World Copper Ltd. — Interim / Quarterly Report 2021

Dec 24, 2020

ALLANTE RESOURCES LTD. MANAGEMENT DISCUSSION AND ANALYSIS THREE MONTHS ENDED OCTOBER 31, 2020

OVERVIEW

The following management discussion and analysis (“MDA”), prepared on December 23, 2020, should be read in conjunction with the audited financial statements for the year ended July 31, 2020 and the unaudited financial statements for the three months ended October 31, 2020. All amounts are stated in Canadian dollars unless otherwise indicated. These financial statements together with this MDA are intended to provide investors with a reasonable basis for assessing the financial performance of Allante Resources Ltd. (“Company”).

The head office, the principal address, and the registered and records office of the Company are located at 303595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5.

Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements.

Additional information related to the Company is available for view on SEDAR at www.sedar.com or by requesting further information from the Company’s head office in Vancouver.

DESCRIPTION OF BUSINESS

The Company was incorporated under the Business Corporations Act (British Columbia) on June 16, 2006 and was classified as a Capital Pool Company as defined in the TSX Venture Exchange (“TSX-V”) Policy 2.4. The principal business of the Company is the identification and evaluation of assets or a business and once identified or evaluated, to negotiate an acquisition or participation in a business subject to receipt of shareholder DRAFT approval, if required, and acceptance by regulatory authorities of its Qualifying Transaction (“QT”). On March 7, 2007, the Company’s shares began trading on the TSX Venture Exchange, and on February 3, 2010 the Company’s shares were moved to the NEX board.

On February 28, 2020, the Company entered into a Share Exchange Agreement, as amended on April 30, 2020 (the “Agreement”) with World Copper, and the shareholders of World Copper, pursuant to which the Company will acquire all of the issued and outstanding common shares in the capital of World Copper.

On September 15, 2020, the Company entered into a Second Amendment to Share Exchange Agreement with World Copper, to reflect the name change of Wealth Copper Ltd. to World Copper Ltd., and settle the debt of up to $320,000 of the Company’s related party through the issuance of common shares in the capital of World Copper concurrently with closing.

The transaction will take place by way of a share exchange and, upon closing, the Company will issue common shares to the shareholders of World Copper, in exchange for World Copper shares on a one-to-one basis. The transaction will result in the reverse take-over of the Company and is the Company’s “qualifying transaction” under applicable TSX-V policies.

World Copper has an interest in the Escalones copper-gold porphyry project located in the Santiago Metropolitan Region, in Central Chile, (i) a portion of which is covered by exploitation concessions that are the subject of an option agreement between an indirect, wholly-owned subsidiary of World Copper, and a third-party vendor for a 100% interest in and to the concessions and (ii) a portion of which is covered by exploration concessions, owned by the subsidiary. Minerals produced from the Escalones project are subject to net smelter returns royalties.

In addition, World Copper (through its wholly-owned Chilean subsidiary) holds an option for the acquisition of a 100% interest in mineral exploration concessions that comprise the Cristal copper porphyry project located in northern Chile. Provided that World Copper exercises the option, then World Copper and a previous holder of the Cristal option will enter into joint venture agreement, whereby World Copper will hold an initial 70% interest in the Cristal Property. Minerals produced from the Cristal Property are subject to net smelter returns royalties.

In June 2020, in connection with the transaction, World Copper commissioned Hard Rock Consulting, LLC of Lakewood, Colorado to update a 2014 National Instrument 43-101 resource estimate on World Copper’s Escalones porphyry copper project. The Technical Report (“Technical Report”) is entitled “Mineral Resource Estimate for the Escalones Copper Project, Santiago Metropolitan Region, Chile” with an effective date of June 30, 2020.

Subsequent to the period ended October 31, 2020, in December 2020, the Company announced receipt of conditional approval of the TSX-V on the proposed qualifying transaction. Detailed information regarding the transaction and other relevant information is contained in the Filing Statement dated December 22, 2020, filed on the Company’s SEDAR profile on www.sedar.com. In connection with the Transaction, the Company intends to change its name to “World Copper Ltd.” and World Copper intends to change its name to 1188893 B.C. Ltd. The trading symbol of the resulting issuer on closing of the Transaction is expected to be “WCU”.

The Transaction remains subject to satisfaction of a number of conditions, including completion of the Concurrent Financing. Concurrent with closing, a non-brokered private placement of a minimum of 24,166,667 units of World Copper (each, an “ Offered Unit ”) up to a maximum of 27,083,333 Offered Units at a price of $0.12 per Offered Unit for minimum gross proceeds of $2,900,000 and up to maximum gross proceeds of $3,250,000 (the “ Concurrent Financing ”).

