AI assistant
World Copper Ltd. — Audit Report / Information 2024
Apr 28, 2025
45949_rns_2025-04-28_1c8d262f-d6d7-4177-ae93-660dfd973b49.pdf
Audit Report / Information
Open in viewerOpens in your device viewer
WORLD COPPER LTD.
(An Exploration Stage Company)
Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
Expressed in Canadian Dollars
Corporate Head Office
1570 – 200 Burrard Street
Vancouver, BC
V6C 3L6
WORLD COPPER LTD.
(An Exploration Stage Company)
Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2024 and 2023
| INDEX | Page |
|---|---|
| Independent Auditor’s Report | 3 - 5 |
| Consolidated Financial Statements | 6 - 9 |
| Consolidated Statements of Financial Position | 6 |
| Consolidated Statements of Loss and Comprehensive Loss | 7 |
| Consolidated Statements of Changes in Shareholders’ Equity | 8 |
| Consolidated Statements of Cash Flows | 9 |
| Notes to Consolidated Financial Statements | 10 - 31 |
Page 2 | 31
5
smythe
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF WORLD COPPPER LTD.
Opinion
We have audited the consolidated financial statements of World Copper Ltd. and its subsidiaries (the "Company"), which comprise:
- the consolidated statements of financial position as at December 31, 2024 and 2023;
- the consolidated statements of loss and comprehensive loss for the years then ended;
- the consolidated statements of changes in shareholders' equity for the years then ended;
- the consolidated statements of cash flows for the years then ended; and
- the 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 Accounting Standards").
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 audits 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 in our audits 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 incurred a net loss of $27,282,563 during the year ended December 31, 2024 and as at of that date, has an accumulated deficit of $47,722,630. As stated in Note 1, this event, along with other matters, indicates 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 audits 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.
Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our auditor's report.
SMYTHE LLP | smythecpa.com
VANCOUVER
1700-475 Howe St
Vancouver, BC V6C 2B3
T: 604 687 1231
F: 604 688 4675
LANGLEY
600-19933 88 Ave
Langley, BC V2Y 4K5
T: 604 282 3600
F: 604 357 1376
NANAIMO
201-1825 Bowen Rd
Nanaimo, BC V9S 1H1
T: 250 755 2111
F: 250 984 0886
Page 3 | 31
5
smythe
Other Information
Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.
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 audits of the consolidated financial statements, our responsibility is to read the other information identified above 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.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we 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 Accounting Standards, 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.
SMYTHE LLP | smythecpa.com
VANCOUVER
1700-475 Howe St
Vancouver, BC V6C 2B3
T: 604 687 1231
F: 604 688 4675
LANGLEY
600-19933 88 Ave
Langley, BC V2Y 4K5
T: 604 282 3600
F: 604 357 1376
NANAIMO
201-1825 Bowen Rd
Nanaimo, BC V9S 1H1
T: 250 755 2111
F: 250 984 0886
Page 4 | 31
Smythe
- 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.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes 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 are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or 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 Karen Ka Yee Cheng.
Smythe LLP
Chartered Professional Accountants
Vancouver, British Columbia
April 25, 2025
SMYTHE LLP | smythecpa.com
VANCOUVER
1700-475 Howe St
Vancouver, BC V6C 2B3
T: 604 687 1231
F: 604 688 4675
LANGLEY
600-19933 88 Ave
Langley, BC V2Y 4K5
T: 604 282 3600
F: 604 357 1376
NANAIMO
201-1825 Bowen Rd
Nanaimo, BC V9S 1H1
T: 250 755 2111
F: 250 984 0886
Page 5 | 31
WORLD COPPER LTD.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
As at December 31, 2024 and 2023
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| ASSETS | ||
| Current | ||
| Cash | $ 193,977 | $ 14,329 |
| Receivables | 70,531 | 92,612 |
| Prepaids | 126,979 | 139,230 |
| Assets held for sale (Note 6) | 20,632,703 | - |
| 21,024,190 | 246,171 | |
| Non-Current | ||
| Deposits | 7,587 | 7,587 |
| Equipment (Note 5) | - | 6,300 |
| Exploration and evaluation assets (Note 6) | 1 | 42,671,160 |
| Total Assets | $ 21,031,778 | $ 42,931,218 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current | ||
| Accounts payable and accrued liabilities (Note 11) | $ 2,731,051 | $ 2,356,479 |
| Related party loans (Notes 7) | 123,183 | 4,442,692 |
| Loan payable (Note 8) | - | 60,000 |
| 2,854,234 | 6,859,171 | |
| Non-Current | ||
| Related party loans (Notes 7 and 11) | 1,887,806 | - |
| Loan payable (Note 8) | 62,852 | - |
| Total Liabilities | 4,804,892 | 6,859,171 |
| Shareholders' Equity | ||
| Capital stock (Note 9) | 61,165,409 | 55,189,437 |
| Subscriptions received (Note 9) | 117,000 | - |
| Share-based payment reserves (Notes 10 and 11) | 2,667,107 | 2,454,238 |
| Deficit | (47,722,630) | (21,571,628) |
| Total Shareholders' Equity | 16,226,886 | 36,072,047 |
| Total Liabilities and Shareholders' Equity | $ 21,031,778 | $ 42,931,218 |
On behalf of the Board:
(Signed) "Hendrik Van Alphen"
Hendrik Van Alphen, Director
(Signed) "Timothy McCutcheon"
Timothy McCutcheon, Director
The accompanying notes are an integral part of these consolidated financial statements.
Page 6 | 31
WORLD COPPER LTD.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| EXPENSES | ||
| Accretion (Notes 7 and 11) | $ 109,389 | $ 280,612 |
| Consulting fees (Note 11) | 1,549,526 | 1,237,209 |
| Depreciation (Note 5) | 6,300 | 4,979 |
| Exploration and evaluation (Note 6) | 948,412 | 728,464 |
| Foreign exchange loss | 175,915 | 50,970 |
| Insurance | 52,310 | 74,958 |
| Interest (Notes 7, 8 and 11) | 217,510 | 407,579 |
| Office and miscellaneous | 125,795 | 104,799 |
| Professional fees (Note 11) | 505,764 | 513,172 |
| Rent (Note 11) | 100,266 | 118,447 |
| Share-based payments (Notes 10 and 11) | 1,035,688 | 84,945 |
| Shareholder communications | 483,748 | 744,911 |
| Transfer agent and regulatory fees | 39,994 | 50,654 |
| Travel | 161,565 | 239,344 |
| Wages and benefits (Note 11) | 12,874 | 376,903 |
| Loss before the following | (5,525,056) | (5,017,946) |
| Interest income | - | 7,839 |
| Recovery of VAT (Note 6) | - | 2,422,971 |
| Gain (loss) on extinguishment (Note 7) | 91,962 | (696,201) |
| Loss on sale of investment (Note 4) | - | (60,000) |
| Gain on write off of accounts payable | 197,435 | - |
| Loss on write off of receivables | (8,448) | - |
| Write-down of exploration and evaluation asset (Note 6) | (22,038,456) | (279,367) |
| Net Loss before Income Taxes | (27,282,563) | (3,622,704) |
| Income tax expense (Note 15) | - | (33,607) |
| Net Loss and Comprehensive Loss for the Year | $ (27,282,563) | $ (3,656,311) |
| Basic and diluted loss per common share | $ (0.15) | $ (0.03) |
| Weighted average number of common shares outstanding | 180,295,856 | 121,972,552 |
The accompanying notes are an integral part of these consolidated financial statements.
Page 7 | 31
WORLD COPPER LTD.
