MIRASOL RESOURCES LTD.
CONSOLIDATED FINANCIAL STATEMENTS
For the years ended June 30, 2022 and 2021
(Expressed in Canadian Dollars)
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of
Mirasol Resources Ltd.
Opinion
We have audited the accompanying consolidated financial statements of Mirasol Resources Ltd. (the “Company”), which
comprise the consolidated statements of financial position as at June 30, 2022 and 2021, and the consolidated statements of
loss and comprehensive loss, changes in equity, and cash flows for the years then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the
Company as at June 30, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance
with International Financial Reporting Standards (“IFRS”).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of
the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a
basis for our opinion.
Other Information
Management is responsible for the other information. The other information obtained at the date of this auditor's report includes
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 audit of the consolidated financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
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, and for such internal control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally
accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
The engagement partner on the audit resulting in this independent auditor’s report is Stephen Hawkshaw.
Vancouver, Canada
October 27, 2022
Chartered Professional Accountants
Mirasol Resources Ltd.
Consolidated Statements of Financial Position
As of June 30, 2022, and June 30, 2021
(Expressed in Canadian Funds, except where indicated)
ASSETS
Current Assets
Cash and cash equivalents (Note 6)
Receivables and advances (Note 7)
Current portion of lease receivable (Note 11)
Due from JV partner (Note 12m)
Marketable securities (Note 8)
Non-Current Assets
Equipment (Note 9)
Right-of-use assets (Note 10)
Non-current portion of lease receivable (Note 11)
Exploration and evaluation assets (Note 12)
Total Assets
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities (Note 13)
Current portion of lease liabilities (Note 11)
Long-Term Liabilities
Non-current portion of lease liabilities (Note 11)
Total Liabilities
EQUITY
Share Capital (Note 14)
Reserves (Note 14)
Accumulated Other Comprehensive Loss
Deficit
$
June 30,
2022
June 30,
2021
5,698,539 $
112,258
35,684
219,051
726,456
6,791,988
143,059
70,194
49,514
1,419,519
1,682,286
10,023,402
165,755
-
46,090
1,179,087
11,414,334
148,613
206,142
-
1,706,579
2,061,334
$
8,474,274 $
13,475,668
$
475,242 $
82,140
557,382
115,048
899,176
81,030
980,206
163,642
$
$
672,430 $
1,143,848
57,502,177 $
18,362,103
(24,558)
(68,037,878)
57,477,459
17,828,859
(17,633)
(62,956,865)
7,801,844
12,331,820
Total Liabilities and Equity
$
8,474,274 $
13,475,668
Nature of business (Note 1)
Commitment (Note 17)
Subsequent events (Note 19)
On Behalf of the Board:
“ Patrick Evans ”
“ Nick DeMare ”
,
,
Director
Director
The accompanying notes are an integral part of these consolidated financial statements
Page 5
Mirasol Resources Ltd.
Consolidated Statements of Loss and Comprehensive Loss
For the Years Ended June 30
(Expressed in Canadian Funds, except where indicated)
Income
Option income (Notes 12b and 12c)
Management fees income (Note 12g)
Expenses
Exploration expenditures (Notes 12 and 13)
Business development (Note 13b ii)
Marketing and investor communications
Management fees (Note 13a)
Office and miscellaneous
Share-based payments (Note 13 ii,14c ii,14d)
Professional fees (Note 13b)
Director fees (Note 13a)
Travel
Transfer agent and filing fees
Depreciation (Notes 9 and 10)
2022
2021
$
343,397 $
153,300
496,697
750,719
162,198
912,917
3,738,706
141,167
91,886
441,497
186,602
578,477
149,246
95,550
40,668
26,041
96,752
(5,586,592)
4,848,726
181,611
94,423
613,329
202,148
(25,968)
137,473
83,815
172
31,988
106,237
(6,273,954)
Loss before other items
(5,089,895)
(5,361,037)
Interest income
Interest expense (Note 11)
Foreign exchange gain (loss)
Gain on sale of subsidiaries (Note 18)
Unrealized loss on marketable securities fair value (Note 8)
Other income (expense)
523,497
(33,546)
249,022
-
(739,691)
9,600
614,748
(39,629)
(1,075,835)
66,031
(149,586)
(17,276)
8,882
(601,547)
Loss for the Year
$
(5,081,013) $
(5,962,584)
Other Comprehensive Loss
Items that will not be reclassified to profit and loss:
Exchange differences on translation of foreign operations
(6,925)
17,127
Loss and Comprehensive Loss for the Year
Loss per Share (Basic and Diluted)
$
$
(5,087,938) $
(5,945,457)
(0.09) $
(0.11)
Weighted Average Number of Shares Outstanding
(Basic and Diluted)
53,959,279
54,107,286
The accompanying notes are an integral part of these consolidated financial statements
Page 6
Mirasol Resources Ltd.
Consolidated Statement of Changes in Equity
For the Years Ended June 30
(Expressed in Canadian Funds, except where indicated)
Share Capital
Number of
Common
Shares
Common
Shares
Amount
Balance – June 30, 2020
Treasury shares cancelled (Note 14)
Share issue costs (Note 14)
Share-based payments (Note 14)
Foreign currency translation adjustment
Loss for the year
54,148,878
(280,500)
-
26,665
-
-
$57,767,690
(298,910)
(1,454)
10,133
-
-
Accumulated
Other
Comprehensive
Loss
$(34,760)
-
-
-
17,127
-
Reserves
$17,690,529
174,431
-
(36,101)
-
-
Deficit
$(56,994,281)
-
-
-
-
(5,962,584)
Total
Equity
$18,429,178
(124,479)
(1,454)
(25,968)
17,127
(5,962,584)
Balance – June 30, 2021
53,895,043
$57,477,459
$17,828,859
$(17,633)
$(62,956,865)
$12,331,820
Treasury shares cancelled (Note 14)
Share issue costs (Note 14)
Share-based payments (Note 14)
Foreign currency translation adjustment
Loss for the year
Balance – June 30, 2022
(45,000)
-
165,000
-
-
54,015,043
(48,002)
(705)
73,425
-
-
$57,502,177
28,192
-
505,052
-
-
$18,362,103
-
-
-
(6,925)
-
$(24,558)
-
-
-
-
(5,081,013)
$(68,037,878)
(19,810)
(705)
578,477
(6,925)
(5,081,013)
$7,801,844
The accompanying notes are an integral part of these consolidated financial statements
Page 7
Mirasol Resources Ltd.
Consolidated Statement of Changes in Cash Flows
For the Years Ended June 30
(Expressed in Canadian Funds, except where indicated)
Operating Activities
Loss for the year
Adjustments for:
Interest income
Interest expense
Depreciation
Gain on sale of subsidiaries
Other expense
Share-based payments
Write off of exploration and evaluation assets
Unrealized loss on marketable securities fair value
Unrealized foreign exchange
Changes in non-cash working capital items:
Receivables and advances
Accounts payable and accrued liabilities
Due from joint venture partner
Cash used in operating activities
Investing Activities
Redemption of short-term investments, net
Purchase of exploration and evaluation assets
Proceeds from sale of subsidiaries, net of cash disposed
Purchase of equipment
Interest received
Cash provided by investing activities
Financing Activity
Lease payments
Shares repurchase costs
Treasury shares repurchased
Cash used in financing activities
2022
2021
$
(5,081,013) $
(5,962,584)
(526,829)
33,546
96,752
-
5,047
578,477
-
739,691
(344,053)
(614,748)
39,629
106,237
(66,031)
17,276
(25,968)
64,398
149,586
773,684
(4,498,382)
(5,518,521)
46,646
(423,934)
(172,961)
(45,604)
376,321
(46,090)
(5,048,631)
(5,233,894)
-
-
-
(45,918)
525,301
479,383
(72,228)
(705)
(19,810)
(92,743)
6,707,866
(100,188)
64,700
(47,070)
703,457
7,328,765
(75,480)
(1,454)
(124,479)
(201,413)
Effect of Exchange Rate Change on Cash and Cash Equivalents
337,128
(756,557)
Change in Cash and Cash Equivalents
Cash and Cash Equivalents - Beginning of Year
(4,324,863)
10,023,402
1,136,901
8,886,501
Cash and Cash Equivalents - End of Year
$
5,698,539
$
10,023,402
Cash and Cash Equivalents Consist of:
Cash
Cash equivalents
Supplemental Schedule of Non-Cash Investing and Financing
Transactions:
Marketable securities received as recovery of exploration and
evaluation assets
Recognition of sublease receivable
Cash paid during the year for interest
Cash paid during the year for income taxes
$
$
$
$
1,154,889
4,543,650
5,698,539
$
$
2,175,222
7,848,180
10,023,402
287,060
90,668
33,546
-
$
$
673,251
-
39,629
-
The accompanying notes are an integral part of these consolidated financial statements
Page 8
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
1. Nature of Business
Mirasol Resources Ltd. (“Mirasol” or the “Company”) is incorporated under the laws of the Province of British
Columbia, Canada. The Company’s corporate registered and records office is located at 700 – 1199 Hastings
Street, Vancouver, British Columbia and the head office is located at 1150-355 Burrard Street, Vancouver, British
Columbia.
Mirasol engages in the acquisition and exploration of mineral properties, principally located in Chile and Argentina,
with the objective of identifying mineralized deposits economically worthy of subsequent development, mining or
sale.
The business of mining and exploration involves a high degree of risk and there can be no assurance that current
exploration programs will result in profitable mining operations. The Company has no source of revenue and has
significant cash requirements to meet its administrative overhead and maintain its exploration and evaluation
assets. The recovery of the Company’s exploration and evaluation assets is dependent on the discovery of
economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the
development of these properties, and future profitable production or proceeds from disposition of exploration and
evaluation assets. While the Company has been successful in the past with its financing efforts, there can be no
assurance that it will be able to do so in the future.
COVID-19
In March 2020, the World Health organization declared coronavirus COVID-19 a global pandemic. This contagious
disease outbreak, which has continued to spread, and any related adverse public health developments, has
adversely affected workforces, economies, and financial markets globally, leading to economic uncertainty. Since
COVID-19 vaccination programs began in early 2021, the Company implemented plans to minimize the risks of
the COVID-19 virus, is following government health protocols, and is closely monitoring the pandemic with local
health authorities. The Company’s operations have generally returned to normal, however, due to the current
development of the new COVID19 variants, it is not possible for the Company to predict the duration or magnitude
of the potential adverse results of the outbreak and its effects on the Company’s business, results of operations,
or its ability to raise funds.
Management estimates that the Company has sufficient working capital to maintain its operations and activities
for at least the next twelve months.
2. Basis of Presentation
Statement of compliance
The consolidated financial statements of the Company have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and
interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The policies presented
in Note 3 were consistently applied to all years presented. The Board of Directors approved the consolidated
financial statements on October 27th, 2022.
