AI assistant
Silver Hammer Mining Corp. — Management Reports 2023
Jan 31, 2023
47996_rns_2023-01-30_b4ccb7d1-5ca1-4acd-b5eb-a10551be7de3.pdf
Management Reports
Open in viewerOpens in your device viewer
==> picture [278 x 253] intentionally omitted <==
MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2022
Table of Contents
INTRODUCTION ............................................................................................................................... 3 FORWARD - LOOKING INFORMATION ............................................................................................ 3 COMPANY OVERVIEW ..................................................................................................................... 3 COVID-19 ......................................................................................................................................... 4 FISCAL 2022 HIGHLIGHTS ................................................................................................................ 4 SUBSEQUENT EVENTS ..................................................................................................................... 5 EXPLORATION AND EVALUATION ASSETS ...................................................................................... 5 CHANGE IN MANAGEMENT ............................................................................................................ 9 SELECTED INFORMATION................................................................................................................ 9 SUMMARY OF QUARTERLY INFORMATION .................................................................................. 10 RESULT OF OPERATIONS ............................................................................................................... 10 LIQUIDITY AND CAPITAL RESOURCES ........................................................................................... 11 USE OF PROCEEDS ......................................................................................................................... 12 OUTSTANDING SHARE DATA ........................................................................................................ 13 RELATED PARTY TRANSACTIONS AND BALANCES ........................................................................ 14 OFF-BALANCE SHEET FINANCING ARRANGEMENTS ..................................................................... 15 CRITICAL ACCOUNTING ESTIMATES .............................................................................................. 16 NEW ACCOUNTING STANDARDS .................................................................................................. 16 COMMITMENTS ............................................................................................................................ 16 CONTINGENCIES ............................................................................................................................ 16 FINANCIAL INSTRUMENTS ............................................................................................................ 16 RISKS AND UNCERTAINTIES .......................................................................................................... 16 MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS ........................................ 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
INTRODUCTION
This Management Discussion and Analysis (the “MD&A”) of Silver Hammer Mining Corp.’s (“Silver Hammer” or the “Company”) financial position and results of operations for the year ended September 30, 2022 is prepared as at January 30, 2023. This MD&A should be read in conjunction with the audited consolidated financial statements of the Company and the notes relating thereto, for the year ended September 30, 2022. The audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”). All financial amounts are stated in Canadian currency unless stated otherwise. Additional information relating to the Company is filed on SEDAR at www.sedar.com.
FORWARD - LOOKING INFORMATION
This MD&A may contain forward-looking statements based on assumptions and judgments of management regarding events or results that may prove to be inaccurate as a result of exploration or other risk factors beyond its control. Actual results may differ materially from the expected results.
Except for statements of historical fact, this MD&A contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. In particular, forward-looking information in this MD&A includes, but is not limited to, statements with respect to future events and is subject to certain risks, uncertainties and assumptions. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, which are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause results to differ materially from those expressed in the forward-looking statements include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in commodity prices; governmental regulation of the mining industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for commodities; liabilities inherent in mining operations; changes in tax laws and incentive programs relating to the mining industry; and the other factors described herein under “Risks and Uncertainties” as well as in our public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
COMPANY OVERVIEW
The Company was formed on May 2, 2017 under the laws of British Columbia. The address of the Company’s corporate office and its principal place of business is 206-595 Howe Street, Vancouver, British Columbia, Canada.
The Company’s common shares are listed on the Canadian Securities Exchange under the symbol “HAMR”.
Page 3 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
The Company’s principal business activities include the acquisition and exploration of mineral property assets. As at September 30, 2022, the Company holds interests in early-stage mineral exploration properties and the Company has not yet determined whether the Company’s mineral property assets contain a deposit of minerals that are economically recoverable. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and the future profitable production from the properties or realizing proceeds from its disposition. The outcome of these matters cannot be predicted at this time and the uncertainties cast significant doubt upon the Company’s ability to continue as a going concern.
The Company has four wholly-owned subsidiaries, Silver Strand Exploration Corp., 123456 US Inc., 1304562 BC Ltd., and 1304562 Nevada Ltd. Silver Strand Exploration Corp. and 123456 US Inc. became wholly-owned subsidiaries on June 16, 2021, as discussed below. 1304562 BC Ltd. and 1304562 Nevada Ltd. became wholly-owned subsidiaries on September 2, 2021, as discussed below.
COVID-19
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn.
The Company could be adversely impacted by the effects of the coronavirus. The extent to which the coronavirus impacts the Company, including its operations and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak. The continued spread of the coronavirus globally could materially and adversely impact the Company’s operations including, workforce productivity, increased insurance premiums, limitations on travel, the availability of industry experts and personnel, and restrictions to its drill programs, exploration and other metallurgical testing. To date, the Company has not had any adverse effects from the coronavirus.
FISCAL 2022 HIGHLIGHTS
-
The Company announced, on October 7, 2021, that it had staked an additional 52 new claims at its Eliza Silver Project. The Company also announced that David Grandy stepped down as a director of the Company.
-
On October 14, 2021, the Company reported that Phase I drilling commenced at the Silver Strand Mine.
-
On October 15, 2021, the Company announced the appointment of Morgan Lekstrom as CEO of the Company and Alnesh Mohan as Corporate Secretary of the Company. The Company also announced the resignation of Michael Dake as CEO of the Company, but will remain as a director of the Company.
