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Stallion Uranium Corp. — Audit Report / Information 2024
May 27, 2025
47117_rns_2025-05-26_76ff249c-2f35-4ea4-8d46-753cf1a81544.pdf
Audit Report / Information
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STALLION URANIUM CORP.
Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
SATURNAGROUP CHARTERED PROFESSIONAL ACCOUNTANTS LLP
Suite 1605, 1166 Alberni Street Vancouver, BC Canada V6E 3Z3
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of Stallion Uranium Corp.
Opinion
We have audited the consolidated financial statements of Stallion Uranium Corp. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2024 and 2023, and the consolidated statements of operations and comprehensive loss, changes in shareholders' equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2024 and 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS").
Basis for Opinion
We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the consolidated financial statements, which indicates that the Company has not generated any revenues and incurred negative cash flow from operations during the year ended December 31, 2024 and, as of that date, the Company has a working capital deficit of $419,179 and an accumulated deficit of $32,045,038. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2024. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Aside from the matter described in the Material Uncertainty Related to Going Concern section of our report, we have identified the following key audit matter.
Assessment of Impairment Exploration and Evaluation Assets
As described in Note 4 of the consolidated financial statements, the carrying amount of the Company's exploration and evaluation assets is $9,866,442 as at December 31, 2024. During the year ended December 31, 2024, the Company recorded an impairment loss of $17,710,519. As fully described in Note 2 to the consolidated financial statements, management assesses for indicators of impairment at each consolidated statement of financial position date.
The assessment of impairment indicators for exploration and evaluation assets is identified as a key audit matter due to significant judgment made by management, which in turn led to additional auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in this area, particularly regarding the estimation of the recoverable amounts of these assets.
Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others:
- Evaluating management's assessment of impairment indicators.
- Evaluating the intent for the exploration and evaluation assets through discussion and communication with management.
- Assessing compliance with agreements and expenditures requirements including reviewing option agreements.
- Obtaining, on a test basis through government websites or other sources, confirmation of title to ensure mineral rights underlying the exploration and evaluation assets are in good standing.
Other Information
Management is responsible for the other information. The other information comprises the information included in the Management's Discussion and Analysis, but does not include the consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter of when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Lonny Wong.
Saturna Group LLP
Saturna Group Chartered Professional Accountants LLP
Vancouver, Canada
May 23, 2025
STALLION URANIUM CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
| December 31, 2024 $ | December 31, 2023 $ | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | 1,308,478 | 1,342,063 |
| Marketable securities | 120,000 | – |
| Amounts receivable | 108,989 | 185,712 |
| Prepaid expenses and deposits (Note 4) | 89,950 | 1,044,860 |
| Total current assets | 1,627,417 | 2,572,635 |
| Non-current assets | ||
| Investment (Note 5) | 111,111 | – |
| Exploration and evaluation asset (Notes 4 and 7) | 9,866,442 | 23,068,458 |
| Total non-current assets | 9,977,553 | 23,068,458 |
| Total assets | 11,604,970 | 25,641,093 |
| Liabilities | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (Note 7) | 839,552 | 780,207 |
| Other liabilities (Note 6) | 1,207,044 | 410,168 |
| Total liabilities | 2,046,596 | 1,190,375 |
| Shareholders’ equity | ||
| Share capital (Note 8) | 37,963,818 | 34,211,939 |
| Share-based payment reserve (Note 9) | 1,796,394 | 1,593,646 |
| Warrants reserve (Note 8) | 1,843,200 | 896,885 |
| Deficit | (32,045,038) | (12,251,752) |
| Total shareholders’ equity | 9,558,374 | 24,450,718 |
| Total liabilities and shareholders’ equity | 11,604,970 | 25,641,093 |
Nature of business and continuing operations (Note 1)
Commitment (Note 15)
Subsequent events (Note 16)
Approved and authorized for issuance on behalf of the Board of Directors on May 23, 2025:
/s/ "Matthew Schwab"
/s/ "Jay Martin"
Matthew Schwab, Director
Jay Martin, Director
(The accompanying notes are an integral part of these consolidated financial statements)
STALLION URANIUM CORP.
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in Canadian dollars)
| Year ended December 31, 2024 | Year ended December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Expenses | ||
| Consulting fees (Note 7) | 614,370 | 271,000 |
| Investor relations (Note 7) | 1,213,663 | 1,115,967 |
| Management fees (Note 7) | 306,000 | 211,500 |
| Office and miscellaneous | 122,049 | 132,555 |
| Professional fees (Note 7) | 82,380 | 188,356 |
| Rent | 17,484 | 3,266 |
| Salaries and benefits (Note 7) | 15,773 | – |
| Share-based compensation (Notes 7 and 9) | 202,748 | 253,722 |
| Transfer agent and filing fees | 67,746 | 125,931 |
| Total expenses | 2,642,213 | 2,302,297 |
| Other income (expense) | ||
| Derecognition of flow-through share premium liability (Note 6) | 410,168 | – |
| Gain on disposal of exploration and evaluation assets (Note 4) | 92,963 | – |
| Impairment of exploration and evaluation assets (Note 4) | (17,710,519) | – |
| Interest income | 56,315 | 77,578 |
| Total other income (expense) | (17,151,073) | 77,578 |
| Net loss and comprehensive loss for the year | (19,793,286) | (2,224,719) |
| Loss per share, basic and diluted | (0.74) | (0.13) |
| Weighted average number of common shares outstanding | 26,784,258 | 17,693,635 |
(The accompanying notes are an integral part of these consolidated financial statements)
STALLION URANIUM CORP.
