AI assistant
Silver North Resources Ltd. Management Reports 2025
45758_rns_2025-01-27_820add69-c830-4041-8a37-b081703deb59.pdf
Management Reports
Open in viewerOpens in your device viewer
SILVER NORTH
SILVER NORTH RESOURCES LTD.
(Formerly Alianza Minerals Ltd.)
MANAGEMENT'S DISCUSSION AND ANALYSIS
September 30, 2024
INTRODUCTION
This is Management's Discussion and Analysis ("MD&A") for Silver North Resources Ltd. (formerly Alianza Minerals Ltd.) ("Silver North" or the "Company") and has been prepared based on information known to management as of January 27, 2025.
The MD&A is intended to complement and supplement the Company's consolidated financial statements, but it does not form part of those consolidated financial statements. The MD&A should be read in conjunction with the audited consolidated financial statements and the related notes for the years ended September 30, 2024, 2023 and 2022 which have been prepared in accordance with IFRS Accounting Standards ("IFRS"). All dollar figures included in those financial statements and/or this MD&A are quoted in Canadian dollars unless otherwise specified.
FORWARD LOOKING STATEMENTS
Certain sections of this MD&A provide, or may appear to provide, a forward-looking orientation with respect to the Company's activities and its future results. Consequently, certain statements contained in this MD&A constitute expressed or implied forward-looking statements. Terms including, but not limited to, "anticipate", "estimate", "believe" and "expect" may identify forward-looking statements. Forward-looking statements, while they are based on the current knowledge and assumptions of the Company's management, are subject to risks and uncertainties that could cause or contribute to the actual results being materially different than those expressed or implied. Readers are cautioned not to place undue reliance on any forward-looking statement that may be in this MD&A.
Forward looking statements that have been made in this MD&A include:
- Plans for exploration of the Company's exploration and evaluation assets;
- Impairment of long-lived assets;
- The progress, potential and uncertainties of the Company's exploration and evaluation assets in Canada (Yukon);
- References to future commodity prices;
- Budgets or estimates with respect to future activities;
- Estimates of how long the Company expects its working capital to last;
- Expectations regarding the ability to raise capital and to continue its exploration and development plans on its properties; and
- Management expectations of future activities and results.
ADDITIONAL INFORMATION
Financial statements, MD&A's and additional information relevant to the Company and the Company's activities can be found on SEDAR+ at www.sedarplus.com and/or on the Company's website at www.silvernorthres.com.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SUMMARY AND OUTLOOK
Silver North's primary assets are its 100% owned Haldane silver project and the Tim silver project (under option to Coeur Mining, Inc. ("Coeur")). Silver North also holds gold and base metal projects in Yukon Territory and is actively seeking partners for them. Silver North also holds certain royalties on projects in North and South America.
Silver North recognizes environmental, social and governance ("ESG") best practices as key components to a responsible mineral exploration and mining sector. The Company's exploration programs are conducted to meet or exceed environmental regulations, while respecting the communities and environments in which we operate. Silver North strives to earn its social license wherever it is active, (such as in northern Canada), meeting regularly with local communities, regulators and other concerned parties before, and during, exploration work to understand issues important to local and Indigenous communities. Silver North's approach is based on transparency, open communication, inclusivity and respect, to better enable social and economic benefit for communities as well as build value for investors.
The environment for junior resource companies has been challenging for many months and it is anticipated that recovery of the sector may take many more months. We evaluate our projects on a regular basis using criteria that include political environment, relative cost of exploration, seasonality, target commodity and deposit type. As a result of our review, we may from time to time add or drop the Mineral Properties.
The Company completed a non-brokered private placement in two tranches closing on October 19, 2023 and December 28, 2023 by issuing 2,700,000 non-flow-through units ("Unit") at a price of $0.20 per Unit for gross proceeds of $540,000 and 2,300,000 flow-through shares ("FT Share") at a price of $0.20 per FT Share for gross proceeds of $460,000. Each Unit consists of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a 36-month period at a price of $0.30. In connection with the financing, the Company paid $24,640 in cash finder's fees and issued 123,200 finder's warrants, each of which is exercisable into one common share at a price of $0.20 for a period of 36 months.
The Company completed a non-brokered private placement on April 11, 2024 by issuing 6,500,000 units ("Unit") at a price of $0.10 per Unit for gross proceeds of $650,000. Each Unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a 36-month period at a price of $0.20. In connection with the financing, the Company paid $28,210 in cash finder's fees and another $45,102 paid in cash was also included as share issue costs.
The Company completed a non-brokered private placement in three tranches closing on June 21, 2024, June 28, 2024 and July 18, 2024 by issuing 2,500,000 charity flow-through units ("CFT Unit") at a price of $0.225 per CFT Unit for gross proceeds of $562,500 and 1,655,500 non-flow-through units ("NFT Units") at a price of $0.16 per NFT Unit for gross proceeds of $264,880. Each CFT Unit consists of one common share and one common share purchase warrant. Each NFT Unit consists of one common share and one common share purchase warrant. Each Warrant entitles the holder to purchase one additional common share for a 48-month period at a price of $0.35. In connection with the financing, the Company paid $20,230 in cash finder's fees and issued 126,437 finder's warrants, each of which is exercisable into one common share at a price of $0.16 for a period of 12 months.
The proceeds of the flow-through shares will be spent on Canadian Exploration Expenditures as defined in the Income Tax Act, Canada. The proceeds of non-flow-through units are used for the Company's working capital, general corporate expenses and to undertake further early stage exploration in its Canada properties, and for generating new projects.
For the 2024 fiscal year, the Company has continued to monitor its cash very closely and is focusing on key objectives to improve shareholder value. The Company intends to raise more funds either through exploration partnership agreements or with additional private placements in fiscal 2025.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
Additional Mineral Property information, including 2024 activity, can be found in Section 3 and more detailed Mineral Property information can be found on the Company's website at www.silvernorthres.com.
Management's overall expectations for the Company are positive, due in part to the following factors:
- ☐ The Company is focusing its exploration on silver (and gold/base metal) due to management's expectation of increasing silver (and gold/base metal) prices;
- ☐ The Company is active exploring on its Haldane property;
- ☐ The Company's option agreement with Coeur Mining Inc. ("Coeur") on the Tim property remains in good standing;
- ☐ The Company is working towards negotiating with potential partners on its existing portfolio of properties; and
- ☐ Positive results and progress on the Company's exploration projects.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
TABLE OF CONTENTS
- Background ... 5
- Overview ... 5
2(a) Company Mission and Focus ... 5
2(b) Qualified Person ... 5
2(c) Description of Metal Markets ... 5
2(d) Use of the terms “Mineral Resources” and “Mineral Reserves” ... 5 - Mineral Properties ... 6
3(a) Canada ... 6
i. Haldane, Yukon Territory, Canada ... 6
ii. Tim Property, Yukon Territory, Canada ... 10
iii. GDR, Yukon Territory, Canada ... 13
iv. Yukon Territory, Canada - Others ... 15
3(b) USA ... 15
i. Twin Canyon, Colorado, USA ... 15
ii. Klondike, Colorado, USA ... 15
iii. Stateline, Colorado, USA ... 16
iv. Ashby, Nevada, USA ... 16
3(c) Mexico ... 17
3(d) Peru ... 17 - Risks and Uncertainties ... 19
- Impairment of Long-lived Assets ... 20
- Material Financial and Operations Information ... 21
6(a) Selected Annual Financial Information ... 21
6(b) Summary of Quarterly Results ... 21
6(c) Review of Operations and Financial Results ... 21
6(d) Liquidity and Capital Resources ... 22
6(e) Disclosure of Outstanding Share Data ... 23
6(f) Off-Balance Sheet Arrangements ... 24
6(g) Transactions with Related Parties ... 24
6(h) Financial Instruments ... 26
6(i) Management of Capital Risk ... 28 - Events after the Reporting Period ... 28
- Policies and Controls ... 29
8(a) Significant Accounting Judgments and Estimates ... 29
8(b) Exploration and Evaluation Assets ... 29 - Internal Control Over Financial Reporting ... 30
- Information on the Officers and Board of Directors ... 30
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
1. Background
Silver North was incorporated in Alberta, Canada, on October 21, 2005 under the Business Corporations Act of Alberta.