-
On October 29, 2021, the Company commenced trading on the OTCQB venture exchange market under the symbol “HAMRF”. The Company also provided an update on the Lacy Property which includes filing an assessment report with the BC provincial government.
-
On November 4, 2021, the Company appointed technical advisor, Ron Burk, to the Company’s board of directors.
-
On November 29, 2021, the Company reported results from sampling, mapping and detailed hyperspectral satellite imaging positions at the Silverton Project.
-
On December 6, 2021, the Company reported high-grade silver assays for a number of rock samples collected at the Eliza Silver Project.
-
On December 14, 2021, the Company reported Phase 1 drill results and confirmed significant gold-silver mineralization below old mine workings at Silver Stand.
-
On January 19, 2022, the Company provided a corporate update and 2022 exploration outlook which includes plans for advancing the Company’s portfolio of assets during 2022. For further information regarding the update, refer to the press release available under the Company’s profile on SEDAR (www.sedar.com).
Page 4 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
-
On January 26, 2022, the Company reported historical (2002) high-grade, near-surface drill results and the repatriation of drill core from work previously done on the Silver Strand Project.
-
On February 16, 2022, the Company doubled the Silverton Project area through the staking of additional claims after positive exploration results from rock sampling and mapping program.
-
On March 4, 2022, the Company updated and refined its 3D model at the Silver Strand Project with a series of proposed drillholes for a Phase II drill campaign. Mr. Dake also resigned as a director of the Company.
-
On March 24, 2022, the Company received permits to drill at Silverton Project. The two-year permit, granted by the United States Department of the Interior’s Bureau of Land Management (“BLM”), allows the Company up to 13 drill sites, 8,530 feet of drilling, 3,248 feet of constructed road and 200 feet of overhaul travel covering 2.35 acres of surface disturbance.
-
On May 6, 2022, the Company provided updates on the Silver Strand Project, commencement of exploration field programs at Silverton Project and sample results from Eliza.
-
The Company acquired the California Patent on May 11, 2022, within the Eliza project area and reported high-grade silver assay results obtained during an early phase of exploration at the project as well.
-
On June 2, 2022, the Company announced it closed a brokered and a concurrent non-brokered private placement for gross proceeds of $3,007,049.
-
The Company engaged a drilling contractor for the Company’s Phase II drill program at the Silver Strand Project, as announced on July 7, 2022. Silver Hammer is also progressing exploration of the Eliza Project with a detailed followup soil grid sampling program. The results were reported on October 25, 2022.
-
On July 14, 2022, the Company commenced an induced polarization survey at the Silver Strand Project.
-
On August 15, 2022, the Company announced that the first drillhole of an 11-hole Phase II diamond drill program has been completed at the Silver Strand Project.
SUBSEQUENT EVENTS
-
On October 25, 2022, the Company reported soil sampling results at the Eliza Project.
-
On November 23, 2022, the Company announced the appointment of Warwick Smith as the Company’s new Interim President and Interim CEO upon Morgan Lekstrom’s resignation as President and CEO.
-
On January 4, 2023, the Company reported drill results from the Phase II drilling program at the Silver Strand Project.
EXPLORATION AND EVALUATION ASSETS
Lacy Property
Pursuant to an option agreement dated November 2, 2017 (the “LP Agreement”) and amended on October 8, 2020, with Barrie Field-Dyte (the “LP Optionor”), the Company was granted an option to acquire a 100% undivided interest in the Lacy Property (the “LP Property”) located in the Alberni Mining Division of British Columbia. The LP Property is comprised of three mineral claims.
In accordance with the LP Agreement, the Company has the option to acquire 100% undivided interest in the LP Property by paying $10,000 (paid) upon execution of the Agreement and issue 300,000 common shares of the Company (issued with fair value of $30,000) no later than 15 days after the Company’s common shares are listed on a securities exchange in Canada. As of April 30, 2021, the Company owned 100% of the Lacy Property following the issuance of 300,000 common shares.
The LP Optionors will retain a 2% net smelter returns royalty (the “NSR”) on the LP Property. The Company has the right to purchase each of the percentage of NSR for $1,000,000 during the five-year period commencing from the date the LP Property is put into commercial production.
Page 5 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
On October 29, 2021, the Company announced that it filed an assessment report on the Lacy Property with the BC provincial government. The LP Property comprises 590 hectares of mineral tenures which has produced encouraging results. Management is considering a more detailed program including further geophysics over the next 6-12 months to identify possible drill targets.
During the year ended September 30, 2022, the Company decided not to continue exploration of the Lacy Property. As a result of the Company’s management’s decision not to conduct any significant work on the Lacy Property in the near future, the Company impaired the capitalized costs associated with the Lacy Property with an amount of $265,317 during the year ended September 30, 2022.
Silver Strand Project
The Silver Strand Project has a 5.5 km strike length in the Coeur d’Alene mining district in Idaho. Located in north Idaho’s Silver Valley along Interstate 90, the district has been a significant producer of silver globally, with an aggregate total of more than 1.2 billion ounces of silver being recovered since the late 1880’s, along with major quantities of lead and zinc. Presently operating underground mines are exploiting orebodies up to 1,500 meters below surface.
