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Saga Metals Management Reports 2025
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Management Reports
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SAGA METALS CORP.
Management's Discussion and Analysis
(Expressed in Canadian Dollars, unless otherwise noted)
For the three and nine months ended April 30, 2025 and 2024
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
MANAGEMENT'S DISCUSSION AND ANALYSIS
This management discussion and analysis ("MD&A") of the financial condition and results of Saga Metals Corp. ("SAGA" or the "Company"). SAGA is an entity incorporated under the BC Business Corporations Act on January 10, 2023. The Company is focused on the acquisition, exploration and development of resource properties in Canada. The Company's head office and records offices are located at suite 2288 – 1177 W Hastings Street, Vancouver, BC, Canada, V6E 2K3. On September 24, 2024, the Company completed its initial public offering ("IPO") and received approval from the TSX Venture Exchange ("TSXV") to list its common shares under the symbol SAGA. This MD&A is provided to assist our readers to assess our financial condition, material changes in our financial condition and our financial performance, including our liquidity and capital resources, for the three and nine months ended April 30, 2025. The information in this MD&A is current as of June 27, 2025 and should be read in conjunction with the unaudited condensed interim financial statements for the three and nine months ended April 30, 2025 and 2024. All dollar figures included therein and in the following MD&A are quoted in Canadian dollars.
FORWARD-LOOKING STATEMENTS
This discussion contains "forward-looking statements" that are not historical facts and involve risks and uncertainties. Such information, although considered to be reasonable by the Company's management at the time of preparation, may prove to be inaccurate and actual results may differ materially from those anticipated in the statements made.
This MD&A contains forward-looking statements that reflect the Company's current expectations and projections about its future results and plans, including, but not limited to, statements around the Company's anticipated future drill targets, statements regarding perceived merit of properties, timing regarding the commencement or completion and costs of exploration programs, estimates and plans in respect of LCT readings on the Company's properties, anticipated results and expectations relating to exploration and drill results, plans and goals for the Company's properties, including the Double Mer Property, the Legacy Lithium Property, the Radar Titanium-Vanadium Property and the North Wind Iron Project, goals and expectations in respect of the planned exploration programs on the Company's properties, the Company's future plans for its business, and such other statements that are not historical facts. When used in this MD&A, words such as "will", "estimate", "intend", "expect", "anticipate", "plan", "potential", "anticipates", "goal" or the negative thereof and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks and uncertainties include, but are not limited to: the availability of sources of income to generate cash flow and revenue; the dependence on management and directors; conflicts of interest; risks relating to the receipt of the required licenses and permits; risks relating to additional funding requirements; due diligence risks; a downturn in general economic conditions; impact of political and economic instability relating to international conflicts; a decreased demand or price of precious and base metals; delays in the start of projects with respect to property interests; potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges; and other factors beyond the Company's control that are described in the Company's continuous disclosure materials on SEDAR+ at www.sedarplus.ca.
The forward-looking statements contained herein are based on certain key expectations and assumptions, including: (i) expectations and assumptions concerning timing and completion of the Company's initial public offering and listing of the Company's common shares for trading on the TSX Venture Exchange; (ii) expectations and assumptions concerning the success of the operations of the Company; (iii) management's current expectations, estimates and assumptions about current property interests; (iv) assumptions respecting the global economic and political environment, financial markets and the market price and demand for uranium and lithium; (v) the Company's ability to manage its property interests and operating costs; (vi) the Company's future cash requirements and the ability to raise the funding necessary to carry out the Company's planned work programs; (vii) the Company's ability to attract and retain key staff; and (viii) that the characteristics of samples from certain of the Company's mineral properties are reflective of the deposit as a whole.
Page 2 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date otherwise specifically indicated herein.
Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this MD&A, actual events may differ materially from current expectations. Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
COMPANY OVERVIEW
The Company is a diversified critical mineral exploration company whose principal business is the acquisition and exploration of mineral assets that support the global green energy transition. The Company is considered to be in the exploration stage and currently has interests in five mineral projects in Canada:
(1) the Double Mer Project, a uranium exploration project consisting of an aggregate of 1,024 claims covering an area of 25,600 hectares in eastern central Labrador; 90 km northeast of Happy Valley, Goose Bay, which is the subject of the Double Mer Uranium Technical Report;
(2) the Legacy Lithium Project, an LCT spodumene pegmatite lithium exploration project consisting of an aggregate of 663 claims covering an area of 34,243.76 hectares in the Eeyou Istchee James Bay region of Quebec, which is the subject of the Legacy Lithium Technical Report and the Rio Tinto option to joint venture agreement;
(3) The Amirault Lithium Project, covering 611 claims spanning 31,605.44 hectares contiguous to the Legacy Lithium Project and increases the Company's foothold of the striking paragneiss trend;
(1) the Radar Titanium-Vanadium Project, a titanium-vanadium layered mafic intrusion exploration project consisting of an aggregate of 967 claims covering an area of 24,175 hectares in Cartwright, Goose Bay region of Labrador; and
(2) the North Wind Iron Project, consisting of 255 claims comprising 6,375 hectares, located in west central Labrador.
The Company's material properties are the Double Mer Uranium Property, which is the subject of the Double Mer Uranium Technical Report, and the Legacy Lithium Property, which is the subject of the Legacy Lithium Technical Report.
Double Mer Uranium Project
The Company's Double Mer Uranium project has seen significant exploration at different periods of time between 1970 through 2008. The Uranium radiometrics highlight an 18 km east-west linear trend averaging approximately 500 meters in width. With millions of dollars in historical work spent on Double Mer, SAGA has confirmed a 14 km strike of anomalous rock samples and further verified the property's uranium radiometric trend producing multiple Counts per Second (CPS) readings above 5,000 CPS, with notable peaks of 22,000 CPS in an outcrop and 27,000 CPS in a sub-rounded boulder—surpassing the historical 21,000 CPS benchmark. SAGA's exploration efforts during the 2024 field season identified three key zones along the prospective trend that represent the highest potential for further uranium exploration: Luivik, Nanuk and Katjuk zones.
The property sits within the northeastern part of the Grenville Structural Province and contains similarly linked geology to the Central Mineral Belt located just north of the property boundary and host to other notable Uranium projects including Atha Energy and Paladin Energy.
