Temas Resources Corp. — Management Reports 2023

Oct 27, 2023

TEMAS RESOURCES CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE COMPANY’S FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

The following Management Discussion & Analysis (“MD&A”) is intended to assist in the understanding of the trends and significant changes in the financial condition and results of operations of Temas Resources Corp. (hereinafter “Temas” or the “Company”) for the nine months ended September 30, 2023 and 2022 and the notes thereto. The MD&A should be read in conjunction with the audited financial statements for year ended December 31, 2022. The MD&A has been prepared effective October 27, 2023.

SCOPE OF ANALYSIS

The following is a discussion and analysis of Temas Resources Corp. The Company reports its financial results in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

FORWARD LOOKING STATEMENTS

The information set forth in this MD&A contains statements concerning future results, future performance, intentions, objectives, plans and expectations that are, or may be deemed to be, forward-looking statements. These statements concerning possible or assumed future results of operations of the Company are preceded by, followed by or include the words ‘believes,’ ‘expects,’ ‘anticipates,’ ‘estimates,’ ‘intends,’ ‘plans,’ ‘forecasts,’ or similar expressions. Forwardlooking statements are not guaranteeing of future performance. These forward-looking statements are based on current expectations that involve numerous risks and uncertainties, including, but not limited to, those identified in the Risks Factors section. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate. These factors should be considered carefully, and readers should not place undue reliance on forward-looking statements. The Company may not provide updates or revise any forwardlooking statements, except those otherwise required under paragraph 5.8(2) of NI 51-102, whether written or oral that may be made by or on the Company's behalf.

TRENDS

Other than as disclosed in this MD&A, the Company is not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect on its revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

GENERAL BUSINESS AND DEVELOPMENT

Temas Resources Corp. (formerly Clean Earth Chemical Corp. ‐ the “Company”) was incorporated pursuant to the provisions of the British Columbia Business Corporations Act on June 25, 2018, under the name “Clean Earth Chemical Corp.” On August 12, 2019, the Company changed its name to Temas Resources Corp. The Company is in the exploration stage with respect to its mineral property interest and has not yet achieved commercial production. The Company commenced trading on the Canadian Stock Exchange (CSE) on May 19, 2020, under the ticker TMAS and on OTCQB under the ticker TMASF on August 5, 2020.

The Company’s head office and registered and records office is located at 520‐999 West Hastings Street, Vancouver, British Columbia, V6C 2W2.

The Company is a reporting issuer in the Province of British Columbia. All public filings for the Company can be found on the SEDAR website www.sedar.com.

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HIGHLIGHTS

La Blache Project

The Company is in the process of completing a Preliminary Economic Assessment Report and updated Mineral Resource Estimate for the La Blache property. As at the date of this MD&A, ten holes totaling 2,326 metres have been completed, and the Company assay results were received and reported August 8[th] , 2023. In the fourth quarter of last year, the Company also re‐assessed the historic drill core and started working on a preliminary economic assessment report.

Lac Brule Project

During the year, the Company applied for a drilling permit for the Lac Brule property to allow the company to drill sufficient infill holes to complete an updated resource. In the fourth quarter, planning and the procurement of resources commenced.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s exploration activities are subject to various federal, provincial and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made and expects to continue to make in the future, filings and expenditures to comply with such laws and regulations.

As at September 30, 2023, the Company has a cash balance of $79,377 compared to a cash balance of $789,501 at December 31, 2022. The Company had working capital deficit of $1,300,770 as at September 30, 2023 (December 31, 2022 ‐ $775,172).

The continuation of the Company as a going concern is dependent on its ability to raise additional capital or debt financing, including on reasonable terms, in order to meet business objectives towards achieving profitable business operations.

Fiscal 2023

The Company has closed the first tranche of its non‐brokered private placement, issuing 3.18 million units for gross proceeds of $318,000. The Company intends to issue up to 4.5 million units at a price of 10 cents per unit for aggregate gross proceeds of up to $450,000. Each unit comprises of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the company at a price of 15 cents per share for a period of two years from the closing date. The warrants shall include an acceleration clause which will provide that, in the event that the closing price of the subscriber's common shares on the Canadian Securities Exchange, or such other relevant exchange, is equal to or greater than 30 cents per share for a period of 10 consecutive trading days, the company may provide holders of the warrants with written notice that holders have 30 days within which to exercise the warrants on the original terms.