Consolidated Statements of Changes in Shareholders' Equity
(Expressed in Canadian Dollars)
For the years ended December 31, 2024 and 2023
| Number of Shares | Capital Stock | Subscriptions Received | Share-based Payment Reserve | Deficit | Total Shareholders' Equity | |
|---|---|---|---|---|---|---|
| Balance, December 31, 2022 | 113,700,331 | $ 53,175,656 | $ - | $ 2,343,305 | $ (18,829,220) | $ 36,689,741 |
| Shares issued – private placement (Note 9) | 11,306,667 | 2,035,200 | - | - | - | 2,035,200 |
| Share issue costs – paid in cash (Note 9) | - | (19,175) | - | - | - | (19,175) |
| Finder fee warrants – on private placements (Note 9) | - | (2,244) | - | 2,244 | - | - |
| Share-based payments (Note 10) | - | - | - | 84,945 | - | 84,945 |
| Warrants issued on loan extensions (Note 7) | - | - | - | 937,647 | - | 937,647 |
| Transfer of cancelled options | - | - | - | (514,081) | 514,081 | - |
| Transfer of expired warrants | - | - | - | (399,822) | 399,822 | - |
| Loss for the year | - | - | - | - | (3,656,311) | (3,656,311) |
| Balance, December 31, 2023 | 125,006,998 | 55,189,437 | - | 2,454,238 | (21,571,628) | 36,072,047 |
| Shares issued – private placement (Note 9) | 69,547,069 | 4,868,295 | - | - | - | 4,868,295 |
| Shares issued – ATM (Note 9) | 29,480,500 | 2,031,084 | - | - | - | 2,031,084 |
| Share issue costs – ATM (Note 9) | - | (720,760) | - | - | - | (720,760) |
| Share issue costs – paid in cash (Note 9) | - | (164,235) | - | - | - | (164,235) |
| Finder fee warrants – on private placements (Note 9) | - | (38,412) | - | 38,412 | - | - |
| Warrants issued on loan extensions (Note 7) | - | - | - | 270,330 | - | 270,330 |
| Subscriptions received (Note 9) | - | - | 117,000 | - | - | 117,000 |
| Share-based payments (Note 10) | - | - | - | 1,035,688 | - | 1,035,688 |
| Transfer of cancelled options | - | - | - | (156,858) | 156,858 | - |
| Transfer of expired warrants | - | - | - | (974,703) | 974,703 | - |
| Loss for the year | - | - | - | - | (27,282,563) | (27,282,563) |
| Balance, December 31, 2024 | 224,034,567 | $ 61,165,409 | $ 117,000 | $ 2,667,107 | $ (47,722,630) | $ 16,226,886 |
The accompanying notes are an integral part of these consolidated financial statements.
Page 8 | 31
WORLD COPPER LTD.
Consolidated Statements of Cash Flows
For the years ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Loss for the year | $ (27,282,563) | $ (3,656,311) |
| Item not affecting cash: | ||
| Accretion on loans | 109,389 | 280,612 |
| Depreciation | 6,300 | 4,979 |
| Accrued interest on loans | 215,133 | 405,484 |
| Foreign exchange on loans | 182,865 | 70,780 |
| (Gain) loss on extinguishment | (91,962) | 696,201 |
| Gain on write off of accounts payable | (197,435) | - |
| Loss on write off of receivables | 8,448 | - |
| Loss on sale of investments | - | 60,000 |
| Share-based payments | 1,035,688 | 84,945 |
| Write-down of exploration and evaluation assets | 22,038,456 | 279,367 |
| Changes in non-cash working capital items: | ||
| Receivables | 13,633 | 179,594 |
| Prepaids | 12,251 | 381,184 |
| Accounts payable and accrued liabilities | 45,373 | (712,122) |
| Net cash used in operating activities | (3,904,424) | (1,925,287) |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Proceeds on sale of marketable securities | - | 500,000 |
| Exploration and evaluation assets | - | (583,818) |
| Net cash used in investing activities | - | (83,818) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Related party loans repayments | (2,573,946) | - |
| Subscriptions received | 117,000 | - |
| Proceeds from issuance of shares | 6,899,379 | 2,035,200 |
| Share issue costs | (164,235) | (19,175) |
| Financing costs - ATM | (194,126) | - |
| Net cash provided by financing activities | 4,084,072 | 2,016,025 |
| Change in cash for the year | 179,648 | 6,920 |
| Cash, beginning of year | 14,329 | 7,409 |
| Cash, end of year | $ 193,977 | $ 14,329 |
| Cash paid for interest | $ 1,554,110 | $ - |
| Cash paid for tax | $ - | $ - |
Significant non-cash financing and investing transactions during the year ended December 31, 2024 included:
- Issued 765,900 warrants valued at $38,412 as finder’s fees for private placements (Note 9).
- Issued 7,251,925 warrants valued at $270,330 under a loan extension (Note 7 and 11).
- As at December 31, 2024, $526,634 in financing costs related to ATM is included within accounts payable and accrued liabilities.
- Exploration and evaluation assets of $20,632,703 were reclassified as assets held for sale.
Significant non-cash financing and investing transactions during the year ended December 31, 2023 included:
- Issued 32,297 warrants valued at $2,244 as finder’s fees for private placements (Note 9).
- Issued 10,321,657 warrants with a value of $937,647 on loan extensions (Notes 7 and 11).
The accompanying notes are an integral part of these consolidated financial statements.
Page 9 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
World Copper Ltd. (the “Company”) was incorporated under the Business Corporations Act (British Columbia) on June 16, 2006, and began trading under the symbol “WCU.V” on the TSX Venture Exchange (“TSXV”) on January 26, 2021.
The Company is an exploration stage junior mining company currently engaged in the identification, acquisition, and exploration of mineral resources in Chile and the United States. The Company’s head office and records office are located at #1570 – 200 Burrard Street, Vancouver, British Columbia, V6C 3L6, Canada.
These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. Several adverse conditions may cast significant doubt on the validity of this assumption. The Company incurred a net loss of $27,282,563 during the year ended December 31, 2024 (2023 - $3,656,311) and as at of December 31, 2024, has an accumulated deficit of $47,722,630 (2023 - $21,571,628). The Company is currently unable to self-finance operations, has limited resources, has no source of operating cash flow, and has no assurances that sufficient funding will be available to conduct further exploration and development of its exploration and evaluation assets and to maintain operations.
The Company has relied principally upon the issuance of securities and loans for financing. Future capital requirements will depend on many factors, including the Company’s ability to execute its business plan. The Company intends to continue relying upon the issuance of securities to finance its future activities, but there can be no assurance that such financing will be available on a timely basis under terms acceptable to the Company. Subsequent to December 31, 2024, the Company raised additional funds (Note 17).
These consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that may result from the inability to secure future financing and therefore be unable to continue as a going concern. Such a situation would have a material adverse effect on the Company’s business, financial performance, and financial condition. Such adjustments could be material.
2. BASIS OF PRESENTATION
a) Basis of presentation
These consolidated financial statements have been prepared in accordance with the IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS”).
They have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss or fair value through other comprehensive loss, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.
The Board of Directors approved these consolidated financial statements for issue on April 25, 2025.
b) Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries.
P a g e 10 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
2. BASIS OF PRESENTATION (Continued)
c) Principles of consolidation
These consolidated financial statements include the financial statements of the Company and the entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All significant intercompany transactions and balances have been eliminated.
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries listed in the following table:
| Country of Incorporation | Principal Activity | |
|---|---|---|
| SASC Metallurgy Corp. (“SASC”) | Canada | Mineral exploration |
| Zonia Holdings Corp. (“Zonia”) | Canada | Mineral exploration |
| Escalones Copper Corp. (“Escalones”) | Canada | Mineral exploration |
| Cardero Copper (USA) Inc. | USA | Mineral exploration |
| TriMetals Mining Chile SCM (“TriMetals”) | Chile | Mineral exploration |
| Wealth Copper Chile S.p.A | Chile | Mineral exploration |
d) Critical estimates, judgments and assumptions
The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.
The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:
Critical accounting estimates
Critical accounting estimates are estimates made by management that may result in a material adjustment to the carrying amount of assets and liabilities within the next financial year and include, but are not limited to, the following:
Share-based payments
Share-based payments related to issuance of options and warrants is valued using the Black-Scholes option pricing model at the date of grant. The Black-Scholes option pricing model utilizes subjective assumptions such as expected price volatility and expected life of the option. Share-based payment expense also utilizes subjective assumption on forfeiture rate. Changes in these input assumptions can significantly affect the fair value estimate.
