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XAU Resources Inc. — Management Reports 2025
Sep 30, 2025
47717_rns_2025-09-29_da8b502b-1f29-432a-8089-2b1aef0f3f10.pdf
Management Reports
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XAU Resources Inc.
MANAGEMENT DISCUSSION AND ANALYSIS
(Unaudited – Expressed in Canadian dollars)
THREE AND NINE MONTHS ENDED JULY 31, 2025 AND
JULY 31, 2024
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
INTRODUCTION
This Management’s Discussion and Analysis (“MD&A”) of XAU Resources Inc. (the “Company”), prepared as of September 29 2025, should be read in conjunction with the financial statements and the notes thereto for the three and nine months ended July 31, 2025 which were prepared in accordance with International Financial Reporting Standards (“IFRS”). All amounts are expressed in Canadian dollars unless otherwise indicated.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this MD&A may constitute forward-looking statements. These statements relate to future events or the Company’s future performance. All statements, other than statements of historical fact, may be forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “propose”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&Ashould not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this MD&A and are expressly qualified, in their entirety, by this cautionary statement. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various risk factors.
This MD&A may contain “forward-looking statements” which reflect the Company’s current expectations regarding future results of operations, performance and achievements of the Company. The Company has tried, wherever possible, to identify these forward-looking statements by, among other things, using words such as “anticipate,” “believe,” “estimate,” “expect” and similar expressions. The statements reflect the current beliefs of the management of the Company and are based on currently available information. Accordingly, these statements are subject to known and unknown risks, uncertainties and other factors, which could cause the actual results, performance, or achievements of the Company to differ materially from those expressed in, or implied by, these statements.
The Company undertakes no obligation to publicly update or review the forward-looking statements whether as a result of new information, future events or otherwise.
Historical results of operations and trends that may be inferred from the following discussions and analysis may not necessarily indicate future results from operations.
DESCRIPTION OF BUSINESS
The Company was incorporated under the Canada Business Corporations Act on June 18, 2018 and was classified as a Capital Pool Company, as defined in the Policy 2.4 of the TSX Venture Exchange (the “Exchange”). The principal business of the Company was the identification and evaluation of assets or businesses with a view to completing a qualifying transaction (“Qualifying Transaction”). The Company completed its Qualifying Transaction with North West Exploration Inc. on June 20, 2022. As part of the Qualifying Transaction, the subscription receipts issued by the Company on March 7, 2022, pursuant to
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
a non-brokered private placement were automatically converted to 4,000,000 common shares of the resulting issuer.
The financing consisted of 4,000,000 subscription receipts issued at $0.25 per subscription receipt for gross proceeds of $1,000,000. The proceeds were released from escrow on the closing of the Qualifying Transaction and will enable the resulting issuer to fund the phase one work program on the Noseno Property.
In connection with the financing, the Company paid $5,047 to certain finders and issued 20,188 finder warrants. Each finder warrant is exercisable to acquire one common share of the resulting issuer at $0.25 for a period of twenty-four months from the date of issuance. In connection with the closing of the Qualifying Transaction, the Company granted 400,000 stock options to certain directors, officers and consultants of the Company. Each Option is exercisable to acquire one common share of the Company at $0.25 for a period of five years from the date of the grant.
Following the completion of the Qualifying Transaction, 12,611,500 common shares, 1,222,222 stock options and 20,188 finder warrants of the are issued and outstanding.
On October 31, 2024, the Company granted 865,000 stock options to certain directors, officers and consultants of the Company. Each Option is exercisable to acquire one common share of the Company at $0.06 for a period of five years from the date of the grant.
On February 14, 2025, the Company made an adjustment to the number of options granted to a director, reducing the total by 3,850 while keeping the rest of terms consistent. The total amount of outstanding options reduced to 1,261,150.
On October 21, 2021, the Company entered an option agreement to acquire an undivided 100% interest in the "Noseno Project" located approximately two-hundred kilometers west of Georgetown, Guyana. The Noseno Project comprises 37 licenses covering 37,623 acres, together with 100% of the mineral and mining rights attached thereto or derived therefrom.