On February 28, 2023, the Company issued 100,000 common shares at $0.225 for proceeds of $22,500 in connection with the Crescita Capital equity investment facility.

On March 27, 2023, the Company settled outstanding fees of $25,000 for 55,555 common shares with an issue price of $0.50.

Fiscal 2022

On December 19, 2022, the Company issued 208,333 flow‐through units at a price of $0.89 per unit for gross proceeds of $150,000. Each unit is comprised of one flow‐through share and one half‐share purchase warrant, each whole warrant is exercisable at $0.90 per common share, and expires three years from the date of issuance. The Company paid cash share issuance costs of $7,500 and issued 18,750 finder’s warrants, exercisable at $0.90 per common share, and expire two years from the grant date. The finder’s warrants have a fair value of $3,868.

On November 22, 2022, the Company issued 250,000 common shares for gross proceeds of $14,625 in connection with the Equity Investment Facility.

On November 22, 2022, the Company issued 486,111 flow‐through units at a price of $0.72 per unit for gross proceeds of $350,000. Each unit is comprised of one flow‐through share and one half‐share purchase warrant, each whole warrant is exercisable at $0.90 per common share, and expires three years from the date of issuance. The

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Company paid cash share issuance costs of $21,500, issued 19,444 finder’s warrants, exercisable at $0.72 per common share, and expire three years from the grant date, and issued 18,750 finder’s warrants, exercisable at $0.90 per common share, and expire two years from the grant date. The finder’s warrants have a combined fair value of $11,916.

On November 1, 2022, the Company issued 22,222 common shares for gross proceeds of $12,240 in connection with the Equity Investment Facility.

On October 12, 2022, the Company issued 77,777 common shares for gross proceeds of $44,100 in connection with the Equity Investment Facility.

On August 31, 2022, the Company issued 847,222 flow‐through units at a price of $0.72 per unit for gross proceeds of $610,000. Each unit is comprised of one flow‐through share and one half‐share purchase warrant, each whole warrant is exercisable at $0.90 per common share, and expires three years from the date of issuance. The Company paid cash share issuance costs of $30,500 and issued 76,250 finder’s warrants, exercisable at $0.90 per common share, and expire three years from the grant date. The finder’s warrants have a fair value of $43,709.

On August 22, 2022, the Company issued 111,111 common shares for gross proceeds of $57,000 in connection with the Equity Investment Facility.

On August 8, 2022, the Company issued 555,555 common shares for gross proceeds of $29,250 in connection with the Equity Investment Facility.

Contractual Commitments

The Company does not have any contractual commitments.

Equity Investment Facility

On November 18, 2020, the Company entered into a $5,000,000 equity investment facility with Crescita Capital. The Company can draw down funds from the $5,000,000 equity investment facility from time to time during the three‐ year term at the Company’s discretion by providing a drawdown notice to Crescita Capital, and in return for each drawdown notice funded by Crescita Capital, the Company will allot and issue fully paid common shares to Crescita Capital. To date, the Company has drawn $1,247,115 on the facility and as at September 30, 2023, the remaining undrawn balance is $3,752,885.

The shares issued in connection with any drawdown notice will be priced at the higher of (i) the floor price set by the Company and (ii) 90% of the average closing bid price resulting from the following ten days of trading after the drawdown notice (“Pricing Period”). The drawdown notice amount requested by the Company cannot exceed 700% of the average daily trading volume of the Pricing Period.

In connection with the equity investment facility, the Company paid a commitment fee. This fee consisted of a 3% commission to be paid in common shares, at a price of $2.25 per share (67,777 shares valued at $150,000), and warrants equal to 8% of the outstanding common shares of the Company (515,364 warrants valued at $2,560,331). The warrants have an exercise price of $2.25 per common share and expire three years from the grant date. The warrants were fair valued using the Black‐Scholes Option Pricing Model using the following assumptions average risk‐free interest rate ‐ 0.29%; expected life ‐ 3 years; expected volatility ‐ 100.00%; forfeiture rate ‐ Nil and expected dividends ‐ Nil.