On August 14, 2023, the Company changed its name from "Alianza Minerals Ltd." to "Silver North Resources Ltd." and consolidated its shares on a five pre-consolidation common shares for one new common share basis ("Consolidation") and began trading on the TSX Venture Exchange (the "Exchange" or "TSXV") under the symbol "SNAG". Historical information on the formation of the Company can be found on the Company's website www.silvernorthres.com or on SEDAR+ at www.sedarplus.com.
2. Overview
2(a) Company Mission and Focus
The Company's goal is to advance its 100% owned Haldane silver project and Tim silver project (under option to Coeur), both located in Canada's Yukon Territory.
The Company also actively seeks to partner its other gold and base metal projects in Yukon Territory (Canada).
2(b) Qualified Person
Jason Weber, BSc., P.Geo is the Qualified Person as defined under National Instrument 43-101 responsible for the technical disclosure in this document. Mr. Weber is the President and Chief Executive Officer of Silver North.
Mr. Weber prepared the technical information contained in this MD&A.
2(c) Description of Metal Markets
Silver (and gold/base metal) prices have remained above their long term averages, albeit with high levels of volatility. Market interest in silver and gold exploration is currently stronger than for base metals.
Market interest in exploration for copper, zinc and lead is increasing. The Company will continue to monitor its resources relative to its opportunities during the fiscal year.
2(d) Use of the terms "Mineral Resources" and "Mineral Reserves"
Any reference in this MD&A to Mineral Resources does not mean Mineral Reserve.
A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.
Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
3. Mineral Properties
Currently, the Company has properties in Yukon Canada. The following is a brief description of the Mineral Properties owned by the Company.
3(a) Canada
i. Haldane, Yukon Territory, Canada
On March 2, 2018, the Company purchased a 100% interest in the Haldane Property from Equity Exploration Consultants Ltd. ("Equity"). The 8,579-hectare (429 claims) Haldane Property is located 25 km west of Keno City, Yukon Territory, in the western portion of the Keno Hill Silver District.
The Company mobilized crews to the Haldane Property in August 2024 and began drilling in September 2024.
On October 16, 2024, the Company announced that the 2024 drilling campaign at the Haldane Property was completed. A total of 732 metres of drilling was completed in 3 holes testing the West Fault and Main Fault targets. This marks Silver North's first test of the Main Fault, with two holes successfully intersecting the target in moderately oxidized to unoxidized rocks allowing for strong recovery of the vein targets.
In addition to continuing step-out tests of the West Fault target, an important goal of the 2024 program was to test the Main Fault below the level of oxidation for a true representation of this target's potential for high grade silver mineralization. The surface expression of the Main Fault indicates potential for a large structure, with historical oxidized vein samples at surface averaging 151 g/t silver over 7.6 m and 223 g/t silver over 3.6 m at the Main Zone and Main Zone South showings. Heavily oxidized, poorly recovered intersections in 2011 and 2013 drilling by previous operators intersected similarly anomalous results.
Hole HLD24-29 intersected a somewhat oxidized structure above the Main Fault from 158.6m – 162.0m followed by unoxidized Main Fault breccia and siderite vein from 171.0m to 176.7m. The width of this zone warranted a follow up hole, targeting the structure 50 metres down dip. Hole HLD24-30 accomplished this, intersecting the same partially oxidized structure above the Main Fault from 171.0 – 172.5m and the Main Fault as a much wider, unoxidized, structural zone from 183.5 to 203.0 metres down hole, exhibiting multiple fault splays with strong gouge and breccia zones as well as quartz-siderite+/- sulphide veins. The program successfully showed that the Main Fault is a viable silver target with strong Keno District style veining characteristics indicating its potential to host high grade silver mineralization as seen elsewhere in the district. This was corroborated by strong analytical results from this target, released November 14, 2024 and summarized below.
A fourth hole at the Bighorn target was dropped from the program due to deteriorating conditions that made drill pad access difficult. Bighorn remains a high priority target and a pad was constructed early in the program that will be available for use in the next drill campaign at Haldane.
Main Fault Target
The Main Fault, thought to be a parallel structure to the West Fault, was targeted in the 2024 drill program based on surface sampling of the fault at the Main and Main South showings where oxidized vein samples on surface average 151 g/t silver over 7.6 m and 223 g/t silver over 3.6 m. Two holes tested this target (HLD24-29 and -30), successfully intersecting a wide structural zone consisting of three siderite-sulphide vein faults and breccias with an interstitial stockwork of siderite bearing veinlets and brecciated host rocks that forms the overall structural zone.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
In hole HLD24-29 the widest structural zone returned 13.75m true width ("TW") of 157 g/t silver, 1.42% lead and 0.67% zinc and blossomed to 28.36m (TW) of 130 g/t silver, 0.55% lead and 0.52% zinc 50 metres down dip in hole 30. High grade oxidized and brecciated siderite vein fault material at the upper boundary returned 1.83m (TW) of 1,088 g/t silver, 3.90 g/t gold, 1.89% lead and 0.63% zinc including 0.73m (TW) of 2,470 g/t silver, 9.64 g/t gold, 3.88% lead and 0.99% zinc in hole HLD24-30. It is notable that these upper boundary intersections are unusually high in gold as compared to other intersections at the Haldane Property. The oxidized nature of these intersections makes it difficult to determine the mineralogy associated with the elevated gold values at this time.