The Company spent the latter part of SAGA's fiscal Q2 and early part of Q3 completing restoration on the camp located 1 km from the Luivik zone.
Page 3 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
Legacy Lithium Property
SAGA owns the Legacy Lithium Property in Quebec's Eeyou Istchee James Bay region which is comprised of two projects: Legacy Lithium Project and Amirault Project. The Legacy Lithium project is being developed in partnership with Rio Tinto. In July 2024, the Company announced an option to joint venture agreement with Rio Tinto Exploration Canada. The Legacy Lithium project was further expanded through the acquisition of the Amirault Lithium Project. Together, these properties cover 65,849 hectares and share significant geological continuity with other major players in the area, including Rio Tinto, Winsome Resources, Azimut Exploration, and Loyal Lithium.
In addition to the uranium and lithium projects, SAGA owns a 21,750-hectare land package just 10kms south of the coastal city of Cartwright, Labrador, known as the Radar Titanium-Vanadium Project as well as a 6,375 hectare land package southwest of Shefferville in Labrador, known as the North Wind Iron Project.
Radar Titanium-Vanadium (Ti-V) Project
The Company's 100%-owned Radar Property is located 10 km from the coastal city of Cartwright, Labrador, benefiting from tremendous infrastructure, including road access, deep-water port, airstrip and nearby hydro-electric power. The Radar Property comprises 24,175-hectares and entirely encloses the Dykes River intrusive complex mapped at 160km² on surface.
The Dykes River intrusive complex is a recently recognized Mesoproterozoic layered mafic intrusion (Gower, 2017). It has gained attention due geological similarities to large AMCG-type intrusions and a very extensive titanium-vanadium-iron (Ti-V-Fe) rich layer.
The 2024 Radar Ti-V exploration program focused on expanding prospecting, geological mapping, and soil sampling in areas near previously identified geophysical anomalies. These efforts have produced results that reinforce Radar's potential for hosting high-grade titanium and vanadium mineralization with grades up to 11.1% TiO2 and 0.66% V2O5. Advanced geophysics and magnetic inversion interpretation clearly outlined the phases within the layered mafic intrusion and mineralization potential over 600m at depth, creating drill-ready targets.
Radar Ti-V-Fe Project 2025 Winter Drill Program Highlights:
- Analytical results have been received on all 7 diamond drill holes from the 2025 winter program.
- Combined with petrographic analysis, these assays confirm that the primary economic mineral is vanadiferous titanomagnetite—favorable for simplified metallurgical processing.
- Notable intercepts of vanadiferous titanomagnetite from the 2025 winter drill program include:
- 20.2 meters grading 31.35% Fe, 6.32% TiO₂, and 0.435% V₂O₅ in HEZ-07
- 57.7 meters grading 27.09% Fe, 5.305% TiO₂, and 0.365% V₂O₅ in HEZ-07
- 25.0 meters grading 19.92% Fe, 4.14% TiO₂, and 0.213% V₂O₅ in HEZ-05
- 31.5 meters grading 25.95% Fe, 5.34% TiO₂ and 0.28% V₂O₅ in HEZ-01
- 50 meters grading 49% Fe, 4.74% TiO₂ and 0.305% V₂O₅ in HEZ-04
- 28 meters grading 11% Fe, 4.22% TiO₂, and 0.214% V₂O₅ in HEZ-06
- 37 meters grading 4% Fe, 4.17% TiO₂, and 0.069% V₂O₅ in HEZ-02
- 55 meters grading 37% Fe, 4.07% TiO₂, and 0.051% V₂O₅ in HEZ-03
- Titanomagnetite-rich zones average between 20% and 40% titanomagnetite, with localized massive layers exceeding 60%.
- Drilling has confirmed the presence of oxide layering and associated magnetic anomalies to vertical depths of up to 300 meters.
Page 4 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
- Current drilling has tested just 1/40th of the identified 20 km strike extent of the oxide layering zone within the Dykes River Intrusion
North Wind Iron Ore Project
The North Wind Iron Ore project sits within the Labrador Trough, an extensive 1,100-kilometer suite of Proterozoic rocks, is renowned for hosting world-class iron ore deposits and is a major hub for iron ore exploration. The project contains 8 historical drill holes which made up part of the New Millenium Iron's resource estimate 43-101 in 2013. The average grade of the drill holes which now sit within the North Wind Iron property was 20.74% Fe over the complete 8 drill holes and total 590 meters drilled with the highest graded stratigraphy being the LRGC averaging 24.76% Fe over the total 277 meters of this stratigraphic unit drilled and intercepted over 8 holes.
During the 2024 field season, SAGA's exploration team took 24 samples from the Sokoman Formation and returned assays ranging from 4.88% to 84.57%. The highest grades concentrated in the middle and lower iron formation members, spanning over a 4km NW-SE trend with an impressive 600–700 meters in combined width. SAGA further ran Davis Tube separation techniques confirming the presence of magnetite-rich taconite ore, along with high-purity hematite, limonite, and goethite. These results are comparable to regional resources at the KéMag, Sheps Lake, and Perrault Lake deposits, which boast strong resource estimates.
SAGA's focus is on advancing its portfolio of critical mineral projects. As analytical results are obtained, reviewed and interpreted by SAGA's in-house geological team, future exploration initiatives and programs are developed in an effort to achieve value creation for stakeholders of the Company
Capital Expenditure
The Company has no commitments for capital expenditures.