On December 20, 2021, the Company entered an amending agreement to delete and replace the conditions against cash payment.
On February 4, 2022, the Company entered another amending agreement to delete and replace the conditions against work expenditure.
The Company further entered an amendment agreement on January 23, 2024 and in order to maintain in force the rights granted, and to maintain in force the option and earn the interest in the Property, the Company must:
-
make the following cash payments – a total of $2,500,000 USD will be paid in accordance with the following schedule:
-
Pay $2,500,000 USD on or before December 31, 2027.
-
maintain work expenditures levels in respect of exploration work on the Property in each of the four years for a cumulative total of $5,000,000 USD. The Company must incur these work expenditures for the exploration work on the Property in accordance with the following schedule (collectively, the "Work Expenditures"):
-
Incur $5,000,000 USD on or before December 31, 2027.
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
The mineral properties may potentially expose the Company to risks and considerations not normally associated with exploration activities in North America. The Company’s ability to retain its properties, raise and deploy capital may be adversely affected by changes in governing regimes, policies, laws, and regulations, all of which are beyond the Company’s control.
The Company’s head office, principal address and registered and records office is located at Suite 4100, 66 Wellington Street West, Toronto, Ontario, Canada, M5K 1B7.
PROJECT STATUS
The Noseno Project is a key exploration asset within XAU Resources’ portfolio, located in Guyana. It is an early-stage gold exploration project with significant potential based on initial geochemical results. The Company’s objective is to systematically advance the project through staged exploration programs, culminating in drilling and potential resource delineation.
Work Completed
Between October 14, 2022, and December 18, 2022, the Issuer conducted a field exploration program on the Noseno claims. The program consisted of:
- BLEG Stream Sediment Sampling: A total of 142 samples were collected and analyzed for gold using the Bulk Leach Extractable Gold (BLEG) method.
- Rock Sampling: 19 rock chip samples were collected and analyzed for gold by fire assay at Actlabs laboratory in Georgetown, Guyana.
- Multi-Element Geochemical Analysis: The 142 stream sediment samples were also analyzed for a broad suite of elements using ICP-OES at Actlabs in Zacatecas, Mexico.
The results of this program were disclosed via a news release on April 13, 2023, following the receipt of all multi-element assay data.
To date, no drilling or additional fieldwork has been conducted at Noseno beyond the 2022 exploration program. The delay in further work has been due to challenging corporate finance conditions for junior mineral exploration issuers.
Issuer’s Plan for the Project
Despite funding constraints, the initial geochemical results were favorable, and the Issuer intends to proceed with further exploration, subject to securing adequate capital. The planned activities for the short-term include:
- Completion of the Stream Sediment Sampling Program: 40 remaining sites to be sampled.
- Prospecting & Geological Mapping: Further field reconnaissance to refine drill targets.
- First-Pass Soil Sampling Program: Collection of 3,000+ soil samples, followed by infill soil sampling where warranted.
- Initial Target Testing: Trenching and/or first-pass diamond drilling based on positive soil sampling results.
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
These activities align with the phased exploration budget, as detailed below:
| Phase | Objective | Activity / Items | Duration | Units | Estimated Cost (US$) | Total Cost by Phase (US$) |
|---|---|---|---|---|---|---|
| I | Initial property evaluation and target generation | BLEG stream sediment sampling | Stream sampling in Oct-Dec 2022; program 80% complete | |||
| II | Access & Accomodations | Improved camp, 1 new ATV | 45,000 | |||
| Initial property evaluation and target generation | Complete BLEG streams | 0.3 mo | 40 streams | 10,000 | ||
| Target development | 1st pass soil sampling & geol/prospecting | 3 mo | 3,400 soils 300 rocks | 185,000 | 240,000 | |
| III | Target development | Infill soil sampling, geol/prospecting | 2 mo | 1,700 soils 300 rocks | 100,000 | 100,000 |
| IV | Initial target testing | Trenching | 3 mo | 4,000m trenching | 450,000 | 450,000 |
| V | Follow up target testing | 1st pass diamond drilling | 2 mo | 2,500m of DDH | 650,000 | 650,000 |
~1 yr
US$ 1,440,000
CAD$ 1,960,000
Status Relative to Plan
The Noseno Project is progressing in line with technical milestones, but its advancement is currently contingent on securing funding. The Issuer remains committed to executing the next phases of exploration, which will be prioritized based on available financial resources. The next steps will focus on refining target areas through geochemical and geophysical surveys before moving into trenching and drilling.