Consolidated Statements of Changes in Shareholders' Equity
(Expressed in Canadian dollars)
| Share capital | Share-based payment reserve $ | Warrants reserve $ | Deficit $ | Total shareholders' equity $ | ||
|---|---|---|---|---|---|---|
| Number of shares | Amount $ | |||||
| Balance, December 31, 2022 | 12,012,493 | 21,207,761 | 1,339,924 | 807,325 | (10,027,033) | 13,327,977 |
| Shares issued for U92 acquisition (Note 3) | 600,000 | 1,050,000 | – | – | – | 1,050,000 |
| Units issued for private placement | 6,387,090 | 7,603,508 | – | – | – | 7,603,508 |
| Shares issued for evaluation and exploration assets | 3,066,667 | 5,363,333 | – | – | – | 5,363,333 |
| Shares issuance costs | 60,000 | (602,495) | – | 89,560 | – | (512,935) |
| Flow-through share premium | – | (410,168) | – | – | – | (410,168) |
| Share-based compensation | – | – | 253,722 | – | – | 253,722 |
| Net loss for the year | – | – | – | – | (2,224,719) | (2,224,719) |
| Balance, December 31, 2023 | 22,126,250 | 34,211,939 | 1,593,646 | 896,885 | (12,251,752) | 24,450,718 |
| Units issued for private placement | 8,199,480 | 5,610,195 | – | 806,628 | – | 6,416,823 |
| Share issuance costs | – | (651,272) | – | 139,687 | – | (511,585) |
| Flow-through share premium | – | (1,207,044) | – | – | – | (1,207,044) |
| Share-based compensation | – | – | 202,748 | – | – | 202,748 |
| Net loss for the year | – | – | – | – | (19,793,286) | (19,793,286) |
| Balance, December 31, 2024 | 30,325,730 | 37,963,818 | 1,796,394 | 1,843,200 | (32,045,038) | 9,558,374 |
(The accompanying notes are an integral part of these consolidated financial statements)
STALLION URANIUM CORP.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
| Year ended December 31, 2024 | Year ended December 31, 2023 | |
|---|---|---|
| $ | $ | |
| Operating activities | ||
| Net loss for the year | (19,793,286) | (2,224,719) |
| Items not involving cash: | ||
| Derecognition of flow-through share premium liability | (410,168) | – |
| Gain on disposal of exploration and evaluation assets | (92,963) | – |
| Impairment of exploration and evaluation assets | 17,710,519 | – |
| Share-based compensation | 202,748 | 253,722 |
| Changes in non-cash operating working capital: | ||
| Amounts receivable | 76,723 | (121,707) |
| Prepaid expenses and deposits | 452,559 | (1,019,870) |
| Accounts payable and accrued liabilities | (369,977) | 64,346 |
| Net cash used in operating activities | (2,223,845) | (3,048,228) |
| Investing activities | ||
| Exploration and evaluation assets expenditures | (4,564,978) | (4,267,237) |
| Exploration and evaluation asset option payments received | 400,000 | – |
| Government grant received for exploration and evaluation assets | 50,000 | – |
| Proceeds from disposal of exploration and evaluation assets | 400,000 | – |
| Net cash used in investing activities | (3,714,978) | (4,267,237) |
| Financing activities | ||
| Proceeds from issuance of shares | 6,416,823 | 7,603,508 |
| Share issuance costs | (511,585) | (512,935) |
| Net cash provided by financing activities | 5,905,238 | 7,090,573 |
| Change in cash and cash equivalents | (33,585) | (224,892) |
| Cash and cash equivalents, beginning of year | 1,342,063 | 1,566,955 |
| Cash and cash equivalents, end of year | 1,308,478 | 1,342,063 |
| Cash and cash equivalents consist of: | ||
| Cash in bank | 56,320 | 309,731 |
| Cashable guaranteed investment certificate | 1,252,158 | 1,032,332 |
| Total cash and cash equivalents | 1,308,478 | 1,342,063 |
| Non-cash investing and financing activities: | ||
| Shares received as exploration and evaluation asset option payment | 111,111 | – |
| Marketable securities received as proceeds from disposal of exploration and evaluation assets | 120,000 | – |
| Shares issued for acquisition of exploration and evaluation assets | – | 5,363,333 |
| Exploration and evaluation assets expenditures included in accounts payable and accrued liabilities | 429,322 | 540,534 |
| Exploration and evaluation assets expenditures reallocated from prepaid expenses and deposits | 502,351 | – |
| Allocation of private placement proceeds to warrants reserve | 806,628 | – |
| Shares issued for share issuance costs | – | 60,000 |
| Fair value of finder's warrants issued | 139,687 | 89,560 |
| Flow-through share premium liability deducted from share capital | 1,207,044 | 410,168 |
(The accompanying notes are an integral part of these consolidated financial statements)
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Nature of Business and Continuing Operations
Stallion Uranium Corp. (formerly Stallion Discoveries Corp., Stallion Gold Corp., Hybrid Minerals Inc., and Savoy Ventures Inc.) (the "Company") was incorporated on November 7, 2011 under the Business Corporations Act (British Columbia). The head office of the Company is located at Suite 700, 838 West Hastings Street, Vancouver, British Columbia, V6C 0A6.
The Company's principal business activities include the acquisition and exploration of mineral property assets. These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. For the year ended December 31, 2024, the Company has not generated any revenues and incurred negative cash flow from operating activities. As at December 31, 2024, the Company has a working capital deficit of $419,179 and an accumulated deficit of $32,045,038. The Company's ability to continue as a going concern is dependent upon its ability to generate and maintain future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management is of the opinion that sufficient working capital will be obtained from external financing to meet the Company's liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These factors indicate the existence of a material uncertainty that may cast doubt on the ability of the Company to continue as a going concern. These consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. Such adjustments could be material.
- Material Accounting Policy Information
(a) Statement of compliance and basis of presentation
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Stallion Gold Idaho Corp. ("Stallion Idaho"), U92 Exploration Limited ("U92"), effective on January 5, 2023, Hathor Exploration Ltd. ("Hathor"), effective on January 11, 2023, and 1262446 B.C. Ltd, effective on May 26, 2023. All significant intercompany balances and transactions have been eliminated on consolidation. Where control of an entity is obtained during a financial year, its results are included in the consolidated statements of operations from the date on which control commences. Where control of an entity ceases during a financial year, its results are included for the part of the year during which control exists.
These consolidated financial statements have been prepared on a historical cost basis and are presented in Canadian dollars.
(b) Use of estimates and judgments
The preparation of these consolidated financial statements in conformity with IFRS requires the Company's management to make judgements, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
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STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(b) Use of Estimates and Judgments (continued)
Significant estimates
Significant assumptions about the future and other sources of estimation uncertainty in estimates made by management at the 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:
Share-based payments
Fair values are determined using the Black-Scholes option pricing model. Estimating fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measurement of the fair value of the Company's stock options.
Deferred income taxes
The determination of income tax expense and the composition of deferred income tax assets and liabilities involves judgment and estimates as to the future taxable earnings, expected timing of reversals of deferred income tax assets and liabilities, and interpretations of tax laws. The Company is subject to assessments by tax authorities who may interpret the tax law differently. Changes in these interpretations, judgments, and estimates may materially affect the final amount of current and deferred income tax provisions, deferred income tax assets and liabilities, and results of operations.