Table 1 – Haldane Property – 2024 Significant Drill Intersections
| Hole | From (m) | To (m) | Interval (m) | True Width(m) | Ag (g/t) | Au (g/t) | Pb (%) | Zn (%) | Silver Eq (g/t)^{1} |
|---|---|---|---|---|---|---|---|---|---|
| HLD24-28 (West) | 243.71 | 244.09 | 0.38 | 0.19 | 122 | 0.17 | 2.07 | 0.48 | 218 |
| HLD24-29 (Main) | 146.20 | 162.00 | 15.80 | 13.75 | 157 | 0.08 | 1.42 | 0.67 | 233 |
| incl. | 147.60 | 150.00 | 2.40 | 2.09 | 206 | 0.10 | 1.49 | 1.36 | 311 |
| incl. | 157.00 | 160.50 | 3.50 | 3.05 | 460 | 0.15 | 4.34 | 1.23 | 653 |
| and incl. | 158.60 | 160.50 | 1.90 | 1.65 | 777 | 0.25 | 7.86 | 2.22 | 1,123 |
| 171.00 | 176.30 | 5.30 | 4.61 | 53 | 0.06 | 1.13 | 1.43 | 147 | |
| incl. | 174.20 | 176.30 | 2.10 | 1.83 | 105 | 0.04 | 2.61 | 2.07 | 268 |
| HLD24-30 (Main) | 159.00 | 161.50 | 2.50 | 1.83 | 1,088 | 3.90 | 1.89 | 0.63 | 1,491 |
| incl. | 159.00 | 160.00 | 1.00 | 0.73 | 2,470 | 9.64 | 3.88 | 0.99 | 3,422 |
| 164.20 | 203.00 | 38.80 | 28.36 | 130 | 0.09 | 0.55 | 0.52 | 174 | |
| incl. | 171.70 | 172.50 | 0.80 | 0.58 | 1,210 | 0.42 | 3.15 | 0.45 | 1,358 |
| incl. | 183.85 | 191.80 | 7.95 | 5.81 | 365 | 0.23 | 1.80 | 1.37 | 491 |
| and incl. | 190.80 | 191.80 | 1.00 | 0.73 | 1,025 | 0.54 | 8.52 | 2.18 | 1,415 |
| incl | 201.75 | 203.00 | 1.25 | 0.91 | 194 | 0.18 | 0.54 | 1.08 | 266 |
¹ Silver-equivalent values are calculated assuming 100% recovery using the formula: ((20 * silver (g/t) / 31.1035) + (1650 * gold (g/t) / 31.1035) + (0.90 * 2204 * lead %/100) + (1.10 * 2204 * zinc %/100)) * (31.1035 / 20). Metal price assumptions are US$20/oz silver, US$1650/oz gold, US$0.90/lb lead and US$1.10/lb zinc. While metal prices today are generally higher than those used in the formula, these are the values used for past drilling at Haldane in order to compare past results.
High grade, partially oxidized and strongly brecciated siderite vein fault from the centre of the Main Fault structural zone returned 3.05m (TW) of 460 g/t silver, 0.15 g/t gold, 4.34% lead and 1.23% zinc, including 1.65m (TW) of 777g/t silver, 0.25 g/t gold, 7.86% lead and 2.22% zinc in HLD24-29 and 5.8m (TW) 365 g/t silver, 0.23 g/t gold, 1.80% lead and 1.37% zinc 50 meters down dip from HLD24-30.
The best result from the lowermost unoxidized siderite vein and vein fault breccia was an intercept of 0.91m (TW) of 194 g/t silver, 0.18 g/t gold, 0.54% lead and 1.08% zinc from HLD24-30.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
Figure 1 - Haldane Property Drill Plan Map
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
Page 8 of 31
SILVER NORTH
Figure 2 - Cross Section HLD24-29 & -30
West Fault Target
Holes HLD24-29 and -30 potentially tested the very upper portions of the West Fault prior to reaching the Main Fault. The intersections occur high in the hole in very oxidized material. A significant fault zone was intersected in HLD24-29 but was unmineralized while the projected intersection in HLD24-30 was not recovered. Due to the shallow nature of the intersections and associated poor core recovery,
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
management does not believe that this is an adequate test of the West Fault in this area and plans deeper drilling in this area in the future.
Hole HLD24-28, intersected the West Fault but deviated significantly more shallowly than expected and to the west of the intended target pierce point. The hole intersected several narrow discrete siderite-galena-sphalerite veins and siderite veinlets with the best of these returning 0.19m (TW) of 122 g/t silver, 0.169 g/t gold, 2.07% lead and 0.47% zinc. The hole did not close off the interpreted SW plunge of high-grade silver mineralization intersected in 2021 drilling, which remains open at a more steeply oriented plunge.
ii. Tim Property, Yukon Territory, Canada
The road-accessible Tim property is located in southern Yukon. Exploration at Tim property is targeting high-grade silver-lead mineralization similar to that at Coeur Mining Inc.'s ("Coeur") Silvertip operation, located 19 kilometres south of the Tim property.
In 2013, the Company's predecessor, Tarsis Resources Ltd. ("Tarsis") completed a focused work program to re-evaluate a historical zone of silver-lead-zinc rich carbonate replacement mineralization (commonly known as "CRD" style mineralization) originally exposed by mechanized trenching in 1988. Historical chip sampling across the zone returned 352 g/t silver and 9.12% lead across 4.00 metres. In addition to this exposure, similar mineralization was also reported in adjacent trenches 180 and 250 metres on either side of the central trench. This zone has never been tested with drilling. Tarsis resampled the central trench in 2013, returning 3.7 metres assaying 365 g/t silver and 7.5% lead from a channel sample.
On January 27, 2020, and subsequently amended on December 5, 2023, the Company announced that it signed an option agreement with a subsidiary of Coeur Mining Inc. to acquire an option on the property. Coeur can earn an initial 51% interest in the Tim property by completing item numbers 1 to 7 per the table below:
| Date/Period | Expenditures | Option Payment | |
|---|---|---|---|
| 1 | On the Effective Date | None | $10,000 (received) |
| 2 | On or before 1st anniversary of the Class 1 Notification Date | $50,000 (completed) | $15,000 (received) |
| 3 | On or before 2nd anniversary of the Class 1 Notification Date | $500,000 | $25,000 (received) |
| 4 | By December 31, 2023 | - | $50,000 (received) |
| 5 | By December 31, 2024 | $700,000 | $75,000 (subsequently received) |
| 6 | By December 31, 2025 | $1,100,000 | $100,000 |
| 7 | By December 31, 2026 | $1,353,073 | $100,000 |
| 8 | By December 31, 2027 | - | $100,000 |
| 9 | On or before the 8th anniversary of the Class 1 Notification Date | - | $100,000 |
(*) Class 1 Notification Date is December 16, 2020.
As further consideration for the agreed upon amendments, Coeur agreed to make a one-time payment of $50,000 to the Company on or before December 31, 2023 (received).
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
After earning an initial 51% interest in the property, Coeur may increase its interest to 80% by financing a feasibility study and notifying the Company of its intention to develop a commercial mine on the property on or before the eighth anniversary of the date of notification of the Class 1 exploration permit, as well as completing item numbers 8 and 9 per the table above.
On March 27, 2024, the Company outlined its plans for the 2024 drilling program and on July 3, 2024, the Company announced that Coeur had commenced the 2024 drilling program at the Tim property, with plans to complete 2,200 metres of drilling, testing the potential for CRD-style mineralization along almost 2,000 metres of strike length of prospective stratigraphy. Drilling targeted both structurally-hosted "chimney" style mineralization and stratigraphically controlled "manto" mineralization, including recent surface sampling to verify historical sampling 468.1 g/t silver, 21.1% lead, and 0.3% zinc over 4.0 metres from one re-opened trench and 265.0 g/t silver, 6.7% lead and 0.9% zinc over 8.8 metres from another trench, located approximately 200 metres along strike..
On August 19, 2024, the Company provided an update on 2024 Yukon exploration activities at the Tim silver property, describing all four holes drilled to date as having intersected the strongly oxidized Wolf structure and/or parallel splays of it. The Wolf Fault is noted to emplace overlying Kechika phyllite and argillites in fault contact with the underlying prospective Rosella Limestone Formation. At depth, parallel structures to the Wolf Fault are seen within the argillites of the Boya Formation that underlie the Rosella limestones. Geological and structural features that had been observed in the drilling to date consist of diagnostic features that are commonly associated with significant CRD mineralization and have been observed at the Silvertip deposits. Such characteristics include fugitive calcite veining that fluoresces in UV light (displaying the classic "barbeque" pink and orange fluorescence) and re-crystallization of the host limestones. These features suggest that the Wolf Fault target at Tim could be part of a productive CRD system.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
Page 11 of 31
SILVER NORTH
Coeur indicated it would also be undertaking two additional detailed airborne geophysical surveys over the entire project consisting of magnetics and radiometrics surveys and a Mobile MT survey that has the potential to detect conductive features at much greater depths than the recent SkyTEM airborne survey of the property. These elements represented an expansion of the planned 2024 exploration program.