The value of the commitment fee was recorded as a deferred financing charge and is being amortized as share issue costs over the term of the equity investment facility, with amortization charges amounting to $668,301 for the nine months ended September 30, 2023 (2022 ‐ $668,301). As at September 30, 2023, the carrying amount of the deferred financing charges is $153,462 (December 31, 2022 ‐ $821,762).

Liability and Income Tax Effect on Flow-through Shares

Funds raised through the issuance of flow‐through common shares are expected to be expended on qualified Canadian mineral exploration expenditures, as defined pursuant to Canadian income tax legislation. The flow‐ through gross proceeds less the qualified expenditures made to date represent the funds received from flow‐through share issuances that have not been spent and are held by the Company for such expenditures.

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In December 2020, the Company issued 402,777 flow‐through common shares at $9.00 per share for gross proceeds of $3,625,000 and recognized an initial liability for flow‐through shares of $606,250. During the years ended December 31, 2021 and 2022, the Company has completed its flow‐through spending obligations and has recognized a flow‐through recovery of $606,250.

During the 2022 year, the Company issued 1,541,666 flow‐through common shares at an average price of $0.72 for gross proceeds of $1,110,000 and recognized an initial liability for flow‐through shares of $143,750. As at September 30, 2023, the Company has spent $341,463 of the flow‐through obligations and recognized a flow‐through recovery of $44,221.

During the 2022 year, the Company issued 13,875,000 flow‐through common shares at an average price of $0.08 for gross proceeds of $1,110,000 and recognized an initial liability for flow‐through shares of $143,750. As at September 30, 2023, the Company has spent $341,463 of the flow‐through obligations and recognized a flow‐through recovery of $44,221.

EXPLORATION AND PROPERTY

La Blache Property, Quebec, Canada

On September 23, 2020, the Company purchased a 100% interest in the La Blache property in Core‐Nord, Quebec from Cloudbreak Discovery Corp. and Cronin Services Ltd. (collectively known as “Vendors”) for an aggregate of 2,222,222 shares in the Company, $60,000 in cash payments and delivery of an NSR royalty of 2%, subject to the right of the Company to repurchase one‐half of the NSR royalty (1%) for $2,500,000 at any time.

DAB Property, Quebec, Canada

On January 15, 2020, the Company entered into an option agreement with Contigo Resources Ltd. (“Contigo”) to acquire a 100% interest in the 124 claims comprising the DAB property. Under the terms of the option agreement, the Company needs to undertake the following to exercise its option: make cash payments of $25,000 (paid) on January 15, 2020 and $50,000 (paid) on January 15, 2021 (paid); and issue 1,111,111 common shares of the Company to Contigo on January 15, 2020 (issued).

Per the terms of the option agreement, Contigo retains a 2% net smelter royalty (“NSR”) on the DAB property. The Company can purchase 50% of the NSR at any time for a cash payment of $1,500,000.

Lac Brule, Quebec, Canada supplemental

To augment the Company’s claims acquired through staking, on August 19, 2021, the Company had entered into a purchase agreement to acquire a 100% interest in an additional mineral claim comprising the Lac Brule property. Under the terms of the agreement, the Company made a cash payment of $10,000 and issued 5,555 common shares of the Company to the seller at a value of $19,000. Per the terms of the option agreement, the seller retains a 1% net smelter royalty (“NSR”) on the additional mineral claim. The Company can purchase 50% of the NSR at any time for a cash payment of $500,000.

The carrying value of the Company’s mineral properties is as follows:

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Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as for problems arising from the frequently ambiguous conveyance history

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characteristic of many mineral properties. The Company has investigated the titles to its exploration and evaluation assets and, to the best of its knowledge, the titles to its property are in good standing.

INVESTMENTS

On March 26, 2021, the Company purchased a 50% interest in ORF Technologies Inc. (“ORF”) for $600,000. ORF Technologies Inc. holds a portfolio of patents related to mineral extraction. The Company has accounted for the investment in ORF using the equity method of accounting.