Significant judgments
The critical judgments that the Company's management has made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognized in the Company's consolidated financial statements are as follows:
Exploration and evaluation assets
The application of the Company's accounting policy for exploration and evaluation expenditures requires judgment in determining whether it is likely that future economic benefits are likely either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The deferral policy requires management to make certain estimates and assumptions about future events or circumstances, in particular whether an economically viable extraction operation can be established. Estimates and assumptions may change if new information becomes available. If information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the consolidated statement of operations in the period when the information becomes available.
Business combinations
Judgment is used in determining whether an acquisition is a business combination or an asset acquisition. If the acquisition of an asset does not constitute a business as defined in IFRS 3, Business Combinations, the acquirer identifies and recognizes the individual identifiable assets acquired and liabilities assumed. The cost is allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of acquisition. Such a transaction does not give rise to goodwill.
9
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(b) Use of Estimates and Judgments (continued)
Going concern
The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but is not limited to, 12 months from the end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company's ability to continue as a going concern.
(c) Cash and cash equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance, are readily convertible to known amount of cash, and which are subject to insignificant risk of changes in value to be cash equivalents.
(d) Exploration and evaluation expenditures
(i) Exploration and evaluation expenditures
Asset acquisition costs and exploration and evaluation expenditures are recorded at cost. When shares are issued as part of asset acquisition costs, they are valued at the closing share price on the date of issuance unless the fair value of goods or services received is determinable. Payments relating to assets acquired under an option or joint venture agreement, where payments are made at the sole discretion of the Company, are recorded in the consolidated financial statements upon payment.
Option payments received are treated as a reduction of the carrying value of the related asset until the Company's option and/or royalty payments received are in excess of costs incurred and then are credited to income.
All expenditures related to the cost of exploration and evaluation of assets including acquisition costs for interests in mineral claims are classified and capitalized as intangible assets until the property to which they relate is placed into production, sold, allowed to lapse or abandoned. These costs will be depreciated over the estimated useful life of the property following commencement of commercial production or will be written off if the property is sold, allowed to lapse, abandoned, or determined to be impaired.
The Company has taken steps, in accordance with industry standards, to verify mineral properties in which it has an interest. Although the Company has made efforts to ensure that legal title to its properties is properly recorded in the name of the Company when all terms of agreements have been met, there can be no assurance that such title will ultimately be secured.
(ii) Impairment
Exploration and evaluation assets are assessed for impairment when indicators and circumstances suggest that the carry amount may exceed its recoverable amount. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the consolidated statement of operations.
10
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(d) Exploration and evaluation expenditures (continued)
(ii) Impairment (continued)
Industry-specific indicators for an impairment review arise typically when one of the following circumstances applies:
- Substantive expenditure or further exploration and evaluation activities is neither budgeted nor planned;
- Title to the asset is compromised, has expired, or is expected to expire;
- Adverse changes in the taxation, regulatory, or political environment;
- Adverse changes in variables in commodity prices and markets making the project unviable; and
- Variations in the exchange rate for the currency of operation.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the consolidated statement of operations.
(e) Restoration, rehabilitation, and environmental obligations
An obligation to incur restoration, rehabilitation, and environmental costs arises when environmental disturbance is caused by the exploration or development of a mineral property interest. Such costs arise from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset, along with a corresponding liability as soon as the obligation to incur such costs arises. The timing of the actual rehabilitation expenditure is dependent on a number of factors such as the life and nature of the asset, the operating license conditions and, when applicable, the environment in which the mine operates.
Discount rates using a pre-tax rate that reflects the time value of money and risks specific to the liability are used to calculate the net present value. These costs are charged to the consolidated statement of operations over the economic life of the related asset, through amortization using either the unit-of-production or the straight-line method. The corresponding liability is progressively increased as the effect of discounting unwinds creating an expense recognized in the consolidated statement of operations. The Company has no restoration, rehabilitation and environmental obligations as at December 31, 2024 and 2023.
(f) Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the respective instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are included in the initial carrying value of the related instrument and are amortized using the effective interest method. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the consolidated statement of operations.
Fair value estimates are made at the consolidated statement of financial position date based on relevant market information and information about the financial instrument. All financial instruments are classified into either: fair value through profit or loss ("FVTPL") or amortized cost.
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STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(f) Financial instruments (continued)
The Company has made the following classifications:
Cash
Amortized cost
Marketable securities
FVTPL
Investment
FVTPL
Accounts payable and accrued liabilities
Amortized cost
Financial Assets
IFRS 9 – Financial Instruments (“IFRS 9”) establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit or loss (“FVTPL”). The Company determines the classification of the financial assets at initial recognition. The basis of classification depends on the Company’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. Subsequent to initial recognition, financial assets are measured at amortized cost using the effective interest method, less any impairment.
Financial assets at amortized cost
Financial assets are measured at amortized cost if they are not designated at FVTPL, and the following conditions are met:
- are non-derivative financial assets which are held within a business model whose objective is to hold assets to collect contractual cash flows and selling financial assets; and,
- the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at FVTOCI
Financial assets are measured at fair value through other comprehensive income only if they not designated at FVTPL, and the following conditions are met:
- it has been held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and,
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Interest income is calculated using the effective interest method and gains or losses arising from impairment and foreign exchange are recognized in the consolidated statement of operations and comprehensive loss. All other changes in the carrying amount of financial assets are recognized in other comprehensive income. Upon derecognition, the cumulative gain or loss previously recognized in other comprehensive income is reclassified to the consolidated statement of operations and comprehensive loss. The Company does not hold any financial assets measured at fair value through other comprehensive income.
Financial assets at FVTPL
Assets that do not meet the criteria to be measured at amortized cost, or fair value through other comprehensive income, are measured at fair value through profit or loss. All interest income and changes in the financial assets’ carrying amount are recognized in the consolidated statement of operations and comprehensive loss.
12
13
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(f) Financial instruments (continued)
Financial Assets (continued)
Impairment of financial assets
Financial assets, other than those classified as FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been decreased.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.
When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are offset against the allowance account. Changes in the carrying amount of the allowance account are recognized in the consolidated statement of operations. Loss allowances are based on the lifetime ECL's that result from all possible default events over the expected life of the trade receivable, using the simplified approach.
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through the consolidated statement of operations to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
Financial Liabilities and Equity Instruments
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized as the proceeds received, net of direct issue costs.
