of the Award and deliver the Company's mining data to the Venezuelan government. The Company would be entitled to resume legal enforcement of the Award if payment due under the Settlement Agreement is not received by the Company within the periods provided, and the Company also is able to terminate the Settlement Agreement under certain default scenarios. The Venezuelan government retained the right to continue proceedings to set aside the Award at the seat of arbitration in Paris.
As at March 31, 2025 and the date of this report, the Company has not received the payment of $100 million.
In September 2021, the Supreme Court of the State of New York granted the Company's motion to enter a default judgment for $100 million plus interest in favor of Rusoro against Venezuela for breach of the Settlement Agreement dated October 5, 2018 (with further interest at the statutory rate of 9% per annum from the date of judgment to the date of payment). Rusoro will take the necessary steps to enter the order as a judgment, serve it on Venezuela, and vigorously pursue its payment or enforcement as partial payment for the unlawful expropriation of its investments in Venezuela.
In January 2019, the Paris Court of Appeals partially annulled the Award (the "French Court Decision"). Whilst the Paris Court of Appeals upheld the tribunal's finding on the merits that Venezuela is liable for the unlawful expropriation of the Company's investments, it annulled the Award's finding on damages. The French Court Decision did not seek to determine the damages that Venezuela must pay to the Company for its breach of the Treaty.
In March 2021, the French Supreme Court overturned the French Court Decision, therefore reinstating the arbitral Award in full and will allow the Company to continue to vigorously pursue recognition and enforcement of the Award.
In September 2021, Venezuela voluntarily dismissed its appeal of the Award judgment rendered by the U.S. District Court in Washington DC in favor of Rusoro, and against Venezuela.
On July 7, 2023, the U.S. Court of Appeals for the Third Circuit ruled that various parties holding judgments against the Republic of Venezuela, including Rusoro, were entitled to enforce their judgments against property owned by a subsidiary of Petroleos de Venezuela ("PDVSA"), on the grounds that PDVSA was the corporate alter-ego of the Venezuelan state. On this basis, the U.S. District Court for the District of Delaware commenced a sale process on October 23, 2023 whereby the shares of PDV Holding ("PDVH"), a company 100% owned by PDVSA and the indirect owner of CITGO Petroleum Corporation, are to satisfy the judgments of various creditors holding judgments against Venezuela, including Rusoro. Venezuela and PDVSA asked the U.S. Supreme Court to review this ruling, and on January 8, 2024, the Supreme Court denied the petition for certiorari filed by Venezuela and PDVSA. This means that the Third Circuit's ruling authorizing issuance of writs of attachment against the shares of PDVH in satisfaction of creditors' judgments is final and unappealable.
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
On January 8, 2024, the Delaware court designated certain of the judgment creditors in the case, including Rusoro, to be "Additional Judgment Creditors", meaning that they are entitled to share in the proceeds of the sale of the PDVH shares when they are auctioned, subject to a waterfall established by order of the Delaware court. In March 2025, Rusoro agreed to join a Consortium together with Gold Reserve Ltd., Koch Minerals SARL and Koch Nitrogen International SAR to submit a credit bid to purchase 100% of the PDVH Shares. The consortium's bid was not selected as the stalking horse.
Topping bids, intended to increase the purchase price for the PDVH shares, are to be submitted in June 2025. Prior to submitting any final bid, Rusoro shall, among other things, obtain all necessary and advisable consents and approvals of its stakeholders. The sale hearing is scheduled to take place in July 2025, and the transaction will proceed to closing following the Delaware court's issuance of a sale order.
There are material uncertainties surrounding the Nationalization, the Award, and the Settlement Agreement, including, but not limited to the ultimate receipt of payments pursuant to the Settlement Agreement or the timing and/or form of any other compensation otherwise related to the Nationalization. Management is making efforts to work with vendors and potential creditors not covered by the CSA to have them forbear on demanding currently due amounts while it pursues the above-mentioned courses of action. There is, however, no assurance that the sufficient sources of funding described above will be available to the Company, that they will be available on terms and a timely basis that are acceptable to the Company, or that the Company will be able to secure additional funding.