Basis of measurement
These consolidated financial statements have been prepared on a historical cost basis. Financial instruments
classified as financial instruments at fair value through profit or loss are stated at their fair value. In addition, these
consolidated financial statements have been prepared using the accrual basis of accounting except for the cash
flow information.
Page 9
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies
a) Consolidation
These consolidated financial statements include the accounts of the Company (the “Parent”) and its subsidiaries.
The principal subsidiaries of the Company, their activities, and their geographic locations as of June 30, 2022,
were as follows:
Subsidiary
Principal activity
Location
Minera Mirasol Chile Limitada
Cabo Sur S.A.
Australis S.A.
Minera Del Sol S.A.
Nueva Gran Victoria S.A.
Recursos Mirasol Holdings Ltd.
MDS Property Holdings Ltd.
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Holding company
Holding company
Chile
Argentina
Argentina
Argentina
Argentina
British Virgin Islands
British Virgin Islands
Proportion of
interest held
by the
Company
100%
100%
100%
100%
100%
100%
100%
Subsidiaries are included in the consolidated financial results of the Company from the effective date of
acquisition or control and up to the effective date of disposition or loss of control. Control is achieved when the
Company has power over the investee, is exposed to or has rights to variable returns from its involvement with
an investee and has the ability to affect those returns through its power over the investee.
The transactions among the entities in the consolidated group pertain to the transfer of funds and payment of
third-party costs. All inter-group transactions and balances have been eliminated upon consolidation.
b) Significant Accounting Estimates and Judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, profit, and expenses. The
estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making the judgments
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimate is revised if the revision affects only that period or in the period
of the revision and further periods if the review affects both current and future periods.
Significant accounting estimates and judgments are related to, but are not limited to, the following:
a)
Impairment of exploration and evaluation assets: The capitalized carrying value of each property group is
reviewed regularly for conditions that are indicators of impairment. This review requires significant judgment
as the Company does not have any proven and probable reserves that enable future cash flows to be
compared to the carrying values. Factors considered in the assessment of asset impairment include, but
are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility,
title, environmental or political factors that could affect the claims’ value; whether there has been an
accumulation of costs significantly in excess of the amounts originally expected for the claims’ acquisition,
or cost of holding; whether exploration activities produced results that are not promising such that no more
Page 10
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
b) Significant Accounting Estimates and Judgments (Cont’d…)
work is being planned in the foreseeable future; and whether the Company has the necessary funds to be
able to maintain its interest in the mineral claims.
The Company has concluded that impairment conditions do not exist for its exploration and evaluation
assets hold as of June 30, 2022.
Ownership of exploration and evaluation assets involves certain risks due to the difficulties of determining
and obtaining clear title to claims as well as the potential for problems arising from the frequently ambiguous
conveyance history characteristics of many exploration and evaluation assets.
The Company has investigated ownership of its exploration and evaluation assets, and, to the best of its
knowledge, ownership of its interests is in good standing.
b) Valuation of share purchase options: The Company provides compensation benefits to its employees,
directors and officers through a stock option plan. The fair value of each option award is estimated on the
date of the grant using the Black-Scholes option pricing model.
Expected volatility assumption used in the model is based on the historical volatility of the Company’s share
price. The Company uses historical data to estimate the period of option exercises and their forfeiture rates
for use in the valuation model.
The risk-free interest rate for the expected term of the option is based on the yields of government bonds.
Changes in these assumptions, especially the volatility and the expected life determination could have a
material impact on the Company’s profit or loss. All estimates used in the model are based on historical data
which may not be representative of future results.
c)
Income taxes: The Company is subject to income taxes in numerous jurisdictions. Uncertainties exist with
respect to interpretations of tax regulations.
Judgment is required in determining whether deferred tax assets are recognized on the statement of
financial position. The recognition of deferred tax assets requires management to assess the likelihood that
the Company will generate taxable income in future periods to utilize the deferred tax assets. Due to a
history of losses deferred tax assets have not been recognized.
d) Functional currencies: The functional currency of an entity is the currency of the primary economic
environment in which an entity operates. The determination of an entity’s functional currency requires
judgment based on analysis of relevant factors identified in IAS 21, The Effects of Changes in Foreign
Exchange Rates (“IAS 21”).
Except for the Company’s subsidiaries in the British Virgin Islands (Note 3a), the Company has determined
that its subsidiaries in Chile and Argentina incur costs in United States Dollars, Canadian Dollars, as well
as the Chilean and Argentine Pesos and therefore do not indicate a single primary currency for operating in
these jurisdictions. These subsidiaries are financed entirely by its Canadian Parent and therefore act as its
extension. The Company has therefore determined that the functional currency of all of its subsidiaries in
Chile and Argentina is the Canadian Dollar, similar to the Parent.
Page 11
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
c) Foreign Currencies
The functional currency of the Company and its operating subsidiaries, Minera Del Sol S.A., Australis S.A.,
Nueva Gran Victoria S.A., Cabo Sur S.A., and Minera Mirasol Chile Limitada, is the Canadian Dollar (“$”). The
functional currency of its holding subsidiaries, Recursos Mirasol Holdings Ltd., and MDS Property Holdings Ltd.
is the United States Dollar.
Any transactions in currencies other than the functional currency have been translated to the Canadian Dollar in
accordance with IAS 21. Transactions in currencies other than the functional currency are recorded at the rates
of exchange prevailing on dates of transactions. At the end of each reporting period, monetary assets and
liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-
monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at
rates prevailing at the date when the fair value was determined. All gains and losses on translation of these
foreign currency transactions are included in profit or loss. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Assets and liabilities of entities with a functional currency other than the Canadian Dollar are translated at the
period end rates of exchange, and the results of their operations are translated at average rates of exchange for
the period. The resulting changes are recognized in accumulated other comprehensive income (loss) (“AOCI”)
in equity as a foreign currency translation adjustment. The Company’s presentation currency is the Canadian
Dollar.
d) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit with banks and short-term redeemable interest-bearing
investments with maturities of three months at the purchase date. Deposits with banks and short-term interest-
bearing investments with original term to maturity greater than three months but less than one year are presented
as short-term investments.
e) Financial Instruments
Classification
Financial assets are classified at initial recognition as either: amortized cost, fair value through profit or loss
(“FVTPL”), or fair value through other comprehensive income ("FVTOCI"). The classification depends on the
Company’s business model for managing the financial assets and the contractual cash flow characteristics. For
assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive
income.
Fair value through profit or loss (“FVTPL”) – Financial assets carried at FVTPL are initially recorded at fair value
and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from
changes in the fair value of the financial asset held at FVTPL are included in profit or loss in the period in which
they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.
Fair value through other comprehensive income (“FVTOCI”) - Investments in equity instruments at FVTOCI are
initially recognized at fair value plus transaction costs. Subsequently, they are measured at fair value, with gains
and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Financial assets at amortized cost - A financial asset is measured at amortized cost if the objective of the
business model is to hold the financial asset for the collection of contractual cash flows, and the asset's
contractual cash flows are comprised solely of payments of principal and interest. They are classified as current
assets or non-current assets based on their maturity date and are initially recognized at fair value and
subsequently carried at amortized cost less any impairment.
Page 12
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
e) Financial Instruments (Cont’d…)
Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never
separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL or the
Company has opted to measure at FVTPL.
The Company classifies its financial instruments as follows:
Cash and cash equivalents
Marketable securities
Receivables
Accounts payable and accrued liabilities
Advances to/from JV partner
Measurement
FVTPL
FVTPL
Amortized cost
Amortized cost
Amortized cost
Financial assets and liabilities at FVTPL are initially recognized at fair value and transaction costs are expensed
in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial
assets or liabilities held at FVTPL are included in profit or loss in the period in which they arise. Where the
Company has opted to designate a financial liability at FVTPL, any changes associated with the Company's
credit risk will be recognized in OCI.
Financial assets and liabilities at amortized cost are initially recognized at fair value, and subsequently carried
at amortized cost less any impairment.
Impairment
The Company assesses on a forward-looking basis the expected credit loss ("ECL") associated with financial
assets measured at amortized cost, contract assets and debt instruments carried at FVOCI. The impairment
methodology applied depends on whether there has been a significant increase in credit risk.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference
between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s
original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account
against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease
in impairment loss is reversed through profit or loss.
f)
Impairment of Non-Financial Assets
The carrying amounts of non-financial assets are reviewed for impairment whenever facts and circumstances
suggest that the carrying amounts may not be recoverable. If there are indicators of impairment, the recoverable
amount of the asset is estimated in order to determine the extent of any impairment. For the purpose of
measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (“cash-generating units” or “CGUs”).
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present
value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the
amount by which the asset’s carrying amount exceeds its recoverable amount.
Page 13
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
f)
Impairment of Non-Financial Assets (Cont’d…)
Non-financial assets that have been impaired in prior periods are tested for possible reversal of impairment
whenever events or changes in circumstances indicate that the impairment has reversed. If the impairment has
reversed, the carrying amount of the asset is increased to its recoverable amount but not beyond the carrying
amount that would have been determined had no impairment loss been recognized for the asset in the prior
periods. A reversal of an impairment loss is recognized in profit or loss in the period of such reversal.
g) Equipment
Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the
asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The
carrying amount of a replaced asset is derecognized when replaced.
The Company provides for depreciation as follows:
• Exploration equipment: 30% declining balance; and
• Computer hardware: 30% declining balance.
The Company allocates the amount initially recognized to each asset’s significant components and depreciates
each component separately. Residual values, depreciation methods and useful lives of the assets are reviewed
periodically and adjusted on a prospective basis as required.
h) Exploration and Evaluation Assets
The Company capitalizes the direct costs of acquiring mineral property interests as exploration and evaluation
assets. Option payments are considered acquisition costs if the Company has the intention of exercising the
underlying option.
Exploration and evaluation costs are charged to operations in the period incurred until such time as it has been
determined that a property has economically recoverable reserves, and is technically feasible, in which case the
balance is tested for impairment and subsequent development costs are capitalized. Exploration costs include
value-added taxes because the recoverability of these amounts is uncertain.
The receipt of option payments from the Company’s joint venture partners are applied first towards the
capitalized cost for the acquisition of pertinent mineral property interests. Option payments in excess of the
capitalized acquisition costs are netted against the exploration costs for the period. JV management fees are
included in exploration expenditures on the statement of loss and comprehensive loss.
i)
Lease liability
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. The Company assesses whether the contract involves the use of an identified asset,
whether the right to obtain substantially all of the economic benefits from use of the asset during the term of the
arrangement exists, and if the Company has the right to direct the use of the asset. At inception or on
reassessment of a contract that contains a lease component, the Company allocates the consideration in the
contract to each lease component on the basis of their relative standalone prices.