Other financial liabilities
Other financial liabilities (including loans and borrowings and trade payables and other liabilities) are initially measured at fair value, net of transaction costs. Subsequently, other financial liabilities are measured at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(g) Income taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the consolidated statement of operations. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred income tax
Deferred income tax is provided using the statement of financial position method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
(h) Foreign currency translation
Items included in the financial statements of each of the group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in Canadian dollars which is the Company's functional and presentation currency.
Transactions denominated in foreign currencies are translated using the exchange rate in effect on the transaction date or at an average rate. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange in effect at the consolidated statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Realized foreign exchange gains and losses are included in the consolidated statement of operations.
The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- assets and liabilities presented are translated at the closing rate at the date of the consolidated statement of financial position;
- income and expenses are translated at average exchange rates for the year unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions; and
- all resulting exchange differences are recognized in other comprehensive income.
14
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(i) Flow-through shares
The resource expenditure deductions for income tax purposes related to exploration and development activities funded by flow-through share arrangements are renounced to investors in accordance with Canadian tax legislation. On issuance, the premium recorded on the flow-through share, being the difference in price over a common share with no tax attributes, is recognized as a liability. When expenditures are renounced to flow through share investors, the deferred income tax liability associated with the renounced tax deductions is recognized through the consolidated statement of operations with a pro-rata portion of the deferred premium.
(j) Share-based payments
The grant date fair value of equity-based payment awards granted to employees is generally recognized as share-based compensation expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
The fair value of stock options is measured at the grant date using the Black-Scholes option pricing model. The fair value is recognized as an expense over the vesting period, which is the period over which all of the specified vesting conditions are satisfied with a corresponding increase in equity. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. Non-market vesting conditions are considered in making assumptions about the number of awards that are expected to vest. When the options are exercised, any proceeds received are credited to share capital along with the amount reflected in share-based payment reserve.
(k) Loss per share
The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. As at December 31, 2024, the Company has 7,143,503 (2023 – 3,901,292) potentially dilutive shares outstanding.
15
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(I) Recent accounting standards
A number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended December 31, 2024, and have not been early adopted in preparing these consolidated financial statements.
Classification of liabilities as current or non-current (amendments to IAS 1, presentation of financial statements)
On January 23, 2020, an amendment was issued to IAS 1 to address inconsistencies with how entities apply the standards over classification of current and non-current liabilities. The amendment serves to address whether, in the statement of financial position, debt and other liabilities with an uncertain settlement should be classified as current or non-current. This amendment is effective on January 1, 2024. The Company adopted the amendment on the effective date and the adoption did not have a material impact on the Company's consolidated financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18 – Presentation and Disclosure in Financial Statements which will replace IAS 1, Presentation of Financial Statements. The key new concepts introduced in IFRS 18 relate to the structure of the statement of earnings (loss), required disclosures in the financial statements for certain earnings or loss performance measures that are reported outside an entity's financial statements and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. IFRS 18 will apply for reporting periods beginning on or after January 1, 2027, and also applies to comparative information. The Company is still in the process of assessing the impact of this standard on its consolidated financial statements.
Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates and are not expected to have a significant impact on the Company's consolidated financial statements.
- Acquisitions
U92 Exploration Limited
On January 5, 2023, the Company acquired U92 Exploration Limited ("U92") pursuant to a share purchase agreement. U92 is a corporation existing under the laws of the province of British Columbia with strategic claims in the Western Athabasca Basin.
The Company acquired all of the issued and outstanding common shares of U92, for consideration of: (i) issuing 600,000 common shares of the Company and (ii) $300,000.
This acquisition has been accounted for as an acquisition of assets as U92 did not meet the definition of a business under IFRS 3, Business Combinations.
| $ | |
|---|---|
| Purchase consideration | |
| Fair value of 600,000 common shares (Note 7) | 1,050,000 |
| Cash | 300,000 |
| 1,350,000 | |
| Net asset acquired: | |
| Exploration and evaluation assets (Note 4) | 1,350,000 |
16
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Acquisitions (continued)
Hathor Exploration Ltd.
On January 11, 2023, the Company acquired Hathor Exploration Ltd. pursuant to a share purchase agreement. Hathor is a corporation existing under the laws of the province of British Columbia, which includes 17 mineral claims held strategically throughout the Athabasca Basin.
The Company acquired all of the issued and outstanding common shares of Hathor, for consideration of $400,000 and $37,500 as a finder's fee to an arms-length third party.
This acquisition has been accounted for as an acquisition of assets as Hathor did not meet the definition of a business under IFRS 3, Business Combinations.
$
| Purchase consideration | $ |
|---|---|
| Cash | 437,500 |
| Net asset acquired: | |
| Exploration and evaluation assets (Note 4) | 437,500 |
- Exploration and Evaluation Assets
| Horse Heaven Property $ | Richmond Mountain Property $ | Athabasca Basin Property $ | Total $ | |
|---|---|---|---|---|
| Acquisition costs: | ||||
| Balance, December 31, 2022 | 10,940,000 | 32,063 | – | 10,972,063 |
| Additions | 5,080,000 | 33,657 | 2,470,833 | 7,584,490 |
| Balance, December 31, 2023 | 16,020,000 | 65,720 | 2,470,833 | 18,556,553 |
| Additions | – | – | 25,569 | 25,569 |
| Option payments received – cash | (400,000) | – | – | (400,000) |
| Option payments received – shares | (111,111) | – | – | (111,111) |
| Disposal of claims | – | – | (427,037) | (427,037) |
| Impairment | (15,308,889) | (65,720) | (452,791) | (15,827,400) |
| Balance, December 31, 2024 | 200,000 | – | 1,616,574 | 1,816,574 |
| Exploration costs: | ||||
| Balance, December 31, 2022 | 848,124 | 27,167 | – | 875,291 |
| Assay and claim fees | 160,981 | 27,304 | 5,147 | 193,432 |
| Geological consulting and fieldwork (Note 7) | 57,280 | 182,522 | 3,203,380 | 3,443,182 |
| Balance, December 31, 2023 | 1,066,385 | 236,993 | 3,208,527 | 4,511,905 |
| Assay and claim fees | 192,326 | 40,492 | 610,730 | 843,548 |
| Geological consulting and fieldwork (Note 7) | 63,548 | 283,375 | 4,280,611 | 4,627,534 |
| Government grant received | – | – | (50,000) | (50,000) |
| Impairment | (1,322,259) | (560,860) | – | (1,883,119) |
| Balance, December 31, 2024 | – | – | 8,049,868 | 8,049,868 |
| Carrying amounts: | ||||
| As at December 31, 2023 | 17,086,385 | 302,713 | 5,679,360 | 23,068,458 |
| As at December 31, 2024 | 200,000 | – | 9,666,442 | 9,866,442 |
17
18
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Exploration and Evaluation Assets (continued)
Horse Heaven Property
On March 1, 2021, the Company entered into a share option agreement ("Agreement") pursuant to which the Company has been granted the option to acquire all the shares outstanding in 1262446 B.C. Ltd. ("Horse Heaven Parent"), a private mineral exploration company. Horse Heaven Parent is the sole owner of Horse Heaven Holdings Inc. which holds a 100% interest in the Horse Heaven mineral property located in Idaho, USA. As consideration, the Company paid $1,200,000 and issued 7,200,000 common shares as follows:
- $200,000 as a non-refundable deposit on the letter of intent and execution and delivery of the agreement (paid);
- $200,000 and 2,400,000 common shares following the satisfaction or waiver of all of the conditions precedent in the Agreement (the "Effective Date") (paid and issued);
- $400,000 and 2,400,000 common shares on the first anniversary of the Effective Date (paid and issued) and
- $400,000 and 2,400,000 common shares on the second anniversary of the Effective Date (paid and issued) (Note 7).