On September 4, 2024, the Company announced that the 2024 drilling program at the Tim Property was completed and the drill was demobilized from site. A total of 2,252 metres were drilled in six holes in the program. The 2024 program was conducted under the direction of Coeur's exploration team based at Silvertip. Tim is road accessible via 25 km of 4 x 4 access off the Silvertip Mine Road.
During the year ended September 30, 2024, Coeur was invoiced $9,750 (received) for reimbursements related to the Tim property.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
iii. GDR, Yukon Territory, Canada
On May 14, 2024, the Company announced that it completed an option agreement with three prospectors who hold the GDR Project in southern Yukon. The GDR Project consists of three claim groups totalling 150 claims in the Silvertip-Midway District and in the vicinity of Silver North's previously discussed Tim Silver Property. The GDR Project claims cover geology prospective for Carbonate Replacement Deposits ("CRD") similar to that being explored at Tim and at Coeur's nearby Silvertip Mine Project.
The Company can earn a 100% interest in the GDR property under the following terms:
| Date/Period | Cash | Shares |
|---|---|---|
| On the Closing Date (5 business days following TSX Venture Exchange's approval) ** | $6,000 (paid) | 180,000 (issued) |
| On or before 1st anniversary of the Closing Date | $6,000 | 180,000 |
| On or before 2nd anniversary of the Closing Date | $20,000 | 240,000 |
| On or before 3rd anniversary of the Closing Date | $30,000 | 240,000 |
| On or before 4th anniversary of the Closing Date | $40,000 | 720,000 |
** Closing Date is defined as May 29, 2024.
On exercise of the option, the GDR property will be subject to a Net Smelter Return (NSR) royalty of 2.4%, 0.9% of which can be purchased for $2,000,000 by the Company until 6 months after the start of production.
The three properties comprising the GDR Project (Veronica, MR, and MFW claim groups) are road and trail accessible with excellent potential for high-grade Ag-Zn-Pb CRD mineralization similar to the nearby Silvertip mine project owned by Coeur. The project claims have Ag-Pb-Zn showings and multi-element soil geochemical anomalies underlain by Paleozoic limestone, in a similar geological setting to CRD mineralization at Silvertip.
Veronica is located 11 km by road north of Silvertip and within 2 km of Silver North's Tim project. MR and MFW are located a further 10 km and 17 km north, and north of the Alaska Highway.
At Veronica a multi-element soil anomaly has been defined over an area 450 by 450 m and is open to the east with values that range from 0.3 - 31.1 ppm Ag, 60 - 3100 ppm Pb, and 50 - 612 ppm Zn. This new anomaly has not been trenched, drilled or explained by prospecting and presents a compelling target for exploration follow up. Limestone and quartzite outcrop in the area.
Further south on the Veronica property and along the Yukon border, high Ag, Pb and Zn values in soils are associated with quartz veins cutting Paleozoic shales. Soil values range from 0.1 - 8.67 ppm Ag, 28 - 2780 ppm Pb, 25 - 2500 ppm Zn, and have not been explained.
The nearby Stollery barite prospect has had historic soils sampling and cat trenching and may represent a sedex Zn-Pb-Ag-barite environment.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
The MFW property covers a discontinuous 1500 m-long Ag-Pb-Zn soil anomaly that remains unexplained. Confirmation sampling within the anomaly conducted in 2016 returned 14 of 61 soil samples with >2.0 ppm Ag, with a high of 17.95 ppm Ag, 348 ppm Pb, 1060 ppm Zn, 143.5 ppm As and 10.65 ppm Sb. The anomalous elements are suggestive of a potential CRD style mineralized source. Nearby outcrops consist of limestone and quartzite.
The MR property covers a number of historic trenches excavated to explore a series of carbonate-hosted, zinc-oxide prospects. The best results include: 20m of 5.05% Zn, 1.97% Pb and 3.4 ppm Ag and 1.5m of 8.8% Pb and 51.4 ppm Ag. A vein structure discovered in 2016 and chip sampled in 2018 returned 1m @ 477 ppm Ag, 9.29% Pb and 0.91% Zn. Soil sampling to the southeast of this structure has defined an anomaly over 300 by 500m of >2 ppm Ag and up to 7.6 ppm Ag with associated anomalous Pb and Zn concentrations. The anomaly remains unexplored and unexplained. No exploration work was completed on any of the three projects in 2024.
The Veronica claim group partially lies within the Area of Interest surrounding the Tim Property, and as such, the Company is obligated to offer the Veronica for inclusion within the Tim Option agreement
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
Page 14 of 31
SILVER NORTH
between Silver North and Coeur. If Coeur agrees to include the Veronica claims, it will reimburse one half of Silver North's acquisition costs.
iv. Yukon Territory, Canada - Others
The Company is assessing the next stages of work for its three other Yukon projects: Goz Creek (zinc-silver in central Yukon), Mor Property (gold-silver-base metal drill intersections in southern Yukon) and White River (high grade gold-silver and copper in southwest Yukon). Management is prioritizing these projects for option and where appropriate, programs to upgrade targets to drill-ready status.
3(b) USA
During fiscal 2024, the Company dropped all its USA properties, except for Ashby property where it has optioned to Nevada Canyon.
i. Twin Canyon, Colorado, USA
On June 17, 2020, the Company acquired a lease of the Twin Canyon gold property in southwest Colorado
The Company agreed to assume the terms of Myron Goldstein and Jon Thorson commitments under the lease, namely the annual lease payments of US$15,000 for ten years, with the right to extend the lease for two additional terms of ten years each. The original property owner has a 1.5% NSR on the property, two-thirds (1%) of which is purchasable at any time for US$1,000,000. If annual NSR payments exceed US$20,000 in a given year, the Company will not have to make the annual US$15,000 lease payment for that year.
In June 2024, the Company transferred the Twin Canyon claims back to Goldstein and Thorson and relinquished any other commitments to this property. During the year ended September 30, 2024, the Company wrote off $710,523 of capitalized exploration and evaluation costs.
ii. Klondike, Colorado, USA
On June 7, 2021, the Company and Cloudbreak Discovery PLC ("Cloudbreak") entered into an agreement whereby either company could introduce projects to a Strategic Alliance. Projects accepted into the Strategic Alliance would be held 50/50 as to beneficial ownership but funding of the initial acquisition and any preliminary work programs would be funded 40% by the introducing partner and 60% by the other party. The initial term of the Strategic Alliance was two years and may be extended for an additional two years. The Strategic Alliance was not a separate legal entity of any kind and represented a cost-sharing arrangement only.
The Klondike project is located approximately 25 km south of Naturita, Colorado. This property lies within the Paradox Copper Belt, which includes the producing Lisbon Valley Copper Mine. There are numerous historical copper occurrences that have been identified throughout the district; however, many of these have not been explored using modern exploration techniques.
On December 3, 2021, as amended February 1, 2022, the Company and Cloudbreak entered into an option agreement, pursuant to which it granted Volt an option to earn a 100% interest in the Klondike property. The Company and Cloudbreak were to each receive 50% of the option payments.