Asset Purchase Agreement with Silver Strand Development LLC
On June 16, 2021, the Company completed the acquisition (the “SS Acquisition”) of all the issued and outstanding securities of Silver Strand Exploration Corp. (formerly Silver Hammer Mining Corp.) (“Silver Strand”). As a result of the SS Acquisition, the Company, through 123456 US Inc., the wholly owned subsidiary of Silver Strand, entered into an asset purchase agreement with a third party, Silver Strand Development LLC (“SSD”) (the “SSD Agreement”) to acquire a 100% interest in certain mineral claims (the “SSD Claims”) located in the State of Idaho, USA.
To acquire 100% interest of the SSD Claims, the Company will have to:
-
Pay US$10,000 to SSD for the transfer of the title to 123456 US Inc. of the SSD Claims (the “Transfer of Title”) (paid);
-
Pay US$25,000 to SSD within 5 business days of the Acquisition (paid – $31,171);
-
Issue 200,000 common shares of the Company to SSD at the date of the Acquisition (issued with fair value of $50,000);
-
Pay US$25,000 to SSD on the anniversary following the completion of the SS Acquisition (paid – $32,371); and
-
Issue 200,000 common shares of the Company to SSD on the anniversary following the completion of the SS Acquisition (issued with a fair value of $73,000).
On October 14, 2021, the Company announced that Phase I drilling commenced at the Silver Strand Project. Phase I drilling was designed to provide valuable information regarding the orientation and the depth and lateral extensions of the known gold- and silver-bearing zones to support the Company’s modelling and plans for future drilling.
On December 14, 2021, the Company reported results from the completed initial Phase I drilling campaign, with all six drillholes cutting significant Au-Ag mineralization beneath the historical mine workings.
On January 26, 2022, the Company reported results from previously unreported drilling that was completed by a previous owner of the Silver Strand Project. The drill results included 2,071 grams silver equivalent per tonne (“g/t AgEq”) over 1 metercore length, 1,249 g/t AgEq over 3.3 meters, plus multiple greater than 1,000 g/t AgEq assayed intercepts from previously unreported drill-holes. The Company also obtained the drill cores and assay certificates corresponding to this 2002 drilling campaign.
On March 4, 2022, the Company updated and refined its 3D model at the Silver Strand Project with a series of proposed drillholes for a Phase II drill campaign. It is designed to test up to 220 meters below the existing mine workings and a
Page 6 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
further 165 metres down dip from Phase I drilling. The Company engaged local contractors and commenced its Phase II program in August.
On May 6, 2022, the Company provided updates on the Silver Strand Project, with a drill program to test 250 metres below the existing workings as well as test select surface targets which commenced in July. The Company also plans to file a new NI 43-101 technical report for 2022.
The Company engaged a drilling contractor for the Phase II drill program at the Silver Strand Project, as announced on July 7, 2022. The Phase II drill program will focus on expanding the known silver-gold zone down-dip and will also assess the potential for additional mineralized chutes to the southeast.
On July 14, 2022, the Company commenced an induced polarization survey at the Silver Strand Project. The survey is intended to track the known mineralized zone laterally, as well as to search for parallel mineralized zones and will run concurrent with the drill program. The survey will be conducted by Big Sky Geophysics, and the data collected from the survey will be used in concert with data collected from a recent drone-supported magnetic survey to assess and enhance both underground and surface targets.
On August 15, 2022, the Company announced that the first drillhole of an 11-hole Phase II diamond drill program had been completed at the Silver Strand Project. Approximately 1,100 meters of drilling is expected across X drillholes from the Company’s established underground drilling station, with ability to expand the program depending on core observations and initial assay results.
On January 4, 2023, the Company reported drill results from the Phase II drilling program. The Company completed nine drillholes from its previously established underground drilling station that were generally focused on testing the historically mined zone of gold-silver (“Au-Ag”) mineralization at greater depth and further along strike. Going forward, the Company will be updating its 3D model of the Silver Strand deposit, incorporating lithological and alteration information as well as the multi-element geochemical data produced by the drillhole assays from the two drilling programs.
Eliza Silver Project and Silverton Silver Project
On September 2, 2021, the Company completed the acquisition (the “BCCO Acquisition”) of all the issued and outstanding securities of 1304562 B.C. Ltd. (“BCCO”). As a result of the BCCO Acquisition, the Company now owns a 100% interest in the Eliza Silver Project and the Silverton Silver Project.
Eliza Silver Project
The Eliza Silver Project is located in the general area of the Hamilton silver mining district in western White Pine County, Nevada. A number of small high-grade silver mines and prospects were developed in the district in the late 1800’s.
During the year ended September 30, 2022, the Company entered into an asset purchase agreement with Treasure Hill Resources LLC (“TH Resources”) to acquire certain patented mining claims and associated property rights in White Pine County, Nevada (the “California Patent”) with an amount of $31,263 (US$25,000). TH Resources will retain a 1% NSR from the production of minerals from the California Patent.
The Company announced, on October 7, 2021, that it staked 52 new claims, more than doubling its original land holding in the district. With the addition of these new claims, the Eliza land package now comprises 88 claims covering 5.52 square kilometers.
On December 6, 2021, the Company reported high-grade silver assays for a number of rock samples collected at the Eliza Silver Project. A total of 73 rock-chip samples were collected within the Eliza Silver Project area along with 35 geochemical
Page 7 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
survey samples. The assay results confirm the existence of a well-developed silver-rich mineral system that also shows enrichments in copper, lead and zinc. In addition to the targeted rock sampling, the Company also completed hyperspectral imaging analysis of the Eliza property area.
On May 6, 2022, the Company completed an initial sampling program at Eliza Silver Project, including 8 rock samples from the California mine area, 1 rock sample from the Belmont area and 11 rock samples from the Passynak Mine.