In May 2023, the Company completed the payments and exercised its option to acquire a 100% interest in Horse Heaven Parent.
On November 8, 2024, the Company entered into a share option agreement with 1503571 B.C. Ltd. (the "Optionee") whereby the Company has granted the optionee the option to acquire 100% of the issued and outstanding common shares of the Horse Heaven Parent pursuant to the following terms:
i. $200,000 upon signing of the binding letter of intent (received);
ii. $200,000 on the effective date of the agreement (received);
iii. $2,000,000 in common shares of the Optionee at a deemed price of $0.18 per share on the effective date of the agreement (received) (Note 5); and
iv. $200,000 on November 8, 2025.
During the year ended December 31, 2024, the Company recorded an impairment of $16,631,148 to reduce the carrying value of the property to $200,000 which represents the remaining cash payment due on November 8, 2025.
Richmond Mountain Property
On May 20, 2022, the Company entered into an earn-in option agreement to acquire 100% of the membership interest in Richmond Mountain LLC ("Richmond") from Bronco Creek Exploration Inc., a wholly-owned subsidiary of EMX Royalty Corporation ("EMX"). Richmond is the sole owner of the Richmond Mountain gold property (the "Project"). As consideration, the Company agreed to pay US$500,000 and incur US$1,500,000 in exploration expenditures as follows:
- Cash payments to be made:
- US$25,000 upon execution and delivery of the agreement (paid).
- US$25,000 on or before the first anniversary of the Effective Date (paid);
- US$50,000 on or before the second anniversary of the Effective Date;
- US$50,000 on or before the third anniversary of the Effective Date;
- US$100,000 on or before the fourth anniversary of the Effective Date; and
- US$250,000 on or before the fifth anniversary of the Effective Date.
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Exploration and Evaluation Assets (continued)
Richmond Mountain Property (continued)
- Exploration expenditures to be incurred:
- US$200,000 on or before the first anniversary of the Effective Date;
- US$200,000 on or before the second anniversary of the Effective Date;
- US$300,000 on or before the third anniversary of the Effective Date;
- US$350,000 on or before the fourth anniversary of the Effective Date; and
- US$450,000 on or before the fifth anniversary of the Effective Date.
Upon completing the option earn-in, EMX will retain a 4% net smelter royalty ("NSR") interest on the property. The Company has the ability to buy down the NSR to 2.5% by:
- Completing an initial half-percent (0.5%) royalty buyback for a payment of US$750,000 prior to the third anniversary of the option exercise.
- If the first buyback is completed, an additional half percent (0.5%) can be bought back for US$1,000,000, and a third half percent (0.5%) increment for US$1,200,000 at any time prior to commercial production.
Beginning on the first anniversary of the option exercise, the Company will also make annual advance royalty payments of US$100,000. Additionally, after the option has been exercised, the Company will make payments in gold ounces (or the US$ equivalent) at the following milestones:
- 200 ounces of gold upon completion of a preliminary economic assessment;
- 400 ounces of gold upon completion of a prefeasibility study; and
- 650 ounces of gold upon completion of a feasibility study.
During the year ended December 31, 2024, the Company terminated the option agreement, resulting in the Company recognizing an impairment of $626,580.
Athabasca Basin Property
On January 5, 2023 and January 11, 2023, the Company entered into share purchase agreements to acquire 100% interest in U92 and Hathor, which own certain mineral claims in the Athabasca Basin (Note 3).
On July 18, 2023, the Company entered into an option agreement with Atha Energy Corp. ("Atha") which gives the Company an option to acquire a 70% interest in 47 mineral claims located in the Western Athabasca Basin, Saskatchewan. The option will become exercisable upon completion of the following milestones and will remain exercisable for one year thereafter:
- Issuance of 666,667 common shares of the Company within two business days following the satisfaction of customary conditions precedent (issued) (Note 8);
- Accumulation of $3,311,770 Saskatchewan Exploration Expenditure Credits on the property within 12 months (incurred); and
- Accumulation of an additional $8,688,230 Saskatchewan Exploration Expenditure Credits (for an aggregate of $12,000,000) on the property within 60 months.
During the term of the option, the Company will be the sole operator of all exploration programs on the property.
If the Company fails to incur sufficient exploration expenditures to meet the deficiency deposit amount paid Atha for 23 claims, it is obligated to issue Atha such number of common shares equal to one hundred and fifty percent (150%) of the amount of the deficiency deposit forfeited on such claim. Refer to Note 16.
19
20
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Exploration and Evaluation Assets (continued)
Athabasca Basin Property (continued)
Following the exercise of the option, the Company and Atha will commence a joint venture on the property with the Company and Atha holding a 70% and 30% interest, respectively.
As at December 31, 2024, the Company had a deposit of $49,235 (2023 - $562,841) related to the extension of time and deficiency deposit rules in accordance with Mineral Tenure Registry Regulation which is included in prepaid expenses and deposits.