On February 3, 2023, the Company received notice from option partner, Volt, that Volt terminated its option on the Klondike property, effective February 2, 2023. The Company and Cloudbreak retained a 100% interest in this property.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
The Company and Cloudbreak did not mutually agree to extend the Strategic Alliance agreement and the agreement terminated in June 2023.
In August 2024, the Company transferred the Klondike claims back to original owner and relinquished any other commitments to this property. During the year ended September 30, 2024, the Company wrote off $8,922 of capitalized exploration and evaluation costs.
iii. Stateline, Colorado, USA
On November 29, 2021, the Strategic Alliance of the Company and Cloudbreak announced the acquisition of the Stateline Property ("Stateline"), located in Colorado and Utah, consisting of 22 unpatented mining claims acquired from local prospectors.
The Stateline project was purchased from the underlying vendors for a USD$20,000 cash payment and a further USD$40,000 payment in the form of cash and/or shares.
On February 10, 2022, the Company and Cloudbreak announced the optioning of the Stateline property to Volt. Under the Stateline Option Agreement, Volt could earn a 100% interest in the property under the following terms (all payments amounts were split 50/50 between the Company and Cloudbreak):
The Company and Cloudbreak did not mutually agree to extend the Strategic Alliance agreement and the agreement terminated in June 2023.
On August 11, 2023, Volt terminated the option agreement and the Company retained a 100% interest in this property.
In August 2024, the Company transferred the Stateline claims back to original owner and relinquished any other commitments to this property. During the year ended September 30, 2024, the Company recovered $2,067 of capitalized exploration and evaluation costs.
iv. Ashby, Nevada, USA
The Ashby property, acquired from Sandstorm in January 2015, is located in Mineral County, near Hawthorne. The claims cover mesothermal gold-bearing quartz veins within the Jurassic Dunlap Formation. Historic production of 9,000 ounces is reported from the 1930's and several hundred ounces per year during the 1980's and 1990's. Vein widths range from 15 centimeters to 1.8 meters and gold grades are reported from sub-gram to multi-ounce intervals. The property has had very limited modern exploration.
A 2% NSR is payable to Nevada Eagle Resources LLC and a 1% NSR is payable to Sandstorm Gold Ltd. on production from the property.
On August 2, 2017, the Company signed an exploration lease agreement to lease the Ashby gold property to Nevada Canyon Gold Corp. ("Nevada Canyon"). Under the terms of the agreement, Nevada Canyon made a US$1,000 payment on signing and an annual payment of US$2,000 and will grant a 2% Net Smelter Royalty ("NSR") on future production from the Lazy 1-3 claims comprising the Ashby property. Nevada Canyon will also be responsible for all claim fees and certain reclamation work to be undertaken on the property. The initial term of the lease is 10 years and can be extended for an additional 20 years.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
3(c) Mexico
The Company has a 1% NSR, capped at $1,000,000, on certain Mexican properties that were sold to Almadex Minerals Limited.
3(d) Peru
On March 23, 2023, the Company sold its project data associated with the La Estrella project in Peru to Highlander Silver Corp. ("Highlander") in consideration for the payment of $15,000 and the issuance of 75,000 common shares of Highlander.
The Company retains a 1.08% Net Smelter Royalty on the Pucarana property.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
Page 17 of 31
SILVER NORTH
Exploration and Evaluation Assets for the year ended September 30, 2024
| Haldane | Tim | Others - Maintained | Others - Dropped | Total | |
|---|---|---|---|---|---|
| Balance at September 30, 2023 | $ 5,048,921 | $ - | $ 1,129,142 | $ 703,582 | $ 6,881,645 |
| Additions during the period | |||||
| Acquisition costs: | |||||
| Property acquisition | - | - | 45,600 | 3,375 | 48,975 |
| - | - | 45,600 | 3,375 | 48,975 | |
| Exploration expenditures: | |||||
| Camp, travel and meals | 66,154 | 3,335 | - | 3,645 | 73,134 |
| Drilling | 416,562 | - | - | - | 416,562 |
| Field equipment rental | 1,155 | - | - | - | 1,155 |
| Geochemical | - | - | - | 549 | 549 |
| Geological consulting | 140,953 | 55,129 | 4,246 | 592 | 200,920 |
| Licence and permits | - | - | 7,980 | (3,118) | 4,862 |
| Permitting | - | - | - | 6,148 | 6,148 |
| Trenching | 12,470 | - | - | - | 12,470 |
| 637,294 | 58,464 | 12,226 | 7,816 | 715,800 | |
| Less: | |||||
| Option payments received | - | (50,000) | (2,700) | - | (52,700) |
| Proceeds received in excess of exploration and evaluation asset costs - recognized as income | - | 1,286 | 2,700 | - | 3,986 |
| Recovered exploration expenditures | - | (9,750) | - | - | (9,750) |
| Write-down of properties | - | - | - | (717,378) | (717,378) |
| Net additions | 637,294 | - | 57,826 | (706,187) | (11,067) |
| Foreign currency translation | - | - | - | 2,605 | 2,605 |
| Balance at September 30, 2024 | $ 5,686,215 | $ - | $ 1,186,968 | $ - | $ 6,873,183 |
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
4. Risks and Uncertainties
The Company is engaged in the exploration for mineral deposits. These activities involve significant risks which even with careful evaluation, experience and knowledge may not, in some cases, be eliminated. The Company's success depends on a number of factors, many of which are beyond its control. The primary risk factors affecting the Company include inherent risks in the mining industry, metal price fluctuations and operating in foreign countries and currencies.
Inherent risks within the mining industry
The commercial viability of any mineral deposit depends on many factors, not all of which are within the control of management. Some of the factors that will affect the financial viability of a given mineral deposit include its size, grade and proximity to infrastructure. Government regulation, taxes, royalties, land tenure and use, environmental protection and reclamation and closure obligations could also have a profound impact on the economic viability of a mineral deposit.
Mining activities also involve risks such as unexpected or unusual geological operating conditions, floods, fires, earthquakes, other natural or environmental occurrences and political and social instability. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks as a result of high premiums or for other reasons. The Company does not currently maintain insurance against political or environmental risks. Should any uninsured liabilities arise, they could result in increased costs, reductions in profitability, and a decline in the value of the Company's securities.
There is no assurance at this time that the Company's current mineral properties will be economically viable for development and production.
Prices for gold and other commodities
Metals prices are subject to volatile price fluctuations and have a direct impact on the commercial viability of the Company's exploration properties. Price volatility results from a variety of factors, including global consumption and demand for metals, international economic and political trends, fluctuations in the US dollar and other currencies, interest rates, and inflation. The Company has not hedged any of its potential future gold or other metal sales. The Company closely monitors gold prices as well as other metal prices to determine the appropriate course of action to be taken by the Company.
Foreign currency risks
The Company uses the Canadian dollar as its measurement and reporting currency, and therefore fluctuations in exchange rates between the Canadian dollar and other currencies may affect the results of operations and financial position of the Company. The Company does not currently have any foreign currency or commercial risk hedges in place.
The Company raises the majority of its equity financings in Canadian dollars while foreign operations are predominately conducted in Peruvian soles and US dollars. Fluctuations in the exchange rates between the Canadian dollar, US dollar and Peruvian soles may impact the Company's financial condition.
Risks Associated with Foreign Operations
The Company's investments in foreign countries such as USA carry certain risks associated with different political, business, social and economic environments. The Company might evaluate gold and other commodities in foreign jurisdictions, but will undertake new investments only when it is satisfied that the
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
risks and uncertainties of operating in different cultural, economic and political environments are manageable and reasonable relative to the expected benefits.
Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyance and regulatory characteristics of property rights in certain foreign countries. Access to mineral properties also involves certain inherent risks due to the change in local ranchers and land owners.
Future government, political, legal or regulatory changes in the foreign jurisdictions in which the Company currently operates or plans to operate could affect many aspects of the Company's business, including title to properties and assets, environmental protection requirements, labor relations, taxation, currency convertibility, repatriation of profits or capital, the ability to import necessary materials or services, or the ability to export produced materials.
The exploration of mineral resources in any foreign jurisdictions is subject to a comprehensive review, approval and permitting process that involves various federal, state and local agencies. There can be no assurance given that the required approvals and permits for a mining project, if technically and economically warranted, on the Company's claims can be obtained in a timely or cost-effective manner. The foreign government may enact a law requiring royalties on minerals produced from federal lands, including unpatented claims.
Competition
The Company competes with larger and better-financed companies for exploration personnel, contractors and equipment. Increased exploration activity has increased demand for equipment and services. There can be no assurance that the Company can obtain required equipment and services in a timely or cost-effective manner.
Financing
All of the Company's short- to medium-term operating and exploration cash flow have been derived from external financing. Should changes in equity-market conditions prevent the Company from obtaining additional external financing in the future, the Company will review its exploration-property holdings and programs to prioritize project expenditures based on funding availability.
5. Impairment of Long-lived Assets
The Company completed an impairment analysis as at September 30, 2024, which considered the indicators of impairment in accordance with IAS 36, "Impairment of Assets". Management concluded that no further impairment charges were required other than those already taken because:
- there have been no significant changes in the legal factors or climate that affects the value of the properties;
- all property rights remain in good standing;
- there have been no significant changes in the projections for the properties;
- exploration results are generally positive; and
- the Company intends to continue its exploration and development plans on its properties or seek optionees/partners for future exploration of its properties.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
6. Material Financial and Operations Information
6(a) Selected Annual Financial Information
The following selected annual financial information has been derived from the last three audited financial statements of the Company, which have been prepared in accordance with IFRS. All dollar amounts are expressed in Canadian dollars.
6(b) Summary of Quarterly Results
| Year Ended September 30, 2024 | Year Ended September 30, 2023 | Year Ended September 30, 2022 | |
|---|---|---|---|
| General and administrative expenses | $ 1,396,837 | $ 627,057 | $ 1,338,320 |
| Write-off of exploration and evaluation assets / Impairment allowance | 717,378 | 338,943 | 1,038,046 |
| Loss for the year | 2,031,413 | 795,040 | 2,051,990 |
| Basic and diluted loss per share | 0.05 | 0.02 | 0.07 |
| Total assets | 7,802,451 | 7,162,990 | 8,094,131 |
| Total long-term financial liabilities | Nil | Nil | Nil |
| Cash dividend declared – per share | N/A | N/A | N/A |
The following is a summary of the Company's financial results for the last eight quarters:
| Three months ended | ||||
|---|---|---|---|---|
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |
| Loss before other items | $ 334,112 | $ 597,533 | $ 278,338 | $ 186,854 |
| Net loss | $ 267,861 | $ 623,949 | $ 965,116 | $ 174,487 |
| Loss per share | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.00 |
| Three months ended | ||||
| --- | --- | --- | --- | --- |
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |
| Loss before other Items | $ 212,548 | $ 113,150 | $ 164,001 | $ 137,358 |
| Net loss | $ 462,436 | $ 119,143 | $ 61,300 | $ 152,161 |
| Loss per share | $ 0.01 | $ 0.00 | $ 0.00 | $ 0.00 |
6(c) Review of Operations and Financial Results
For the three months ended September 30, 2024 compared with the three months ended September 30, 2023:
The Company recorded a net loss for the three months ended September 30, 2024 of $267,861 (loss per share - $0.01) compared to a loss of $462,436 (loss per share - $0.01) for the three months ended September 30, 2023.
Excluding the non-cash share-based payments of $50,556 (2023 - $Nil), expenses increased to $283,556 (2023 - $212,548). The change in the expenses was mainly due to: (a) investor relations and shareholder information of $136,239 (2023 - $47,992) as the Company has been active in promoting to its shareholders and potential investors regarding the Company's operating activities as well as its exploration programs on its properties; while being offset by (b) wages, benefits and consulting fees of $38,652 (2023 - $58,156) as the Company allocated $10,125 (2023 - $12,000) to exploration and evaluation assets as geological consulting fees.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
The other major items for the three-months ended September 30, 2024, compared with September 30, 2023, were:
- Flow-through share premium recovery of $54,503 (2023 - $Nil);
- Proceeds received in excess of exploration and evaluation assets costs of $3,986 (2023 - $133,008);
- Write-down of exploration and evaluation assets of a negative amount of $2,737 (2023 - $338,943); and
- Write-down of VAT receivables of $ Nil (2023 - $42,706).
The Company has been monitoring its use of cash and has been actively seeking ways to reduce its operating expenses.
For the year ended September 30, 2024 compared with the years ended September 30, 2023 and 2022:
The Company recorded a net loss for the year ended September 30, 2024 of $2,031,413 (loss per share - $0.05) compared to a loss of $795,040 (loss per share - $0.02) for the year ended September 30, 2023 and a loss of $2,051,990 (loss per share - $0.07) for the year ended September 30, 2022.
Excluding share-based payments of $336,735 (2023 - $Nil; 2022 - $365,300), expenses increased to $1,060,102 (2023 - $627,057; 2022 - $973,020). The change in the expenses was mainly due to change in investor relations and shareholder information of $602,716 (2023 - $144,501; 2022 - $465,385).
The other major items for the year ended September 30, 2024, compared with September 30, 2023 and 2022, were:
- Fair value gain on marketable securities of $7,500 (2023 - $76,985; 2022 - fair value loss of $84,485);
- Flow-through share premium recovery of $54,503 (2023 - $4,221; 2022 - $28,828);
- Proceeds received in excess of exploration and evaluation assets costs of $3,986 (2023 - $133,008; 2022 - $341,966);
- Write-down of exploration and evaluation assets of $717,378 (2023 - $338,943; 2022 - $1,038,046); and
- Write-down of VAT receivables of $Nil (2023 - $42,706; 2022 - $Nil).
The Company has been monitoring its use of cash and has been actively seeking ways to reduce its operating expenses.
6(d) Liquidity and Capital Resources
As at September 30, 2024, the Company had a working capital deficiency of $361,496 (September 30, 2023 - $683,757). As at September 30, 2024, $709,647 was held in cash (2023 - $135,203). The change is due to (a) net proceeds from financing activities of $2,219,820; (b) proceeds from sale of marketable securities of $20,625; (c) a decrease in deposits of $5,444; while being offset by (d) operating activities of $1,300,229; and (e) net exploration and evaluation assets expenditures of $369,274.
During the year ended September 30, 2024, the Company received gross proceeds of $2,392,380 for three private placements (see "Summary and Outlook" section).
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
During 2025, as in prior years, the Company expects to spend most of its funds on exploration and administration and the source of those funds is generally from private placement financing. While current cash positions are low at year end, Silver North does expect to be able to raise sufficient funds to continue with its exploration plans and pay for its administration costs for following year.
There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary in order for the Company to achieve its stated business objectives.