The registered office of the Company is 3200-650 West Georgia Street, Vancouver, British Columbia, Canada and the corporate headquarters is located at 3123-595 Burrard Street, Vancouver, British Columbia, Canada.
Consolidated Results of Operations
Results for the three months ended March 31, 2025:
Loss and comprehensive loss for the three months ended March 31, 2025, increased by $10,411 from the three months ended March 31, 2024. The increase in loss was primarily due to:
- The change in amortized cost of various liabilities created a loss of $20,604 for the current period compared to a loss of $9,496 for the prior comparative period, due to the revaluation of liabilities that are recorded at amortized cost and the increased inflation linked to the asset retirement obligation.
Selected Quarterly Information
| Q1 2025 | Q4 2024 | Q3 2024 (Restated) | Q2 2024 (Restated) | Q1 2024 (Restated) | Q4 2023 (Restated) | Q3 2023 (Restated) | Q2 2023 (Restated) | |
|---|---|---|---|---|---|---|---|---|
| Revenue | - | - | - | - | - | - | - | - |
| Net loss attributable to equity shareholders of the Company as previously presented | (20,604) | (7,522) | (13,184) | (10,137) | (10,545) | (10,767) | (4,632) | (5,250) |
| Restatement adjustments (Note 1) | - | - | (27) | 352 | 352 | 1,325 | 1,325 | 785 |
| Net loss attributable to equity shareholders of the Company | (20,604) | (7,522) | (13,211) | (9,785) | (10,193) | (9,442) | (3,307) | (4,465) |
| Basic and diluted loss per share as previously presented $ | (0.03) | (0.01) | (0.02) | (0.02) | (0.02) | (0.02) | (0.01) | (0.01) |
| Basic and diluted loss per share as restated $ | (0.03) | (0.01) | (0.02) | (0.02) | (0.02) | (0.02) | (0.00) | (0.00) |
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
Restatements (Note 18 of the annual financial statements)
In the preparation of the annual financial statements, management identified certain errors in prior year consolidated financial statements that necessitated that prior year consolidated interim and annual financial statements be restated. The nature of the restatements is more fully explained in Note 18 to the consolidated financial statements for the years ended December 31, 2024 and 2023. The impacts of these restatements on the selected quarterly information is outlined in the table above.
Interim period changes
Over the last 8 quarters the Company's loss has been primarily driven by the revaluation of the gold sales contract with the spot price of gold fluctuating between $1,848 and $3,090. In addition, in Q4 2024 and Q1 2025 the change in decommissioning provision, significantly affected the total loss due to change in the inflation rate of the Venezuela currency.
Financial Position
The Company's assets totalled $556 as at March 31, 2025 (December 31, 2024 - $780).
The Company's working capital deficiency as at March 31, 2025, was $202,878 (December 31, 2024 - $181,895).
The Company did not repay the loan payable on the June 10, 2011 maturity date and, as at March 31, 2025, the remaining principal of $29,750 continues to incur interest at 11% as of June 10, 2011. During the year ended December 31, 2017, the Company had retired $250 of principal. As at March 31, 2025, the Loan was still in default with $29,750 in principal and $107,649 outstanding (December 31, 2024 - $29,750 in principal and $103,135). The loan payable is carried at management's estimate of amortized cost of $78,033 (December 31, 2024 - $75,584), however the investors have become parties to the CSA. The loan is held in US dollars and is secured by share pledges over the Company's subsidiaries which prior to the Nationalization held the mining concessions for the Choco Mine and the San Rafael El Placer and Increible 6 mineral properties, but excluding the Isidora Mine. On June 14, 2012, the loan Lenders signed the CSA whereby they agreed not to take any steps or actions to exercise their rights and remedies against the Company until the expiration of a standstill period, subject to various clauses. In consideration for the CSA, the Lenders were provided a contingent success fee in addition to amounts due and payable under the Loan of 20% of the Loan. See Note 15 of the interim financial statements for more detailed information.
As at March 31, 2025 and December 31, 2024, all cash was held in Canadian bank accounts.