On February 12, 2024, the Company entered into a purchase and sale agreement with Mustang Energy Corp. ("Mustang") (formerly Glorious Creation Limited), under which the Company agreed to sell, assign transfer and convey Mustang a 100% undivided, beneficial and legal interest in 7 mineral claims, which the Company acquired in January 2023 through the acquisition of Hathor. Pursuant to the agreement, the consideration paid by Mustang is as follows:
Cash payments to be made by Mustang:
- $100,000 upon signing the agreement (received); and
- $300,000 on the closing date (received).
Common shares issued by Mustang:
- 500,000 common shares six months following the closing date (received);
- 500,000 common shares twelve months following the closing date;
- 500,000 common shares eighteen months following the closing date; and
- 1,000,000 common shares twenty-four months following the closing date.
The Company shall retain a 3% NSR from minerals mined and removed from the property, of which Mustang may purchase up to one-half of the NSR at any time prior to commercial production on the property as follows: $500,000 for 0.5%; $750,000 for an additional 0.5%; and $1,000,000 for an additional 0.5%. During the year ended December 31, 2024, the total consideration received comprised of proceeds of $400,000 and the fair value of $120,000 for 500,000 Mustang common shares. The carrying value of the claims disposed of was $427,037, resulting in a gain on disposal of $92,963.
On July 11, 2024, the Company provided a reduction notice to Atha in relation to releasing 8 claims on the Athabasca Basin property. The remaining 39 claims remain in good standing as required in the option agreement. During the year ended December 31, 2024, the Company recorded an impairment of $452,791 in relation to these 8 claims.
During the year ended December 31, 2024, the Company staked an additional 23 claims located in the province of Saskatchewan for $25,569.
- Investment
During the year ended December 31, 2024, the Company received 11,111,111 shares of 1503571 B.C. Ltd. valued at $111,111 related to the option to acquire a 100% of the issued and outstanding shares of Horse Heaven Parent (Note 4). The investment is not traded in an active market. The Company estimated the fair value of the investment and concluded that the carrying value approximates the fair value of the investment as at December 31, 2024.
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
6. Other Liabilities
Other liabilities include the liability portion of the flow-through shares issued. The following is a continuity schedule of the liability portion of the flow-through share issuances:
| $ | |
|---|---|
| Balance, December 31, 2022 | – |
| Liability incurred on flow-through shares issued (Note 8) | 410,168 |
| Balance, December 31, 2023 | 410,168 |
| Liability incurred on flow-through shares issued (Note 8) | 1,207,044 |
| Derecognition of liability upon filing renunciation of tax deductions | (410,468) |
| Balance, December 31, 2024 | 1,207,044 |
7. Related Party Transactions
(a) As at December 31, 2024, the amount of $9,212 (2023 – $nil) was owed to the Chief Executive Officer (“CEO”) of the Company. During the year ended December 31, 2024, the amount of $14,583 (2023 - $nil) was incurred to the CEO of the Company for salaries and benefits.
(b) As at December 31, 2024, the amount of $90,000 (2023 – $nil) was accrued to a company controlled by the former CEO of the Company. During the year ended December 31, 2024, the amount of $270,000 (2023 - $175,500) was incurred to a company controlled by the former CEO of the Company for management fees.
(c) As at December 31, 2024, the amount of $5,250 (2023 – $nil) was owed to a company controlled by the Chief Financial Officer of the Company. During the year ended December 31, 2024, the amounts of $36,000 (2023 - $36,000) and $35,110 (2023 - $26,500) were incurred to companies controlled by the Chief Financial Officer of the Company for management fees and professional fees, respectively.
(d) As at December 31, 2024, the amount of $9,000 (2023 – $nil) was owed to a company controlled by the former VP Exploration (U.S.) of the Company. During the year ended December 31, 2024, consulting fees of $99,000 (2023 - $108,000) and fieldwork expenditures of $19,479 (2023 - $11,412) were incurred to a company controlled by the former VP Exploration (U.S.) of the Company.
(e) As at December 31, 2024, the amount of $17,221 (2023 – $nil) was owed to a company controlled by the VP Exploration (Canada) of the Company. During the year ended December 31, 2024, consulting fees of $144,000 (2023 - $60,000) and fieldwork expenditures of $9,210 (2023 - $nil) were incurred to a company controlled by the VP Exploration (Canada) of the Company.
(f) During the year ended December 31, 2024, the amount of $46,500 (2023 - $36,000) was incurred to a company controlled by the Corporate Secretary of the Company for consulting fees.
(g) During the year ended December 31, 2024, the amount of $14,543 (2023 – $nil) was incurred to a company where a director of the Company is the President and CEO for investor relations. As at December 31, 2024, $14,543 (2023 - $nil) was owed to this company.
(h) During the year ended December 31, 2024, the Company granted stock options with a fair value of $173,839 (2023 - $250,005) to officers and directors of the Company.
21
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Share Capital
Authorized: Unlimited common shares without par value
Shares issued during the year ended December 31, 2024:
(a) On February 8, 2024, the Company issued 955,892 Federal flow-through units ("FFT Unit") at a price of $1.60 per unit, 849,664 Saskatchewan flow-through units ("SFT Unit") at a price of $1.80 per unit, and 750,000 units at $1.10 per unit for gross proceeds of $3,883,822. Each FFT Unit consisted of one flow-through common share and one-half of one share purchase warrant. Each SFT Unit consisted of one flow-through common share and one-half of one share purchase warrant. Each unit consisted of one common share and one-half of one share purchase warrant. Each whole share purchase warrant is exercisable at a price of $1.80 per common share expiring on February 8, 2026. The Company incurred share issuance costs of $348,941 and issued 161,039 finders' warrants with a fair value of $86,113. Each finder's warrant is exercisable at $1.10 per common share expiring on February 8, 2026. The fair value of the finder's warrants was calculated using the Black-Scholes option pricing model with an expected life of two years, volatility of 100%, risk-free rate of 4.14%, and dividend yield of 0%. The flow-through liability associated with this issuance was $1,072,711 and the fair value associated with the share purchase warrants using the residual method was $383,334.