Each Offered Unit will be comprised of one common and one common share purchase warrant of World Copper. Each warrant will be exercisable for one common share for a period of 24 months following issuance at a price of $0.20 per warrant. The Concurrent Financing is expected to close immediately prior to or concurrently with the closing of the Transaction. World Copper may pay a finder's fee on all or a portion of the Concurrent Financing consisting of a cash commission equal to 8% of the gross proceeds raised by each finder and finder's warrants equal to 8% of the corresponding number of Offered Units. Each finder's warrant is non-transferable and is exercisable for one common share for a period of 24 months following the closing of the Concurrent Financing at a price of $0.20 per finder's warrant.

The proceeds of the Concurrent Financing are expected to be used to fund costs associated with closing the DRAFT Transaction, the proposed work program on the Escalones project described in the Filing Statement and for general working capital purposes.

The transaction has not yet closed and is subject to the acceptance of the TSX-V and the provisions of the Agreement.

RESULTS OF OPERATIONS

For the three months ended October 31, 2020, the Company recorded a net loss of $15,241 (2019 - $11,629). At October 31, 2020, the Company had no continuing source of operating revenues or related expenditures.

The Company has not paid any dividends on its common shares and has no present intention of paying dividends, as it anticipates that all available funds for the foreseeable future will be used to finance its business activities.

SELECTED ANNUAL INFORMATION

	Years ended July 31,
	2020-$-2019-$-2018-$-
Net lossLoss per shareTotal assetsTotal deficiency	(53,389)(65,218)(56,898)(0.02)(0.02)(0.02)6027637(426,587)(373,198)(307,980)

YEAR ENDING JULY 31, 2020

For the year ended July 31, 2020, the Company had no revenues and had a loss of $53,389 (2019 - $65,218). As a result of managements efforts to minimize costs while working to complete the Qualifying Transaction, in the current year, the areas of decrease were primarily professional fees of $8,372 (2019 - $13,178), and transfer agent filing fees of $10,941 (2020 - $13,842) due to timing of the Company’s annual general meeting.

The Company continues to seek opportunities to complete its Qualifying Transaction. Due to its current negative working capital position, the Company expects that it will need to raise capital through share issuances.

YEAR ENDING JULY 31, 2019

For the year ended July 31, 2019, the Company had no revenues and had a loss of $65,218 (2018 - $56,898). Areas of increase include professional fees of $13,178 (2018 - $6,913), and travel to $1,514 (2018 - $nil). The increases are due to increases in cost and utilization of these services in connection to the Company’s initiation of a prospective QT.

The Company continued to seek opportunities to complete its Qualifying Transaction. Due to its negative working capital position, the Company expects that it will need to raise capital through share issuances.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

The following is a summary of selected financial information compiled from the quarterly interim unaudited financial statements for eight quarters ending October 31, 2020:

	Three months ended
	DRAFTOctober 31, 2020-$-July 31, 2020-$-April 30, 2020-$-January 31, 2020-$-
Total assetsWorking deficiencyShareholders’ deficiencyNet loss for the periodLoss per share	108601281,827(441,828)(426,587)(412,191)(399,280)(441,828)(426,587)(412,191)(399,280)(15,241)(14,397)(12,910)(14,453)(0.00)(0.00)(0.00)(0.00)
	Three months endedOctober 31, 2019-$-July 31, 2019-$-April 30, 2019-$-January 31, 2019-$-
Total assetsWorking deficiencyShareholders’ deficiencyNet loss for the periodLossper share	196276355163(384,827)(373,198)(351,790)(336,489)(384,827)(373,198)(351,790)(336,489)(11,629)(21,408)(15,301)(14,811)(0.00)(0.00)(0.00)(0.00)

DISCUSSION

The Company’s usage of services was generally commensurate across the two comparative fiscal years; however, the timing of utilization of those applicable services varied. Given the Company is in the business of looking for a qualifying transaction, and based on the level of activity, further analysis of quarterly fluctuations does not provide meaningful information.

THREE MONTHS ENDING OCTOBER 31, 2020

In the three months ending October 31, 2020, the Company had no revenues and had a loss of $15,241 (2019 - $11,629). Expenses in the comparative periods were commensurate with utilization of services in the comparative periods, with minimal variance. The increase in professional fees to $3,261 (2019 - $1,525) and transfer agent and filing fees to $3,940 (2019 - $2,149) is due to timing issues of invoices and is commensurate with the usage of services in the current period.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations to date through the issuance of common shares. The Company continues to seek capital through various means which may include the issuance of equity and/or debt.