The Company acquired the California Patent on May 11, 2022, within the Eliza Silver Project area and reported highgrade silver assay results obtained during an early phase of exploration at the project as well. A program of geophysical survey is also planned to commence in the following months. Results of the geochemical and geophysical surveys will be used to define priority drill targets ahead of an initial phase of drilling at the project.
The Company announced on July 7, 2022 that it is progressing exploration of the Eliza Project with a detailed follow-up soil grid sampling program, the results of which were announced on October 25, 2022.
On October 25, 2022, the Company reported soil sampling results that have defined significant anomalies that extend well beyond the small historical mine areas. A total of 518 soil samples were collected from the northern area of Eliza with results ranging from below detection limit to 26.95 grams per tonne silver. The purpose of the soil sampling program was to further define the extent of mineralization within the northern area and examine any geochemical patterns that may exist. The soil sampling program has outline four distinct areas, which are now being further evaluated. The historic mining areas include the California, Passynak and Belmont mines; a new fourth area, the Western Anomaly will also be addressed going forward.
Silverton Silver Project
The Silverton Project is located in south-central Nevada about 100 kilometers southwest of the Eliza Project. The Company’s original six-claim mineral property covers the historic Silverton mine, a small 19[th] century producer of silver.
During the year ended September 30, 2022, the Company made a reclamation deposit of $28,651 (US$22,600) as collateral for the project in the event of future operations. As of September 30, 2022, the balance of the reclamation – deposit was $31,049 (US$22,600) (September 30, 2021 $nil).
On October 7, 2021, the Company announced initial results from a surface rock sampling program at the Silverton Project which also confirmed the presence of gold mineralization on the eastern side of the property.
On November 29, 2021, the Company reported results from rock and soil sampling, geological mapping and detailed hyperspectral satellite image analysis that had recently been completed on the project. A total of 35 rock-chip samples and 111 soil samples were collected from the property; the best sample yielded 692 g/t silver.
On February 16, 2022, the Company doubled the Silverton Project area through the staking of additional claims after positive exploration results from rock sampling and mapping program.
On March 24, 2022, the Company received permits to drill at Silverton Project. The two-year permit, granted by the BLM, allows the Company up to 13 drill sites, 8,530 feet of drilling, 3,248 feet of constructed road and 200 feet of overhaul travel covering 2.35 acres of surface disturbance.
On May 6, 2022, the Company reported a mapping and sampling program is underway to test the potential strike length of surface mineralization at Silverton Project. Data collected from the field work is designed to refine existing targets and generate new target areas along strike as the Company works towards finalizing phase I drill targets at Silverton Project.
Page 8 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
CHANGE IN MANAGEMENT
On October 7, 2021, the Company announced that David Grandy stepped down as a director of the Company.
On October 15, 2021, the Company announced the appointment of Morgan Lekstrom as CEO of the Company and Alnesh Mohan as Corporate Secretary of the Company. The Company also announced the resignation of Michael Dake as CEO of the Company, but will remain as a director of the Company.
On November 4, 2021, the Company appointed Ron Burk, Technical Advisor, to the Company’s board of directors.
On March 4, 2022, the Company announced that Michael Dake stepped down as a director of the Company.
On November 23, 2022, the Company announced the appointment of Warwick Smith as the Interim President and Interim CEO. The Company also announced the resignation of Morgan Lekstrom as President and CEO of the Company.
SELECTED INFORMATION
| SELECTED INFORMATION | |||
|---|---|---|---|
| For theyear ended | |||
| September 30, 2022 | September 30, 2021 | September 30, 2020 | |
| $ | $ | $ | |
| Operating expenses | 1,774,314 | 1,565,948 | 24,165 |
| Interest and miscellaneous income | - | - | - |
| Net loss for the year | (2,093,631) | (1,565,948) | (24,165) |
| Comprehensive loss for the year | (1,850,272) | (1,558,778) | (24,165) |
| Basic and diluted loss per share: | |||
| - net loss | (0.05) | (0.10) | (0.00) |
| As at | September 30, 2022 | September 30, 2021 | September 30, 2020 |
|---|---|---|---|
| $ | $ | $ | |
| Working capital | 1,371,934 | 1,640,916 | 6,557 |
| Total assets | 9,350,541 | 7,894,134 | 167,548 |
| Total liabilities | 352,723 | 274,852 | 43,964 |
| Share capital | 11,281,349 | 8,154,807 | 236,501 |
| Deficit | 3,805,996 | 1,766,365 | 200,417 |
The fluctuation in operating expenses and corporate costs is attributable to variations in various expense items, such as management and consulting fees, investor relations and promotions, professional fees, regulatory and transfer agents, travel and general and administrative expenses, which occur due to the administrative, exploration and fund-raising activities occurring during a particular period and to the availability of funds in those periods to pay for those activities. There is no seasonality to these variations, nor are they indicative of any trend. As the Company became more active and undertook acquisitions during the year ended September 30, 2021 and subsequently continued exploration activities into the September 30, 2022 fiscal year, the related expenditures and total assets increased compared to prior periods.
Page 9 of 20
MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
SILVER HAMMER MINING CORP.