SELECTED INFORMATION
| July 31, 2025 $ | October 31, 2024 $ | |
|---|---|---|
| Total assets | 82,847 | 117,001 |
| Total non-current financial liabilities | - | - |
| Working capital | (448) | 77,159 |
| Expenses | 77,607 | 214,144 |
| Loss and comprehensive loss | 77,607 | 214,144 |
| Net loss per share | 0.00 | (0.02) |
The Company has no revenue, paid no dividends, and had no long-term liabilities during the period ended October 31, 2024, to July 31, 2025.
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
DISCUSSION OF OPERATIONS
For the three months ended July 31, 2025, the Company recorded a net loss of $10,668 compared with a net loss of $34,611 during the same period in 2024. For the nine months ended, July 31, 2025, the Company recorded a net loss of $77,607 compared with a net loss of $127,451 during the same period in 2024. The net loss for the three and nine months ended July 31, 2025, is attributable to professional fees, interest expense, registration and filing fees and administrative expenses.
| Three months ended July 31, | Nine months ended July 31, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2023 | |
| Professional Fees | 7,054 | 4,784 | 53,812 | 44,966 |
| Exploration and evaluation expenses | 26,658 | 59,043 | ||
| Administrative expenses | 2,431 | 3,033 | 13,079 | 15,799 |
| Interest expense | 412 | - | 412 | - |
| Registration and filing expenses | 771 | 136 | 10,304 | 7,643 |
| Total expenses | 10,668 | 34,611 | 77,607 | 127,451 |
| Loss and comprehensive loss | (10,668) | (34,611) | (77,607) | (127,451) |
SUMMARY OF QUARTERLY RESULTS
The following is a summary of the Company's financial results:
| Quarter ended July 31, 2025 | Quarter ended April 30, 2025 | Quarter ended January 31, 2025 | Quarter ended October 31, 2024 | Quarter ended July 31, 2024 | Quarter ended April 30, 2024 | Quarter ended January 31, 2024 | Quarter ended October 31, 2023 | |
|---|---|---|---|---|---|---|---|---|
| Other Income | $ — | $ — | $ — | $ — | $ — | $ — | $ — | |
| Expenses | 10,668 | 22,841 | 44,097 | 86,693 | 34,611 | 64,849 | 27,991 | 65,692 |
| Loss and comprehensive loss | (10,668) | (22,841) | (44,097) | (86,693) | (34,611) | (64,849) | (27,991) | (65,692) |
| Loss per common share | (0.00) | (0.00) | (0.00) | (0.02) | (0.01) | (0.01) | (0.01) | (0.01) |
Major variances in expenses are as follows:
For the quarter ended July 31, 2025, there are no exploration and evaluation expenses compared to $26,658 for the quarter ended July 31, 2024. In addition, professional fees were $7,054 during the quarter ended July 31, 2025 compared to $4,784 for the quarter ended July 31, 2024.
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
THIRD QUARTER
The Company recorded a net loss of $10,668 ($0.00 per share) for the three months ended July 31, 2025.
LIQUIDITY AND CAPITAL RESOURCES
As at July 31, 2025, the Company held cash of $81,999 (October 31, 2024: $117,001), current liabilities totaled $83,295 (October 31, 2024: $39,842) and a working capital deficit of $448 compared to positive working capital of $77,159 as at October 31, 2024).