Page 11 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
2. BASIS OF PRESENTATION (Continued)
d) Critical estimates, judgments and assumptions (Continued)
Critical accounting estimates (Continued)
Interest rates
The Company estimates a market interest rate in determining the fair value of the loans payable. The determination of market interest rate is subjective and could significantly affect the fair value estimate.
Significant judgments
The preparation of these consolidated financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. The following discusses the most significant accounting judgments the Company has made in the preparation of the consolidated financial statements.
Going concern
The assumption that the Company will be able to continue as a going concern is subject to critical judgments of management with respect to assumptions surrounding the short and long-term operating budget, expected profitability, investing and financing activities, and management's strategic planning. Should those judgments prove to be inaccurate, management's continued use of the going concern assumption could be inappropriate.
Assets held for sale
Judgment is required in determining whether an asset meets the criteria for classification as "assets held for sale" in the consolidated statement of financial position. Criteria considered by management include the existence of and commitment to a plan to dispose of the assets, the expected selling price of the assets, the expected timeframe of the completion of the anticipated sale and the period of time any amounts have been classified within assets held for sale. The Company reviews the criteria for assets held for sale each period and reclassifies such assets to or from this financial position category as appropriate. In addition, there is a requirement to periodically evaluate, and record assets held for sale at the lower of their carrying value and fair value less costs to sell.
Exploration and evaluation assets impairment
At the end of each reporting period, the Company assesses each of its exploration and evaluation assets or cash-generating units ("CGUs") to determine whether any indication of impairment exists. The Company has used geographical proximity, geological similarities, analysis of shared infrastructure, commodity type, assessment of exposure to market risks, and materiality to define its CGUs.
Judgment is required in determining whether indicators of impairment exist, including factors such as: the period for which the Company has the right to explore, expected renewals of exploration rights, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted or planned, and results of exploration and evaluation activities on the exploration and evaluation assets. During the year ended December 31, 2024, the Company determined there were indicators of impairment with respect to the Escalones Property. The Company estimated the recoverable amount, being the higher of value-in-use and fair value less cost of disposal, in order to determine the extent of the impairment (Note 6).
P a g e 12 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
2. BASIS OF PRESENTATION (Continued)
d) Critical estimates, judgments and assumptions (Continued)
Significant judgments (Continued)
Value Added Tax
Expenditures incurred by the Company in Chile are subject to Chilean Value Added Tax (“VAT”). Under Chilean law, VAT paid can be used in the future to offset amounts resulting from VAT charged on sales. Under certain circumstances and subject to approval from tax authorities, a company can also apply for early refund of VAT prior to generating sales. The Company applied for a refund of VAT during the year ended December 31, 2023 and recorded the refund in the period in which it was received.
Modification versus extinguishment of financial liability
Judgment is required in applying IFRS 9 – Financial Instruments to determine whether the amended terms of the loan agreements are a modification of an existing financial liability and whether amendments that are substantial should be accounted for as an extinguishment of the original financial liability.
Provisions and contingent liabilities
The Company is currently assessing the impact of a potential litigation by a certain director (Note 16). If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, a liability is accrued for the estimated loss. The Company assesses the potential liability by analyzing litigation and regulatory matters using available information. The Company develops its views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable.
Page 13 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
3. MATERIAL ACCOUNTING POLICIES
a) Exploration and evaluation assets
All of the Company’s projects are currently in the exploration and evaluation phase. Pre-exploration costs are expensed in the period in which they are incurred. Acquisition costs include cash consideration and the fair value of common shares issued and are capitalized as exploration and evaluation assets. Exploration and evaluation expenditures are expensed as incurred. These direct expenditures include such costs as materials used, geological and geophysical evaluation, surveying costs, drilling costs, payments made to contractors, and depreciation on equipment during the exploration phase. As the Company currently has no operational income, any incidental revenues earned in connection with exploration activities are recorded in profit and loss.
b) Impairment of non-current assets
Non-current assets are evaluated at each reporting date by management for indicators that carrying value is impaired and may not be recoverable. When indicators of impairment are present, the recoverable amount of an asset is evaluated at the level of a cash-generating unit (“CGU”), the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets, where the recoverable amount of a CGU is the greater of the CGU’s fair value less costs to sell and its value in use. An impairment loss is recognized in profit or loss to the extent the carrying amount exceeds the recoverable amount.
In calculating recoverable amount, if applicable, the Company uses discounted cash flow techniques to determine fair value when it is not possible to determine fair value either by quotes from an active market or a binding sales agreement.
Discounted cash flow techniques often require management to make estimates and assumptions, which if incorrect, could result in a material difference in the consolidated financial statements.
An impairment loss is reversed if there is an indication that there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed 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 had been recognized.
P a g e 14 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
3. MATERIAL ACCOUNTING POLICIES (Continued)
c) Assets held for sale
Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is met when the sale is highly probable, the asset is available for sale in its present condition. For the sale to be highly probable, there must be an active program to locate a buyer and a plan to complete the sale must be initiated. The asset must be actively marketed for a price reasonable in relation to its fair value, and the sale should be expected to be completed within one year from the date of classification. Certain events or circumstances beyond the Company’s control may extend the period to complete the sale beyond one year.
The assets that meet these criteria are measured at the lower of carrying amount and fair value less cost of disposal, with impairments recognized in the consolidated statement of loss and comprehensive loss. An impairment loss is recognized for any initial or subsequent write-down of the asset to fair value less cost to dispose. Non-current assets and liabilities held for sale are presented separately in current assets and liabilities within the consolidated statement of financial position. Assets held for sale are not depreciated, depleted, or amortized. The comparative period consolidated statement of financial position is not restated.
d) Foreign currency translation
The functional currency of the Company and its subsidiaries is measured using the currency of the primary economic environment in which that entity operates.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss.
Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive income (loss) to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income (loss).
e) Share-based compensation
The Company grants stock options to acquire common shares of the Company to directors, officers, employees, and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes or provides services similar to those performed by an employee.
The fair value of stock options granted to employees is measured on the date of grant, using the Black-Scholes option pricing model, and is recognized over the vesting period. Consideration paid for the shares on the exercise of stock options is credited to capital stock.
In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the equity instruments issued. Otherwise, share-based payments are measured at the fair value of goods or services received.
f) Earnings or loss per share
Basic earnings or loss per share is calculated on the weighted average number of common shares outstanding during the reporting period. In the Company’s case when it incurs a net loss for the period, diluted loss per share presented is the same as basic loss per share, as the effect of outstanding options and warrants in the diluted loss per common share calculation would be anti-dilutive.
P a g e 15 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
3. MATERIAL ACCOUNTING POLICIES (Continued)
g) Capital stock
The proceeds from the issuance of common shares and exercise of stock options and warrants are recorded as capital stock. The Company’s shares are classified as equity instruments. Share issue costs on the issue of the Company’s shares are charged directly to share capital.
h) Valuation of warrants
The Company has adopted the residual value method with respect to the measurement of shares and warrants issued as part of units. The residual value method first allocates value to common shares issued in the private placements at their fair value, as determined by the last trading price on the closing date. The balance, if any, is allocated to the warrants. Any fair value attributed to the warrants is recorded in shareholders’ equity. Warrants issued as consideration outside the scope of IFRS 2 Share-based payment are valued using the Black-Scholes pricing model.
i) Financial instruments
Financial Assets
The Company recognizes a financial asset when it becomes a party to the contractual provisions of the instrument. The Company classifies financial assets at initial recognition as financial assets: measured at amortized cost, measured at fair value through other comprehensive income, or measured at fair value through profit or loss.
The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Assessment and decision on the business model approach used is an accounting judgment.
The Company only holds financial assets classified at fair value through profit or loss.
Financial assets measured at fair value through profit or loss (“FVTPL”)
A financial asset measured at FVTPL is recognized initially at fair value with any associated transaction costs being recognized in profit or loss when incurred. Subsequently, the financial asset is re-measured at fair value, and a gain or loss is recognized in profit or loss in the reporting period in which it arises.