In March 2012, as a result of the Nationalization, the Company wrote-off the remaining balances of mineral properties and inventories. As a result of the significant asset write-downs done in 2012 and Q4 2011, as at March 31, 2025, the Company presents a shareholder's deficiency rather than equity on the face of its statement of financial position, as the Company's liabilities exceed the Company's assets.
Liquidity and Capital Resources
The Company's cash position was $556 as at March 31, 2025 (December 31, 2024 - $780).
Under the terms of the Litigation Funding Agreement, the Funder has agreed to assist in the funding of Rusoro's legal costs in relation to the international arbitration proceedings against the Republic of Venezuela (the "Respondent") on a non-recourse basis as well as funding a reasonable amount of corporate costs. Pursuant to the Litigation Funding Agreement, the Company entered into the CSA with significant equity holders and creditors who agreed not to take any steps or actions to exercise their rights and remedies against the Company until the expiration of a standstill period, subject to various clauses.
Since inception to the date of this report, the Funder has approved approximately $17 million in payments to the Company and its vendors as recoveries on litigation and corporate overhead costs. The Company has $Nil that can be drawdown in accordance with the terms of the Litigation Funding Agreement as at the date of this report. Recoveries of $nil were received during the three months ended March 31, 2025 (December 31, 2024 - $nil).
There are material uncertainties surrounding the Nationalization and the related Award and Settlement Agreement, including, but not limited to the timing and/or form of the recovery of compensation.
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BUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
Outlook
As a result of the Nationalization, the Company's sole recourse has been to file a Request for Arbitration under the ICSID Additional Facility Rules against the Bolivarian Republic of Venezuela alleging violations of the provisions of the Treaty. The Request for Arbitration was filed in July 2012. On August 22, 2016, the Tribunal, awarded the Company compensation of $967.77 million plus pre and post award interest, which combined equates to in excess of $2.14 billion as at the date of this report. The Company's objective is to diligently pursue the collection of the Award.
Contingencies
In addition to the financial liabilities with contingent repayment terms disclosed Note 8, 9 and 15 of the interim financial statements, the Company has various contingent liabilities which are dependent upon successful recovery of compensation pursuant to the Award and Settlement Agreement. As of the date of this report, the Company has not received the initial payment of $100 million nor any other payments claimed in its litigation against the government of Venezuela (Note 1 of the interim financial statements). Due to the uncertainty of the amount of the Award, the enforcement and collection of the Award, the receipt of the payments under the Settlement Agreement (or future litigation success), or ultimately, the Company's ability to receive fair compensation for the expropriation of its investments in Venezuela, the Company only considers the payment to be received when funds are received by the Company in a bank account which is fully controlled by the Company. As at March 31, 2025 and the date of this report, the Company assessed that the likelihood of receiving the payments or other compensation is indeterminable and the contingent obligations arising as a result of the collection of the Award or Settlement Agreement cannot be reasonably estimated.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Related Party Transactions
The nature of transactions undertaken and the relationships with related parties of the Company are as follows:
| Relationship with the Company | Nature of transactions | |
|---|---|---|
| Company A | An officer/director of the Company and a director of the Company are also an officer and director, respectively, of Company A. | Machinery and facilities rental and provision of general mining-related services. |
| Company B | A director of the Company is also a partner of Company B. | Provision of legal services. |
| Company C | A director of the Company is also an officer of Company C. | Provision of corporate administrative services. |
In addition to related party transactions and balances disclosed elsewhere in these interim financial statements, the Company entered into transactions with related parties as outlined below:
| Three months ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| $ | $ | |
| Provision of corporate administrative services | 30 | 30 |
| 30 | 30 |
Included in accounts payable and accrued liabilities (Note 4 of the interim financial statements) are amounts due to Company A, B, and C of $1,442 (December 31, 2024 - $1,442). These amounts are unsecured, due on demand and non-interest bearing.
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
Compensation of Management and Directors
The remuneration of the directors and key management personnel during the period was as follows:
| Three months ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| $ | $ | |
| Salaries and director's fees | 275 | 208 |
| 275 | 208 |
Included in accounts payable and accrued liabilities (Note 5 of the interim financial statements) is $4,560 (December 31, 2024 - $4,285) related to compensation of management and directors.