As a lessee, the Company recognizes a right-of-use asset and a lease liability at the commencement date of a
lease. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning
and restoration costs, less any lease incentives received.
The right-of-use asset is subsequently depreciated from the commencement date to the earlier of the end of the
lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Page 14
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
i) Lease liability (Cont’d…)
A lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by the interest rate implicit in the lease, or if that rate cannot be readily
determined, the incremental borrowing rate. Lease payments included in the measurement of the lease liability
are comprised of:
fixed payments, including in-substance fixed payments, less any lease incentives receivable;
a)
b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at
the commencement date;
c) amounts expected to be payable under a residual value guarantee;
d) exercise prices of purchase options if the Company is reasonably certain to exercise that option; and
e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, or if there is a change in the
estimate or assessment of the expected amount payable under a residual value guarantee, purchase, extension
or termination option. Variable lease payments not included in the initial measurement of the lease liability are
charged directly to profit or loss.
j) Lease receivable
At the commencement of a lease, the Company, if acting in capacity as a lessor, will classify the lease as a
finance lease and recognize a lease receivable at an amount equal to the net investment in the lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset or if the lease is a sublease,
by reference to the ROU asset arising from the original lease (the “head lease”). A lease is classified as an
operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an
underlying asset or the lease is a short-term lease. Cash received from an operating lease is included in other
income in the Company’s consolidated statement of profit and loss on a straight-line basis over the period the
lease.
The lease receivable is measured at amortized cost using the effective interest method. It is remeasured when
there is a change in future lease receivables arising from a change in an index or rate, or if there is a change in
the estimate or assessment of the expected amount receivable under a residual value guarantee, purchase,
extension or termination option. Variable lease receivables not included in the initial measurement of the lease
receivable are charged directly to profit or loss.
k) Provisions
(i) Decommissioning and restoration provision: Future obligations to retire an asset, including dismantling,
remediation and ongoing treatment and monitoring of the site related to normal operations are initially
recognized and recorded as a liability based on estimated future cash flows discounted at a risk free rate.
The decommissioning and restoration provision is adjusted at each reporting period for changes to factors
including the expected amount of cash flows required to discharge the liability, the timing of such cash flows
and the pre-tax rate for risk specific to the liability.
The liability is also accreted to full value over time through periodic charges to profit or loss. This unwinding
of the discount is charged to financing expense in profit or loss.
The amount of the decommissioning and restoration provision initially recognized is capitalized as part of
the related asset’s carrying value and depreciated to profit or loss. The method of depreciation follows that
of the underlying asset. The costs related to a decommissioning and restoration provision are only
capitalized to the extent that the amount meets the definition of an asset and can bring about future
economic benefit.
Page 15
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
k) Provisions (Cont’d…)
For the years presented, the Company does not have any decommissioning or restoration provisions.
(ii) Other provisions: Provisions are recognized when a current legal or constructive obligation exists, as a
result of past events, and it is probable that an outflow of resources that can be reliably estimated will be
required to settle the obligation. Where the effect is material, the provision is discounted using an appropriate
pre-tax rate for risk specific to the liability.
l)
Income Taxes
Income tax expense (recovery) is comprised of current and deferred tax. Income tax is recognized in profit or
loss except to the extent that it relates to items recognized directly in equity, in which case the income tax is also
recognized directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous
years.
In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is
determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted
at the date of statement of financial position and are expected to apply when the deferred tax asset or liability is
settled. Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except,
in the case of subsidiaries, where the timing of the reversal of the temporary difference is controlled by the
Company and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are presented as non-current.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities, when they relate to income taxes levied by the same taxation authority and when
the Company intends to settle its current tax assets and liabilities on a net basis.
m) Share-based Payments
The Company grants share options to buy common shares of the Company to directors, officers, employees,
and service providers. The Company recognizes share-based payment expense based on the estimated fair
value of the options. A fair value measurement is made for each vesting instalment within each option grant and
is determined using the Black-Scholes option-pricing model. The fair value of the options is recognized over the
vesting period of the options granted as both share-based payment expense and reserves. This includes a
forfeiture estimate, which is revised for actual forfeitures in subsequent periods. The reserves account is
subsequently reduced if the options are exercised, and the amount initially recorded is then credited to share
capital.
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, such share-based payments are measured at the fair value of goods or
services received.
Page 16
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
3. Significant Accounting Policies (Cont’d…)
m) Share-based Payments (Cont’d…)
The Company grants to employees, officers, directors and consultants, Restricted Share Units (“RSUs”) in such
numbers and for such terms as may be determined by the Board. RSUs granted under the RSU Plan are
exercisable into common shares for no additional consideration after the vesting conditions, as specified by the
Board, are met. The Company intends to settle each RSU with one common share of the Company and therefore
RSUs are accounted for as equity-settled instruments.
RSUs are measured at fair value on the date of grant and the corresponding share-based compensation is
recognized over the vesting period in profit or loss.
n) Loss per Share
Basic loss per share is computed by dividing loss available to common shareholders by the weighted average
number of common shares outstanding during the year.
The computation of diluted loss per share assumes the conversion, exercise, or contingent issuance of securities
only when such conversion, exercise or issuance would have a dilutive effect on the loss per share. The dilutive
effect of convertible securities is reflected in the diluted loss per share by application of the "if converted" method.
For the year presented, this calculation proved to be anti-dilutive.
o) Comprehensive Income (Loss)
Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss) and
represents the change in equity which results from transactions and events from sources other than the
Company’s shareholders. The Company’s translation of its subsidiaries which have a functional currency other
than the Canadian Dollar is the only item affecting comprehensive income (loss) for the years presented.
p) Share Capital
Common shares of the Company are classified as equity. Transactions costs directly attributable to the issue of
common shares and share options are recognized as a deduction from equity, net of any tax effect.
The Company uses the residual value method with respect to the measurement of shares and warrants issued
as private placement units. The residual value method first allocates value to the more easily measurable
component based on fair value and then the residual value, if any, to the less easily measurable component.
The fair value of the common shares issued in the private placements was determined to be the more easily
measurable component and were valued at their fair value, as determined by the quoted bid price on the
issuance date. The balance, if material, was allocated to the attached warrants. Any fair value attributed to the
warrants on exercise is recorded as equity. If the warrants are exercised the related reserves are reclassified
from reserves to share capital.
Page 17
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
4. Recent Accounting Pronouncements and Adoptions
New accounting standards issued but not yet in effect
Classification of liabilities as current or non-current (Amendments to IAS 1)
The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) which
clarified the guidance on whether a liability should be classified as either current or non-current. The amendments:
(i) Clarify that the classification of liabilities as current or non-current should only be based on rights that
are in place “at the end of the reporting period”;
(ii) Clarify that classification is unaffected by expectations about whether an entity will exercise its right to
defer settlement of a liability; and
(iii) Make clear that settlement includes transfers to the counterparty of cash, equity instruments, other
assets or services that result in extinguishment of the liability.
This amendment is effective for annual periods beginning on or after January 1, 2023. Earlier application is
permitted. The extent of the impact of adoption of this amendment has not yet been determined.
Insurance contracts IFRS 17
IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform
measurement and presentation approach for all insurance contracts. These requirements are designed to achieve
the goal of a consistent, principle-based accounting for insurance contracts.
IFRS 17 supersedes IFRS 4 and applies to annual reporting periods beginning on or after 1 January 2023. The
extent of the impact of adoption of this amendment has not yet been determined.
5. Financial Instruments
Categories of financial instruments
Financial assets
Fair Value Through Profit or Loss
Cash and cash equivalents
Marketable securities
Amortized Cost
Receivables and advances
Due from JV Partner
Financial liabilities
Amortized Cost
Accounts payable and accrued liabilities
a) Fair Value
June 30,
2022
June 30,
2021
$
5,698,539 $
726,456
10,023,402
1,179,087
112,258
219,051
165,755
46,090
$
6,756,304 $
11,414,334
$
475,242
475,242 $
899,176
899,176
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:
Page 18
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
5. Financial Instruments (Cont’d…)
a) Fair Value (Cont’d…)
Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities;
Level 2 – Inputs other than quoted prices that are directly or indirectly observable for the asset or liability; and,
Level 3 – Inputs that are not based on observable market data;
Level 1
Cash and cash equivalents
Marketable securities
June 30,
2022
June 30,
2021
$
$
5,698,539 $
726,456 $
10,023,402
1,179,087
The fair values of the Company’s other financial instruments approximate their carrying values because of the
short-term nature of these instruments.
b) Management of Capital Risk
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern to pursue the development of its exploration and evaluation assets and to maintain a flexible capital
structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company
includes the components of equity.
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 the capital structure, the Company may
attempt to issue new shares, acquire or dispose of assets, enter into joint ventures or obtain debt financing. In
order to facilitate the management of its capital requirements, the Company prepares annual expenditure
budgets that are updated as necessary depending on various factors, including successful capital deployment
and general industry conditions.
To maximize ongoing exploration, the Company does not pay out dividends.
The Company’s investment policy is to invest its cash in highly liquid short-term redeemable interest-bearing
investments with maturities of twelve months or less from the original date of acquisition, selected with regards
to the expected timing of expenditures from continuing operations. The Company is not subject to externally
imposed capital requirements. There were no changes to the Company’s approach to capital management
during the year.
c) Management of Financial Risk
The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact
on the Company's financial instruments are summarized below.
(i) Currency risk
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The
Company operates in Canada, Argentina and Chile and a portion of its expenses are incurred in United States
(“US”) dollars, Australian dollars and in Argentine and Chilean Pesos. A significant change in the currency
exchange rates between the US and Australian dollar relative to the Canadian dollar and the Argentine and
Chilean Peso to the Canadian dollar could have an effect on the Company’s results of operations, financial
position or cash flows. The Company has not hedged its exposure to currency fluctuations.
At June 30, 2022, the Company is exposed to currency risk through the following assets and liabilities
denominated in US and Australian dollars, and Argentine and Chilean Pesos:
Page 19
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
5. Financial Instruments (Cont’d…)
c) Management of Financial Risk (Cont’d…)
Cash and cash equivalents
Receivables and advances
Accounts payable and accrued liabilities
US
Dollars
3,077,951
118,862
(41,165)
Australian
Dollars
569,069
-
(4,356)
Argentine
Peso
3,931,165
1,558,834
(21,788,585)
Chilean
Peso
71,483,741
14,939,367
(41,885,835)
Based on the net exposures as at June 30, 2022, and assuming that all other variables remain constant, a
10% depreciation or appreciation of the Canadian dollar against the US and Australian dollar would result in
an increase/decrease of $406,637 and $50,214, respectively in the Company’s comprehensive loss.
Likewise, a 10% depreciation or appreciation of the Canadian dollar against the Argentine and Chilean Peso
would result in an increase/decrease of $(16,788) and $6,235, respectively in the Company’s comprehensive
loss.
(ii) Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet
its contractual obligations.