ORF has developed several patented, innovative leaching and solvent extraction processes. With the ORF transaction, in conjunction with MetaLeach™, Temas believes that these combined technologies will make a difference in helping to alleviate the significant environmental impact that results from present‐day mineral processing.

Pursuant to the Acquisition, Temas acquired 50% of the outstanding shares of ORF in exchange for a cash payment of $600,000. In closing, the parties entered into a shareholders’ agreement governing their rights and obligations going forward, including development and dividend policies, and pre‐emptive rights to existing shareholders to acquire positions of other existing shareholders. With the 50% acquisition of ORF, Temas’ objectives are to achieve and provide the lowest cost processing alternative for specialty, strategic and rare earth metals producers.

Transaction Highlights:

• Cost efficiencies: TiO2 technology developed by ORF proved to be approximately 144.8% more cost‐ efficient than conventional processes. The Company anticipates comparable cost efficiencies in the production of nickel, iron, gold, rare earth metals and many more.

• More environmentally friendly: The recovery technologies offer a significant reduction in carbon footprint when compared to conventional processing methods.

• Complementary acquisitions: ORF provides a suite of technologies that will complement and work alongside the licensing agreement with Metaleach™. The ORF technology suite is also capable of supporting Temas Resources’ internal La Blache projects as well as unrelated third‐party mining projects.

The Company structured the acquisition to ensure the existing principals responsible for the development of the technologies at ORF would have a significant vested interest in the ongoing commercial success of the technologies. ORF was established as a holding company for the intellectual property developed by Process Research Ortech (“PRO”), a company established in 1990 during the privatization of the Ontario Research Foundation’s (“ONT”) metallurgical testing facilities. ONT was created as an independent corporation by a provincial Act in 1928.

As at the date of this report, ORF is nearing the completion of ilmenite pilot process testing on materials from the Company La Blache exploration project for recovery expectations and to refine the ability to produce pigment‐quality TiO2, iron and vanadium by‐products at the PRO. Approximately 1,000 kilograms (kg) of ore have been leached, followed by the selective solution extraction of titanium, iron and vanadium chlorides, and the precipitation of a high‐purity TiO2 final product. The Company is currently focused on perfecting the processing of ilmenite concentrate because it is traditionally considered an uneconomic waste rock and is widely available. Based on initial results, by implementing the ORF technology these innovative, low‐cost process methods, have achieved better than expected results even with low‐grade and/or contaminated feedstock. Early results of the ORF technology's pilot test work that processes ilmenite feedstock report leach recovery for titanium (Ti), iron (Fe) and vanadium (V) as shown in the attached table.

For the nine months ended September 30, 2023, the Company recorded an equity loss of $9,500 (2022 – $11,809) relating to its investment in ORF. As at September 30, 2023, the investment is recorded at $562,252 (December 31, 2022 ‐ $571,752).

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SHARE CAPITAL AND OUTSTANDING SHARE DATA

Common Shares

On June 26, 2023, the common shares of the Company were consolidated on a basis of 9 pre‐consolidation shares to 1 post‐consolidation share, no fractional shares were issued. Accordingly, the Company has effected the share consolidation in these financial statements as if it had happened at the beginning of periods reported, and disclosed all share capital, warrant and stock option information respectively on a post consolidated basis

Authorized – Unlimited Common shares without par value.

Issued and Outstanding as at September 30, 2023 and the date of this report 9,832,386 (9,676,831 ‐ December 31, 2022)

Fiscal 2023

On February 28, 2023, the Company issued 100,000 common shares at $0.225 for proceeds of $22,500 in connection with the Crescita Capital equity investment facility.

On March 27, 2023, the Company settled outstanding fees of $25,000 for 555,555 common shares with an issue price of $0.45.

Fiscal 2022

On December 19, 2022, the Company issued 208,333 flow‐through units at a price of $0.89 per unit for gross proceeds of $150,000. Each unit is comprised of one flow‐through share and one half‐share purchase warrant, each whole warrant is exercisable at $0.90 per common share, and expires three years from the date of issuance. The Company paid cash share issuance costs of $7,500 and issued 18,750 finder’s warrants, exercisable at $0.90 per common share, and expire two years from the grant date. The finder’s warrants have a fair value of $3,868.