SELECTED ANNUAL INFORMATION
| For the year ended July 31, 2024 | Period from incorporation from January 10, 2023 to July 31, 2023 | |
|---|---|---|
| $ | $ | |
| Net loss and comprehensive loss for the period | (1,174,272) | (211,358) |
| Basic and diluted loss per share | (0.07) | (0.10) |
| July 31, 2024 | July 31, 2023 | |
| $ | $ | |
| Working capital (deficiency) | 397,715 | 1,143,405 |
| Total assets | 3,368,624 | 1,634,485 |
| Total liabilities | 502,086 | 92,975 |
| Shareholders' equity (deficiency) | 4,195,168 | 1,695,868 |
| Deficit | (1,385,630) | (211,358) |
SUMMARY OF QUARTERLY RESULTS
| Three-months period ended | April 30, 2025 | January 31, 2025 | October 31, 2024 | July 31, 2024 |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Net loss | (399,651) | (884,597) | (909,835) | (610,446) |
| Net income (loss) and comprehensive income (loss) | 42,403 | (821,009) | (705,221) | (610,446) |
| Basic and diluted loss per share | 0.00 | (0.03) | (0.03) | (0.04) |
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
| Three-months period ended | April 30, 2024 | January 31, 2024 | October 31, 2023 | July 31, 2023 |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Net loss | (349,860) | (78,975) | (134,991) | (165,324) |
| Net loss and comprehensive loss | (349,860) | (78,975) | (134,991) | (165,324) |
| Basic and diluted loss per share | (0.02) | (0.00) | (0.02) | (0.33) |
The Company was incorporated on January 10, 2023. Net loss and comprehensive loss observed throughout fiscal 2023 was comprised of management and consulting fees incurred during the quarters. Throughout the quarters in fiscal 2024, net loss and comprehensive loss was primarily driven by management fees, professional fees, listing expenses, and share-based compensation in support of the Company's corporate activities, including undergoing an IPO which completed near the end of September 2024. The primary activities impacting net loss during the fiscal quarters in 2025, were associated with the closing of the IPO in November 2024, the closing of an additional private placement in December 2024, as well as various corporate and property exploration activities. During the nine months ended April 30, 2025, the Company recognized a flow-through share premium liability recovery of $490,366. In addition, the Company received a Junior Exploration Assistance ("JEA") grant of $225,000 from the government of Newfoundland in connection with its exploration activities on its mineral properties located in the province.
RESULTS OF OPERATIONS
For the three months ended
| April 30, 2025 | April 30, 2024 | $ Movement | % Movement | |
|---|---|---|---|---|
| Operating Expenses | ||||
| Advertising and marketing | $ 30,119 | $ 21,920 | 8,199 | 37% |
| Bank fees | 174 | 77 | 97 | 126% |
| Communications | 4,386 | 1,394 | 2,992 | 215% |
| Consulting fees | 137,000 | 85,250 | 51,750 | 61% |
| Depreciation | 4,877 | 1,333 | 3,544 | 266% |
| Dues and subscriptions | 292 | 166 | 126 | 76% |
| Exploration and evaluation expense | 72,843 | 3,210 | 69,633 | 2169% |
| Fuel | 11,032 | 594 | 10,438 | 1757% |
| Listing expense | 45,698 | 17,450 | 28,248 | 162% |
| Insurance | 11,557 | - | 11,557 | 100% |
| Meals and entertainment | 3,836 | 3,717 | 119 | 3% |
| Office expenses | 1,405 | 1,917 | (512) | -27% |
| Professional fees | 9,360 | 100,816 | (91,456) | -91% |
| Rent | 3,000 | 3,000 | - | 0% |
| Share based compensation | 13,122 | 86,538 | (73,416) | -85% |
| Transfer agent and regulatory expense | (7,586) | 88 | (7,674) | -8720% |
| Travel expenses | 58,536 | 22,390 | 36,146 | 161% |
| Operating loss | $ (399,651) | $ (349,860) | ||
| Other income and expenses | ||||
| Flow-through premium recovery | 217,807 | - | 217,807 | 100% |
| Other income | 225,002 | - | 225,002 | 100% |
| Other expenses | (755) | - | (755) | 100% |
| Net income (loss) and comprehensive income (loss) | $ 42,403 | $ (349,860) |
During the three months ended April 30, 2025, the Company incurred various operating costs in support of on-going corporate activities. In addition, the Company was actively conducting exploration related activities on its mineral properties. The Company had significant activities in connection with executing its exploration strategies over its mineral properties based in Quebec and Newfoundland and Labrador respectively. The following expense and changes from the comparative period are noted:
Page 6 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
- Consulting fees relate to fees paid to members of key management including the CEO, CFO, and CGO, as well as fees paid to consultants providing corporate finance advisory services. The Company did not incur any consulting expenses associated with advisory services in the comparative period.
- The Company had significant exploration activities across its various mineral properties during the three months ended April 30, 2025 as compared to April 30, 2024. Consequently, there was significantly more fuel and exploration expenses observed in the current period.
- Costs associated with the Company's IPO include listing expense and portion of professional fees necessary for the IPO process. There were no such expenses incurred during the comparative period.
- The Company incurred insurance and transfer agent expenses during the three months ended April 30, 2025 as a result of its public company status and governance requirements. The Company was not a public company in the comparative period and did not have to incur such expenses in the comparative period. The Company also required insurance coverage over its exploration activities which were limited in the comparative period.
- The Company incurred more legal fees during the three months ended April 30, 2024 due to go-public efforts during this period. During the three months ended April 30, 2025, there was less legal activity required.
- The Company incurred share-based compensation expenses in connection with the grant of stock options to external consultants of the Company. In the comparative period, share-based compensation was higher due to the issuance of PSUs to the CEO and CGO of the Company.
- During the three months ended April 30, 2025, the Company incurred various eligible flow-through expenditures resulting in the recognition of a flow-through premium recovery which is presented as other income in the statement of loss and comprehensive loss. There were no flow-through financings and therefore no recovery income observed in the comparative period.
- The Company received a JEA grant of $225,000 from the government of Newfoundland in connection with its exploration activities on its mineral properties located in the province. There was no such grant received in the comparative period.