The Company’s cash and cash equivalents are held through large financial institutions. The Company’s
receivables primarily consist of interest receivable due from major financial institutions on short term
investments. Management believes that credit risk concentration with respect to receivables is remote.
(iii) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company manages liquidity risk through the management of its capital structure and financial leverage as
outlined above. As at June 30, 2022, the Company’s financial liabilities consist of accounts payable and
accrued liabilities. All of the Company’s current obligations are expected to be paid within one year.
Management believes the Company has sufficient funds to meet its liabilities as they become due.
(iv) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The risk that the Company will realize a loss as a result of a
decline in the fair value of the Company’s cash and cash equivalents is limited because these investments
are generally held to maturity. The applicable rates of interest on such investments range between 0.12%
and 1.50%.
(v) Price risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to
changes in market prices, other than those arising from interest rate risk, foreign currency risk and equity
price risk. As at June 30, 2022, with other variables unchanged, a 10% decrease in the market value of the
Company’s marketable securities would result in an increase of the Company’s loss and comprehensive loss
of $72,646.
Page 20
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
6. Cash and Cash Equivalents
Cash and cash equivalents comprise of cash and short-term redeemable Guaranteed Investment Certificates
(“GIC”) placed with major Canadian financial institutions. Maturity dates of these GIC’s are within one year.
7. Receivables and Advances
Goods and services tax receivable
Interest receivable
Prepaid expenses and advances
8. Marketable Securities
Common shares:
Balance June 30, 2020
Additions
Balance June 30, 2021
Additions
Balance June 30, 2022
Fair value change:
At June 30, 2020
Additions
Fair value change
At June 30, 2021
Additions
Fair value change
At June 30, 2022
June 30,
2022
6,094
2,599
103,565
$
112,258
$
June 30,
2021
5,695
6,347
153,713
165,755
$
$
3,745,269
2,805,212
6,550,481
3,827,462
10,377,943
$ 655,422
673,251
(149,586)
1,179,087
287,060
(739,691)
$ 726,456
The Company holds 10,377,943 common shares (June 30, 2021 – 6,550,481) of Silver Sands Resources Corp.
(“Silver Sands”) (Note 12g) that were received as partial consideration on an option agreement. During the year
ended June 30, 2022, the Company received 3,827,462 common shares (2021- 2,805,212) with a fair value of
$0.075 (2021 - $0.24) per common share. The fair value of the common shares received of $287,060 (2021 -
$673,251) was recorded as a recovery against the acquisition cost of the property.
As at June 30, 2022, the market price of the shares was $0.07 per share (June 30, 2021 - $0.18). Accordingly,
the Company recorded an unrealized fair value loss of $739,691 (2021 - $149,586) in the consolidated statement
of loss and comprehensive loss.
Page 21
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
9. Equipment
Cost
Balance as at June 30, 2020
Additions for the year
Balance as at June 30, 2021
Additions for the year
Balance as at June 30, 2022
Accumulated Depreciation
Balance as at June 30, 2020
Depreciation for the year
Balance as at June 30, 2021
Depreciation for the year
Balance as at June 30, 2022
Carrying Amounts
As at June 30, 2021
As at June 30, 2022
10. Right-of-Use of Assets
Right of Use Assets
Cost:
At June 30, 2020, and 2021
Sublease deduction (note 11)
At June 30, 2022
Depreciation:
At June 30, 2020
Charge for the year
At June 30, 2021
Charge for the year
At June 30, 2022
Net Book Value:
At June 30, 2021
At June 30, 2022
Exploration
Equipment
Computer
Hardware
Total
$
$
$
$
$
$
$
$
643,398 $
47,414
690,812 $
45,918
736,730 $
508,083 $
48,190
556,273 $
47,250
603,523 $
93,079 $
(344)
92,735 $
-
92,735 $
73,246 $
5,415
78,661 $
4,222
82,883 $
736,477
47,070
783,547
45,918
829,465
581,329
53,605
634,934
51,472
686,406
134,539 $
133,207 $
14,074 $
9,852 $
148,613
143,059
$ 311,407
(90,668)
$ 220,739
$ 52,633
52,632
105,265
45,280
$ 150,545
$ 206,142
$ 70,194
Depreciation of right-of-use assets is calculated using the straight-line method over the remaining lease term.
Page 22
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
11. Lease Liabilities and lease receivable
Lease Liabilities
Beginning balance
Lease payments made
Interest expense
Less: current portion
Non-current portion
June 30,
2022
244,672
(81,030)
33,546
$
June 30,
2021
280,523
(75,480)
39,629
197,188
$
244,672
(82,140)
(81,030)
115,048
$
163,642
$
$
$
The following are the minimum lease payments for the next four years:
Period
In 1 year
Second year
Third year
Fourth year
Lease receivable
Beginning balance
Additions (note 10)
Lease payments made
Interest income
Less: current portion
Non-current portion
Amount Payable
$82,140
$87,690
$74,000
-
June 30,
2022
-
90,668
(8,802)
3,332
$
June 30,
2021
-
-
-
-
85,198
$
(35,684)
49,514
$
-
-
-
$
$
$
The following are the minimum lease receivable for the next four years:
Period
In 1 year
Second year
Third year
Fourth year
Amount Receivable
$35,684
$38,064
$31,720
-
Page 23
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
12. Exploration and Evaluation Assets
The Company owns 100% of the mineral exploration rights to a large portfolio of properties focused in two mining
regions, namely the Atacama region in northern Chile and the Santa Cruz Province in southern Argentina. As well,
the Company holds several other properties in the San Juan and Catamarca provinces of northern Argentina. The
Company also focuses on generative exploration to identify and acquire new prospects.
A reconciliation of capitalized acquisition costs is as follows:
171,777
-
1,024,549
203,027
20,166
1,419,519
Acquisition Costs
Chile
Gorbea belt
Zeus
Argentina
Balance at
June 30, 2021
Cost
Write-offs
and
Recoveries
Balance at
June 30, 2022
$
171,777 $
-
- $
-
-
-
$
Santa Rita and Virginia
Sascha-Marcelina
Pipeline projects
1,311,609
203,027
20,166
-
-
-
(287,060)
-
-
$
1,706,579 $
- $
(287,060)
$
Balance at
June 30, 2020
Cost
Recoveries
Balance at
June 30, 2021
Chile
Gorbea belt
Zeus
Argentina
$
171,777 $
64,398
- $
-
-
(64,398)
$
Santa Rita and Virginia
Sascha-Marcelina
Pipeline projects
1,984,860
102,839
20,166
-
100,188
-
(673,251)
-
-
$
2,344,040 $
100,188 $
(737,649)
$
171,777
-
1,311,609
203,027
20,166
1,706,579
Chile
a) Gorbea option to joint venture
The Company owns a 100% interest in certain mineral claims located in northern Chile and referred to as the
Gorbea Gold Project (“Gorbea”).
On January 28, 2019, the Company signed an agreement with NCM, whereby NCM has been granted the
option to acquire up to a 75% interest in Gorbea, exercisable in stages over a nine-year, or shorter, earn-in
period. The agreement requires NCM to fund US$4 million in exploration expenditures and make a
US$100,000 option payment (received) in the first 18 months of the option. NCM will be the operator of the
exploration program and will receive a 5% management fee.
In December 2020, the Company and NCM agreed to amend the agreement allowing NCM to exercise its
option to enter the farm-in phase of the Agreement by making a US$500,000 payment to Mirasol (received
and recorded as option income in the Company’s consolidated statements of loss and comprehensive loss).
In August 2022, NCM terminated the option agreement.
Page 24
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
12. Exploration and Evaluation Assets (Cont’d…)
b) Coronación option to joint venture:
On September 24, 2019, the Company entered into a definitive agreement with First Quantum Minerals
(“FQM”) for the Company’s Coronación Copper/Gold Project in northern Chile.
On February 8, 2022, the Company and FQM amended the agreement, and granted to FQM the option to
earn-in 80% of the project over 7 years by:
• Making annual cash payments totaling US$875,000:
o On signing of definitive agreement: US$50,000 (received)
o 1st anniversary: US$50,000 (received)
o 2nd anniversary: US$75,000 (received)
o 4th anniversary: US$100,000
o 5th anniversary: US$150,000
o 6th anniversary: US$200,000
o 7th anniversary: US$250,000
o Completing at least 10,000 m of drilling; and
o Delivering a NI 43-101 compliant Prefeasibility Study Report.
During the year ended June 30, 2022, the Company recorded US$75,000 (2021 – US$50,000) as option
income in the Company’s consolidated statement of loss and comprehensive loss.
As part of the agreement, FQM is committed to completing 3,000 m of drilling and a systematic geophysical
program on the project before April 30, 2023. Following this period, FQM is required to spend a minimum of
US$500,000 per year over the term of the agreement. FQM is the operator during the option period. Following
the completion of the 80% earn-in, FQM will have a one-time option to acquire the remaining 20% on terms to
be negotiated between the parties. If this option is not exercised, the parties will form a participating joint
venture to further fund the development of the project.
c) Nord Property option to joint venture:
On September 4, 2020, the Company signed a definitive agreement with Mineria Activa (“Mineria”) for the
Company’s 100% owned Nord project in northern Chile.
The Company granted to Mineria the option to earn-in 100% of the project over four years by:
• Making annual cash payments totaling US$3,000,000:
o On signing of definitive agreement: US$50,000 (received)
o 1st anniversary: US$200,000 (received)
o 2nd anniversary: US$400,000
o 3rd anniversary: US$600,000
o 4th anniversary: US$1,750,000
• Committing to complete at least US$500,000 of exploration expenditures over the first two years
of the option period.
During the year ended June 30, 2022, the Company recorded US$200,000 (2021 – 50,000) as option income
in the Company’s consolidated statement of loss and comprehensive loss.
In August 2022, Mineria terminated the option agreement.
Page 25
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
12. Exploration and Evaluation Assets (Cont’d…)
d)
Inca Property option to purchase:
On January 7, 2020, the Company signed an option agreement with subsidiaries of Newmont Corporation
(“NEM”) to acquire the Inca Gold Project in northern Chile.
The Company was granted the option to earn-in 100% of the project, subject to a 1.5% NSR royalty, by drilling
1,000 m on the project over two years and incurring US$3 million in exploration expenditures over five years.
The Company can terminate the agreement at any time after the completion of the initial 1,000 m drilling
commitment.
Upon completion of this option, NEM will have the right to earn back 70% of the project, in two stages, by:
• Stage 1:
o Making a cash payment of US$3 million to the Company; and
o Funding US$6 million in exploration expenditures over three years.
If NEM completes Stage 1 but not Stage 2, the Company will retain 100% of the project and NEM will be
granted an additional 0.5% NSR royalty which may be bought back by the Company at fair market value.