On November 22, 2022, the Company issued 250,000 common shares for gross proceeds of $14,625 in connection with the Equity Investment Facility.

On November 22, 2022, the Company issued 486,111 flow‐through units at a price of $0.89 per unit for gross proceeds of $350,000. Each unit is comprised of one flow‐through share and one half‐share purchase warrant, each whole warrant is exercisable at $0.90 per common share, and expires three years from the date of issuance. The Company paid cash share issuance costs of $21,500, issued 19,444 finder’s warrants, exercisable at $0.89 per common share, and expire three years from the grant date, and issued 18,750 finder’s warrants, exercisable at $0.90 per common share, and expire two years from the grant date. The finder’s warrants have a combined fair value of $11,916.

On November 1, 2022, the Company issued 22,222 common shares for gross proceeds of $12,240 in connection with the Equity Investment Facility. On October 12, 2022, the Company issued 77,777 common shares for gross proceeds of $44,100 in connection with the Equity Investment Facility.

On August 31, 2022, the Company issued 847,222 flow‐through units at a price of $0.89 per unit for gross proceeds of $610,000. Each unit is comprised of one flow‐through share and one half‐share purchase warrant, each whole warrant is exercisable at $0.90 per common share, and expires three years from the date of issuance. The Company paid cash share issuance costs of $30,500 and issued 76,250 finder’s warrants, exercisable at $0.90 per common share, and expire three years from the grant date. The finder’s warrants have a fair value of $43,709.

On August 22, 2022, the Company issued 111,111 common shares for gross proceeds of $57,000 in connection with the Equity Investment Facility.

On August 8, 2022, the Company issued 55,555 common shares for gross proceeds of $29,250 in connection with the Equity Investment Facility.

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SHARE CAPITAL AND OUTSTANDING SHARE DATA (continued)

Stock Options

As at September 30, 2023, the Company has 910,000 stock options outstanding (December 31, 2022: 461,296) outstanding with 910,000 stock options exercisable.

	Weighted Average	Remaining Life
Number of Options	Exercise Price	(In Years)	Expiry Date
100,000	6.39	0.09	November 3, 2023
33,333	1.26	3.41	February 27, 2027
16,667	1.08	1.45	March 14, 2025
760,000	0.105	2.84	August 2,2026
910,000	0.86	2.53

On August 2, 2023, the Company granted 760,000 stock options to consultants, directors and officers of the Company exercisable at $0.105 per option for a period of three years. The options are vested immediately. The options were fair valued using Black‐Scholes Option Pricing Model using the following assumptions: average risk‐ free rate – 4.43%; expected life – 3 years; expected volatility – 187.79%; forfeiture rate ‐ Nil and expected dividends – Nil.

On March 14, 2022, the Company granted 16,666 stock options to an officer of the Company exercisable at $1.08 per option for a period of three years. The options are vest immediately. The options were fair valued using Black‐ Scholes Option Pricing Model using the following assumptions: average risk‐free rate – 1.94%; expected life – 3 years; expected volatility – 99.77%; forfeiture rate ‐ Nil and expected dividends – Nil.

On February 2, 2022, the Company granted 72,222 stock options to various directors, officers, and consultants of the Company at an exercise price of $1.26 per option. The options will expire in five years and vest immediately on the grant date. The options were fair valued using Black‐Scholes Option Pricing Model using the following assumptions: average risk‐free rate – 1.61%; expected life – 5 years; expected volatility – 100.00%; forfeiture rate ‐ Nil and expected dividends – Nil

Share Purchase Warrants

Share purchase warrants outstanding as at September 30, 2023 are as follows:

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RESULTS OF OPERATIONS

All of the information described below is accounted for in accordance with IFRS, as issued by IASB. The reader is encouraged to refer to Note 3 of the Company’s annual financial statements for the year ended December 31, 2022 for the summary of significant accounting policies.