Page 7 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
For the nine months ended
| April 30, 2025 | April 30, 2024 | $ Movement | % Movement | |
|---|---|---|---|---|
| Operating Expenses | ||||
| Advertising and marketing | $ 666,672 | $ 37,604 | 629,068 | 1673% |
| Bank fees | 795 | 242 | 553 | 229% |
| Communications | 18,767 | 3,662 | 15,105 | 412% |
| Consulting fees | 332,033 | 213,328 | 118,705 | 56% |
| Depreciation | 10,393 | 3,999 | 6,394 | 160% |
| Dues and subscriptions | 919 | 860 | 59 | 7% |
| Exploration and evaluation expense | 221,869 | 9,185 | 212,684 | 2316% |
| Fuel | 139,511 | 2,322 | 137,189 | 5908% |
| Foreign exchange | 2,933 | - | 2,933 | 100% |
| Listing expense | 264,272 | 17,450 | 246,822 | 1414% |
| Insurance | 31,747 | - | 31,747 | 100% |
| Meals and entertainment | 13,587 | 7,352 | 6,235 | 85% |
| Office expenses | 2,892 | 2,529 | 363 | 14% |
| Professional fees | 132,810 | 136,973 | (4,163) | -3% |
| Rent | 9,000 | 7,750 | 1,250 | 16% |
| Share based compensation | 201,589 | 86,538 | 115,051 | 133% |
| Transfer agent and regulatory expense | 29,243 | 263 | 28,980 | 11019% |
| Travel expenses | 115,051 | 33,768 | 81,283 | 241% |
| Operating loss | $ (2,194,083) | $ (563,825) | ||
| Other income and expenses | ||||
| Flow-through premium recovery | 490,366 | - | 490,366 | 100% |
| Other income | 225,002 | - | 225,002 | 100% |
| Other expenses | (5,112) | - | (5,112) | 100% |
| Net loss and comprehensive loss | $ (1,483,827) | $ (563,825) |
During the nine months ended April 30, 2025, the Company incurred various operating costs all in support of going corporate activities, including the second tranche of an IPO offering which closed in November 2024. The Company saw increased expenditures associated with being a public company. Throughout the fiscal quarters of fiscal 2025, the Company had significant activities in connection with executing its exploration strategies over its mineral properties based in Quebec and Newfoundland and Labrador respectively. The following expense and changes from the comparative period are noted:
- Advertising and marketing expense were related to investor relations and promotion of the Company for equity financing purposes. In the comparative period ended April 30, 2024, no such activity was necessary given the Company had not yet listed and was not public.
- Consulting fees relate to fees paid to members of key management including the CEO, CFO, and CGO, as well as fees paid to consultants providing corporate finance advisory services. The Company did not incur any consulting expenses associated with advisory services in the comparative period.
- The Company had significant exploration activities across its various mineral properties during the nine months ended April 30, 2025 as compared to nine months ended April 30, 2024. Consequently, there was significantly more fuel and exploration expenses observed in the current period.
- During the nine months ended April 30, 2025, the Company incurred significant costs associated with the Company's IPO include listing expense and portion of professional fees necessary for the IPO process. During the comparative period, go-public efforts were on-going and listing expenses had yet to be incurred.
Page 8 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
-
The Company incurred insurance and transfer agent expenses during the nine months April 30, 2025 as a result of its public company status and governance requirements. The Company was not public in the comparative period. The Company also required insurance coverage over its exploration activities which were limited in the comparative period.
-
The Company incurred share-based compensation expenses in connection with the granting of stock options to members of key management as well as external consultants in connection with services rendered. There was less share-based compensation in the comparative period as there was no granting of stock options; in the comparative period, share-based compensation was all related to the issuance of PSUs to the CEO and CGO of the Company.
-
The Company incurred significantly more indirect travel costs associated with its exploration of its mineral properties during the nine months ended April 30, 2025. There was limited travel activity in the comparative period.
-
The Company raised flow-through financing as part of its IPO offering as well in subsequent private placement financings post IPO. For accounting purposes, a flow-through premium liability was recognized on closing of the IPO and the private placements. Subsequently, during the nine months ended April 30, 2025, the Company incurred various eligible flow-through expenditures resulting in the recognition of a flow-through premium recovery which is presented as other income in the statement of loss and comprehensive loss. There were no flow-through financings in the comparative period.
-
The Company received a JEA grant of $225,000 from the government of Newfoundland in connection with its exploration activities on its mineral properties located in the province. There was no such grant received in the comparative period.
OUTSTANDING SHARE DATA
As of the date of this MD&A the Company has the following outstanding equity securities outstanding:
| Type | # Outstanding |
|---|---|
| Common shares | 41,094,133 |
| Share purchase warrants | 11,899,101 |
| Stock options | 1,170,000 |
| RSUs | 40,000 |
Page 9 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
Authorized share capital
As at April 30, 2025, the Company is authorized to issue an unlimited number of common shares without par value.
| Issued and outstanding common shares | Number of Shares | Amount |
|---|---|---|
| Balance at July 31, 2023 | 16,706,766 | $ 1,695,868 |
| Common shares issued to acquire mineral property rights | 5,025,000 | 1,966,250 |
| Common shares issued on exercise of share purchase warrants | 1,070,165 | 321,050 |
| Share issuance costs | - | (13,000) |
| Common shares issued on exercise of PSUs | 1,500,000 | 225,000 |
| Balance at July 31, 2024 | 24,301,931 | $ 4,195,168 |
| Common shares issued to acquire Radar royalty rights | 25,000 | 10,000 |
| Common shares issued to acquire mineral property rights | 175,000 | 64,063 |
| Common shares issued on initial public offering (i)(ii) | 5,989,584 | 2,395,834 |
| Common shares issued on private placement (iii) | 1,673,285 | 669,314 |
| Share issuance costs (i)(ii)(iii) | - | (541,815) |
| Exercise of share warrants | 266,666 | 80,000 |
| Balance at April 30, 2025 | 32,431,466 | $ 6,872,564 |
As at April 30, 2025, the Company had 1,400,626 common shares held in escrow.
(i) On September 23, 2024, the Company completed tranche one of its IPO offering issuing an aggregate of 2,320,750 hard dollar units of the Company (the "HD Units") at a price of $0.40 per HD Unit, 167,166 standard flow-through units of the Company (the "Standard FT Units") at a price of $0.48 per Standard FT Unit, and 1,250,000 charity flow-through units of the Company (the "Charity FT Units") at a price of $0.60 per Charity FT Unit for aggregate gross proceeds of $1,758,500.
Each HD Unit consists of one common share of the Company and one-half of one transferable common share purchase warrant (each whole such warrant, an "HD Warrant"). Each HD Warrant will entitle its holder to purchase one common share of the Company (each, a "Warrant Share") at a price of $0.60 per Warrant Share at any time prior to 24 months following the closing of the Offering.
Each Standard FT Unit consists of a "flow-through share" and one-half of one transferable common share purchase warrant (each whole such warrant, a "Standard FT Warrant"), which Standard FT Warrant will qualify as a "flow-through share" as defined under the Canadian Income Tax Act ("ITA"). The Standard FT Warrants will have the same terms as the HD Warrants and are exercisable into Warrant Shares.