6(e) Disclosure of Outstanding Share Data
Common Shares
Authorized: unlimited number of common shares without par value and an unlimited number of preferred shares issuable in series.
| Issued and Outstanding | ||
|---|---|---|
| September 30, 2024 | January 27, 2025 | |
| Common shares | 47,713,494 | 47,713,494 |
Stock option transactions and the number of stock options for the year ended September 30, 2024 are summarized as follows:
| Expiry date | Exercise price | September 30, 2023 | Granted | Exercised | Expired / cancelled | September 30, 2024 |
|---|---|---|---|---|---|---|
| July 30, 2024 | $0.50 | 345,000 | - | - | (345,000) | - |
| October 15, 2025 | $0.70 | 401,000 | - | - | - | 401,000 |
| January 18, 2027 | $0.50 | 1,160,000 | - | - | - | 1,160,000 |
| March 17, 2027 | $0.50 | 100,000 | - | - | (100,000) | - |
| April 24, 2029 | $0.15 | - | 1,860,000 | - | - | 1,860,000 |
| July 2, 2029 | $0.15 | - | 450,000 | - | - | 450,000 |
| Options outstanding | 2,006,000 | 2,310,000 | - | (445,000) | 3,871,000 | |
| Options exercisable | 2,006,000 | 2,122,500 | - | (445,000) | 3,683,500 | |
| Weighted average exercise price | $0.54 | $0.15 | $Nil | $0.50 | $0.31 |
The continuity of warrants for the year ended September 30, 2024 is as follows:
| Expiry date | Exercise price | September 30, 2023 | Issued | Exercised | Expired | September 30, 2024 | |
|---|---|---|---|---|---|---|---|
| May 19, 2025 | (a) | $0.625 | 1,000,000 | - | - | - | 1,000,000 |
| March 15, 2025 | $0.50 | 87,860 | - | - | - | 87,860 | |
| October 19, 2026 | $0.30 | - | 1,250,000 | - | - | 1,250,000 | |
| December 28, 2026 | $0.30 | - | 100,000 | - | - | 100,000 | |
| April 11, 2027 | $0.20 | - | 6,500,000 | - | - | 6,500,000 | |
| June 21, 2028 | $0.35 | - | 2,500,000 | - | - | 2,500,000 | |
| June 28, 2028 | $0.35 | - | 1,099,250 | - | - | 1,099,250 | |
| July 18, 2028 | $0.35 | - | 556,250 | - | - | 556,250 | |
| Outstanding | 1,087,860 | 12,005,500 | - | - | 13,093,360 | ||
| Weighted average exercise price | $0.61 | $0.26 | $Nil | $Nil | $0.29 |
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
(a) Pursuant to the warrant incentive program, 87,860 warrants were exercised for 87,860 common shares and 87,860 incentive warrants at a price of $0.50 expiring on March 15, 2025.
The continuity of finder's warrants for the year ended September 30, 2024 is as follows:
| Expiry date | Exercise price | September 30, 2023 | Issued | Exercised | Expired | September 30, 2024 |
|---|---|---|---|---|---|---|
| June 21, 2025 | $0.16 | - | 105,000 | - | - | 105,000 |
| June 28, 2025 | $0.16 | - | 10,500 | - | - | 10,500 |
| July 18, 2025 | $0.16 | - | 10,937 | - | - | 10,937 |
| October 19, 2026 | $0.20 | - | 79,450 | - | - | 79,450 |
| December 28, 2026 | $0.20 | - | 43,750 | - | - | 43,750 |
| Outstanding | - | 249,637 | - | - | 249,637 | |
| Weighted average exercise price | $Nil | $0.18 | $Nil | $Nil | $0.18 |
As at the date of the MD&A, the remaining outstanding stock options, warrants and finder's warrants, if all exercised, would increase the Company's cash by $5,080,425. However, some of the strike prices of the options, warrants and finder's warrants are greater than the current share price, and this may influence whether options, warrants and finder's warrants that expire in the near future will be exercised.
As at the date of this MD&A, there were 47,713,494 common shares issued and outstanding and 64,927,491 common shares outstanding on a diluted basis.
6(f) Off-Balance Sheet Arrangements
None at this time.
6(g) Transactions with Related Parties
The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:
For the year ended September 30, 2024
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Share-based payments | Total | |
|---|---|---|---|---|---|---|
| Jason Weber | ||||||
| Chief Executive Officer, | ||||||
| Director | $ 162,000 | $ Nil | $ Nil | $ Nil | $ 53,851 | $ 215,851 |
| Rob Duncan | ||||||
| VP of Exploration | $ 126,724 | $ Nil | $ Nil | $ Nil | $ 46,158 | $ 172,882 |
| Winnie Wong | ||||||
| Chief Financial Officer | $ Nil | $ Nil | $ Nil | $ Nil | $ 30,772 | $ 30,772 |
| Marc G. Blythe | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 30,772 | $ 30,772 |
| Mark T. Brown | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 46,158 | $ 46,158 |
| Craig Lindsay | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 30,772 | $ 30,772 |
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
For the year ended September 30, 2023
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Share-based payments | Total | |
|---|---|---|---|---|---|---|
| Jason Weber | ||||||
| Chief Executive Officer, | ||||||
| Director | $ 162,000 | $ Nil | $ Nil | $ Nil | $ Nil | $ 162,000 |
| Rob Duncan | ||||||
| VP of Exploration | $ 150,000 | $ Nil | $ Nil | $ Nil | $ Nil | $ 150,000 |
For the year ended September 30, 2022
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Share-based payments | Total | |
|---|---|---|---|---|---|---|
| Jason Weber | ||||||
| Chief Executive Officer, | ||||||
| Director | $ 162,000 | $ Nil | $ Nil | $ Nil | $ 59,000 | $ 221,000 |
| Rob Duncan | ||||||
| VP of Exploration | $ 150,000 | $ Nil | $ Nil | $ Nil | $ 44,250 | $ 194,250 |
| Winnie Wong | ||||||
| Chief Financial Officer | $ Nil | $ Nil | $ Nil | $ Nil | $ 29,500 | $ 29,500 |
| Marc G. Blythe | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 29,500 | $ 29,500 |
| Mark T. Brown | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 44,250 | $ 44,250 |
| Craig Lindsay | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 29,500 | $ 29,500 |
| John Wilson | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 14,750 | $ 14,750 |
| Sven Gollan | ||||||
| Director | $ Nil | $ Nil | $ Nil | $ Nil | $ 23,100 | $ 23,100 |
Related party transactions and balances
| Years ended | Balance due | ||||
|---|---|---|---|---|---|
| Services | September 30, 2024 | September 30, 2023 | As at September 30, 2024 | As at September 30, 2023 | |
| Amounts due to: | |||||
| Jason Weber | Consulting fee and share-based payment | $ 215,851 | $ 162,000 | $ Nil | $ 56,700 |
| Rob Duncan | Consulting fee and share-based payment | $ 172,882 | $ 150,000 | $ Nil | $ 49,679 |
| Pacific Opportunity Capital Ltd. (a) | Accounting, financing, and shareholder communication services | $ 224,507 | $ 158,000 | $ 606,564 | $ 527,644 (b) |
| Mark Brown | Expenses reimbursement | $ 32,724 | $ 9,546 | $ Nil | $ 3,082 |
| Marc G. Blythe | Expenses reimbursement | $ 2,020 | $ Nil | $ 2,115 | $ Nil |
| TOTAL: | $ 645,964 | $ 479,546 | $ 608,679 | $ 637,105 |
(a) The president of Pacific Opportunity Capital Ltd., a private company, is a director of the Company.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
(b) Includes a $63,465 advance that is non-interest bearing without specific terms of repayment.