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SUMMARY OF QUARTERLY RESULTS

Three months ended		30-Sep-23		30-Jun-23		31-Mar-23		31-Dec-22
Loss before non‐operating expenses	$	(276,981)	$	(136,770)	$	269,535	$	(2,028,828)
Loss before income taxes	$	(278,275)	$	(139,770)	$	(227,430)	$	(2,062,121)
Loss per common share, basic and diluted	$	(0.03)	$	(0.01)	$	(0.02)	$	(0.02)
Net and comprehensive loss	$	(278,275)	$	(139,770)	$	(227,430)	$	(2,062,121)
Net and Comprehensive Lossper Common Share,Basic and Diluted	$	(0.03)	$	(0.01)	$	(0.02)	$	(0.21)
Three months ended		30-Sep-22		30-Jun-22		31-Mar-22		31-Dec-21
Loss before non‐operating expenses	$	(749,447)	$	(478,289)	$	(737,559)	$	(1,462,078)
Loss before income taxes	$	(751,136)	$	(473,598)	$	(737,559)	$	(1,326,416)
Loss per common share, basic and diluted	$	(0.01)	$	(0.01)	$	(0.01)	$	(0.02)
Net and comprehensive loss	$	(751,136)	$	(473,598)	$	(737,559)	$	(1,326,416)
Net and Comprehensive Lossper Common Share,Basic and Diluted	$	(0.08)	$	(0.06)	$	(0.09)	$	(0.17)

SELECT FINANCIAL INFORMATION

	Nine months ended	Nine months ended	Variance	Discussion
	30-Sep-23	30-Sep-22
Amortization expense	‐	47,349	(47,349)	Amortization expense on Metaleach rights
Consulting	195,408	275,960	(80,552)	Consultingexpenses decreased due to cost savings initatives
Equityloss in investee	9,500	15,034	(5,534)	Equityloss on ORF Technologies
Exploration expenditures	282,845	1,101,505	(818,660)	Expenses decreased due to the less activity in exploration programs. Companyis focusingon PEA work.
General and Administrative	‐	166,597	(166,597)	G&A expenses decreased due to cost savings initatives
Insurance	10,500	11,500	(1,000)	‐
Interest and Bank Charges	3,503	915	2,589	Increase in interest due to short term loan
Interest income	(3,090)	(7,035)	3,946	‐
Investor Relations	43,819	298,981	(255,162)	Investor relations expneses decreased due to decreased activities andprepaid items are fullyamortized
Patents	1,865	3,018	(1,153)	Patentpayments on ORF Technologies
Professional Fees	35,014	22,764	12,250	Increase inprofessional fees due short term loan expenses
Recoveryof flow‐throughpremium liability	(44,221)	(177,105)	132,884	Flow through income was generated due to the Company incurring eligible expenses in the currentperiod.
Share‐basedpayments	72,000	108,278	(36,278)	No share basedpayments duringtheperiod
Transfer Agent and FilingFees	38,331	91,574	(53,243)	Decrease in tranfer agent fees due to less financingactivities
Travel	‐	2,959	(2,959)	‐
Total expenses	645,475	1,962,293	(1,316,818)

	Three months ended	Three months ended	Variance	Discussion
	30-Sep-23	30-Sep-22
Amortization expense	‐	15,783	(15,783)	Amortiation expense on Metaleach rights
Consulting	95,905	90,200	5,705	‐
Equityloss in investee	1,500	3,224	(1,724)	Equityloss on ORF Technologies
Exploration expenditures	33,369	641,073	(607,704)	Expenses decreased due to the less activity in exploration programs. Companyis focusingon PEA work.
General and Administrative	‐	22,120	(22,120)	G&A expenses decreased due to cost savings initatives
Insurance	3,375	3,750	(375)	‐
Interest and Bank Charges	2,982	277	2,705	Increase in interest due to short term loan
Interest income	(206)	(4,913)	4,707	‐
Investor Relations	34,613	‐	34,613	Investor relations expenses increased due to capital raise activities duringthequarter
Patents		‐	‐
Professional Fees	6,091	‐	6,091
Recoveryof flow‐throughpremium liability	‐	(87,105)	87,105	Flow through income was lower due to the Company not incurring eligible expenses in the currentperiod.
Share‐basedpayments	72,000	‐	72,000	Incentive stock options were issued duringthequarter
Transfer Agent and FilingFees	28,646	66,727	(38,081)	Decrease in tranfer agent fees due to a smaller shareholder base for AGM
Total expenses	278,275	751,136	(472,861)