• Stage 2:
o Delivering a NI 43-101 compliant Prefeasibility Study reflecting a resource of no less than 2
million ounces of gold-equivalent using agreed upon cut-off grades; or
Incurring an additional US$15 million in exploration expenditures over three years.
o
If NEM completes Stage 2, the Company and NEM will hold 30% and 70%, respectively, in a joint venture
company holding the project. The Company will then have the option to either fund its 30% interest or reduce
it to a 25% interest in exchange for a loan from NEM to fund the project development to commercial production.
e) Rubi Property to joint venture:
On June 19, 2020, the Company signed an agreement with Mine Discovery Fund Pty Ltd. (“MDF”), a private
Australian company, for the Company’s 100% owned Rubi project in northern Chile.
Mirasol has granted MDF the option to earn-in 80% of the project over 8 years. MDF must complete 2,000m
of drilling on the project over the later of:
• 18 months from execution of the agreement; or
• 12 months after receipt of necessary drill permits.
Following the completion of the initial commitment, MDF is required to spend a minimum of US$1 million per
year in exploration expenditures over the term of the agreement. In order to exercise the option, MDF must
also deliver a positive NI 43-101 compliant Prefeasibility Study on the project.
Mirasol is the operator of the project during the option period.
f) Zeus Property
The Company owned a 100% interest in certain mineral claims, which now form part of the Zeus Gold Project
located in northern Chile.
Page 26
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
12. Exploration and Evaluation Assets (Cont’d…)
During the year ended June 30, 2018, the Company entered into an option agreement to acquire a 100%
interest in certain other claims of the Zeus Gold Project. The Company can acquire the claims under option by
making staged option payments totalling US$2.747 million over five years and incur US$300,000 in exploration
expenditures within three years. The property owner retains a 1.5% NSR royalty. The Company has a right to
buy 0.5% of the royalty for US$3 million.
In October 2020, the Company terminated the option agreement, and wrote-off $64,398 in capitalized costs
on the project to exploration expenditures in the consolidated statement of loss and comprehensive loss.
Argentina
g) Sascha-Marcelina option to purchase
The Company owns a 100% interest in certain mineral claims, which now form part of the Sascha-Marcelina
Gold Project located in Santa Cruz, Argentina.
During the year ended June 30, 2019, the Company entered into an option agreement to acquire a 100%
interest in certain other claims now included in the Sascha-Marcelina Project. On January 23, 2022, the option
agreement was amended. The Company can acquire the claims under option by making staged option
payments totalling US$3.75 million over five years.
The Company has a minimum US$300,000 exploration spending commitment during the option period. The
property owner retains a 1.5% NSR royalty.
Option payments are due as follows:
On signing (paid)
On or before January 23, 2020 (paid)
On or before January 23, 2021 (paid)
On or before January 23, 2023
On or before January 23, 2024
On or before January 23, 2025
Total
US$25,000
US$50,000
US$75,000
US$50,000
US$100,000
US$3,450,000
US$3,750,000
h) Virginia Property option to joint venture:
On May 21, 2020, the Company entered into an option agreement with Silver Sands for the Company’s 100%
owned Virginia Silver Project in the Santa Cruz Province of Argentina.
Under the agreement, Mirasol granted Silver Sands the option to acquire 100% of the project over three years
by:
• Making share issuances totalling 19.9% of the shares outstanding (the “S/O”) of Silver Sands upon
completion of the option:
o On signing of the definitive agreement: 9.9% of the S/O (received) (Note 8)
o 1st anniversary: 5% of the S/O (received) (Note 8)
o 2nd anniversary: 5% of the S/O (received) (Note 8)
o 3rd anniversary: top up to 19.9% of the S/O (inclusive of the previous issuances)
Page 27
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
12. Exploration and Evaluation Assets (Cont’d…)
• Completing, or funding US$6 million in exploration expenditures:
o Year 1: US$1 million (received)
o Year 2: US$2 million (received)
o Year 3: US$3 million
• Mirasol is the operator of the project during the option period and will receive a management fee and
recognized $153,300 (2021 - $162,198) in management fees during the year ended June 30, 2022.
Upon completion of the option, Silver Sands will have earned a 100% interest in the project and Mirasol will
retain a 3% NSR royalty, of which 1% can be bought back by Silver Sands for US$2 million.
i) Homenaje
On April 15, 2021, the Company signed a definitive agreement with Patagonia Gold Corp (“PGC”) for the
Company’s Homenaje project in northern Argentina.
The Company granted an option to earn 75% of the project over six years once PGC completes:
• An initial work program over 2.5 years of US$1.15 million in exploration expenditures, of which
US$400,000 must be spent within the first 18 months, including 2,500 m of drilling;
• A NI 43-101 compliant Prefeasibility Study by the end of the option period; and
• Spending a minimum of US$400,000 annually, or US$200,000 in any six-month period, thereafter.
j) Nico
On April 15, 2021, the Company signed a definitive agreement with PGC for the Company’s Nico Project in
northern Argentina.
Under the agreement, Mirasol will transfer its interest in the Nico property to PGC in return for a 1.5% NSR
royalty. Mirasol will have the right to regain full ownership of the property at no cost if production on the property
has not commenced by the end of year three.
k) Libanesa
On October 4, 2021, the Company entered into an option agreement with Golden Arrow Resources Corp
(“Golden Arrow”) for the Company’s Libanesa project located in the Santa Cruz Province of Argentina.
Under the terms of the agreement, Mirasol will grant Golden Arrow an option to earn 75% of the Libanesa
project over six years by:
• Making annual cash payments totaling US$1,000,000:
o US$100,000 to be paid on the 2nd, 3rd, and 4th anniversaries
o US$250,000 on the 5th anniversary; and
o US$450,000 on the 6th anniversary.
•
Incurring, or funding exploration expenditures totalling US$4.0 million
o USD $500,000 per year during the first 2 years; and
o USD $750,000 per year for the following 4 years.
In July 2022, Golden Arrow terminated the option agreement.
Page 28
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
l) Pipeline Properties:
The Company carries out exploration programs on a number of properties which are prospective for precious
and base metals in Chile and Argentina.
m) Advances to/from joint venture partners:
As at June 30, 2022, the Company has a receivable balance of $219,051 (2021 - $46,090) of overspent
exploration advances.
13. Related Party Transactions
Details of the transactions between the Company’s related parties are disclosed below.
a) Compensation of key management personnel
Key management personnel include persons having the authority and responsibility for planning, directing, and
controlling the activities of the Company as a whole.
The remuneration of management and independent directors was as follows:
Management compensation (i)
Share-based payments (ii)
Director’s fees (iii)
Year Ended June 30,
$
2022
525,580
392,329
95,550
$
1,013,459
2021
317,191
(91,051)
83,815
309,955
$
$
i. Management compensation is included in management fees (2022 - $384,443; 2021 - $62,500) and in
exploration expenditures (2022 – $141,137; 2021 - $254,691) in the Company’s consolidated statements of
loss and comprehensive loss.
ii.
Share-based payments are included in the share-based payments expense in the Company’s consolidated
statements of loss for the years ended June 30, 2022, and 2021.
iii.
The independent directors of the Company are paid $2,100 per month (2021 - $1,785 per month).
b) Transactions with other related parties
Certain of the Company’s officers and directors render services to the Company as sole proprietors or through
companies in which they are an officer, director, or partner.
The following companies are related parties through association of the Company’s directors and officers:
Max Pinsky Personal Law Corporation
Chase Management Ltd.
Manning Lee Management Ltd.
Nature of transactions
Legal fees
Professional fees
CFO services
Page 29
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
13. Related Party Transactions (Cont’d…)
The Company incurred the following fees and expenses with related parties as follows:
Legal fees (i)
CFO services (ii)
Years Ended June 30,
2022
80,986
15,000
95,986
2021
96,794
30,000
126,794
$
$
$
$
i.
Legal fees are included in professional fees (2022 - $39,286; 2021 - $54,508) and in business development
(2022 – $41,700; 2021 - $42,286) in the Company’s consolidated statements of loss and comprehensive loss.
ii. CFO services are included in management fees in the Company’s consolidated statements of loss for the
years ended June 30, 2022, and 2021.
Included in accounts payable and accrued liabilities at June 30, 2022, is an amount of $46,819 (2021 - $40,935)
owing to directors and officers of the Company and to companies where the directors and officers are principals.
14. Share Capital
a) Authorized Share Capital
The Company’s authorized share capital consists of an unlimited number of common shares without par value.
All issued common shares are fully paid. As at June 30, 2022 the Company had 54,015,043 common shares
outstanding.
b) Normal Course Issuer Bid
On October 19, 2020, the Company filed a normal course issuer bid (the “NCIB”) which authorizes the Company
to repurchase for cancellation up to 3,900,000 of its issued and outstanding common shares. The NICB expired
on October 21, 2021.
On November 25, 2021, the Company announced its intention to renew its NCIB, to purchase for cancellation, up
to 3,500,000 of its issued and outstanding common shares. The Bid commenced on December 15, 2021, and will
terminate on December 14, 2022, or such earlier time as the Bid is completed or at the option of the Company.
During the year ended June 30, 2022, the Company repurchased and cancelled a total of 45,000 (2021 – 280,500)
common shares for $19,810 (2021 – $124,479) cash consideration under the NCIB.
c) Share Purchase Options (“Options”)
The Company has established a share purchase option plan (the “Plan”) whereby the Board of Directors may,
from time to time, grant Options to directors, officers, employees, and consultants under the long-term incentive
plan. Options granted must be exercised no later than five years from the date of grant or such lesser period as
determined by the Company’s Board of Directors.
The exercise price of an Option is equal to or greater than the closing market price on the TSX Venture Exchange
(“TSXV”) on the day preceding the date of grant. The vesting terms for each grant are set by the Board of Directors.
The Plan provides that the aggregate number of shares reserved for issuance shall not exceed 10% of the total
number of issued and outstanding shares. At June 30, 2022, a total of 5,401,504 Options were reserved under the
Plan with 4,035,000 Options outstanding.
Page 30
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
14. Share Capital (Cont’d…)
c) Share Purchase Options (“Options”)
i. Movements in share purchase options during the year
A summary of the Company’s share purchase options and the changes for the year are as follows:
Options outstanding as at June 30, 2020
Expired / Forfeited
Options outstanding as at June 30, 2021
Granted
Expired / Forfeited
Options outstanding as at June 30, 2022
Options exercisable as at June 30, 2022
ii. Fair value of share purchase options granted
Number of Options
4,425,000
Weighted Average
Exercise Price
$1.04
(2,850,000)
1,575,000
3,300,000
(840,000)
4,035,000
1,666,250
$1.19
$0.87
$0.37
$0.99
$0.43
$0.52
During the year ended June 30, 2022, the Company recognized share-based compensation expense of $505,052
(2021 – $36,101 net recovery). The net recovery in 2021 was a result of options vesting offset against previously
recorded share-based payments associated with unvested options cancelled due to the resignation of the former
CEO.