Net cash provided by operating activities for the period ended October 31, 2020 was $48 (2019 – $80, used in).

The Company has a working capital deficiency at October 31, 2020 of $441,828 (July 31, 2020 - $426,587). The Company has a history of successful equity financings, but there can be no assurance of successfully completing future financings or a Qualifying Transaction. The Company will need to raise further capital to continue operations and complete its Qualifying Transaction and Management is actively seeking such opportunities.

RELATED PARTY TRANSACTIONS

During the period ended October 31, 2020, the Company accrued $7,875 (2019 - $7,875) for rent, office and other administration costs recorded in office and miscellaneous with a company controlled by the President of the Company, Joe DeVries. Included in accounts payable and accrued liabilities at October 31, 2020 was $324,972 (July 31, 2020 - $301,615) owing to this company and $5,093 (July 31, 2020 - $5,093) owing to the President.

DRAFT

FINANCIAL RISK MANAGEMENT

The Company is exposed to minimal financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank accounts. This risk is managed by using a major bank that is a high credit quality financial institution as determined by rating agencies.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company's ability to continue as a going concern is dependent on management's ability to raise required funding through future equity issuances. 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. The Company is exposed to liquidity risk.

Interest rate risk

The Company is not currently exposed to significant interest rate risk.

Capital Management

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern such that it can provide returns for shareholders and benefits for other stakeholders. The Company considers the items included in shareholders’ equity as capital. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares, sell assets to settle liabilities or return capital to its shareholders. The Company is not exposed to externally imposed capital requirements.

Currency risk

The Company is not currently exposed to significant foreign currency risk.

Classification of financial instruments

Fair value

The fair value of the Company’s financial assets and liabilities approximates the carrying amount due to their short-term nature.

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 only financial asset is cash with a fair value measured at Level 1 hierarchy.

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ADDITIONAL INFORMATION

Off-Balance Sheet Arrangements

As at October 31, 2020 and up to the current date, the Company had no off-balance sheet arrangements.

Legal Proceedings

As at the current date management was not aware of any legal proceedings involving the Company.

Outstanding Share Data

As at October 31, 2020 and the current date, the Company has 4,000,600 common shares outstanding, and 833,333 of the issued shares held in escrow.

Stock Options

As at October 31, 2020, and the current date, there are no stock options outstanding.

Warrants

As at October 31, 2020, and the current date, there are no warrants outstanding.

Contingent Liabilities

As at October 31, 2020 and up to the current date management was not aware of any outstanding contingent liabilities relating to the Company’s activities.

Any forward-looking information in this MDA is based on the conclusions of management. The Company cautions that due to risks and uncertainties, actual events may differ materially from current expectations. With respect to the company’s operations, actual events may differ from current expectations due to economic conditions, new opportunities, changing budget priorities of the company, and other factors.

CAPITAL DISCLOSURE

The Company manages its capital structure and makes adjustments to it based on the funds available to the Company, in order to support the acquisition of a new business. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to acquire and sustain future development of a business. 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 were no changes in the Company’s approach to capital management during the period ended October 31, 2020. The Company is not subject to externally imposed capital requirements.

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION

The Company's financial statements and the other financial information included in this management report are the responsibility of the Company's management, and have been examined and approved by the Board of Directors. The financial statements were prepared by management in accordance with IFRS and include certain amounts based on management’s best estimates using careful judgment. The selection of accounting principles and methods is management’s responsibility.

Management recognizes its responsibility for conducting the Company’s affairs in a manner to comply with the DRAFT requirements of applicable laws and established financial standards and principles, and for maintaining proper standards of conduct in its activities. The Board of Directors supervises the financial statements and other financial information through its audit committee, which is comprised of a majority of non-management directors.

This committee’s role is to examine the financial statements and recommend that the Board of Directors approve them, to examine the internal control and information protection systems and all other matters relating to the Company’s accounting and finances. In order to do so, the audit committee meets annually with the external auditors, with or without the Company’s management, to review their respective audit plans and discuss the results of their examination. This committee is responsible for recommending the appointment of the external auditors or the renewal of their engagement.

DIRECTORS

Certain directors of the Company are also directors, officers and/or shareholders of other companies. Such associations may give rise to conflicts of interest from time to time. The directors of the Company are required to act in good faith with a view to the best interests of the Company and to disclose any interest which they may have in any project opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors, any directors in a conflict will disclose their interests and abstain from voting in such matters. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time.