The Company may have capital requirements in excess of its currently available resources. In the event the Company's plans change, its assumptions change or prove inaccurate, or its capital resources in addition to projected cash flow, if any, prove to be insufficient to fund operations, the Company may be required to seek additional financing. There can be no assurance that the Company will have sufficient financing to meet its future capital requirements or that additional financing will be available on terms acceptable to the Company in the future.
The Company's objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and to maintain a flexible capital structure that optimizes the costs of capital within a framework of acceptable risk. Capital is comprised of the Company's shareholders' equity and any debt that it may issue. The Company manages the capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue debt, acquire or dispose of assets or adjust the amount of cash. The Company is dependent on the capital markets as its primary source of operating working capital and the Company's capital resources are largely determined by its ability to compete for investor support of its projects.
PROMISSORY NOTES PAYABLE
On July 11, 2025, the Company issued unsecured promissory notes totaling $70,000 to finance working capital needs. The notes bear interest at 7% per annum, compounded quarterly. These notes mature on December 31, 2025, at which time the principal and all accrued interest are payable in cash.
As at July 31, 2025, the carrying amount of the notes was $70,412, comprising principal of $70,000 and accrued interest of $412. The interest of $412 has been recognized as a current liability on the statement of financial position.
TRANSACTIONS WITH RELATED PARTIES
Promissory notes of $70,000 were obtained on July 11, 2025, of which $50,000 was subscribed by directors of the Company.
CAPITAL MANAGEMENT
The Company's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders.
The Company includes equity, comprised of share capital, contributed surplus and deficit, in the definition of capital.
The Company's primary objective with respect to its capital management is to ensure that it has sufficient
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
cash resources to fund the identification and evaluation of potential acquisitions. To secure the additional capital necessary to pursue these plans, the Company may attempt to raise additional funds through the issuance of equity or by securing strategic partners.
OFF BALANCE SHEET ARRANGEMENTS
The Company has not had any off-balance sheet arrangements from the date of its incorporation to the date of this MD&A.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS RISKS AND UNCERTAINIES
The Company is exposed to a variety of risks related to financial instruments. The Board approves and monitors the risk management processes. The principal types of risk exposure and the way in which they are managed are 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. The Company has deposited the cash with a Schedule 1 Canadian bank from which management believes the risk of loss is remote.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to meet liabilities when due. Accounts payable and accrued liabilities are due within the current operating period. The Company has a sufficient cash balance to settle current liabilities.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Foreign currency risk
Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency.
As at July 31, 2024, the Company did not have any financial instruments denominated in foreign currency and the Company believes its foreign currency risk to be minimal.
Fair Value
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
XAU RESOURCES INC.
MANAGEMENT DISCUSSION AND ANALYSIS
For the three and nine months ended July 31, 2025
Level 3: Inputs that are not based on observable market data.
The fair value of the Company's receivables and accounts payable and accrued liabilities approximates their carrying value because of the short-term nature of the financial instruments. The Company's cash is measured at fair value using Level 1 inputs.
Risk Disclosures and Fair Values
The Company's financial instruments, consisting of cash, accounts payable and accrued liabilities, approximate fair value due to the relatively short-term maturities of the instruments. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Reference should be made to the Company's significant accounting policies contained in Note 2 of the Company's audited financial statements for year ended October 31, 2024. These accounting policies can have a significant impact on the Company's financial performance and financial position of the Company.
DISCLOSURE OF OUTSTANDING SHARE DATA
Share Capital
As at July 31, 2025, the Company had 12,611,500 common shares issued and outstanding.
Stock Options
As at July 31, 2025, the Company had 1,261,150 stock options outstanding.
Warrants
As at July 31, 2025, the Company had no warrants outstanding.
ADDITIONAL INFORMATION
For further details, see the Company's unaudited interim condensed financial statements for the period ended July 31, 2024. Additional information about the Company can also be found on SEDAR at:
https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00046473