Disclosure of Outstanding Share Data
As at the date of this report, the Company has 616,232,732 common shares issued and outstanding, 27,485,000 share options outstanding and exercisable and 12,556,691 warrants outstanding.
Financial Instruments
Financial Assets and Liabilities
The Company's financial instruments consist of the following: cash, accounts payable and accrued liabilities, a loan payable, obligations under the Litigation Funding Agreement, a derivative financial liability ("gold delivery contract") (Note 6) and promissory notes payable.
The carrying amounts of cash, accounts payable and accrued liabilities, obligations under the Litigation Funding Agreement, and promissory notes payable are considered to be reasonable approximations of their fair values due to the short-term nature of these instruments. The gold delivery contract is marked to market at each reporting period based on the current spot price of gold and the number of gold ounces owing to the gold buyer (Note 6), and as such, is a reasonable approximation of the fair value. Management reviewed all significant financial instruments held by the Company and determined that no significant differences between fair value and carrying value existed as at March 31, 2025.
Financial instruments that are measured subsequent to initial recognition at fair value are grouped into a hierarchy based on the degree to which the fair value is observable.
- Level 1 fair value measurements are derived from unadjusted, quoted prices in active markets for identical assets or liabilities.
- Level 2 fair value measurements are derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability directly or indirectly.
- Level 3 fair value measurements are derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.
The gold delivery contract, being a derivative financial liability, is measured using Level 2 inputs, which is the spot gold price.
Financial Instrument Risk Exposure
The Company thoroughly examines the various financial instrument risks to which it is exposed, and assesses the impact and likelihood of those risks. Where material, these risks are reviewed and monitored by management. There have not been any significant changes from the previous period as to how these risks are reviewed and monitored by management. The types of financial instrument risk exposures and the objectives and policies for managing these risks exposures are described below.
Credit Risk
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. Management does not believe the Company is exposed to any significant concentration of credit risk as all of its cash is held with Canadian banks.
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
Liquidity Risk
Liquidity risk is the risk that the Company will be unable to meet its obligations associated with financial liabilities as they fall due. The Company manages liquidity risk by monitoring cash and other financial resources available to meet its maturing obligations. The Company currently has a working capital deficiency of $202,878. The Company assesses liquidity risk as high.
Market Risk
The significant market risk exposures to which the Company is exposed are interest rate risk and currency risk.
i. Interest Rate Risk
Interest rate risk is the risk that the future cash flows and fair values of the Company's financial instruments will fluctuate because of changes in market interest rates. The majority of the Company's financial instruments, if applicable, have fixed interest rates and therefore management does not believe the Company is exposed to any significant concentration of interest rate risk.
ii. Currency Risk
Currency risk is the risk that the value of the Company's financial instruments will fluctuate due to changes in foreign exchange rates. The Company is exposed to currency risk as the Company's financial assets and liabilities include items denominated in BsS and C$.
Changes in the applicable exchange rate may result in a decrease or increase in foreign exchange gains or losses recognized in profit or loss. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.
The Company's Venezuelan operations and cash holdings are currently subject to currency and exchange controls. These government-imposed controls may adversely affect the Company as such controls limit the Company's ability to flow US dollars out of the country for US dollar operating and capital expenditures.
As at March 31, 2025, the Company had a net monetary liability position of $nil (December 31, 2024 - $nil) denominated in Venezuelan Bolivars.
As at March 31, 2025, the Company had cash of $617, and amounts payable and accrued liabilities of $1,084, expressed in Canadian dollars.
Significant Estimates – Amortized Cost of Financial Instruments with Contingent Repayment Terms
The Company has financial liabilities for which the timing and amount of repayment are contingent on the outcome of litigation proceedings (Notes 8, 9 & 15 of the interim financial statements).
Estimating amortized cost under IFRS 9 for these liabilities requires significant judgment, particularly in forecasting the probability, timing, and amount of future cash outflows.
Given the inherent uncertainty, actual results may differ materially from management's current estimates. Key factors influencing variability include changes in the expected success rate of the litigation, the settlement amount, and the timing of cash outflows.
In accordance with IFRS 9.B5.4.6, the Company reassesses expected cash flows at each reporting date, and any resulting adjustments to amortized cost are recognized through profit or loss. The original effective interest rate is not adjusted.