SUMMARY OF QUARTERLY INFORMATION
| Three months ended | Three months ended | |||
|---|---|---|---|---|
| September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 | |
| $ | $ | $ | $ | |
| Interest income | - | - | - | - |
| Net loss | (639,373) | (550,847) | (401,195) | (448,216) |
| Comprehensive loss | (477,167) | (506,133) | (421,702) | (445,270) |
| Basic and diluted lossper share | (0.01) | (0.01) | (0.01) | (0.02) |
| Three months ended | ||||
| September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | |
| $ | $ | $ | $ | |
| Interest income | - | - | - | - |
| Net loss | (315,160) | (1,193,295) | (36,758) | (20,735) |
| Comprehensive loss | (307,990) | (1,193,295) | (36,758) | (20,735) |
| Basic and diluted lossper share | (0.01) | (0.09) | (0.00) | (0.00) |
The variations in operating expenses in the previous periods are primarily a result of the Company completing its exploration and evaluation asset acquisitions and listing on the Canadian Securities Exchange. Fluctuations reported were the result of the level of activity of the Company in each given reporting period.
RESULT OF OPERATIONS
Three Months Ended September 30, 2022 compared with the Three Months Ended September 30, 2021
The Company is in the exploration stage and has no revenue from operations. During the three months ended September 30, 2022, the Company recorded a net loss of $639,373, an increase of $324,213, compared to a net loss of $315,160 for the three months ended September 30, 2021. The increase in net loss was a result of the Company’s acquisition of Silver Strand and BCCO, financing activity and increased business and exploration activity.
During the three months ended September 30, 2022, the Company incurred the following significant expenditures:
-
Consulting fees of $83,000 (September 30, 2021 – $76,500) which includes general consulting services, corporate advisory services as well as fees paid to the Company’s Former President and CEO (related party);
-
Investor relations and promotion of $177,726 (September 30, 2021 – $341,471) which were incurred as a result of marketing and advisory services, social media services, conferences and seminars attended by the Company and business and corporate development services;
-
Professional fees of $68,927 (September 30, 2021 – $63,051) which were paid for corporate secretary services, legal fees, audit, accounting and tax fees. Accounting fees of $31,200 (September 30, 2021 – $48,620) were paid to Quantum Advisory Partners LLP (related party), a partnership in which the CFO is an incorporated partner; and
-
Regulatory and transfer agents of $7,054 (September 30, 2021 – $8,436) which were paid to the Canadian Securities Exchange for listing fees, filing fees which were reimbursed to McMillan LLP as well as transfer agent fees paid to Endeavor Trust Corporation.
During the three months ended September 30, 2022, the Company decided not to continue exploration of the Lacy Property. As a result of the Company’s management’s decision not to conduct any significant work on the Lacy Property in the near future, the Company impaired the capitalized costs associated with the Lacy Property with an amount of $265,317 during the three months ended September 30, 2022.
Page 10 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
Year Ended September 30, 2022 compared with the Year Ended September 30, 2021
The Company is in the exploration stage and has no revenue from operations. During the year ended September 30, 2022, the Company recorded a net loss of $2,039,631, an increase of $473,683, compared to a net loss of $1,565,948 for the year ended September 30, 2021. The increase in net loss was a result of the Company’s acquisition of Silver Strand and BCCO, financing activity and increased business and exploration activity.
During the year ended September 30, 2022, the Company incurred the following significant expenditures:
-
Consulting fees of $406,000 (September 30, 2021 – $124,417) which includes general consulting services, corporate advisory services as well as fees paid to the Company’s Former President and CEO (related party);
-
Investor relations and promotion of $848,561 (September 30, 2021 – $424,559) which were incurred as a result of marketing and advisory services, social media services, conferences and seminars attended by the Company and business and corporate development services;
-
Professional fees of $351,087 (September 30, 2021 – $220,625) which were paid for corporate secretary services, legal fees, audit, accounting and tax fees. Accounting fees of $136,380 (September 30, 2021 – $72,020) were paid to Quantum Advisory Partners LLP (related party), a partnership in which the CFO is an incorporated partner;
-
Regulatory and transfer agents of $48,242 (September 30, 2021 – $44,102) which were paid to the Canadian Securities Exchange for listing fees, filing fees which were reimbursed to McMillan LLP as well as transfer agent fees paid to Endeavor Trust Corporation; and
-
Travel of $12,402 (September 30, 2021 – $11,936) incurred by the All Mine Consulting (related party) for travel expenses incurred during the year.
During the year ended September 30, 2022, the Company decided not to continue exploration of the Lacy Property. As a result of the Company’s management’s decision not to conduct any significant work on the Lacy Property in the near future, the Company impaired the capitalized costs associated with the Lacy Property with an amount of $265,317 during the year ended September 30, 2022.
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2022, the Company had working capital of $1,371,934 (September 30, 2021 – $1,640,916) including cash of $1,427,556 (September 30, 2021 – $1,606,841).
Negative cash outflows of $1,821,157 were recorded from operating activities during the year ended September 30, 2022. This is primarily due to outflows relating to consulting fees, investor relations and promotion, professional fees, regulatory and transfer agents and travel.
The Company’s activities have been funded through equity financings and the Company expects it will continue to be able to utilize this source of financing until it develops cash flow from future operations.
There can be no assurances the Company will be successful in its endeavors. If such funds are not available or other sources of finance cannot be obtained then the Company will be forced to curtail its activities to a level for which funding is available or can be obtained.
Page 11 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
USE OF PROCEEDS
April 2021
The proposed use of proceeds for the April 2021 initial public offering consisted of exploration activity on the Company’s Lacy Property and for general working capital purposes.