Impairment
In relation to the impairment of financial assets, IFRS 9 Financial Instruments requires an expected credit loss model. The expected credit loss model requires the Company to account for expected credit losses (“ECL”) and changes in those ECL at each reporting date to reflect changes in credit risk since initial recognition of the financial assets.
Financial Liabilities
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled, or when it expires. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities subsequently measured at amortized cost. All interest-related charges are reported in profit or loss within interest expense, if applicable.
As at December 31, 2024 and 2023, the Company’s financial instruments are comprised of cash, marketable securities, receivables excluding GST, deposits, accounts payable and accrued liabilities, loans payable, and related party loans.
P a g e 16 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- MATERIAL ACCOUNTING POLICIES (Continued)
j) New accounting pronouncements
The Company is performing an assessment of upcoming accounting standards that are not yet effective to assess the impact of adopting these accounting standards on its consolidated financial statements.
- MARKETABLE SECURITIES
During the year ended December 31, 2022, the Company received 2,000,000 common shares of Electric Royalties Ltd. The shares were initially recorded at $470,000. During the year ended December 31, 2023, the securities were sold for $500,000 at a loss of $60,000 to an entity related via common management and board of directors.
- EQUIPMENT
| Office Equipment | Computer Equipment | Total | |
|---|---|---|---|
| Cost | |||
| Balance at December 31, 2022, 2023, and 2024 | $ 12,306 | $ 3,979 | $ 16,285 |
| Accumulated depreciation | |||
| Balance at December 31, 2022 | $ 3,006 | $ 2,000 | $ 5,006 |
| Depreciation | 3,000 | 1,979 | 4,979 |
| Balance at December 31, 2023 | 6,006 | 3,979 | 9,985 |
| Depreciation | 6,300 | - | 6,300 |
| Balance at December 31, 2024 | $ 12,306 | $ 3,979 | $ 16,285 |
| Carrying amounts | |||
| At December 31, 2023 | $ 6,300 | $ - | $ 6,300 |
| At December 31, 2024 | $ - | $ - | $ - |
- EXPLORATION AND EVALUATION ASSETS
| Zonia Property, USA | Escalones Property, Chile | Cristal Property, Chile | Total | |
|---|---|---|---|---|
| Acquisition costs capitalized | ||||
| Balance, December 31, 2022 | $ 34,701,408 | $ 7,385,934 | $ 279,367 | $ 42,366,709 |
| Acquisition costs - cash | - | 583,818 | - | 583,818 |
| Impairment | - | - | (279,367) | (279,367) |
| Balance, December 31, 2023 | 34,701,408 | 7,969,752 | - | 42,671,160 |
| Impairment | (14,068,705) | (7,969,751) | - | (22,038,456) |
| Transfer to assets held for sale | (20,632,703) | - | - | (20,632,703) |
| Balance, December 31, 2024 | $ - | $ 1 | $ - | $ 1 |
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- EXPLORATION AND EVALUATION ASSETS (Continued)
| Exploration and evaluation expenses - 2024 | Zonia Property, USA | Escalones Property, Chile | Cristal Property, Chile | Total |
|---|---|---|---|---|
| Assays | $ 5,243 | $ - | $ - | $ 5,243 |
| Consulting | 456,310 | - | - | 456,310 |
| Environmental | 1,927 | - | - | 1,927 |
| Field and camp supplies | 42,530 | 17,060 | - | 59,590 |
| Geophysical | 126,210 | - | - | 126,210 |
| Property taxes, lease and other | 135,614 | 86,485 | - | 222,099 |
| Reports | 6,178 | - | - | 6,178 |
| Transportation and equipment rentals | 70,855 | - | - | 70,855 |
| Year ended December 31, 2024 | $ 844,867 | $ 103,545 | $ - | $ 948,412 |
| Exploration and evaluation expenses - 2023 | Zonia Property, USA | Escalones Property, Chile | Cristal Property, Chile | Total |
| --- | --- | --- | --- | --- |
| Assays | $ 4,906 | $ - | $ - | $ 4,906 |
| Community relations | - | 1,498 | - | 1,498 |
| Consulting | 64,279 | - | - | 64,279 |
| Drilling, roads & trenches | 186,927 | 2,257 | - | 189,184 |
| Environmental | 1,402 | - | - | 1,402 |
| Field and camp supplies | 12,113 | 16,995 | - | 29,108 |
| Geological | 57,819 | 32,611 | - | 90,430 |
| Geophysical | 20,475 | - | - | 20,475 |
| Property taxes, lease and other | 152,627 | 171,334 | - | 323,961 |
| Transportation and equipment rentals | 792 | 2,429 | - | 3,221 |
| Expenditures | 501,340 | 227,124 | - | 728,464 |
| Expense recovery (Chilean VAT) | - | (2,422,971) | - | (2,422,971) |
| Year ended December 31, 2023 | $ 501,340 | $ (2,195,847) | $ - | $ (1,694,507) |
Page 18 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
6. EXPLORATION AND EVALUATION ASSETS (Continued)
Escalones Property, Chile
During the year ended December 31, 2019, the Company became party to an option agreement for the Escalones property. The remaining payments required to earn a 100% interest in the Escalones property, amended on May 24, 2021, are as follows:
i) paying USD$60,000 on or before June 30, 2020 (paid);
ii) paying USD$140,000 on or before December 31, 2020 (paid);
iii) paying USD$150,000 on or before May 24, 2021 amendment date (paid);
iv) paying USD$150,000 on or before September 30, 2021 (paid);
v) paying USD$200,000 on or before July 12, 2022 (paid);
vi) paying USD$150,000 on or before September 30, 2022 (paid);
vii) paying USD$165,000 on or before November 30, 2022 (paid);
viii) paying USD$216,000 on or before July 6, 2023 (paid);
ix) paying USD$216,000 on or before September 30, 2023 (paid);
x) paying USD$218,000 on or before December 31, 2024;
xi) paying USD$800,000 on or before June 30, 2025;
xii) paying USD$800,000 on or before December 31, 2025;
xiii) paying USD$800,000 on or before June 30, 2026; and
xiv) paying USD$450,000 on or before December 31, 2026.*
- The Company is currently renegotiating the terms to reduce and extend payments
An additional payment of USD$350,000 is required to be made with the final payment on or before December 31, 2026. The Company has granted a 2% net smelter returns royalty ("NSR") to the underlying Escalones Property owner.
During the year ended December 31, 2024, the Company made the decision to write down the Escalones Project to a nominal value of $1. The write-down is warranted due to the continued uncertainty regarding any future recategorization of the Sanctuary of Nature (within which the Escalones Project is located) and the lapse of a pre-existing easement. The Company has been communicating with the landowner to secure a flexible management plan in order for the area in which the Escalones Project is located to be categorized as a multiple-use conservation area and has also been renegotiating access rights to the Escalones Project. There is uncertainty as to the outcome of any future recategorization of the Sanctuary of Nature and the surface access rights negotiations, and any potential impacts of same on the exploration of the Escalones Project. The uncertainty is an indicator of impairment, and accordingly, an impairment expense of $7,969,751 was recorded in the consolidated statements of loss and comprehensive loss for the year ended December 31, 2024. The estimated recoverable value was based on its fair value less cost of disposal of $1, estimated in accordance with Level 3 of the fair value hierarchy. As the property has been in the exploration stage, there are no projected cash flows available to determine an appropriate value-in-use. Therefore, a value-in-use model is not further considered.
Cristal Property, Chile
During the year ended December 31, 2019, the Company entered into an assignment and assumption agreement (the "Assignment Agreement") with New Energy Metals Corp. ("Vendor") whereby the Company obtained the right, title, benefit, and interest in and to an option agreement in respect of the Cristal Property. The Company has made cash payments of USD$200,000 towards the option.
During the year ended December 31, 2023, the Company impaired the cost of $279,367 bringing the carrying value of the Cristal Property to $Nil in accordance with Level 3 of the fair value hierarchy. The Company has not incurred any exploration expenditures on the property in the past two fiscal years nor does it plan to incur exploration expenditures subsequent to December 31, 2023. As the Cristal property has been in the exploration stage, there are no projected cash flows available to determine an appropriate value-in-use. Therefore, a value-in-use model is not further considered. During the year ended December 31, 2023, the Company informed the Optionor that it was not proceeding with the agreement and returned the Cristal Property.