On September 14, 2021, and on May 1, 2022 the Company granted 3,100,000 and 200,000 respectively, shares
purchase options to directors, management and consultants. The weighted-average fair values of stock options
granted, and the assumptions used to calculate the related compensation expense for the year ended June 30,
2022, was estimated using the Black-Scholes Option Pricing Model with the following assumptions:
iii.
Share purchase options outstanding at the end of the year
Expected dividend yield
Expected share price volatility
Risk-free interest rate
Expected life of options
Fair value of options granted (per share option)
September 30, 2021
0.0%
98.05%
0.79%
4.5years
$0.24
May 1, 2022
0.0%
95.43%
2.76%
4.5years
$0.57
Page 31
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
14. Share Capital (Cont’d…)
c) Share Purchase Options (“Options”)
A summary of the Company’s options outstanding as at June 30, 2022 is as follows:
Exercise price
$
1.09
0.52
0.40
0.34
0.80
Options
Outstanding
200,000
710,000
50,000
2,875,000
200,000
4,035,000
Weighted
Average
Remaining Life
of Options
(years)
3.52
Options
Exercisable
200,000
560,000
50,000
756,250
100,000
1,666,250
Expiry Date
March 14, 2023
November 8, 2023
April 28, 2023
September 14, 2026
May 01, 2027
d) RSU Plan
On May 12, 2021, the shareholders approved an RSU Plan (the “RSU Plan”). The RSU Plan was also approved
by the Board of Directors on May 25, 2022, and by the TSXV on April 13, 2022. The RSU Plan provides for the
issuance of up to 1,000,000 restricted share units (the “RSUs”). Under the RSU Plan, RSUs may be granted to
directors, officers, employees and consultants of the Company (excluding investor relations consultants) as
partial compensation for the services they provide to the Company. The RSU Plan is a fixed number Plan, and
independent of the number of Options available under the Company’s stock option plan.
During the year ended June 30, 2022, the Company granted 165,000 RSU’s (2021 – 26,665). During the year
ended June 30, 2022, the Company recognized $73,425 (2021 - $10,133) as share-based payments. As of
June 30, 2022, no RSU’s were outstanding (2021 – Nil).
15. Segmented Information
The Company’s business consists of a single reportable segment being mineral property acquisition and
exploration. Details on a geographical basis are as follows:
Total Non-Current Assets
Canada
Argentina
Chile
$
June 30,
2022
133,245 $
1,344,912
204,129
June 30,
2021
225,480
1,623,059
212,795
$
1,682,286 $
2,061,334
Page 32
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
16. Income Taxes
The Company is subject to Canadian federal and provincial tax rates.
The Company has no taxable income in Canada.
The tax expense at statutory rates for the Company can be reconciled to the reported income taxes per the
statement of loss and comprehensive loss as follows:
Net loss before income taxes
Canadian federal and provincial income tax rates
Expected income tax recovery based on the above
Non-deductible expenses
t
Impact of sale of subsidiaries
Change in unrecognized deductible temporary
differences
Foreign exchange and other
Total income tax recovery
The Company’s unrecognized deferred tax assets are as follows:
Unrecognized deferred income tax assets:
Non-capital losses
Exploration and evaluation assets
Share issue costs
Other
Total unrecognized deferred income tax assets
Year Ended
June 30, 2022
Year Ended
June 30, 2021
$
$
$
(5,081,013)
27.00%
(1,372,000)
288,000
$
$
(5,962,584)
27.00%
(1,610,000)
503,000
-
1,516,000
1,190,000
(106,000)
(1,052,000)
643,000
-
$
-
June 30,
2022
June 30,
2021
$
$
3,772,000
3,578,000
-
189,000
7,539,000
$
$
2,848,000
3,404,000
11,000
86,000
6,349,000
In assessing the recoverability of deferred tax assets other than deferred tax assets resulting from the initial
recognition of assets and liabilities that do not affect accounting or taxable profit, management considers whether
it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income during the periods in which
those temporary differences become deductible.
Deductible temporary differences, unused tax losses and unused tax credits:
June 30,
2022
June 30,
2021
Expiry date
Range
Non-capital losses
Exploration and evaluation assets
Share issue costs
Other
$
14,255,000 $
14,052,000
1,000
1,233,000
See below
10,623,000
13,382,000 Not applicable
2041 to 2045
40,000
479,000 Not applicable
Page 33
Mirasol Resources Ltd.
Notes to the Consolidated Financial Statements
For the Years Ended June 30, 2022, and 2021
(Expressed in Canadian Funds, except where indicated)
16. Income Taxes (Cont’d…)
The Company has non-capital loss carry-forwards of approximately $14,255,000 that may be available for tax
purposes. The loss carry-forwards are principally in respect of Canadian, Argentine and Chilean operations and
expire as follows:
2023
2024
2025
2026
2027
2037 to 2042
No-expiry
17. Commitment
$
Canada
Argentina
- $
-
-
-
-
10,427,000
-
1,000 $
14,000
196,000
3,078,000
2,000
-
-
$
10,427,000 $
3,291,000 $
Chile
-
-
-
-
-
-
538,000
538,000
On February 6, 2019, the Company signed a lease for its head office located at 1150 - 355 Burrard Street,
Vancouver, British Columbia, effective May 1, 2019, to April 30, 2025. The Company has made a security deposit
of $20,000. On March 15, 2022, the Company signed a license agreement to share the office space with a
Company related virtue of certain directors in common, covering the period April 1, 2022, to April 30, 2025.
18. Sale of Subsidiaries
On January 7, 2021, the Company sold its wholly-owned subsidiaries, La Curva Exploraciones SA (“La Curva”)
and Oroaustral Exploraciones SA (“Oroasutral”) (the “Subsidiaries”). The sale transaction was effected pursuant
to an Agreement for Purchase dated December 29, 2020, by and between the Company and arm’s length third
parties (“Purchasers”), as buyer (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the
Company sold its 100% interest in the Subsidiaries for total consideration of $64,700. The net liabilities of the
Subsidiaries was $1,331 at the date of sale. Accordingly, the Company realized a gain on sale of $66,031 which
has been reflected in the Company’s consolidated statements of loss and comprehensive loss.
Consideration received
Accounts payable
Net assets
Gain on disposal
$
64,700
1,331
1,331
$
66,031
19. Subsequent event
In July 2022, a total of 50,000 stock options of the Company were exercised for gross proceeds of $17,000.
In October 2022, the Company repurchased and cancelled 35,000 common shares, for $13,650 cash
consideration under the NCIB.
Page 34
Management Discussion and Analysis
For Mirasol Resources Ltd.
(“Mirasol” or the “Company”)
INTRODUCTION
The Management Discussion and Analysis (“MD&A”) should be read in conjunction with the
Company’s annual audited consolidated financial statements for the year ended June 30, 2022,
which are publicly available on SEDAR at www.sedar.com. All financial information, unless otherwise
indicated, has been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All dollar amounts
referenced, unless otherwise indicated, are expressed in Canadian funds.
The following discussion of the Company’s financial condition and results of operations should be
read in conjunction with its audited consolidated financial statements and related notes for the year
ended June 30, 2022.
This MD&A is prepared as of October 27, 2022.
COVID-19
In March 2020, the World Health organization declared COVID-19 a global pandemic. This
contagious disease outbreak, which has continued to spread, has adversely affected workforces,
economies and financial markets globally, leading to economic uncertainty.
Since COVID-19 vaccination programs began in early 2021, the Company implemented plans to
minimize the risks of the COVID-19 virus, is following government health protocols and is closely
monitoring the pandemic with local health authorities. The Company’s operations have generally
returned to normal, however, due to the current development of the new COVID-19 variants, it is not
possible for the Company to predict the duration or magnitude of the potential adverse results of the
outbreak and its effects on the Company’s exploration activities and business development
initiatives.
1
FORWARD LOOKING INFORMATION
This MD&A contains certain forward-looking statements and information relating to Mirasol that are
based on the beliefs of its management as well as assumptions made by and information currently
available to the Company. When used in this document, the words “anticipate”, “believe”, “estimate”,
“expect” and similar expressions, as they relate to Mirasol or its management, are intended to identify
forward-looking statements.
This MD&A may use the terms “Inferred Resource”, “Indicated Resource”, “Measured Resource” and
“Mineral Resource”. The Company advises that these terms are recognized by and defined in
Canadian securities regulations (under National Instrument 43-101 “Standards of Disclosure for
Mineral Projects”). Investors are cautioned not to assume that any part of or all, of the mineral
occurrences in these categories will ever be converted into reserves.
This MD&A contains forward-looking statements relating to, among other things, the Company’s
goals and plans going forward, regulatory compliance, the sufficiency of current working capital, and
the estimated cost and availability of funding for the continued exploration and development of the
Company’s exploration properties. Such statements reflect the current views of Mirasol with respect
to future events and are subject to certain risks, uncertainties and assumptions. The material factors
and assumptions used to develop forward-looking information include, but are not limited to, the
future prices of gold, silver and copper, success of exploration activities, permitting time lines,
currency exchange rate fluctuations, government regulation affecting mining operations and policies
linked to pandemics, social and environmental risks, the estimation of mineral resources, capital
expenditures, costs and timing of the development of new discoveries, unanticipated reclamation
expenses, title disputes or claims and limitations on insurance coverage, continued availability of
capital and financing, and general economic, market or business conditions.
Forward looking statements are based on the beliefs, estimates and opinions of the Company’s
management on the date the statements are made. The Company undertakes no obligation to
update these forward-looking statements in the event that management’s beliefs, estimates or
opinions, or other factors, should change, except as may be required by applicable law.
Tim Heenan (MAIG), President for the Company, and a “Qualified Person” under National Instrument
43-101 (“NI 43-101”), has reviewed and approved the scientific and technical information in this
MD&A. This technical information was prepared by the Qualified Person for the Company at the time
of disclosure.
2
CORPORATE AND STRATEGIC OVERVIEW
Mirasol (TSXV: MRZ) (OTCPK: MRZLF) is a mineral exploration company targeting gold, silver and
copper (“Au”, “Ag” and “Cu”, respectively) deposits, mainly in the Atacama-Puna region of northern
Chile and Argentina, and in the Santa Cruz Province of southern Argentina. Both regions are highly
prospective and host many large-scale precious and base metal mines, operated by some of the
world’s largest mining companies.
Mirasol’s business strategy combines the joint venture funding model with self-funded exploration of
quality projects. This hybrid strategy was developed to accelerate the drill testing of key projects that
potentially host economic discoveries. This year, Mirasol has been advancing three self-funded
projects, Sobek and Inca Gold in Chile, and Sascha-Marcelina in Argentina. In addition, Mirasol has
four active option agreements across Chile and Argentina. Under these option agreements, Mirasol’s
partners are funding all exploration and land holding costs, which allows the Company to focus its
available resources on self-funded exploration and business development opportunities, while
retaining exposure to potentially significant discoveries. The Inca Gold project is subject to an option
agreement where Mirasol is earning into the property owned by Newmont.