The following tables sets forth the intended and actual use of proceeds from the April offering:
| Intended Use of Proceeds of April 2021 Initial Public Offering |
Intended Use of Proceeds of April 2021 Initial Public Offering |
Actual Use of Proceeds from April 2021 Initial Public Offering |
(Over)/under expenditure |
Explanation of Variance and impact on business objectives |
|---|---|---|---|---|
| $ | $ | $ | ||
| To complete the recommended | Actual expenditures came | |||
| exploration program on the Lacy | under budget; no impact | |||
| Property for 12 months | 105,950 | 101,788 | 4,162 | on business objective. |
| Additional working capital | ||||
| To provide funding sufficient to | to fund operations; no | |||
| meet administrative costs for 12 | impact on business | |||
| months | 91,872 | 130,534 | (38,662) | objective. |
| Agent’s commission | 24,000 | 24,000 | - | N/A |
| Actual fees assessed; no | ||||
| impact on business | ||||
| Agent’s corporate finance fee | 25,000 | 7,500 | 17,500 | objective. |
| Actual fees assessed; no | ||||
| Estimated expenses of the | impact on business | |||
| offering | 49,000 | 32,000 | 17,000 | objective. |
| Estimated working capital as at | ||||
| February28,2021 | 5,822 | 5,822 | - | N/A |
| Total | 301,644 | 301,644 | - |
Page 12 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
June 2021
The proposed use of proceeds for the June 2021 unit offering consisted of exploration activities on the Company’s Lacy Property, exploration on Silver Strand Project and for general working capital purposes.
The following table sets forth the actual use of proceeds from the June 2021 unit offering:
| Actual Use of Proceeds from June 2021 Unit Offering | |
|---|---|
| $ | |
| Exploration on the Lacy Property | - |
| Exploration on the Silver Strand Project | 1,177,296 |
| Exploration on the Eliza Silver Project | 93,803 |
| Exploration on Silverton Silver Project | 55,087 |
| General workingcapitalpurposes | 2,195,304 |
| Total | 3,521,490 |
June 2022
The proposed use of proceeds for the June 2022 unit offering consists of exploration of the Silver Strand Project in Idaho, the Eliza Silver Project in Nevada, the Silverton Silver-Gold Project in Nevada, and for general and working capital purposes. The Company has allocated funds to date consistent with the proposed use of funds.
Variances from the intended and actual use of proceeds are a result of exploration which was focused on the Silver Strand Project and the Eliza Silver Project as initially proposed for the Lacy Property. The focus has been on the drill program at the Silver Strand Project as well as the rock sampling program at the Eliza Silver Project.
OUTSTANDING SHARE DATA
At September 30, 2022, the Company had 46,713,662 (September 30, 2021 – 37,405,960) common shares issued and outstanding with a value of $11,281,349 (September 30, 2021 – $8,154,807).
Escrow Shares
On March 4, 2021, the Company entered into an escrow agreement pursuant to National Policy 46-201 Escrow for Initial Public Offerings , whereby common shares will be held in escrow and are scheduled for release as follows:
-
On the Listing Date: 250,000 common shares (released)
-
• On November 3, 2021: 375,000 common shares (released) • On May 3, 2022: 375,000 common shares (released) • On November 3, 2022: 375,000 common shares (released subsequent to September 30, 2022) • On May 3, 2023: 375,000 common shares • On November 3, 2023: 375,000 common shares • On May 3, 2024: 375,000 common shares
As of September 30, 2022, there were 1,500,000 common shares held in escrow (September 30, 2021 – 2,250,000).
During the year ended September 30, 2022
- On June 2, 2022, the Company completed a brokered private placement and non-brokered private placement (collectively the “2022 Financing”) by issuing 7,325,286 units and 588,000 units, respectively, at $0.38 per unit for
Page 13 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
total gross proceeds of $3,007,049. Each unit is comprised of one common share of the Company and one-half of one transferable common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of the Company at a price of $0.50 for a period of 24 months from the closing date of the 2022 Financing.
In connection with the 2022 Financing, the Company paid a cash commission of $182,146 to the agent, a cash advisory fee of $27,900 and issued 502,831 broker’s warrants and 50,000 advisory warrants. The broker’s warrants and advisory warrants are exercisable to acquire one common share of the Company at a price of $0.38 for a period of 24 months from the closing date of the 2022 Financing.
In addition, the Company incurred $178,093 in other share issuance costs.
-
On August 18, 2022, the Company issued 200,000 common shares of the Company pursuant to the SSD Agreement.
-
1,094,416 warrants were exercised for gross proceeds of $475,708.
-
100,000 options were exercised for gross proceeds of $62,000.
-
200,000 options were cancelled.
As at the date of this MD&A, the Company had the following common shares, options and warrants issued and outstanding:
-
46,713,662 common shares;
-
11,289,538 Warrants with exercise prices ranging from $0.10 to $0.50; and
-
2,400,000 stock options with exercise prices ranging from $0.62 to $0.65.