Page 19 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
6. EXPLORATION AND EVALUATION ASSETS (Continued)
Zonia, Arizona USA
Pursuant to an option agreement dated August 27, 2015, and as amended on October 3, 2018, between the Company and Redstone Resources Corporation ("Redstone"), the Company completed the acquisition of a 100% interest in the Zonia copper project.
On August 17, 2022, the Company granted to Electric Royalties Ltd. ("Electric Royalties"): (i) a 0.5% Gross Revenue Royalty ("GRR") on the Zonia Project; (ii) an option to acquire a further 0.5% GRR on the Zonia Project for an additional cash payment of $3.0 million; and (iii) an option to acquire a 1% GRR on the Zonia Norte deposit, for a cash payment of $3.0 million.
During the year ended December 31, 2024, the Company initiated a strategic review process and engaged an advisor to assist and evaluate a range of strategic alternatives that may be available to the Company to grow and maximize value for all shareholders. Through this process management determined the property met the definition of an asset held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations. Consequently, the Company recategorized the Zonia Asset as Assets Held for Sale and recognized an impairment loss of $14,068,705 as the carrying value of the asset exceeded fair value less costs to sell. Management estimated fair value less costs to sell based on a binding letter agreement entered on February 12, 2025 to an arm's length third party in consideration for $26.0 million cash payable in three tranches over a thirty-month period. The net present value of the cash consideration per the agreement, net of commissions, discounted using an effective interest rate of 16% was used to calculate fair value less costs to sell.
7. RELATED PARTY LOANS
DIRECTORS' LOAN
The Company has loans aggregating $65,000 plus accrued interest due to two former directors of Zonia. The loans bear interest at a rate of 8% per annum, compounded annually, repayable on demand.
The Company has a loan of $85,000 plus accrued interest, due to E.L. II Properties Trust (related to a Director of the Company). The loan bears interest at a rate of 12% per annum, compounded quarterly, repayable on May 22, 2026, per amending agreement with E.L. II Properties Trust (extended from May 22, 2024).
ZONIA LOAN
The Company has a facility agreement with E.L. II Properties Trust, an unsecured credit facility (the "Facility") of USD$630,000 plus accrued interest. The Facility bears interest at 8% per annum, compounded quarterly, repayable on February 22, 2026, per amending agreement with E.L. II Properties Trust (extended from February 22, 2024).
OTHER LOAN ADVANCES
The Company has three loan agreements with E.L. II Properties Trust, for unsecured loans (the "Loan Advances") in the aggregate of USD$750,265 plus accrued interest. The loans bear interest at 8% per annum, compounded quarterly, repayable on February 22, 2026, per amending agreement with E.L. II Properties Trust (extended from February 22, 2024).
Page 20 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
7. RELATED PARTY LOANS (Continued)
DIVIDEND LOAN
The Company has a loan agreement with E.L. II Properties Trust and Kopple Family Partnership, L.P. (related to a Director of the Company) for an unsecured loan (the “Dividend Loan”) in the aggregate of $1,019,836 plus accrued interest. The loan was repaid on April 29, 2024, with residual interest outstanding $17,036, payable on demand and bears interest at 8% per annum.
EXTENTIONS – ZONIA AND OTHER LOAN ADVANCES
On January 10, 2023, the Company extended the due dates on advances from E.L. II Properties Trust. Four loans in the aggregate amount of USD$1,065,265 were extended to February 22, 2024. The Company issued 10,321,657 non-transferable bonus warrants at an exercise price of $0.14 CAD per share expiring on February 22, 2024. The issued warrants contain a clause that restricts exercise if exercising causes the holders' ownership to exceed 19.99%. In accordance with IFRS 9 – Financial Instruments, the Company determined the extension of the loans and grant of bonus warrants meet the definition of a substantial modification and was accounted for as an extinguishment of debt. The fair value of the liability portion at the time of amendment was determined based on an estimated discount rate of 23%, the bonus warrants of $937,647 were valued using Black-Scholes option pricing model with the following assumptions: risk-free rate of 4.25%, expected volatility of 87%, expected dividend of $Nil, and expected life of 1 year. Consequently, the bonus warrants of $937,647, net of a gain on extinguishment of debt of $246,446, totaling $696,201 was recognized as a loss on extinguishment in the consolidated statements of loss and comprehensive loss.
On August 13, 2024, the Company extended the due dates on advances from E.L. II Properties Trust (related to a Director of the Company). Four loans in the aggregate amount of USD$1,380,265 and CAD$85,000 were to be extended to have new due dates of February 22, 2026, and May 22, 2026, as noted above. The Company issued 7,251,925 non-transferable bonus warrants at an exercise price of $0.135 CAD per share expiring July 18, 2026. The issued warrants contain a clause that restricts exercise if exercising causes the holders' ownership to exceed 19.99%. In accordance with IFRS 9 – Financial Instruments, the Company determined the extension of the loans and grant of bonus warrants meet the definition of a substantial modification and was accounted for as an extinguishment of debt. The fair value of the liability portion at the time of amendment was determined based on an estimated discount rate of 23%, the bonus warrants of $270,330 were valued using Black-Scholes option pricing model with the following assumptions: risk-free rate of 3.24%, expected volatility of 111%, expected dividend of $Nil, and expected life of 2 years. Consequently, the bonus warrants of $270,330, net of a gain on extinguishment of debt of $362,292, totaling $91,962 was recognized as a gain on extinguishment in the consolidated statements of loss and comprehensive loss.
During the year ended December 31, 2024, the Company repaid the following amounts on the outstanding loans:
| Principal | Accrued Interest | Total | |
|---|---|---|---|
| Loans payable: | |||
| Directors’ Loans | $ - | $ 50,362 | $ 50,362 |
| Zonia Loan | - | 584,070 | 584,070 |
| Other Loan Advances | - | 693,658 | 693,658 |
| Dividend Loan | 1,019,836 | 226,020 | 1,245,856 |
| Total Repaid | $ 1,019,836 | $ 1,554,110 | $ 2,573,946 |
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- RELATED PARTY LOANS (Continued)
Summary of outstanding loans payable on December 31, 2024 and 2023:
| Principal | Accrued Interest | Accretion Discount | Total | |
|---|---|---|---|---|
| Loans payable – December 31, 2023: | ||||
| Directors’ Loans | $ 150,000 | $ 93,350 | $ (7,018) | $ 236,332 |
| Zonia Loan | 833,238 | 551,041 | (27,173) | 1,357,106 |
| Other Loan Advances | 992,300 | 643,721 | - | 1,636,021 |
| Dividend Loan | 1,019,836 | 193,397 | - | 1,213,233 |
| Balance – December 31, 2023 | 2,995,374 | 1,481,509 | (34,191) | 4,442,692 |
| Less current portion | (2,995,374) | (1,481,509) | 34,191 | (4,442,692) |
| Long term portion | $ - | $ - | $ - | $ - |
| Loans payable – December 31, 2024: | ||||
| Directors’ Loans | $ 150,000 | $ 64,729 | $ (14,891) | $ 199,838 |
| Zonia Loan | 906,507 | 70,961 | (133,097) | 844,371 |
| Other Loan Advances | 1,079,557 | 39,615 | (152,392) | 966,780 |
| Balance – December 31, 2024 | 2,136,064 | 175,305 | (300,380) | 2,010,989 |
| Less current portion | (65,000) | (58,183) | - | (123,183) |
| Long term portion | $ 2,071,064 | $ 117,122 | $ (300,380) | $ 1,887,806 |
Continuity of the amounts owing as at December 31, 2024 and 2023, from a director and former directors of the Company’s subsidiary, are as follows:
| Directors’ Loans | Zonia Loan | Other Loan Advances | Dividend Loan | Total | |
|---|---|---|---|---|---|
| Loans payable: | |||||
| Balance – December 31, 2022 | $ 198,106 | $ 1,119,781 | $ 1,488,535 | $ 1,120,840 | $ 3,927,262 |
| Interest expense | 21,944 | 106,628 | 184,519 | 92,393 | 405,484 |
| Gain on extinguishment | (241,446) | - | (241,446) | ||
| Accretion expense | 16,282 | 159,891 | 107,439 | - | 283,612 |
| Foreign exchange adjustment | - | (29,194) | 96,974 | - | 67,780 |
| Balance – December 31, 2023 | $ 236,332 | $ 1,357,106 | $ 1,636,021 | $ 1,213,233 | $ 4,442,692 |
| Interest expense | 21,743 | 86,365 | 71,550 | 32,623 | 212,281 |
| Gain on extinguishment | (18,003) | (160,510) | (183,779) | - | (362,292) |
| Accretion expense | 10,129 | 61,150 | 38,110 | - | 109,389 |
| Foreign exchange adjustment | - | 84,330 | 98,535 | - | 182,865 |
| Repaid | (50,363) | (584,070) | (693,657) | (1,245,856) | (2,573,946) |
| Balance – December 31, 2024 | $ 199,838 | $ 844,371 | $ 966,780 | $ - | $ 2,010,989 |
- LOAN PAYABLE
CEBA LOAN
The Company has a COVID-19 Relief Line of Credit as part of the Government-sponsored Canada Emergency Business Account (“CEBA”) in the amount of $60,000 and has an interest rate of 0% to be repaid by December 31, 2023, of which $20,000 of the loan will be forgiven if $40,000 is repaid in full on or before December 31, 2023. During the year ended December 31, 2024, under the CEBA Loan Program, the Company’s CEBA loan was converted to a term loan with repayment of the loan due on or before December 31, 2025, together with any accrued and unpaid interest at 5% per annum from January 19, 2024. As at December 31, 2024, the Company accrued $2,852 in interest with a carrying value of principal and interest of $62,852.