(b) On July 30, 2024, the Company closed a non-brokered private placement offering for total gross proceeds of $2,533,001 (the "Offering"). The Company issued 5,373,324 flow-through units at a price of $0.45 per unit and 270,600 non flow-through units of the Company at a price of $0.425 per unit. Each flow-through unit consisted of one flow-through common share and one-half of one share purchase warrant. Each non flow-through unit consisted of one common share and one-half of one share purchase warrant exercisable at a price of $0.60 per common share expiring on July 30, 2026. Included in this issuance was 60,000 non flow-through units for proceeds of $25,500 to a company controlled by a director and former CEO of the Company and 20,000 units for proceeds of $8,500 to a director of the Company. In relation to the Offering, the Company paid finders' fees of $162,644 and issued 361,432 finders' warrants with a fair value of $53,574. Each finder's warrant is exercisable at a price of $0.60 per common share expiring on July 30, 2026. The fair value of the finders' warrants was calculated using the Black-Scholes option pricing model with an expected life of two years, volatility of 103%, risk-free rate of 3.45%, and dividend yield of 0%. The flow-through liability associated with this issuance was $134,333 and the fair value associated with the share purchase warrants using the residual method was $423,294.
Shares issued during the year ended December 31, 2023:
(c) On January 18, 2023, the Company issued 600,000 common shares with a fair value of $1,050,000 pursuant to the acquisition of U92 (Note 3).
(d) On February 15, 2023, the Company issued 3,200,000 units at a price of $1.25 per unit for gross proceeds of $4,000,000. Each unit consisted of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share at a price of $2.50 per common share expiring on February 15, 2024. In connection with this private placement, the Company paid finders' fees of $296,040.
(e) On May 26, 2023, the Company issued 2,400,000 common shares with a fair value of $4,680,000 pursuant to the option agreement to acquire Horse Heaven Parent (Note 4).
(f) On September 11, 2023, the Company issued 666,667 common shares with a fair value of $683,333 in pursuant to the option agreement with Atha Energy Corp. (Note 4).
22
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Share Capital (continued)
Shares issued during the year ended December 31, 2023: (continued)
(g) On October 11, 2023, the Company issued 1,832,090 flow-through units at a price of $1.20 per unit and 1,105,000 non flow-through units of the Company at a price of $1.00 per unit for gross proceeds of $3,303,508. Each flow-through unit consisted of one common share and one-half of one common share purchase warrant. Each non flow-through unit consisted of one common share and one-half of one share purchase warrant. Each warrant entitles the holder to purchase one common share at a price of $1.50 per share expiring on October 11, 2025. In connection with this private placement, the Company paid finders' fees of $195,894 and issued 170,246 finders' warrants with a fair value of $81,399. Each finder's warrant entitles is exercisable at a price of $1.50 per common share expiring on October 11, 2025. The fair value of the finder's warrants was calculated using the Black-Scholes option pricing model with an expected life of two years, volatility of 100%, risk-free rate of 4.68%, and dividend yield of 0%. In addition, the Company paid an advisory fee of $60,000 to Canaccord Genuity Corp. which was paid through the issuance of 60,000 non flow-through units. The flow-through liability associated with this issuance using the residual method was $366,418.
(h) On December 22, 2023, the Company 250,000 flow-through units at a price of $1.20 per unit for gross proceeds of $300,000. Each flow-through unit consisted of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one non-flow through common share in the capital of the Company at a price of $1.50 per share expiring on December 22, 2025. In connection with this private placement, the Company paid finders' fees of $21,000 and issued 17,500 finder's warrants with a fair value of $8,161. Each finder's warrant is exercisable at a price of $1.50 per common share expiring on December 22, 2025. The fair value of the finder's warrants was calculated using the Black-Scholes option pricing model with an expected life of two years, volatility of 101.61%, risk-free rate of 3.85%, and dividend yield of 0%. The flow-through liability associated with this issuance using the residual method was $43,750.
- Stock Options
The Company adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX Venture Exchange requirements, grant to directors, officers, and consultants to the Company, non-transferable options to purchase common shares. The number of common shares reserved for issuance is not to exceed 10% of the issued and outstanding common shares of the Company. Such options will be exercisable for a period of up to five years from the date of grant.
The following table summarizes the continuity of the Company's stock options:
| Number of options | Weighted average exercise price $ | |
|---|---|---|
| Outstanding, December 31, 2022 | 330,000 | 1.725 |
| Granted | 185,000 | 1.75 |
| Forfeited | (25,000) | 1.45 |
| Outstanding, December 31, 2023 | 490,000 | 1.75 |
| Granted | 220,000 | 1.11 |
| Outstanding, December 31, 2024 | 710,000 | 1.55 |
23
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
- Stock Options (continued)
Additional information regarding stock options outstanding as at December 31, 2024, is as follows:
| Range of exercise prices $ | Outstanding | Exercisable | |||
|---|---|---|---|---|---|
| Number of stock options | Weighted average remaining contractual life (years) | Weighted average exercise price $ | Number of stock options | Weighted average exercise price $ | |
| 0.50 | 40,000 | 4.4 | 0.50 | 30,000 | 0.50 |
| 1.10 | 40,000 | 3.5 | 1.10 | 40,000 | 1.10 |
| 1.25 | 180,000 | 4.0 | 1.25 | 180,000 | 1.25 |
| 1.725 | 330,000 | 1.7 | 1.725 | 330,000 | 1.725 |
| 2.00 | 120,000 | 3.2 | 2.00 | 120,000 | 2.00 |
| 710,000 | 2.8 | 1.55 | 700,000 | 1.55 |
The fair value for stock options granted have been estimated using the Black-Scholes option pricing model assuming no expected dividends or forfeitures and the following weighted average assumptions:
| 2024 | 2023 | |
|---|---|---|
| Risk-free interest rate | 3.49% | 3.58% |
| Expected life (in years) | 5 | 4.8 |
| Expected volatility | 149% | 155% |
During the year ended December 31, 2024, the Company recognized share-based compensation expense of $202,748 (2023 - $253,722) in share-based payment reserve. The weighted average grant date fair value was $0.88 (2023 - $1.55) per option.
- Share Purchase Warrants
| Number of warrants | Weighted average exercise price $ | |
|---|---|---|
| Balance, December 31, 2022 | – | – |
| Issued | 3,411,292 | 1.95 |
| Balance, December 31, 2023 | 3,411,292 | 1.95 |
| Issued | 4,622,211 | 0.95 |
| Expired | (1,600,000) | 2.50 |
| Balance, December 31, 2024 | 6,433,503 | 1.10 |
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
10. Share Purchase Warrants (continued)
As at December 31, 2024, the following share purchase warrants were outstanding:
| Number of warrants outstanding | Exercise price $ | Expiry date |
|---|---|---|
| 1,668,792 | 1.50 | October 11, 2025 |
| 142,500 | 1.50 | December 25, 2025 |
| 1,277,778 | 1.80 | February 8, 2026 |
| 161,039 | 1.10 | February 8, 2026 |
| 3,183,394 | 0.60 | July 30, 2026 |
| 6,433,503 |
11. Capital Management
The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued share capital, share-based payment reserve, and warrants reserve.