6(h) Financial Instruments
The Company's financial instruments consists of cash, receivables, accounts payable and accrued liabilities, and due to related parties which are all in the normal course of business.
The Company's financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, market risk and commodity price risk.
(a) Currency risk
The Company's property interests in USA before dropping them in fiscal 2024 make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company's financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks. The Company's exploration program, some of its general and administrative expenses and financial instruments denoted in a foreign currency are exposed to currency risk. A 10% change in the US dollar and the Peruvian nuevo sol over the Canadian dollar would change the results of operations by approximately $66,100.
(b) Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to the liquidity of its cash. The Company limits exposure to credit risk by maintaining its cash with a large Canadian financial institution.
(c) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company's holdings of cash. The Company does not have sufficient cash to settle its current liabilities, and further funding will be required to meet the Company's short-term and long-term operating needs. The Company manages liquidity risk through the management of its capital structure.
Accounts payable and accrued liabilities are due within the current operating period.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
(d) Market risk
Market risks to which the Company is exposed include unfavorable movements in commodity prices, interest rates, and foreign exchange rates. As at September 30, 2024, the Company has no producing assets and holds the majority of its cash in secure, Canadian dollar-denominated deposits. Consequently, its exposure to these risks has been significantly reduced, but as the Company redeploys its cash, exposure to these risks may increase. The objective of the Company is to mitigate exposure to these risks while maximizing returns.
The Company may from time-to-time own available-for-sale marketable securities, in the mineral resource sector. Changes in the future pricing and demand of these commodities can have a material impact on the market value of the investments. The nature of such investments is normally dependent on the invested company being able to raise additional capital to further develop and to determine the commercial viability of its resource properties. Management mitigates the risk of loss resulting from this concentration by monitoring the trading value of the investments on a regular basis.
i) Interest rate risk
As at September 30, 2024, the Company's exposure to movements in interest rates was limited to potential decreases in interest income from changes to the variable portion of interest rates for its cash. Market interest rates in Canada are at historically low levels, so management does not consider the risk of interest rate declines to be significant, but should such risks increase, the Company may mitigate future exposure by entering into fixed-rate deposits. A 1% change in the interest rate, with other variables unchanged, would not significantly affect the Company.
ii) Foreign exchange risk
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company may maintain cash and other financial instruments, or may incur revenues and expenditures in currencies other than the Canadian dollar. Significant changes in the currency exchange rates between the Canadian dollar relative to these foreign currencies, which may include but are not limited to US dollars and Peruvian nuevo sol, could have an effect on the Company's results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations.
(e) Commodity price risk
The ability of the Company to develop its mineral properties and the future profitability of the Company are directly related to the market price of minerals such as gold, zinc, lead and copper. The Company's input costs are also affected by the price of fuel. The Company closely monitors mineral and fuel prices to determine the appropriate course of action to be taken by the Company.
IFRS 7 establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table sets forth the Company's financial assets measured at amortized cost by level within the fair value hierarchy.
| As at September 30, 2024 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Assets: | ||||
| Cash | $ 709,647 | $ - | $ - | $ 709,647 |
6(i) Management of Capital Risk
The Company considers its capital to be its shareholders' equity. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the acquisition and exploration of mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk.
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets, or adjust the amount of cash.
In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.
In order to maximize ongoing development efforts, the Company does not pay dividends. The Company's approach to managing capital remains unchanged from the year ended September 30, 2023.
There were no changes to the Company's approach to capital management during the period and the Company is not subject to any externally imposed capital requirements.
7. Events after the Reporting Period
None other than disclosed already in other sections.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
8. Policies and Controls
8(a) Significant Accounting Judgments and Estimates
The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at the consolidated statement of financial position date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:
Critical judgments
The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements:
- the determination that the Company will continue as a going concern for the next year;
- the determination that there have been no events or changes in circumstances that indicate the carrying amount of exploration and evaluation assets may not be recoverable;
- the determination that there are no restoration, rehabilitation and environmental costs to be accrued; and
- the determination that the functional currency of the parent is the Canadian dollar, the functional currency of its subsidiary in the USA is the US dollar and the functional currency of its subsidiaries in Peru is the Peruvian nuevo sol.
8(b) Exploration and Evaluation Assets
The Company is in the exploration stage with respect to its investment in exploration and evaluation assets and accordingly follows the practice of capitalizing all costs relating to the acquisition of, exploration for and development of its mineral claims and crediting all proceeds received against the cost of related claims. Such costs include, but are not exclusive to, geological, geophysical studies, exploratory drilling and sampling. At such time as commercial production commences, these costs will be charged to operations on a unit-of-production method based on proven and probable reserves. The aggregate costs related to abandoned mineral claims are charged to operations at the time of any abandonment or when it has been determined that there is evidence of a permanent impairment. An impairment charge relating to a mineral property is subsequently reversed when new exploration results or actual or potential proceeds on sale result in a revised estimate of the recoverable amount but only to the extent that this does not exceed the original carrying value of the property that would have resulted if no impairment had been recognized.
The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain financing to complete development of the properties, and on future production or proceeds of disposition.
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
The Company recognizes in income costs recovered on exploration and evaluation assets when amounts received or receivable are in excess of the carrying amount.
Upon transfer of "Exploration and evaluation costs" into "Mine Development", all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalized within "Mine development". After production starts, all assets included in "Mine development" are transferred to "Producing Mines".
All capitalized exploration and evaluation expenditures are monitored for indications of impairment. Where a potential impairment is indicated, assessments are performed for each area of interest. To the extent that exploration expenditures are not expected to be recovered, they are charged to operations. Exploration areas where reserves have been discovered, but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is underway as planned.
9. Internal Control Over Financial Reporting
Changes in Internal Control over Financial Reporting ("ICFR")
In connection with National Instrument 52-109, Certification of Disclosure in Issuer's Annual and Interim Filings ("NI 52-109") adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of the Company will file a Venture Issuer Basic Certificate with respect to financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying Management's Discussion and Analysis. The Venture Issue Basic Certification does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI52-109.
Disclosure Controls and Procedures
The Company's CEO and CFO are responsible for establishing and maintaining the Company's disclosure controls and procedures. Management, including the CEO and CFO, have evaluated the procedures of the Company and have concluded that they provide reasonable assurance that material information is gathered and reported to senior management in a manner appropriate to ensure that material information required to be disclosed in reports filed or submitted by the Company is recorded, processed, summarized and reported within the appropriate time periods.
While management believes that the Company's disclosure controls and procedures provide reasonable assurance, they do not expect that the controls and procedures can prevent all errors, mistakes, or fraud. A control system, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met.
10. Information on the Officers and Board of Directors
Directors:
Mark T. Brown, B.Comm, CPA, CA, Executive Chairman
Jason Weber, BSc, P.Geo
Marc G. Blythe, MBA, P.Eng.
Craig T. Lindsay, B.Comm, MBA, CFA
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
SILVER NORTH
Audit Committee members:
Marc G. Blythe, Craig T. Lindsay and Mark T. Brown
Management:
Jason Weber, BSc, P. Geo – Chief Executive Officer, President
Winnie Wong, CPA, CA – Chief Financial Officer and Corporate Secretary
Rob Duncan, MSc, — Vice President - Exploration
SILVER NORTH RESOURCES LTD.
Management's Discussion & Analysis
Page 31 of 31