Page 22 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
9. CAPITAL STOCK
Authorized share capital
Unlimited number of common shares without par value.
Issued share capital
During the year ended December 31, 2024:
i) On April 12, 2024, the Company issued 53,015,112 units at $0.07 per unit for gross proceeds of $3,711,058 in the first of two tranches of a private placement. Each unit consisted of one common share and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to acquire one additional share of the Company for a period of two years from the date of issuance at a price of $0.17 per share. The expiry of the Warrants may be accelerated if the closing price of the Company’s common shares on the TSX Venture Exchange (“TSXV”) is equal to or greater than $0.30 for a minimum of twenty consecutive trading days and a notice of acceleration is provided in accordance with the terms of the Warrants. In connection with the issuance, the Company paid aggregate finder's fees consisting of $85,393 in cash and issued 765,900 finder's warrants valued at $38,412. Each finder's warrant entitles the holder thereof to purchase one common share at a price of $0.17 for a period of 24 months from the date of issuance. Other share issuance costs totaled $78,842.
ii) On April 26, 2024, the Company issued 16,531,957 units at $0.07 per unit for gross proceeds of $1,157,237 in the second of two tranches of a private placement. Each unit consisted of one common share and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to acquire one additional share of the Company for a period of two years from the date of issuance at a price of $0.17 per share. The expiry of the Warrants may be accelerated if the closing price of the Company’s common shares on the TSX Venture Exchange (“TSXV”) is equal to or greater than $0.30 for a minimum of twenty consecutive trading days and a notice of acceleration is provided in accordance with the terms of the Warrants. No finder’s fees were payable pursuant to this tranche.
iii) During the year, the Company established an at-the-market equity program (the "ATM Program") that allows the issuance and sale of common shares from treasury having an aggregate gross sales amount of up to $25 million to the public, over a two-year period (subject to earlier termination), from time to time through BMO Capital Markets (the "Agent"), as sole agent. Sales of the Common Shares under the ATM Program will be made pursuant to the terms and conditions of an equity distribution agreement (the "Distribution Agreement") dated July 17, 2024, between the Company and the Agent. During the period from July 22, 2024 to December 31, 2024, the Company issued 29,480,500 shares under the ATM Program at an average price of $0.069 per share for gross proceeds of $2,031,084, commissions paid of $60,933, and net proceeds received of $1,970,151. The Company incurred $659,827 in additional costs during the period related to the ATM Program.
iv) As at December 31, 2024, the Company received share subscriptions of $117,000 which shares have not yet been issued related to the private placement closed February 4, 2025 (Note 17).
During the year ended December 31, 2023:
i) On March 31, 2023, the Company issued 7,974,344 units at $0.18 per unit for gross proceeds of $1,435,382 in the first of two tranches of a private placement. Each unit consisted of one common share and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to acquire one additional share of the Company for a period of two years from the date of issuance at a price of $0.30 per share. In connection with the issuance, the Company paid aggregate finder's fees consisting of $5,813 in cash and issued 32,297 finder's warrants valued at $2,038. Each finder's warrant entitles the holder thereof to purchase one common share at a price of $0.30 for a period of 24 months from the date of issuance.
Page 23 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
9. CAPITAL STOCK (Continued)
Issued share capital (Continued)
ii) On April 27, 2023, the Company issued 3,332,323 units at $0.18 per unit for gross proceeds of $599,818 in the second of two tranches of a private placement. Each unit consisted of one common share and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to acquire one additional share of the Company for a period of two years from the date of issuance at a price of $0.30 per share. In connection with the issuance, the Company paid aggregate finder's fees consisting of $756 in cash and issued 4,200 finder's warrants valued at $206. Each finder's warrant entitles the holder thereof to purchase one common share at a price of $0.30 for a period of 24 months from the date of issuance.
iii) Other share issuance costs totaling $12,606 were paid during the year ended December 31, 2023.
iv) Held 3,308,780 shares in escrow as at December 31, 2023, which were released in January 2024.
Warrants
Warrant transactions are summarized as follows:
| Number of Warrants | Weighted average exercise price | |
|---|---|---|
| Outstanding, December 31, 2022 | 28,063,071 | $ 0.60 |
| Issued | 16,011,490 | 0.20 |
| Expired | (8,200,833) | 0.60 |
| Outstanding, December 31, 2023 | 35,873,728 | $ 0.42 |
| Issued | 42,791,363 | 0.16 |
| Expired | (15,286,958) | 0.29 |
| Outstanding, December 31, 2024 | 63,378,133 | $ 0.28 |
The following warrants were outstanding at December 31, 2024 and 2023:
| Expiry Date | Exercise Price | Number of Warrants | |
|---|---|---|---|
| December 31, 2024 | December 31, 2023 | ||
| February 22, 2024 | $0.14 | - | 10,321,657 |
| July 21, 2024 | $0.60 | - | 2,132,206 |
| August 31, 2024 | $0.60 | - | 2,638,251 |
| August 31, 2024 (1) | $0.30 | - | 194,844 |
| March 31, 2025 (3) | $0.30 | 3,987,174 | 3,987,174 |
| March 31, 2025 (1) (3) | $0.30 | 32,297 | 32,297 |
| April 27, 2025 | $0.30 | 1,666,162 | 1,666,162 |
| April 27, 2025 (1) | $0.30 | 4,200 | 4,200 |
| September 15, 2025 (2) | $0.60 | 500,000 | 500,000 |
| October 15, 2025 (2) | $0.60 | 536,218 | 536,218 |
| July 27, 2025 (2) | $0.60 | 7,042,996 | 7,042,996 |
| July 27, 2025 (2) | $0.60 | 6,817,723 | 6,817,723 |
| April 12, 2026 | $0.17 | 26,507,559 | - |
| April 12, 2026 (1) | $0.17 | 765,900 | - |
| April 26, 2026 | $0.17 | 8,265,979 | - |
| July 18, 2026 | $0.14 | 7,251,925 | - |
| 63,378,133 | 35,873,728 |
(1) Finder's warrants
(2) Warrant exercises subject to special warrant shares to be issued (see Special Warrant below)
(3) Expired unexercised subsequent to the year end
Page 24 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
9. CAPITAL STOCK (Continued)
Warrants (Continued)
The finder’s warrants issued during the years ended December 31, 2024 and 2023 were valued using the Black-Scholes option pricing model with the following weighted average assumptions:
| 2024 | 2023 | |
|---|---|---|
| Risk-free interest rate average | 4.17% | 3.74% |
| Expected life | 2.00 years | 2.00 years |
| Expected annualized volatility | 92.34% | 79.09% |
| Expected dividend rate | 0.00% | 0.00% |
The loan bonus warrants issued during the years ended December 31, 2024 and 2023 (Note 7) were valued using the Black-Scholes option pricing model with the following weighted average assumptions:
| 2024 | 2023 | |
|---|---|---|
| Risk-free interest rate average | 3.24% | 4.25% |
| Expected life | 2.00 years | 1.00 years |
| Expected annualized volatility | 110.95% | 87.80% |
| Expected dividend rate | 0.00% | 0.00% |
Special Warrant
On September 25, 2019, the Company acquired 100% of the common shares of the SASC Metallurgy Corp., Escalones Copper Corp., and TriMetals Mining Chile SCM (collectively the “TMI Group”), which included a 100% interest in the Escalones property from Gold Springs Resource Corp. (“Gold Springs”). As part of the acquisition, the Company issued a special warrant whereby Gold Springs will be entitled to receive up to an additional 8,148,901 common shares upon the deemed exercise of the special warrant. The special warrants will be deemed to be exercised on a proportionate basis at the time the Company’s warrants are exercised.