RELATED PARTY TRANSACTIONS AND BALANCES
The Company’s related parties as defined as IAS 24, Related Party Disclosures, include the Company’s subsidiaries and the following directors, executive officers, key management personnel, and enterprises which are controlled by these individuals:
| Related Party | Relationship |
|---|---|
| Warwick Smith | Interim CEO, Interim President |
| Alnesh Mohan | CFO, Director and Corporate Secretary |
| Lawrence Roulston | Director |
| Joness Lang | Director |
| Ron Burk | Director, Technical Advisor |
| Harbourside Consulting | A company controlled by the Interim CEO and Interim President |
| Quantum Advisory Partners LLP | A partnership in which the CFO is a partner |
| Morgan Lekstrom | Former CEO, President |
| Michael Dake | Former Director, Former CEO and Former Corporate Secretary |
| David Grandy | Former Director |
| Sean McGrath | Former Director |
| All Mine Consulting | A companycontrolled bythe Former President and CEO |
Page 14 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
Key management personnel include persons having the authority and responsibility for planning, directing, and controlling activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
The following table discloses the total compensation incurred to the Company’s key management personnel during the year ended September 30, 2022 and 2021:
| year ended September 30, 2022 and 2021: | |
|---|---|
| For theyear ended | |
| September 30, 2022 September 30, 2021 $ $ |
|
| Morgan Lekstrom, Former CEO, President Consulting fees Share-basedpayments |
175,000(1) 65,417(2) - 90,691 |
| 175,000 156,108 |
|
| Alnesh Mohan, CFO, Director, Corporate Secretary Professional fees(3) Share-issuance costs(3) Share-basedpayments |
136,380 72,020 3,500 - - 73,047 |
| 139,880 145,067 |
|
| Lawrence Roulston, Director Share-basedpayments |
- 109,570 |
| Joness Lang, Director Share-basedpayments |
- 73,047 |
| Ron Burk, Director, Technical Advisory Share-basedpayments |
- 73,047 |
| Michael Dake, Former CEO, Director, Corporate Secretary Share-basedpayments |
- 30,230 |
| Total | 314,880 587,069 |
(1) $75,000 was paid to All Mine Consulting.
(2) Paid to All Mine Consulting.
- (3) Paid to Quantum Advisory Partners LLP.
The balances due to the Company’s directors and officer included in accounts payables and accrued liabilities were $11,156 as at September 30, 2022 (September 30, 2021 – $15,407) which is owed to Quantum Advisory Partners LLP. These amounts are unsecured, non-interest bearing and payable on demand.
Unless otherwise noted, all related party balances are unsecured, non-interest bearing with no fixed terms of repayment.
OFF-BALANCE SHEET FINANCING ARRANGEMENTS
As of September 30, 2022, and the date of this MD&A, the Company did not have any off-balance sheet financing arrangements.
Page 15 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
CRITICAL ACCOUNTING ESTIMATES
The financial statements, including comparatives, 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, the financial statements have been prepared using the accrual basis of accounting except for cash flow information.
NEW ACCOUNTING STANDARDS
There were no new or amended IFRS pronouncements effective October 1, 2021 that impacted the Company’s audited consolidated financial statements for the year ended September 30, 2022.
COMMITMENTS
The Company does not have any significant commitments except for the mineral property commitments noted above under Exploration and Evaluation Assets.
CONTINGENCIES
The Company’s exploration activities are subject to various federal, provincial and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.
The Company is, from time to time, involved in various claims, legal proceedings and complaints arising in the ordinary course of business. The Company does not believe that adverse decisions in any pending or threatened proceedings related to any matter, or any amount which it may be required to pay damages in any form by reason thereof, will have a material effect on the financial condition or future results of operations of the Company.
FINANCIAL INSTRUMENTS
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 10 of our audited consolidated financial statements for the year ended September 30, 2022. For a discussion on the significant assumptions made in determining the fair value of financial instruments, refer also to note 2 of the financial statements for the year ended September 30, 2022.
RISKS AND UNCERTAINTIES
The Company is in the business of acquiring and exploring mineral properties. It is exposed to a number of risks and uncertainties that are common to other mineral exploration companies in the same business. The industry is capital intensive at all stages and is subjected to variations in commodity prices, market sentiment, exchange rates for currency, inflations and other risks. The Company currently has no source of revenue other than interest income. The Company will rely mainly on equity financing to fund exploration activities on its mineral properties.
Page 16 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company’s business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may apply.
Insufficient Capital
The Company does not currently have any revenue producing operations and may, from time to time, report a working capital deficit. To maintain its activities, the Company will require additional funds which may be obtained either by the sale of equity capital or by entering into an option or joint venture agreement with a third party providing such funding. There is no assurance that the Company will be successful in obtaining such additional financing; failure to do so could result in the loss or substantial dilution of the Company’s interest in the Lacy Property, the Silver Strand Project, the Eliza Silver Project and the Silverton Silver Project.
There can be no assurance that financing will be available to the Company or, if it is, that it will be available on terms acceptable to the Company and will be sufficient to fund cash needs until the Company achieves positive cash flow. If the Company is unable to obtain the financing necessary to support its operations, it may be unable to continue as a going concern. The Company currently has no commitments for any credit facilities such as revolving credit agreements or lines of credit that could provide additional working capital. The Company has no long-term debt, capital lease obligations, operating leases or any other long-term obligations.
Negative Operating Cash Flow
The Company has negative operating cash flow. The failure of the Company to achieve profitability and positive operating cash flows could have a material adverse effect on the Company’s financial condition and results of operations. To the extent that the Company has negative cash flow in future periods, the Company may need to deploy a portion of its cash reserves to fund such negative cash flow. The Company expects to continue to sustain operating losses in the future until it generates revenue from the commercial production of its properties. There is no guarantee that the Company will ever be profitable.
Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits that, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will, in part, be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.