Each Charity FT Unit consists of a "flow-through share" as defined under the Canadian Income Tax Act and one-half of one transferable common share purchase warrant (each whole such warrant, a "Charity FT Warrant"), which Charity FT Warrant will qualify as a "flow-through share". The Charity FT Warrants will have the same terms as the HD Warrants and Standard FT Warrants and are exercisable into Warrant Shares.
The combined Standard FT and Charity FT shares were allocated a flow-through premium of $263,373 which is recognized as a liability on the interim statement of financial position as at April 30, 2025 and will be reduced as the Company incurs eligible exploration expenditures.
In connection with the IPO, the Company paid to an agent a cash commission in the amount of $87,383 and granted to the agent 185,783 share purchase warrants ("Agent Warrants"). Each Agent Warrant is exercisable into one Unit ("Agent Unit") of the Company at a price of $0.40 for a period of 24 months following the closing of the IPO. Each Agent Unit consists of one common share and
Page 10 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
one-half share purchase warrant (each whole warrant an "Agent Unit Warrant") of the Company. Each Agent Unit Warrant would entitle the holder to purchase one common share of the Company at an exercise price of $0.60 for a period of 24 months following the closing of the IPO. The fair value of the Agent Warrants was $63,732, calculated using the Black-Scholes Option Pricing Model and the Geske Compound Option Pricing Model. This amount was charged to share capital as a non-cash share-issuance cost. The Company also incurred $150,991 of share issuance costs relating to legal and agent work fees in connection with the IPO.
(ii) On November 5, 2024, the Company completed the second and final tranche of its IPO offering raising aggregate gross proceeds of $1,116,460. The second tranche consisted of an aggregate of 554,250 hard dollar units (each, a "HD Unit") at a price of $0.40 per HD Unit, 1,030,751 standard flow-through units (each, a "Standard FT Unit") at a price of $0.48 per Standard FT Unit and 666,667 charity flow-through units (each, a "Charity FT Unit") at a price of $0.60 per Charity FT Unit. Each HD Unit consists of one common share of the Company and one-half of one transferable common share purchase warrant (each whole such warrant, an "HD Warrant"). Each HD Warrant will entitle its holder to purchase one common share in the capital of the Company (each, a "Warrant Share") at a price of $0.60 per Warrant Share at any time until September 23, 2026.
In connection with the second tranche of the Offering, the Company paid to the Agent a cash commission in the amount of $69,667, a corporate finance fee of $5,000 plus GST, and granted to the Agent non-transferrable warrants entitling the Agent or its subagents, as applicable, to purchase up to a total of 146,308 common shares of the Company at a price of $0.40 per share until September 23, 2026. The fair value of the Agent Warrants was $50,606, calculated using the Black-Scholes Option Pricing Model and the Geske Compound Option Pricing Model. This amount was charged to share capital as a non-cash share-issuance cost. The Company also incurred $34,918 of share issuance costs relating to legal and agent work fees in connection with the IPO.
(iii) On December 24, 2024, the Company completed a non-brokered private placement (the "December Private Placement") of standard flow-through units (the "Standard FT Units") and Québec flow-through units of the Company (the "QFT Units" and, together with the Standard FT Units, the "FT Units"). The Company issued 975,610 Standard flow-through units at a price of $0.41 per Standard FT Unit for gross proceeds of $400,000.10 and 697,675 QFT Units at a price of $0.43 per QFT Unit for gross proceeds of $300,000.25, for aggregate gross proceeds of $700,000.35.
Each FT Unit consists of one flow-through common share (a "FT Share") as defined in subsection 66(15) of the Income Tax Act (Canada) (the "Tax Act"), and one-half of one transferable common share purchase warrant (each whole such warrant, a "Warrant"). Each Warrant will entitle its holder to purchase one common share in the capital of the Company (a "Warrant Share") at a price of $0.50 until December 23, 2026. The Warrants and the Warrant Shares underlying the Warrants will not qualify as "flow-through shares" under the Tax Act.
In connection with the closing of the December Private Placement, the Company paid cash finder's fee in the amount of $49,000 and issued 117,129 compensation warrants, with each compensation warrant exercisable to acquire one common share in the capital of the Company at an exercise price of $0.41 until December 23, 2026. The fair value of the Agent Warrants was $27,408, calculated using the Black-Scholes Option Pricing Model. This amount was charged to share capital as a non-cash share-issuance cost.
Page 11 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
b) Warrants
The Company's warrants outstanding as at April 30, 2025 and the changes for the nine months ended April 30, 2025 are as follows:
| Number of Warrants | Weighted Average Exercise Price | |
|---|---|---|
| Balance at July 31, 2023 | 9,533,995 | $ 0.17 |
| Exercised (i) | (1,070,165) | 0.30 |
| Balance at July 31, 2024 | 8,463,830 | $ 0.16 |
| Issued | 4,430,654 | 0.55 |
| Exercised (ii) | (266,666) | 0.30 |
| Balance at April 30, 2025 | 12,627,818 | $ 0.29 |
(i) The Company received net proceeds of $321,050 from the exercise of 1,070,165 share purchase warrants during May and June 2024.
(ii) The Company received net proceeds of $80,000 from the exercise of 266,666 share purchase warrants during October 2024.