Other Risks and Uncertainties
For a detailed listing of the risk factors faced by the Company, please refer to the Company's MD&A for the years ended December 31, 2024 and 2023 as on SEDAR+ at www.sedarplus.ca.
Critical Accounting Estimates and Accounting Judgments
The preparation of financial statements under IFRS Accounting Standards requires management to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
The Company's management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised.
The accounting estimates, judgements and assumptions used in the preparation of the Financial Statements are consistent with those applied and disclosed in the notes to the Annual Financial Statements.
Proposed Transactions
As at March 31, 2025 and the MD&A Date, the Company had no proposed transactions.
Forward Looking Statements
Certain statements in this MD&A and certain information incorporated herein by reference constitute "forward-looking information" within the meaning of applicable securities laws. Such forward-looking information includes, without limitation, statements with respect to the future financial or operating performance of the Company, its subsidiaries, projects and arbitration proceedings, the future price of gold and other precious metals, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, reserve determination and reserve conversion rates. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. While the Company has based these statements on its expectations about future events as at the date that such information was prepared, the statements are not guarantees of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking information. The estimates and assumptions of the Company contained or incorporated by reference in this MD&A which may prove to be incorrect, include, but are not limited to: (1) the exchange rate between the C$, the BsS and the US dollar being approximately consistent with current levels; (2) certain price assumptions for gold (3) availability and sufficiency of litigation funding to actively pursue the enforcement and collection of the Award; (4) corporate overhead costs and litigation spending remain within the Company's expectations; and (5) the CSA remains in effect until the settlement of the Award.
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HUSORO MIRING
2025 FIRST QUARTER MANAGEMENT DISCUSSION & ANALYSIS
Known and unknown factors could cause actual results or events to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as diesel fuel and electricity); changes in interest rates; disruption to the credit markets and delays in obtaining financing; inflationary pressures; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, Venezuela or other countries in which the Company does or may carry on business; business opportunities that may be presented to, or pursued by the Company; the Company's ability to successfully integrate acquisitions; operating or technical difficulties in connection with mining or development activities; actual results of exploration activities; the possibility of cost overruns or unanticipated expenses; employee relations; illegal miners; the speculative nature of gold exploration and development, including the risks of obtaining and renewing necessary licenses and permits; the impact of Venezuelan law on the Company's operations; diminishing quantities or grades of reserves; adverse changes in the Company's credit rating; contests over title to properties particularly title to undeveloped properties; the occurrence of natural disasters, hostilities, acts of war or terrorism; corruption and uncertain legal enforcement; requests for improper payments; on the Company's ability to market gold produced and on its results of operations; on the Company's ability to obtain necessary authorizations from the CBV to export gold and on the Company's ability to retain any portion of the funds from sales of exported gold outside of Venezuela; on the ability to access SITME which impact the Company's ability to obtain US dollars to fund operating and capital expenditures; the result or outcome of management's efforts to remediate the potential implications of the transactions that were not in compliance with certain Venezuelan laws and regulations. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formation, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or inability to obtain insurance to cover these risks). All of the forward-looking statements made in or incorporated by reference in this MD&A are qualified by these cautionary statements and those made in the section of this MD&A entitled "Financial Instruments" and "Other Risks and Uncertainties".
Although we have attempted to identify factors that may cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actual results, performances, achievements or events to not be as anticipated, estimated or intended. Also, many of the factors are beyond our control. As actual results and future events could differ materially from those anticipated in such statements and information, readers should not place undue reliance on forward-looking statements or information. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise. All forward-looking statements and information made or incorporated by reference herein are qualified by this cautionary statement.
Internal and Disclosure Controls Over Financial Reporting
The Company is exempted from providing certifications regarding its disclosure controls and procedures as well as regarding its internal control over financial reporting as a "venture issuer". The Company is required to file basic certificates, which it has done for the year ended December 31, 2024. The Company makes no assessment relating to the establishment and maintenance of (i) disclosure controls and procedures or (ii) internal control over financial reporting (as such terms are defined under Multilateral Instrument 52-109) as at March 31, 2025.
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