Page 17 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
Uninsurable Risks
In the course of exploration, development and production of mineral properties, certain risks, in particular, unexpected or unusual geological operating conditions including rock bursts, cave- ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.
Permits and Government Regulations
The future operations of the Company may require permits from various federal, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters. There can be no guarantee that the Company will be able to obtain all necessary permits and approvals that may be required to undertake exploration activity or commence construction or operation of mine facilities on the Company’s Lacy Property. On March 24, 2022, the Company received permits to drill at Silverton Project. The Company currently does not have any permits in place for any of other projects.
Environmental and Safety Regulations and Risks
Environmental laws and regulations may affect the operations of the Company. These laws and regulations set various standards regulating certain aspects of health and environmental quality. They provide for penalties and other liabilities for the violation of such standards and establish, in certain circumstances, obligations to rehabilitate current and former facilities and locations where operations are or were conducted. The permission to operate can be withdrawn temporarily where there is evidence of serious breaches of health and safety standards, or even permanently in the case of extreme breaches. Significant liabilities could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous owners of acquired properties or noncompliance with environmental laws or regulations. In all major developments, the Company generally relies on recognized designers and development contractors from which the Company will, in the first instance, seek indemnities. The Company intends to minimize risks by taking steps to ensure compliance with environmental, health and safety laws and regulations and operating to applicable environmental standards. There is a risk that environmental laws and regulations may become more onerous, making the Company’s operations more expensive.
The Lacy Property is located in an area known for its strong environmental activism and the Company may encounter strong opposition for any of its exploration and development plans which could result in significant delays to the Company’s plans, or result in increased costs to the Company.
Mineral Titles
The Company has not yet obtained a title opinion in respect of the Lacy Property. The claims on the Property have not been legally surveyed. The Property may be subject to prior unregistered agreements, transfers or claims and title may be affected by undetected defects. The Company is satisfied, however, that evidence of title to the Property is adequate and acceptable by prevailing industry standards with respect to the current stage of exploration on the Property.
Fluctuating Mineral Prices and Currency Risk
The Company’s revenues, if any, are expected to be in large part derived from the extraction and sale of precious and base minerals and metals. Factors beyond the control of the Company may affect the marketability of metals discovered, if any. Metal prices have fluctuated widely, particularly in recent years. Consequently, the economic viability of any of the Company’s exploration projects cannot be accurately predicted and may be adversely affected by fluctuations in
Page 18 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
mineral prices. In addition, currency fluctuations may affect the cash flow which the Company may realize from its operations, since most mineral commodities are sold in a world market in US dollars.
Management
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business.
Public Health Crisis
The Company's business, operations and financial condition could be materially adversely affected by the outbreak of epidemics or pandemics or other health crises, including the recent outbreak of COVID-19. On January 30, 2020, the World Health Organization declared the outbreak a global health emergency, on March 12, 2020, the World Health Organization declared the outbreak a pandemic and on March 13, 2020, the U.S. declared that the COVID-19 outbreak in the United States constitutes a national emergency. Over the past several months, there were a large number of temporary business closures, quarantines and a general reduction in consumer activity in Canada, the United States, Europe and China. The outbreak has also caused companies and various international jurisdictions to impose travel, gathering and other public health restrictions. While these effects are expected to be temporary and a number of jurisdictions, including in Canada and the United States, have started to lift certain COVID-19 related restrictions, the duration of the various disruptions to businesses locally and internationally and related financial impact cannot be reasonably estimated at this time.
Public health crises such as COVID-19 can result in volatility and disruptions in the supply and demand for gold, silver and other metals and minerals, global supply chains and financial markets, as well as declining trade and market sentiment and reduced mobility of people, all of which could affect commodity prices, interest rates, credit ratings, credit risk and inflation. The risks to the Company of such public health crises also include risks to employee health and safety, a slowdown or temporary suspension of operations in geographic locations impacted by an outbreak, increased labour and fuel costs, regulatory changes, political or economic instabilities or civil unrest.
While the impact of the COVID-19 pandemic is not expected to last indefinitely, the circumstances relating to the pandemic are dynamic and its impacts on the Company’s business operations cannot be reasonably estimated at this time. However, it is not expected that the COVID-19 pandemic will have a material adverse impact on the Company’s business, results of operations, financial position and cash flows in 2022 and going forward. As the government decreed that mining has been determined an essential service, the Company has resumed operations and have put in place the appropriate safety policies and procedures related to COVID-19.
Current Global Financial Condition
Current global financial conditions have been subject to increased volatility. Access to financing has been negatively impacted by both sub-prime mortgages in the United States and elsewhere and the liquidity crisis affecting the assetbacked commercial paper market. As such, the Company is subject to counterparty risk and liquidity risk. The Company is exposed to various counterparty risks including, but not limited to: (i) through financial institutions that hold the Company’s cash; (ii) through companies that have payables to the Company; and (iii) through the Company’s insurance providers. The Company is also exposed to liquidity risks in meeting its operating expenditure requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability of the Company to obtain loans and other credit facilities in the future and, if obtained, on terms favourable to the Company. If these increased levels of volatility and market turmoil continue, the Company’s operations could be adversely impacted and the trading price of the Common Shares could be adversely affected.
Page 19 of 20
SILVER HAMMER MINING CORP. MANAGEMENT DISCUSSION AND ANALYSIS For the Year Ended September 30, 2022 (Expressed in Canadian Dollars)
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The information provided in this report is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying financial statements.
Page 20 of 20