The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under specific circumstances.
The Company is not subject to externally imposed capital requirements and the Company's overall strategy with respect to capital risk management remains unchanged from the year ended December 31, 2023.
12. Financial Instruments and Risk Management
(a) Fair Values
Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The fair value hierarchy has the following levels:
- Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 - valuation techniques based on 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
- Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Assets and liabilities measured at fair value on a recurring basis were presented on the Company's consolidated statement of financial position as at December 31, 2024 as follows:
| Fair value measurements using | Balance, December 31, 2024 | |||
|---|---|---|---|---|
| Quoted prices in active markets for identical instruments (Level 1) $ | Significant other observable inputs (Level 2) $ | Significant unobservable inputs (Level 3) $ | ||
| Marketable securities | 120,000 | – | – | 120,000 |
| Investment | – | – | 111,111 | 111,111 |
25
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
12. Financial Instruments and Risk Management (continued)
(a) Fair Values (continued)
The fair values of financial instruments, which include cash and cash equivalents, marketable securities, and accounts payable and accrued liabilities, approximate their carrying values due to the relatively short-term maturity of these instruments.
(b) Credit Risk
Credit risk is the risk of potential loss to the Company if a counter party to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash and cash equivalents. The Company limits the exposure to credit risk by only investing its cash and cash equivalents with high-credit quality financial institutions. The carrying amount of these financial assets represents the maximum credit exposure.
(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's objective to managing liquidity risk is to ensure that it has sufficient liquidity available to meet its liabilities when due. The Company relies on raising debt or equity financing in a timely manner.
The following amounts are the contractual maturities of financial liabilities as at December 31, 2024, and 2023:
| 2024 | Total $ | Within 1 year $ | Within 2-5 years $ |
|---|---|---|---|
| Accounts payable and accrued liabilities | 839,552 | 839,552 | – |
| 2023 | Total $ | Within 1 year $ | Within 2-5 years $ |
| Accounts payable and accrued liabilities | 780,207 | 780,207 | – |
(d) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as it does not have any liabilities with variable rates.
(e) Foreign Exchange Rate Risk
Foreign exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates in Canada and the United States, but has the majority of its cash held in Canada in Canadian dollars. Foreign exchange risk arises from purchase transactions as well as financial assets and liabilities denominated in these foreign currencies.
The Company does not use derivative instruments to hedge exposure to foreign exchange rate risk. However, management of the Company believes there is no significant exposure to foreign currency fluctuations.
(f) Price Risk
The Company's ability to raise capital to fund exploration activities is subject to risks associated with fluctuations in the market price of mineral resources. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.
26
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
13. Segmented Information
The Company has one operating segment, mineral exploration. The Company's head office is in Canada and it has exploration and evaluation assets in Canada and the United States. Geographic information for non-current assets other than financial instruments is as follows:
| As at December 31, 2024 | Canada $ | US $ | Total $ |
|---|---|---|---|
| Exploration and evaluation assets | 9,666,442 | 200,000 | 9,866,442 |
| December 31, 2023 | Canada $ | US $ | Total $ |
| Exploration and evaluation assets | 5,679,360 | 17,389,098 | 23,068,458 |
14. Income Taxes
The tax effect (computed by applying the Canadian federal and provincial statutory rates) of the significant temporary differences, which comprise of deferred income tax assets and liabilities, are as follows:
| 2024 $ | 2023 $ | |
|---|---|---|
| Canadian statutory income tax rate | 27% | 27% |
| Income tax recovery at statutory rate | (5,344,187) | (600,674) |
| Tax effect of: | ||
| Permanent differences and other | 37,559 | 385,851 |
| Change in unrecognized deferred income tax assets | 5,306,628 | 214,823 |
| Income tax provision | – | – |
The significant components of deferred income tax assets and liabilities are as follows:
| 2024 $ | 2023 $ | |
|---|---|---|
| Deferred income tax asset (liability) | ||
| Non-capital losses carried forward | 2,257,375 | 1,498,937 |
| Resource pools | 4,154,335 | (342,753) |
| Share issuance costs | 198,328 | 147,226 |
| Total gross deferred income tax assets | 6,610,038 | 1,303,410 |
| Unrecognized deferred income tax assets | (6,610,038) | (1,303,410) |
| Net deferred income tax asset | – | – |
27
28
STALLION URANIUM CORP.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
14. Income Taxes (continued)
As at December 31, 2024, the Company has non-capital losses carried forward of $8,254,739, which are available to offset future years' taxable income. These losses expire as follows:
| $ | |
|---|---|
| 2031 | 31 |
| 2032 | 34,387 |
| 2033 | 103,654 |
| 2034 | 187,647 |
| 2035 | 194,032 |
| 2036 | 111,943 |
| 2037 | 343,257 |
| 2038 | 744,687 |
| 2039 | 134,893 |
| 2040 | 270,239 |
| 2041 | 646,785 |
| 2042 | 626,400 |
| 2043 | 2,305,244 |
| 2044 | 2,551,540 |
| 8,254,739 |
The Company also has available mineral resource related expenditure pools totalling $25,252,868, which may be deducted against future taxable income on a discretionary basis.
15. Commitment
On December 1, 2024, the Company entered into an employment agreement with the CEO of the Company. The Company agreed to pay the CEO a salary of $175,000 per annum for a period of 2 years. Following the completion of an equity financing of at least $5,000,000, the salary will increase to $250,000 per annum.
16. Subsequent Events
(a) On February 28, 2025, the Company consolidated its issued and outstanding common shares on a 1-for-5 basis. All share amounts have been retroactively restated for all periods presented.
(b) On April 24, 2025, the Company issued 14,500,000 common shares at a price of $0.10 per share for proceeds of $1,450,000. In connection with this private placement, the Company paid finders' fees of $72,700 and issued 791,000 finders' warrants. Each finder's warrant is exercisable at a price of $0.20 per common share expiring on April 24, 2028.
(c) On April 29, 2025, the Company entered into a settlement agreement with Atha whereby the Company will issue 802,809 common shares to settle the deficiency of $108,379 (included in accounts payable and accrued liabilities as at December 31, 2024) resulting from not incurring sufficient exploration expenditures pursuant to the exploration and evaluation asset option agreement with Atha.