(iii) The Company issued 185,783 and 146,308 Agent Warrants in connection with its first and second tranche of its IPO offering. The Agent Warrants were exercisable into Units which were further comprised of a common share of the Company and one-half of a common share purchase warrant. The Agent Warrants were fair-valued using the Black-Scholes option pricing model and the Geske compound option pricing model with the following weighted average input assumptions:
| Black-Scholes Option model inputs | |
|---|---|
| Share price at grant date | $ 0.40 |
| Exercise Price | $ 0.40 |
| Expected annual volatility | 131.38% |
| Expected life (in years) | 1.95 |
| Expected dividend yield | 0% |
| Risk-free interest rate | 2.99% |
| Fair value per Warrant | $ 0.26 |
| Geske compound option model inputs | |
| --- | --- |
| Share price at grant date | $ 0.40 |
| Exercise price of compound warrant | $ 0.0001 |
| Exercise price of underlying warrant | $ 0.60 |
| Expected annual volatility | 97.74% |
| Expected life compound warrant (in years) | 2.00 |
| Expected life underlying warrant (in years) | 2.00 |
| Expected dividend yield | 0% |
| Risk-free interest rate | 2.99% |
| Fair value per Warrant | $ 0.17 |
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
Warrants issued and outstanding as at April 30, 2025 are as follows:
| Number of Warrants Outstanding | Number of Warrants Exercisable | Exercise Price | Expiry Date | Weighted Average Remaining Contractual Life in Years |
|---|---|---|---|---|
| 3,000,000 | 3,000,000 | $0.10 | June 26, 2025 | 0.16 |
| 2,197,164 | 2,197,164 | $0.30 | July 19, 2025 | 0.22 |
| 150,000 | 150,000 | $0.40 | September 20, 2025 | 0.39 |
| 1,500,000 | 1,500,000 | $0.10 | April 21, 2026 | 0.98 |
| 1,500,000 | 1,500,000 | $0.10 | May 11, 2026 | 1.03 |
| 2,994,791 | 2,994,791 | $0.60 | September 23, 2026 | 1.40 |
| 332,091 | 332,091 | $0.40 | September 23, 2026 | 1.40 |
| 117,129 | 117,129 | $0.41 | December 23, 2026 | 1.65 |
| 836,643 | 836,643 | $0.50 | December 23, 2026 | 1.65 |
| 12,627,818 | 12,627,818 | 0.81 |
Share Based Compensation
Equity incentive plan
On February 16, 2024, the Company implemented an Equity Incentive Plan (the "EIP") which provides for the grant to eligible consultant, directors, and employees (including officers) of share options ("Options"), Restricted Share Units ("RSU"), Deferred Share Units ("DSU"), and Performance Share Units ("PSU"). The aggregate number of common shares ("Share") that may be subject to issuance under the Equity Incentive Plan, together with any other securities-based compensation arrangements of the Company, shall not exceed 10% of the Company's issued and outstanding share capital from time to time.
The term or expiry date of Options is determined by the Board but cannot be greater than ten years from the date the Option is granted. Options may be earlier terminated in the event of death or termination of employment or appointment. Vesting of Options is determined by the Board. The Board has the right to accelerate the date upon which any instalment of any Option becomes exercisable. Options which are vested, remain fully vested and are exercisable until expiration or termination of the Option.
The Board shall have the authority to determine any vesting terms applicable to the grant of RSUs, provided that no RSUs shall vest until at least one year following the date of grant. The Plan Administrator shall have the sole authority to determine the settlement terms applicable to the grant of RSUs. Subject to the EIP except as otherwise provided in an Award Agreement, on the settlement date for any RSU, the Participant shall redeem each vested RSU for:
(i) one fully paid and non-assessable Share issued from treasury to the participant or as the participant may direct; or
(ii) a cash payment; or
(iii) a combination of Shares and cash
in each case as determined by the Board in its discretion.
The Board may fix a portion of the Director Fees to be payable in the form of DSUs. In addition, each Director ("Electing Person") is given the right to elect an amount (the "Elected Amount") to be paid in the form of DSUs in lieu of cash; subject to the conditions of the EIP. The Board shall have the authority to determine any vesting terms applicable to the grant of DSUs, provided that no DSUs shall vest until at least one year following the date of grant. In no event shall a DSU be settled prior to, or later than one year following, the date of the applicable participant's separation from service. If the DSU award agreement does not establish a date for the settlement of the DSUs, then the settlement date shall be the date of except as
Page 13 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
otherwise provided in an award agreement. On the settlement date for any DSU, the Participant shall redeem each vested DSU for:
(i) one fully paid and non-assessable Share issued from treasury to the participant or as the participant may direct; or
(ii) a cash payment; or
(iii) a combination of Shares and cash as contemplated by paragraphs (i) and (ii)
in each case as determined by the Board in its discretion.
The Board may prescribe, grant PSUs to any participant in respect of services rendered in the year of grant. Each PSU consists of a right to receive a Share of the Company, cash payment, or a combination thereof upon the achievement of such performance goals during such performance periods as the Board shall establish. The performance goals to be achieved during any performance period, the length of any performance period, the amount of any PSUs granted, the termination of a participant's employment and the amount of any payment or transfer to be made pursuant to any PSU will be determined by the Board. The Board has the authority to determine any vesting terms applicable to the grant of PSUs, provided that no PSUs shall vest until at least one year following the date of grant while the Shares are posted for trading on a securities exchange. On the settlement date for any PSU, the Participant shall redeem each vested PSU for:
(i) one fully paid and non-assessable Share issued from treasury to the participant or as the participant may direct; or
(ii) a cash payment; or
(iii) a combination of Shares and cash as contemplated by paragraphs (i) and (ii) in each case as determined by the Board in its discretion.
The Company's share-based compensation for the three and nine months ended April 30, 2025 and 2024 is as follows:
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| April 30, 2025 | April 30, 2024 | April 30, 2025 | April 30, 2024 | |
| Stock options (a) | $ 13,122 | $ - | $ 201,589 | $ - |
| PSU (b) | $ - | $ 86,538 | $ - | $ 86,538 |
| Total share based compensation | $ 13,122 | $ 86,538 | $ 201,589 | $ 86,538 |
Stock options
The changes in stock options during the nine months ended April 30, 2025 are as follows:
| Number of Options | Weighted Average Exercise Price | |
|---|---|---|
| Balance at July 31, 2024 and 2023 | - | $ - |
| Issued (i)(ii) | 1,070,000 | 0.40 |
| Balance at April 30, 2025 | 1,070,000 | $ 0.40 |
(i) In connection with the closing of the IPO, the Company issued an aggregate of 500,000 stock options (the "IPO Options") to certain directors and officers of the Company. Each IPO Option entitles the holder thereof to acquire one common share of the Company at a price of $0.40 per common share for a period of two years from the date of grant. The IPO Options were fair-valued using the Black-Scholes option pricing model and the following weighted average input assumptions
Page 14 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
| Key Management Options | |
|---|---|
| Share price at grant date | $0.39 |
| Exercise Price | $0.40 |
| Expected annual volatility | 144% |
| Expected life (in years) | 1.00 |
| Expected dividend yield | 0% |
| Risk-free interest rate | 2.97% |
| Fair value per option | $0.205 |
(ii) In September 2024, the Company issued 225,000 stock options to consultants of the Company providing corporate advisory services. Each option entitles the holder to acquire one common share of the Company at a price of $0.40 per common share for a period of one year from the date of grant.