Mirasol’s Exploration Focus
Mirasol’s main geographic focus is in the Atacama-Puna region of northern Chile and Argentina and
in Santa Cruz province, southern Argentina, where the Company maintains a high-quality portfolio
of exploration properties with the potential for economic discoveries. This portfolio was assembled
from Mirasol’s project generation activities, which applies innovative, concept-driven geological
techniques combined with follow-up fieldwork.
Chile/Argentina: Atacama – Puna Region
The Company’s portfolio of properties in the Atacama-Puna region is located on a 1,700 km-long
segment of three north-south oriented prolific mineral belts that run through Chile and Argentina.
These belts host many world-class Cu-Au mines and occurrences of differing ages, spanning millions
of years (“Ma”). From youngest to oldest, these belts are:
Miocene to Pliocene (Mio-Pliocene, 23-5 Ma): Targeting high-sulfidation epithermal (“HSE”) Au-Ag
and porphyry Cu-Au-Molybdenum (“Mo”) deposits. In this belt, located to the north of the Maricunga
Belt, Mirasol controls approximately 103,000 ha of granted exploration claims. The Company also
presently holds approximately 30,000 ha of granted exploration claims in the southern part of the
Mio-Pliocene aged Cu belt proximal to the border between Chile and Argentina.
Middle Eocene to Early Oligocene (Eocene-Oligocene 40-28 Ma): Targeting porphyry Cu-Au-Mo
deposits. Mirasol presently holds approximately 21,000 ha of granted exploration claims in this belt.
Paleocene to Early Eocene (Paleocene, 66-53 Ma): Targeting low-intermediate-sulfidation
epithermal Au-Ag and porphyry Cu-Au-Mo deposits. Mirasol presently controls approximately 18,000
ha of granted exploration claims in this belt.
Argentina: Santa Cruz Province
The Company’s project portfolio in Argentina is located in Santa Cruz Province which is within the
Deseado Massif, a 60,000 km2 region of upper-middle Jurassic age volcanics that are recognized
as having a high potential for hosting low- and intermediate-sulfidation epithermal Au-Ag deposits.
Mirasol controls approximately 265,000 ha of exploration and mining claims in the province.
The Company is monitoring the potential impact of the rapid currency devaluation and changing
public policies in Argentina. To date, these issues have not impacted Mirasol’s capacity to operate
and Mirasol continues to receive third-party interest for its projects in both countries.
3
JOINT VENTURE, EXPLORATION AND BUSINESS DEVELOPMENT ACTIVITIES
On March 19, 2020, Mirasol reported the temporary suspension of field activities at its projects in
Chile and Argentina due to the COVID-19 pandemic. In the second half of 2020, the Company
restarted its exploration at the Inca Gold project in Chile and at the Virginia project in Argentina and
has been able to operate successfully and safely in both countries since that time. Health and safety
protocols, which follow local guidelines (provincial in Argentina and national in Chile), have been put
in place to protect the Company’s employees, contractors and the communities surrounding the
projects.
Projects Under Option Agreements
Chile
Coronación Cu-Au Project, Northern Chile (Operated and funded by First Quantum Minerals Ltd.)
On October 7, 2019, Mirasol. announced the signing of a definitive agreement with First Quantum
Minerals (“FQM”) for its 1,200 ha Coronación Cu-Au project, located in northern Chile. FQM was
granted the option to earn an 80% interest in the project over six years, by making annual cash
payments totaling US$875,000, completing at least 10,000m of drilling and delivering a NI 43-101
compliant Prefeasibility Study Report. Following the completion of the 80% earn-in, FQM will have a
one-time option to acquire the remaining 20% interest on terms to be negotiated between the parties
at that time. If this option is not exercised, the parties will form a participating joint venture to further
fund the development of the project.
In July 2021, Mirasol and FQM agreed to extend the timeframe for FQM to complete the committed
3,000m of drilling and the option period by nine months to June 30, 2022, and June 30, 2026,
respectively. In September 2021, FQM made a US$75,000 payment to Mirasol under the option
agreement. To allow further opportunity for engagement with a local community, FQM and Mirasol
agreed in February 2022 to amend the agreement to extend to April 30, 2023, the timeline for the
completion of the drill commitment. In addition, the schedule of cash payments was adjusted with no
payment due in 2022.
Exploration Results
The project is located on a major northwest structural trend associated with several Andean porphyry
Cu deposits. Exploration completed by Mirasol indicates the potential presence of a porphyry/breccia
system intruding a layered Miocene aged volcanic sequence of pyroclastic units subsequently
intruded domes of dacitic composition. Two distinct areas of alteration have been interpreted with
the assistance of Analytical Spectral Device (“ASD”) analysis. The eastern alteration area displays
affinities to a HSE system, with the western area displaying a more typical porphyry deposit style of
alteration. Geochemical rock and soil sampling has also defined a large 600 by 800m Cu-Mo
geochemical anomaly in the western area within an overall 3 by 2.5 km hydrothermal alteration halo
(news release October 17, 2019).
During the last quarter of 2019, FQM completed an initial exploration program that included surface
mapping, geochemical soil and rock chip sampling, IP and Mag magnetic geophysical surveys
(“Mag”) and the collection of rock samples for age-dating. This work has outlined an attractive
porphyry Cu target that displays characteristics similar to other Miocene age porphyry Au-(Cu)
systems in the highly productive Maricunga belt.
4
Rubi Project, Northern Chile (Operated by Mirasol; funded by Mine Discovery Fund)
On October 15, 2020, Mirasol announced a definitive option agreement for its Rubi project in Chile
with Mine Discovery Fund Pty Ltd (“MDF”), a private Australian company.
Mirasol has granted MDF the option to earn an 80% interest in the Project over eight years by funding
and delivering a positive NI 43-101 compliant Prefeasibility Study Report. Following the completion
of an initial committed 2,000m drill program, MDF is required to spend a minimum of US$1 million
per year in exploration expenditures over the term of the agreement. Mirasol serves as the operator
during the option period and collects a management fee.
Following the completion of the 80% earn-in, MDF will have a one-time option to acquire the
remaining 20% interest on terms to be negotiated between the parties. If this option is not exercised,
the parties will form a participating joint venture to further fund the development of the project. If
either party’s interest in the joint venture is diluted to 10% or below, it will convert to a 1.5% NSR
royalty. The non-diluting partner may buy back 0.5% of the NSR royalty for the fair market value as
determined by a qualified independent valuator.
Exploration Results
The 7,543 ha Rubi project is located within the Paleocene age porphyry belt of northern Chile that
hosts a number of significant producing porphyry Cu deposits. The project lies at relatively low
elevation (1,900-2,100m) within 20 km of the El Salvador and Potrerillos porphyry Cu-Mo-Au mines
and has good access to port facilities at Chanaral approximately 80 km to the west.
In November 2021, Mirasol reported on the 1,887m drill program completed at Rubi. Drilling was
focused on the Lithocap and Zafiro targets, with the results supporting the presence of a large and
strong prospective porphyry-style alteration system. Key indicators included the occurrence of
porphyritic daci-andesite intrusive rocks and hydrothermal brecciation, which exhibit strong quartz-
sericite (phyllic) alteration overprinting a relict K-feldspar alteration that host trace fine pyrite-
chalcopyrite-magnetite mineralization. In addition, good ground preparation was observed, which is
critical for ore deposit formation, with strong to locally intense fracturing infilled with late
gypsum/anhydrite and calcite veining. Importantly, assay results confirmed the presence of
anomalous Cu, Mo and locally elevated arsenic (“As”) over substantial intervals of approximately
200m (news release November 8, 2021).
MDF has confirmed their continued commitment to the project. A deep-sensing IP and
magnetotellurics (“MT”) geophysical program is expected to be completed to better delineate the
porphyry Cu target for follow up drilling.
Argentina
Virginia Ag Project, Santa Cruz (Operated by Mirasol; funded by Silver Sands Resources Corp.)
On February 27, 2020, Mirasol announced the signing of a Letter of Intent with Golden Opportunity
Resources Corp., later renamed Silver Sands Resources Corp. (“Silver Sands”) for its Virginia Silver
project in the Santa Cruz Province of Argentina. The Company signed a definitive agreement on May
20, 2020.
Mirasol has granted Silver Sands the option to acquire 100% of the Virginia project over three years
by making annual share issuances, which will total 19.9% of the shares outstanding at the time of
vesting and completing US$6 million in exploration expenditures. Mirasol is the operator of the
project during the option period and receives a management fee.
Upon completion of the option in 2023, Silver Sands will have earned a 100% interest in the project
and Mirasol will retain a 3% NSR royalty, of which 1% can be bought back by Silver Sands for US$2
million.
5
Exploration Results
Mirasol discovered the Virginia Ag deposit in 2009. Virginia hosts a high-grade, intermediate
sulfidation epithermal style mineralization hosted in a series of prominent outcropping vein-breccias
associated with a rhyolitic volcanic flow dome field. From 2010 to 2012, Mirasol completed a series
of drill programs for 23,318m of diamond drilling in 223 holes, designed to test the potential of the
mineralized structures to a maximum depth of 266m to establish a resource. In 2016 the Company
filed of an amended NI 43-101 Resource Estimate defining seven outcropping bodies of high-grade
Ag mineralization, constrained1 within conceptual pits, with an indicated mineral resource of 11.9
million ounces of Ag at 310 g/t Ag and a further inferred mineral resource of 3.1 million ounces of Ag
at 207 g/t Ag (see amended NI 43 -101 technical report titled “Amended Technical Report, Virginia
Project, Santa Cruz Province, Argentina - Initial Silver Mineral Resource Estimate” prepared by D.
Earnest and M. Lechner and filed on SEDAR on February 29, 2016).
Later that year, Mirasol reported that preliminary prospecting of new claims had identified quartz vein
and vein-breccia rock float scattered along a two km trend. With a strong belief in the exploration
potential of the Virginia district, Mirasol further expanded its property holdings in 2017 with an extra
27,017 ha of claims to the south of the limit of the previous drilling. In May 2018, Ag assay results
were reported from the additional prospecting of three new target areas, suggesting the potential for
unrecognized, shallow soil-covered, high-grade mineralization that would potentially expand the
Virginia deposit (news release May 10, 2018).
In October 2020, the Company announced the start of the first phase 2,500m partner-funded drill
program designed to expand the resource by testing both gaps in and extensions to the principal
veins as previously defined at Naty Extension, Ely Central, Martina and Magi veins, as well as newly
identified structures at the Margarita, Patricia and Daniela veins. The drill targets were located to the
north, south and east of the current Virginia deposit and represented high-potential drill-ready zones
within the overall extensive vein field (news release October 29, 2020).