On October 22, 2021, Wealth Minerals Ltd. (“Wealth Minerals”), a related party via common management and board of directors, acquired 13,225,198 common shares and remaining special warrants of the Company held by Gold Springs.
As at December 31, 2024, 6,384,400 (2023 - 6,384,400) special warrants remain outstanding.
10. STOCK OPTION PLAN AND SHARE-BASED PAYMENTS
In January 2021, the Company adopted an incentive stock option plan (the “2021 Plan”). The essential elements of the 2021 Plan provide that the aggregate number of common shares of the Company’s capital stock issuable pursuant to options granted under the 2021 Plan may not exceed 10% of the number of issued shares of the Company at the time of granting the options. Options granted under the 2021 Plan will have a maximum term of ten years. The exercise price of options granted under the 2021 Plan will not be less than the discounted market price of the common shares (defined as the last closing market price of the Company’s common shares immediately preceding the issuance of a news release announcing the granting of the options, less the maximum discount permitted under TSX-V policies), or such other price as may be agreed to by the Company and accepted by the TSX-V. Unless otherwise determined by the directors at the date of grant, options granted under the 2021 Plan vest immediately, except for options granted to consultants conducting investor relation activities, which will become vested with the right to exercise one-fourth of the option upon the conclusion of each three-month period subsequent to the date of grant of the option.
In June 2022, the Company amended the 2021 Plan and adopted a new incentive stock option plan (the “2022 Plan”). The essential elements of the 2022 Plan remain the same as the 2021 Plan, with the only difference being that transferred options will no longer continue to vest.
Page 25 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
10. STOCK OPTION PLAN AND SHARE-BASED PAYMENTS (Continued)
During the year ended December 31, 2024, the Company granted incentive stock options to directors, officers, employees, and consultants of the Company to purchase up to 10,265,000 common shares in the capital stock of the Company; 3,000,000 of these options vest with 750,000 options each six months beginning November 13, 2024 with the final 750,000 vesting on May 13, 2026. The options are exercisable on or before May 13, 2027 at a price of $0.20 per share.
During the year ended December 31, 2024, the Company granted incentive stock options to a consultant of the Company to purchase up to 100,000 common shares in the capital stock of the Company. The options are exercisable on or before June 13, 2026 at a price of $0.22 per share.
During the year ended December 31, 2023, no incentive stock options were granted. The stock-based compensation of $84,945 during the year ended December 31, 2023 is related to vesting provisions on the August 23, 2022 grant.
Stock option transactions are summarized as follows:
| Number of Options | Weighted Average Exercise Price | |
|---|---|---|
| Outstanding, December 31, 2022 | 10,755,000 | $ 0.29 |
| Cancelled | (3,000,000) | 0.27 |
| Outstanding and Exercisable, December 31, 2023 | 7,755,000 | $ 0.30 |
| Issued | 10,365,000 | 0.20 |
| Cancelled | (800,000) | 0.31 |
| Outstanding, December 31, 2024 | 17,320,000 | $ 0.24 |
| Exercisable, December 31, 2024 | 15,070,000 | $ 0.25 |
The following incentive stock options were outstanding at December 31, 2024 and 2023:
| Expiry Date | Exercise Price | 2024 | 2023 |
|---|---|---|---|
| August 23, 2025 | $0.31 | 1,000,000 | 1,000,000 |
| August 19, 2025 | $0.31 | 4,200,000 | 5,000,000 |
| September 30, 2025 | $0.27 | 1,755,000 | 1,755,000 |
| June 13, 2026 | $0.22 | 100,000 | - |
| May 13, 2027 | $0.20 | 10,265,000 | - |
| 17,320,000 | 7,755,000 |
The fair value of options granted was estimated at the date of grant using the Black-Scholes option pricing model based on the following weighted average assumptions:
| Year ended December 31, 2024 | |
|---|---|
| Risk-free interest rate average | 4.16% |
| Expected life | 2.99 years |
| Expected annualized volatility | 89.12% |
| Expected dividend rate | 0.00% |
Expected stock price volatility was derived from an average volatility based on historical movements in the closing prices of the Company's stock for a length of time equal to the expected life of the options. The risk-free rate of return is the yield on a zero-coupon Canadian Treasury Bill of a term consistent with the assumed option life. The expected average option term is the average expected period to exercise, based on the historical activity patterns for each individually vesting tranche. The expected dividend rate is estimated at 0.00% as the Company does not have a history of issuing and paying dividends.
Page 26 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
11. RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION
Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company's executive officers and directors. The transactions with related parties were in the normal course of operations and were measured at the fair value.
Key management personnel compensation during the years ended December 31, 2024 and 2023 was as follows:
| 2024 | 2023 | |
|---|---|---|
| Management fees, included in consulting fees | $ 521,500 | $ 222,000 |
| Directors' fees, included in consulting fees | 8,071 | 27,040 |
| Legal fees, included in professional fees | 287,642 | - |
| Legal fees, included in share issue costs | 485,622 | - |
| Wages and benefits | - | 216,051 |
| Share-based payment | 745,954 | - |
| Rent | 100,266 | 118,447 |
The amounts included within accounts payable and accrued liabilities due to the related parties are as follows:
| 2024 | 2023 | |
|---|---|---|
| Included in accounts payable and accrued liabilities: | ||
| Due to directors and/or entities controlled by them | $ 647,685 | $ 92,929 |
| Due to former directors | 89,267 | 108,000 |
| Due to the CEO | 9,324 | - |
| Due to the former CEO's | 94,500 | 149,690 |
| Due to the CFO | - | 14,700 |
| Due to the corporate secretary – Consulting fees | 18,375 | 30,975 |
| Due to the corporate secretary – Rent | 87,221 | 63,899 |
| Due to the corporate secretary – Expense reimbursements | 161,013 | 28,703 |
| Due to Wealth Minerals | 112,450 | 112,450 |
| $ 1,219,835 | $ 601,346 |
Included in management fees is a termination benefit of $Nil (2023 - $149,690) accrued to the former CEO.
Included in due to former CEO is a termination benefit of $Nil (2023 - $149,690) accrued to the former CEO.
The amounts owing above are unsecured, non-interest bearing and have no fixed term for repayment.
For related party loans, please refer to Note 7.
12. CAPITAL MANAGEMENT
The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to externally imposed capital requirements.
Page 27 | 31
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
12. CAPITAL MANAGEMENT (Continued)
The Company currently has no source of revenues; as such, the Company is dependent upon external financings or the sale of assets (or an interest therein) to fund activities. In order to carry future projects and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There have been no changes to the Company's capital management approach during the year ended December 31, 2024.