In October 2024, the Company issued 225,000 Consultant Options for corporate advisory services. Each option entitles the holder to acquire one common share of the Company at a price of $0.40 per common share for a period of one year from the date of grant.
In January 2025, the Company issued an additional 120,000 options to contractors and consultants of the Company for mineral property exploration and corporate advisory services. Each option entitles the holder to acquire one common share of the Company at a price of $0.40 per common share for a period of one year from the date of grant.
The options granted to consultants and contractors of the Company were fair-valued using the Black-Scholes option pricing model and the following weighted average input assumptions:
| Consultant and Contractor Options | |
|---|---|
| Share price at grant date | $0.37 |
| Exercise Price | $0.40 |
| Expected annual volatility | 144% |
| Expected life (in years) | 1.15 |
| Expected dividend yield | 0% |
| Risk-free interest rate | 2.91% |
| Fair value per option | $0.203 |
(a) Performance Share Units
The changes in PSU are as follows:
| Number of PSU | |
|---|---|
| Balance at July 31, 2023 | - |
| Issued (i) | 1,500,000 |
| Exercised (i) | (1,500,000) |
| Balance at July 31, 2024 and April 30, 2025 | - |
(i) On February 16, 2024, the Company granted 750,000 PSUs each to the CEO and CGO of the Company. The PSUs were valued at $0.15 per unit, equal to the value of a common share from the most recent private placement financing prior to the PSU grant. The PSUs fully vest on the date of filing of the Company's final prospectus in connection with the Company's initial public offering.
On July 15, 2024, the performance conditions of the PSU were fulfilled and 1,500,000 PSUs were exercised into 1,500,000 common shares of the Company.
Page 15 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
TRANSACTIONS WITH RELATED PARTIES
Key management compensation
Key management of the Company consist of the Chief Executive Officer ("CEO"), the Chief Financial Officer ("CFO"), the Chief Geological Officer ("CGO"), as well as directors of the Company. During the three and nine months ended April 30, 2025 the Company incurred the following expenses in relation to key management compensation:
| Key management compensation | Three months ended April 30, 2025 | Three months ended April 30, 2024 | Nine months ended April 30, 2025 | Nine months ended April 30, 2024 |
|---|---|---|---|---|
| Consulting fees paid to an entity controlled by the CEO of the Company (i) | $ 37,500 | $ 22,500 | $ 112,500 | $ 67,500 |
| Consulting fees paid to an entity controlled by the CFO of the Company (ii) | 18,000 | 18,000 | 54,000 | 61,500 |
| Consulting fees payable to an entity controlled by the CGO of the Company (iii) | 30,000 | 7,000 | 90,000 | 7,000 |
| Share based compensation (iv) | - | 86,538 | 124,500 | 86,538 |
| Total key management compensation | $ 85,500 | $ 134,038 | $ 381,000 | $ 222,538 |
(i) As at April 30, 2025, there was $52,502 (July 31, 2024 - $5,625) payable to an entity controlled by the CEO of the Company. This entire balance is unsecured, due on demand and non-interest bearing and is presented within due to related parties as at April 30, 2025.
(ii) As at April 30, 2025, there was $25,351 (July 31, 2024 - $19,013) payable to an entity controlled by the CFO of the Company. This entire balance is unsecured, due on demand and non-interest bearing and is presented within due to related parties as at April 30, 2025.
(iii) As at April 30, 2025, there was $117,093 (July 31, 2024 - $38,680) payable to an entity controlled by the CGO of the Company. $69,468 of this balance is related to reimbursable expenses incurred by the CGO on behalf of the Company. This entire balance is unsecured, due on demand and non-interest bearing and is presented within due to related parties as at April 30, 2025.
(iv) Share-based compensation relates to stock options issued to key management of the company during the three and nine months ended April 30, 2025.
LIQUIDITY AND CAPITAL RESOURCES
As at April 30, 2025, the Company had working capital deficiency of $494,050. This balance included a cash balance of $89,051, and due from related party of $973 to settle current liabilities of $863,036.
The Company has not pledged any of its assets as security for loans, or otherwise and is not subject to any debt covenants. The Company is committed to the following expenditures in relation to the acquisition of its mineral property rights as at April 30, 2025:
Adina Property
- Cash consideration of $50,000 after the date on which the Company grants to Rio Tinto Exploration Canada Inc. ("RIO"), an option to acquire an interest of 50% or more in the Adina Property (the "Adina Commencement Date") – paid on August 8, 2024;
- $50,000 cash payable on or before the first anniversary of the Adina Commencement Date; and
- $50,000 on or before the second anniversary of the Adina Commencement Date
Page 16 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
ANALYSIS OF CASH FLOWS
| Cash provided by (used in): | April 30, 2025 | April 30, 2024 |
|---|---|---|
| Operating activities | $ (1,524,043) | $ (485,970) |
| Investing activities | (1,980,238) | (361,784) |
| Financing activities | 2,808,967 | - |
| Increase (decrease) in cash | $ (695,314) | $ (847,754) |
Operating Activities
Cash flows from operating activities can vary significantly from period to period as a result of the Company's working capital requirements which are dependent on corporate activities as well as exploration activities over its mineral properties. There was greater cash used in operating activities during the nine months ended April 30, 2025 as compared to the comparative period. This was primarily due to the completion of an IPO in September 2024. The Company was also more active and had significantly higher exploration activity and resulting expenditures as compared to the same period in April 30, 2024.
Investing Activities
Cash flows used in investing activities can vary depending on the nature of the transactions occurring during a period. During the nine months ended April 30, 2025, cash used was for the acquisition of mineral property rights and equipment as well as cash expenditures on exploration of its exploration assets. Cash used in the comparative period was only related to the acquisition of mineral property rights.
Financing Activities
During the nine months ended April 30, 2025, the Company collected $3,065,148 in connection with the completion of its IPO while incurring $396,181 of cash share issuance costs. The Company collected $80,000 of proceeds on the exercise of share purchase warrants during the current period. As well, the Company collected $60,000 in advanced subscriptions for a private placement that closed after the period ended April 30, 2025. There were no financing activity observed in the comparative period.