SUMMARY OF FINANCIAL RESULTS FOR MOST RECENTLY COMPLETED PERIODS

The following table summarizes the financial results of operations for the period ended December 31, 2022, and 2021:

	December 31, 2022	December 31, 2021
	$	$
Expenses	(4,024,414)	(3,718,535)
Net loss	(4,024,414)	(3,577,932)
Lossper share ‐ basic & diluted	(0.05)	(0.05)

RELATED PARTY TRANSACTIONS

Key management personnel at the Company are the directors and officers of the Company.

During the period ended September 30, 2023, the Company incurred:

• consulting fees of $180,000 (2022 ‐ $234,500) to a company owned by a director of the Company.

• payroll‐related expenses of Nil (2022 ‐ $148,500) to an officer of the Company

• management fees of Nil (2022 ‐ $150,960) to a former director and officer of the Company

• share‐based payments of $72,000 (2022 ‐ $108,278) to officers, directors and companies with common officers and directors.

• Interest expense of $2,715 (2022‐Nil) on loan from a Company owned by the CEO

As of September 30, 2023, loans and receivable includes:

• $Nil (December 31, 2022 – $25,000) is due to a former director of the Company

• $399,810 (December 31, 2022 – $222,372) payable to a company owned by a director of the Company

• $135,000 (December 31, 2022 ‐ $135,000) due to a former officer of the Company

• $70,000 (December 31, 2022 – $70,000) due to ORF Technologies Inc.

• $142,715(December 31, 2022 – Nil) loan from a Company owned by the CEO

All loans except for the loan from the CEO of the Company are non‐interest bearing and due on demand. All related party transactions are in the normal course of operations and have been measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

CRITICAL JUDGMENTS AND ACCOUNTING ESTIMATES

Basis of Measurement

These financial statements have been prepared on a historical cost basis, except for financial instruments classified in accordance with measurement standards under IFRS. All dollar amounts presented are in Canadian dollars unless otherwise specified. The condensed interim financial statements have been prepared using IFRS principles applicable to a going concern, which contemplate the realization of assets and settlement of liabilities in the normal course of business as they come due.

Income Taxes

Income tax is recognized in profit or loss except to the extent that it relates to items recognized in other comprehensive income of loss or directly in equity, in which case it is recognized in other comprehensive income or loss or equity. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period applicable to the period of expected realization or settlement. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the assets and liabilities on a net basis.

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Deferred tax assets and liabilities are offset when there is a legally right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the group intends to settle its current tax assets and liabilities on a net basis.

Significant Accounting Judgments and Estimates

The preparation of these financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue 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 estimates are revised and in any future periods affected.

Certain of the Company’s accounting policies and disclosures require key assumptions concerning the future and other estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities or disclosures within the next fiscal year. Where applicable, further information about the assumptions made is disclosed in the notes specific to that asset or liability. The critical accounting estimates and judgments set out below have been applied consistently to all periods presented in these financial statements.

a) Ability to continue as a going concern – evaluation of the ability of the Company to realize its strategy for funding its future needs for working capital involves making judgments.

b) Investment in associate – determination of ORF as an associate of the Company requires making judgments about ownership and control.

c) Intangible Asset – Intangible asset is depreciated over the estimated useful life of the asset to the asset’s estimated residual value as determined by management. Assessing the reasonableness of the estimated useful life, residual value and the appropriate depreciation methodology requires judgment and is based on management’s experience and knowledge of the industry.