13. FINANCIAL INSTRUMENTS
The Company's risk exposures and the impact on the Company's financial instruments are summarized below:
Credit risk
Credit risk is the risk of loss associated with counterparty's inability to fulfil its payment obligations. The Company's credit risk is primarily attributable to accounts receivable excluding GST and cash. The Company's management believes it has no significant credit risk.
The financial instrument that potentially subjects the Company to a significant concentration of credit risk is cash. The Company mitigates its exposure to credit loss associated with cash by placing its cash in major financial institutions. As at December 31, 2024, the Company had cash of $193,977 (2023 - $14,329).
Interest rate risk
Interest rate risk is the risk that future cash flows of the Company's assets and liabilities can change due to a change in interest rates. Loans payable have a fixed interest rate between 8% and 12% and cash earns interest rate at a nominal rate. The Company is not exposed to significant interest rate cash flow risk.
Liquidity risk
The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. At December 31,2024, the Company had a cash balance of $193,977 (2023 - $14,329) to settle current liabilities of $2,854,234 (2023 - $6,859,171). All of the Company's accounts payable and accrued liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms and loans payable which have varying payment terms as noted in Note 7. The Company expects to fund these liabilities through the use of existing cash resources and will need to obtain additional equity financing. The Company's undiscounted financial liabilities are due as follows:
As at December 31, 2024:
| 0 to 3 months | 3 to 6 months | 6 to 12 months | More than 12 months | Total | |
|---|---|---|---|---|---|
| Accounts payable and accrued liabilities | $ 2,731,051 | $ - | $ - | $ - | $ 2,731,051 |
| Related party loans | 123,183 | - | - | 2,188,187 | 2,311,370 |
| Loans payable | - | - | - | 62,852 | 62,852 |
| $ 2,854,234 | $ - | $ - | $ 2,251,039 | $ 5,105,273 |
As at December 31, 2023:
| 0 to 3 months | 3 to 6 months | 6 to 12 months | More than 12 months | Total | |
|---|---|---|---|---|---|
| Accounts payable and accrued liabilities | $ 2,244,029 | $ - | $ - | $ - | $ 2,244,029 |
| Related party loans | 3,020,300 | 243,350 | 1,213,233 | - | 4,476,883 |
| Loan payable | 60,000 | - | - | - | 60,000 |
| $ 5,324,329 | $ 243,350 | $ 1,213,233 | $ - | $ 6,780,912 |
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
13. FINANCIAL INSTRUMENTS (Continued)
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and equity prices. The Company is not exposed to significant interest rate or equity price risks at December 31, 2024 and 2023.
Foreign currency risk
The Company is exposed to foreign currency risk as certain monetary financial instruments are denominated in Chilean and United States currencies. Canadian dollar denominated balances generated foreign exchange gains and losses that are reported on the consolidated statement of loss and comprehensive loss. A strengthening of 10% in the Chilean and US dollars against the Canadian dollar would have increased the Company's net loss and comprehensive loss by $315,600 (2023 - $408,747) due to the impact of the exchange rate fluctuation on Canadian dollar denominated financial instruments.
At December 31, 2024, the Company had the following financial instruments denominated in foreign currencies (presented in Canadian dollars):
| Chilean Pesos | United States Dollars | Total | |
|---|---|---|---|
| Cash | $ 20,098 | $ 16,150 | $ 36,248 |
| Accounts payable and accrued liabilities | (781,432) | (304,291) | (1,085,723) |
| Loans | - | (2,107,000) | (2,107,000) |
| Net | $ (761,334) | $ (2,395,141) | $ (3,156,475) |
Fair value
The fair value of the Company's cash, receivables excluding GST, and accounts payable and accrued liabilities approximates the carrying amount due to their short-term maturity of the instruments. The fair value of related party loans and loan payable is determined by using discounted cash flows based on the expected amounts and timing of the cash flows discounted using a market rate of interest adjusted for appropriate credit risk.
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:
- 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's fair value hierarchy is as follows:
| As at | December 31, 2024 | ||
|---|---|---|---|
| Level 1 | Level 2 | Level 3 | |
| Accounts payable and accrued liabilities | $ 2,731,051 | $ - | $ - |
| Related party loans | - | 2,010,989 | - |
| Loan payable | 62,852 | - | - |
| As at | December 31, 2023 | ||
| --- | --- | --- | --- |
| Level 1 | Level 2 | Level 3 | |
| Accounts payable and accrued liabilities | $ 2,356,479 | $ - | $ - |
| Related party loans | - | 4,442,692 | - |
| Loan payable | 60,000 | - | - |
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
14. GEOGRAPHIC SEGMENTED INFORMATION
The Company has one operating segment, being the mineral resource industry with its exploration and evaluation assets in the United States and Chile. The Company's equipment and exploration and evaluation assets at December 31, 2024 and 2023 are located in the United States and Chile as follows:
| USA | Chile | Total | |
|---|---|---|---|
| December 31, 2024 | |||
| Assets held for sale | $ 20,632,703 | $ - | $ 20,632,703 |
| Equipment | - | - | - |
| Exploration and evaluation assets | - | 1 | 1 |
| $ 20,632,703 | $ 1 | $ 20,632,704 | |
| December 31, 2023 | |||
| Equipment | $ 6,300 | $ - | $ 6,300 |
| Exploration and evaluation assets | 34,701,408 | 7,969,752 | 42,671,160 |
| $ 34,707,708 | $ 7,969,752 | $ 42,677,460 |
15. INCOME TAXES
A reconciliation of income taxes by applying the Canadian statutory income tax rate of 27% to the consolidated loss is as follows:
| 2024 | 2023 | |
|---|---|---|
| Loss for the year | $ (27,282,563) | $ (3,689,918) |
| Income tax recovery at Canadian statutory rate | (7,366,292) | (996,278) |
| Non-deductible items | 281,585 | 82,740 |
| Other temporary differences | 4,432,853 | 954,984 |
| Impact of foreign exchange on tax assets and liabilities | - | (196,423) |
| Under provided in prior years | 2,524,303 | 31,160 |
| Unused tax losses and tax offsets not recognized | 127,551 | 157,424 |
| Income tax expense | $ - | $ 33,607 |
The significant components of the Company's deferred tax assets and liabilities that have not been included on the consolidated statement of financial position are as follows:
| 2024 | 2023 | |
|---|---|---|
| Non-capital losses | $ 17,090,548 | $ 16,723,786 |
| Capital losses | 7,922,244 | 7,922,244 |
| Resource properties | 1,267,648 | 1,367,378 |
| Share issue costs | 226,850 | 84,992 |
| $ 26,507,290 | $ 26,098,400 |
The Company has non-capital loss carry-forwards of approximately $63,299,123, which may be available to reduce taxable income in future years. The potential tax benefits of these losses have not been recognized as a deferred tax benefit, as currently it is not probable that such a benefit will be utilized in the foreseeable future. Unless utilized, these losses will expire in 2044. Tax attributes are subject to review and potential adjustment by tax authorities.
WORLD COPPER LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
16. CONTINGENCIES
During the year ended December 31, 2024, the Company became aware of a potential litigation by a certain director. The Company is assessing whether it has an obligation that can lead to outflow of economic benefits and the estimated amount of the obligation. Until such litigation is filed, it is difficult to assess any possible outcome or loss, if any.
17. SUBSEQUENT EVENT
On February 4, 2025, the Company issued 2,837,500 units at a price of $0.08 per unit for gross proceeds of $227,000 on a non-brokered private placement. Each unit consisted of one common share and one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to acquire one additional share of the Company for a period of three years from the date of issuance at a price of $0.16 per share. In connection with the issuance, the Company paid aggregate finder's fees consisting of $7,700 in cash and issued 96,250 finder's warrants. All securities issued in the Offering are subject to a four-month hold period expiring on June 15, 2025.
During the period January 1, 2025 to April 25, 2025, the Company issued 18,817,000 shares under the ATM Program at an average price of $0.0464 per share for gross proceeds of $873,673, commissions paid of $25,250, and net proceeds received of $816,423.
P a g e 31 | 31