SUBSEQUENT EVENTS
- On May 27, 2025, the Company closed the first tranche (the "First Tranche") of its non-brokered private placement for gross proceeds of $1,239,700.10. On closing of the First Tranche, the Company received gross proceeds of $444,200.10 from the issuance of 1,480,667 flow-through units at a price of $0.30 per unit ("FT Units") and $795,500 from the issuance of 3,182,000 hard dollar units at a price of $0.25 per unit ("HD Units"). Each FT Unit consists of one flow-through common share (a "FT Share") as defined in subsection 66(15) of the Income Tax Act (Canada) (the "Tax Act"), and one transferable common share purchase warrant (a "Warrant"). Each Warrant will entitle its holder to purchase one common share in the capital of the Company (a "Warrant Share") at a price of $0.50 for 24 months from the closing date of the Offering (the "Closing Date"). Each HD Unit consists of one common share (a "HD Share") and one Warrant.
- The Company entered into an online marketing agreement with Maximus Strategic Consulting Inc. ("Maximus"). The Company's engagement of Maximus will run for a period of four months beginning on June 1, 2025, and the Company will pay Maximus a fee of $150,000 paid in two instalments.
- On June 20, 2025, the Company collected proceeds of $200,000 on the exercise of 2,000,000 share purchase warrants.
Page 17 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
OFF-BALANCE SHEET ARRANGEMENT
The Company has no off-balance sheet arrangements.
CRITICAL ACCOUNTING ESTIMATES
These financial statements have been prepared using accounting policies consistent with IFRS issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). The financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information. Refer to Note 4 of the audited annual financial statements for the year ended July 31, 2024 for details on critical accounting estimates and judgments.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
In the normal course of business, the Company is inherently exposed to certain financial risks, including market risk, credit risk and liquidity risk, through the use of financial instruments. The timeframe and manner in which the Company manages these risks varies based upon management's assessment of the risk and available alternatives for mitigating risk. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. All transactions undertaken are to support the Company's operations. These financial risks and the Company's exposure to these risks are provided in various tables in Note 12 of the unaudited condensed interim financial statements for the three and nine months ended April 30, 2025. For a discussion on the significant assumptions made in determining the fair value of financial instruments, refer also to Note 2 of the audited annual financial statements for the year ended July 31, 2024.
RISKS AND UNCERTAINTIES
The Company is subject to a number of risk factors due to the nature of its business. These risks and uncertainties may impact the Company's ability to successfully execute its key strategies and may affect future events, performance or results. Some of these risks and uncertainties are described in this MD&A. However, the risks and uncertainties set out in this MD&A are not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company's business performance, condition, operations or strategies and plans.
Ongoing Need for Financing
The Company will require additional financing, including through the sale of assets and/or the issue and sale of equity or debt securities if various events alone or in combination occur. No assurance is given that the Company will be able to obtain necessary financing in a timely manner or on acceptable terms, if at all. The Company will require significant capital in order to develop its concessions and to fund its operating costs. The Company currently has no revenues from operations and is currently wholly reliant upon external financing to fund all of its capital requirements. The Company will require additional financing from external sources to meet such requirements. No assurance is given that such financing will be available to the Company or, if it is, that it will be offered on acceptable terms. If additional financing is raised through the issuance of equity or debt securities of the Company, the interests of shareholders in the net assets of the Company may be diluted. Any failure of the Company to obtain required financing on acceptable terms could have a material adverse effect on the Company's financial condition, results of operations, and liquidity, and could require the Company to cancel or postpone planned capital investments.
Limited operating history
The Company has a limited history of operations, is in the early stage of exploration and must be considered a start-up company. As such, the Company is subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources
Page 18 of 19
Saga Metals Corp.
Management Discussion and Analysis
For the three and nine months ended April 30, 2025 and 2024
(Expressed in Canadian Dollars)
and lack of revenues. No assurance is given that the Company will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in the light of its early stage of operations. The Company has no history of mining operations and gives no assurance that it will successfully produce resources, generate revenue, operate profitably or provide a return on investment in the future. Other factors maintained in this section may also prevent the Company from successfully operating a mine.
Potential Conflicts of Interest
Certain directors or officers of the Company are also directors, officers, shareholders and/or promoters of other reporting and non-reporting issuers. Such associations may give rise to conflicts of interest from time to time. The directors and officers of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest which they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board of Directors, any director in a conflict will disclose his interest and abstain from voting on such matter. Conflicts of interest, if any, will be subject to, and will be resolved in accordance with, the procedures and remedies under the BCBCA.
Reliance on Others and Key Personnel
The success of the Company will be largely dependent upon the performance of its management and key employees, as well as the talents of its outside consultants and suppliers. The Company may not have any "key man" insurance policies, and therefore there is a risk that the death or departure of any one or more members of management or any key employee could have a material adverse effect on the Company. The Company also faces intense competition for qualified personnel and there can be no assurance that the Company will be able to attract and retain the employees, personnel and/or consultants necessary to successfully carry out its activities.
Litigation
All industries are subject to legal claims, with and without merit. Defense and settlement costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, there can be no assurance that the resolution of any particular legal proceeding will not have a material effect on the Company's operations and financial position.
Changes in Laws
Changes to any of the laws, rules, regulations or policies to which the Company is subject could have a significant impact on the Company's business. There can be no assurance that the Company will be able to comply with any future laws, rules, regulations and policies. Failure by the Company to comply with applicable laws, rules, regulations and policies may subject it to civil or regulatory proceedings, including fines or injunctions, which may have a material adverse effect on the Company's business, financial condition, liquidity and results of operations. In addition, compliance with any future laws, rules, regulations and policies could negatively impact the Company's profitability and have a material adverse effect on its business, financial condition, liquidity and results of operations.
Speculative investment
An investment in the Company's common shares is highly speculative and subject to a number of risks and uncertainties. Only those persons who can bear the risk of the entire loss of their investment should participate. An investor should carefully consider the risks described above and the other information filed with the Canadian securities regulators before investing in the Company's common shares. The risks described are not the only ones faced. Additional risks that the Company currently believes are immaterial may become important factors that affect the Company's business. If any of these risks occur, or if others occur, the Company's business, operating results and financial condition could be seriously harmed and investors may lose all of their investment.
Page 19 of 19