d) Impairment – an evaluation of whether or not an asset is impaired involves consideration of whether indicators of impairment exist. Factors which could indicate impairment exists include: significant underperformance of an asset relative to historical or projected operating results, significant changes in the manner in which an asset is used or in the Company’s overall business strategy, the carrying amount of the net assets of the Company being more than its market capitalization or significant negative industry or economic trends. In some cases, these events are clear. However, in many cases, a clearly identifiable event indicating possible impairment does not occur. Instead, a series of individually insignificant events occur over a period of time leading to an indication that an asset may be impaired. Events can occur in these situations that may not be known until a date subsequent to their occurrence. When there is an indicator of impairment, the recoverable amount of the asset is estimated to determine the amount of impairment, if any. If indicators conclude that the asset is no longer impaired, the Company will reverse impairment losses on assets only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Similar to determining if an impairment exists, judgment is required in assessing if a reversal of an impairment loss is required.

Investment in Associate

Investments in which the Company has the ability to exert significant influence, but does not have control, are accounted for using the equity method of accounting whereby the original cost of the investment is adjusted each reporting period for the Associate’s share of earnings, losses, dividends and other changes to the investment’s capital structure during the current reporting period.

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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Set out below is a comparison, by category, of the carrying amounts and fair values of all of the Company’s financial instruments that are carried in the condensed interim financial statements and how the fair value of financial instruments is measured .

Financial and Capital Risk Management

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are described below.

Level 1 ‐ unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 ‐ inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 ‐ inputs that are not based on observable market data.

The Company enters financial instruments to finance its operations in the normal course of business.

The Company has no financial instruments carried at fair value. The Company’s cash, accounts receivable, loan receivable, accounts payable and accrued liabilities and loan payable are recorded at fair value and subsequently measured at amortized cost.

The Company is exposed to varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes. The type of risk exposure and the way in way in which such exposure in managed is provided as follows:

Foreign exchange risk

The Company’s functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a result, the Company’s exposure to foreign currency risk s minimal.

Credit risk

The Company’s cash is largely held in large Canadian financial institutions. The Company does not have any asset‐ backed commercial paper. The Company maintains cash deposits with Schedule A financial institution, which from time to time may exceed federally insured limits. The Company has not experienced any significant credit losses and believes it is not exposed to any significant credit risk.

Interest rate risk

Interest rate risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial assets and liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company does not hold any financial liabilities with variable interest rates. The Company does maintain bank accounts which earn interest at variable rates, but it does not believe it is currently subject to any significant interest rate risk.

Liquidity risk

The Company’s ability to continue as a going concern is dependent on management’s ability to raise the required funding through future equity issuances and through short‐term borrowing. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments.

Price risk

The ability of the Company to explore its mineral properties and the future profitability of the Company are directly related to the market price of precious metals. The Company monitors precious metals prices to determine the appropriate course of action to be taken by the Company.

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OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off‐balance sheet arrangements.

MANAGEMENT’S RESPONSIBILITY

Management is responsible for all information contained in this report. The December 31, 2021 financial statements have been prepared in accordance with IFRS and include amounts based on management’s informed judgments and estimates.

RISKS AND UNCERTAINTIES

An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Only investors whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment should undertake such investment. Prospective investors should carefully consider the risk and uncertainties that have affected, and which in the future are reasonably expected to affect, the Company and its financial position.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this discussion, including information as to future activities, events and financial or operating performance of the Company and its projects, constitute forward‐looking statements. Such forward‐ looking statements involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated activities, events or results implied or expressed in such forward‐ looking statements. Forward‐looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.

Generally, forward‐looking information can be identified by the use of forward‐looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “believes”, or variations of such words and phrases. Forward‐looking information may also be identified in statements where certain actions, events or results “may”, “could", "would”, “might” or “will be taken”, “occur” or “be achieved”.

Forward‐looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made.

Many factors could cause actual activities and events and the Company’s actual results to differ materially from those expressed or implied in any forward‐looking statements made by, or on behalf of, the Company. These include metal prices, exploitation and exploration successes, continued availability of capital and financing and general economic, market or business conditions.

These forward‐looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward‐looking statements, whether as a result of new information, future events or results or otherwise. Investors are cautioned that forward‐looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward‐looking statements due to the inherent uncertainly therein.

OTHER INFORMATION

Additional information on the Company is available on SEDAR at www.sedar.com.

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