In Q1 2021 Mirasol reported the results from the 2,831m Phase I exploration program completed in
calendar Q4 2020. The drill holes completed at Martina, Julia South and Ely Central showed the
potential for significant new mineralization outside of the current deposit (news release January 21,
2021 and February 23, 2021). Notable intersects from the Phase I drill program include:
• Martina: 33.5m at 198.51 g/t Ag, including 17.7m at 316 g/t Ag
• Ely Central: 9.25m at 233.54 g/t Ag, including 4.5m at 441.71 g/t Ag
• Julia South: 8.50m at 123.43 g/t Ag, including 3.90m at 168.34 g/t Ag
• Martina SE: 16.05m at 63.97 g/t Ag including 0.90m at 352.32 g/t Ag
In May 2021, Mirasol reported results from the Phase II drill program, which comprised 20 diamond
drill holes (3,104m) bringing the total holes drilled to 38 (5,935m). A new high-grade zone was
discovered at Ely Central, where drilling has intersected strong and continuous Ag grades in four drill
holes over a 200m strike length. Mineralization at Ely Central remained open to expansion both
laterally to the north and south, and also to depth. In addition, significant intercepts were encountered
at the Ely North, Martina Northwest and Julia South targets, confirming the potential for new
mineralized zones at the project (news release May 17, 2021).
1 The Qualified Persons responsible for this amended Technical Report were commissioned by Mirasol
Resources Ltd. to review all geologic, geochemical, geophysical, surface trenching, diamond drill core
sampling and metallurgical recovery data pertaining to the Virginia Project for the purpose of completing a
Mineral Resource estimate in accordance with the guidelines of the Canadian Institute of Mining and Metallurgy
(CIMM). For calculating conceptual pits, a Ag price of US$20 per ounce was used. Sensitivity analyses by the
Qualified Persons indicate that the Mineral Resources are not particularly sensitive to operating costs or Ag
price fluctuations. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic
viability.
6
Highlighted intercepts from the Phase II program at Ely Central include:
• 9.98m at 560 g/t Ag, including 2.87m at 1,578 g/t Ag
• 9.60m at 639 g/t Ag
• 10.80m at 625 g/t Ag, including 5.70m at 1,110 g/t Ag
The results from Phase I and II exploration programs, which included drilling, mechanical trenching,
sampling and geophysical surveys, were reviewed for planning the 2,700m Phase III program which
was completed in Q4 2021.
Phase III of the exploration program comprised of 20 drill holes completed at Virginia and the Santa
Rita Prospect, located in the north of the property package. At the main Virginia vein field, high-grade
mineralization was discovered on the Margarita vein trend in a single diamond drill hole intersecting
2.63m at 1,456 g/t Ag. This hole was collared to follow up on elevated Ag results in trenches and
float-block sampling on surface and represents the first mineralized interval from this new target.
This intercept confirms the prospectivity of the Margarita target and opens up a new mineralized
trend to be aggressively explored along strike and at depth (news release February 1, 2022).
At the Martina Northwest target, two holes were collared to test the depth extent of the mineralized
polymictic hydrothermal breccia structure that was previously drilled. A drill hole was targeted at the
Martina Northwest structure at 107m below surface and intercepted the same breccia structure.
Unfortunately, core recuperation in this drill hole was poor within the mineralized zone (<50%).
However, a second drill hole completed at a shallower dip successfully intersected 4.75m at 242 g/t
Ag, including 2.45m at 404 g/t Ag, 68m vertically below surface. The results from Martina Norhtwest
are very encouraging as these new intersections support the potential to increase the mineral
resource along this trend.
At Ely, continued drilling returned a broad interval of 33.8m at 88 g/t Ag from 71.3m which
successfully closes the gap between the mineralized structure delineated previously at Ely Central
and Ely North. In addition, Au mineralization was intercepted with hole EC-DDH-007 which returned
4.55m at 0.33 g/t Au and 30 g/t Ag from 173.65m (including 1.2m at 0.63 g/t Au and 26 g/t Ag). The
presence of this Au pulse may indicate the introduction of a stronger and more consistent gold-rich
pulse in the deeper parts of the Virginia vein system that could potentially add significant Au credits
to the project (news release January 25, 2022).
At Santa Rita Central and East, the maiden drilling intercepted encouraging Au and Ag mineralization
confirming that the structures mapped and sampled on surface extend to depth, providing vectors
for further deeper drilling. The Santa Rita prospects have low sulfidation epithermal mineralization
signatures characterized by elevated Au values compared to those returned from the main silver-
rich Virginia vein field. The best results were obtained at Santa Rita East where two drill holes
collared 50m apart returned 5.65m at 0.68 g/t Au from 35.65m, including 1.35m at 1.87 g/t Au and
5.20m at 0.63 g/t Au and 7 g/t Ag from 35.30m (news release February 10, 2022).
In April 2022, Mirasol announced the start of the Phase IV diamond drill program, This program
targeted key prospective zones at Ely Central and North, Margarita and Martina to test gaps and
potential extensions along these trends. In addition, scout holes were completed at the Patricia and
Daniela targets to test below high-grade Ag samples collected on surface and in trenches, and one
hole was also completed at the northern most Santa Rita East prospect (news release April 6, 2022).
Phase IV of the exploration program included a 12-holes, 1,362-meter campaign (news release July
21, 2022). The drilling was designed to extend mineralization outside the existing Virginia resource
by continuing to test the gaps along the main vein structures at Ely and Martina and to define new
mineralization at the Margarita trend. Previously untested, outlying targets approximately 1.5 km to
the north of the main trend, Patricia and Daniela were also drilled during this campaign.
At the Margarita high-grade silver trend, three drill holes successfully extended the mineralized vein
by more than 150 meters to the north-west. The system remains open in both directions. The
Margarita Vein has similar mineralization to the Julia Vein which hosts most of the current silver
7
resources at Virginia. Margarita hole MR-DDH-004 returned 4.85 meters at 720 g/t Ag, including a
discreet intercept of 0.30 meters at 1,775 g/t Ag, exhibiting a strongly banded epithermal vein with
fine-grained sulphides and copper oxides.
At Ely Central three holes were drilled for a total of 261 meters testing the gaps within the 500-meter-
long trend. This newly identified silver-rich vein trend outcrops on surface and has been drilled to
100 meters vertically below surface and remains open to depth. Notable intersections from the Ely
Central drill holes include EC-DDH-011 returning 11.95m at 124 g/t Ag, including 1.8m at 192 g/t Ag.
One drill hole tested the northern extension of the 200-meter-long anomalous southern end of Ely
North vein, which is not currently part of the Ely North conceptual resource pit. The hole intercepted
the vein 100 meters vertically below surface returning 5.65 meters at 144.5 g/t Ag, including 0.6
meters at 418 g/t Ag, extending the trend 50 meters to the north. Further infill drilling is required to
test the remaining gaps along the Ely Trend. This could potentially connect the Ely Central, Ely
South and Ely North conceptual resource pits.
Two new holes were drilled at the Martina vein trend. Martina Central drill hole MC-DDH-002 was
designed to start testing the gap between the Martina Central and northwest trends and returned Ag
intersections of 2.9m at 127 g/t Ag, including 1.45m at 179.5 g/t Ag. Gaps still remain along the
Martina structure with the potential for Ag grades to be associated with the notable high chargeability
responses. Hole MNW-DDH-0064 (8m at 91 g/t Ag) filled the gap in the Martina Northwest and
extended the mineralization along this 200-meter-long trend.
One drill hole tested each the Daniela and the Patricia Veins, located approximately 1.5 km to the
north of the Ely North Resource conceptual pit. Both of these veins were untested targets hosting
the highest-grade surface rock-chip Ag samples. The objective of these holes was to test for downdip
extensions of the surface expressions. The Patricia drill hole PA-DDH-001 intersected 1.45 meters
at 120 g/t Ag, including 0.5 meters at 198.5 g/t Ag, and another parallel structure with 2.95 meters
at 95.7 g/t Ag, including 0.35 meters at 163 g/t Ag. These modest drill results did not replicate the
extremely high-grade rock chips from near source float block samples (over 29,000 g/t Ag and 18,800
g/t Ag) from surface. Follow up drilling along strike will be required to understand the significance of
these intersections.
Subsequent drilling is planned for Q1 2023 to continue to delineate new potential Ag resources at
Virginia, with the intention to complete an Updated Resource Estimate prior to the end of 2023.
Homenaje Au/Ag Project, Santa Cruz (Operated and funded by Patagonia Gold Corp.)
On April 19, 2021, Mirasol announced the signing of a binding agreement with Patagonia Gold Corp.
(“Patagonia”) for the Homenaje project. Mirasol granted Patagonia the option to earn a 75% interest
in the project over six years by delivering, by the end of the option period, a positive Prefeasibility
Study (as defined by NI 43-101) for a resource of no less than 300,000 oz of Au equivalent. In
addition, Patagonia must complete a minimum of US$2.55 million in staged exploration
expenditures.
Upon completion of the option, Mirasol and Patagonia will hold a 25% and 75% interest, respectively,
in a participating joint venture that will hold the project. If either party’s equity interest is diluted below
10%, it will convert to a 2% NSR royalty.
The exploration activities at Homenaje by Patagonia Gold have been temporarily put on hold while
the companies seek clarification from the Santa Cruz provincial authorities to determine the
significance of potentially sensitive archaeological sites recently encountered on the property. The
companies are currently awaiting clear and definitive guidance from provincial authorities on the
protective measures required to resume exploration activities.
8
Exploration Results
Exploration to date has been limited to outcropping erosional windows, as more than 90% of the
project area is covered by thin post-mineral rocks, including Tertiary plateau basalt and gravels. In
these erosional windows, Middle to Upper Jurassic tuffs assigned to La Matilde Formation are
exposed and host localized hydrothermal breccias, veinlets and stockworks of chalcedonic quartz.
Analysis and interpretation of outcropping alteration and mineralization, together with the structural
setting, magnetics and chargeability/resistivity gradient array responses over areas of cover and
outcrop have defined four northwest trending prospective structural trends, with similar geologic
characteristics to those of the adjacent to Pan American Silver’s COSE and Patagonia Gold’s Cap
Oeste mineralized deposits.
Initial rock chip sampling of mineralized structures that discontinuously outcrop in a northwest
trending corridor, identified in an area of 1,500m x 800m that returned anomalous Au, Ag, As, Sb,
Mo, Cu and Pb. Geochemically anomalous samples comprise altered tuff with thin chalcedony
veinlets (news release December 30, 2020).
Patagonia is seeking the required environmental permits to advance exploration. Once granted, it
will complete detailed geological mapping, channel geochemical sampling across exposed
structures, ground magnetics and IP geophysics surveys over priority targets, in order to define drill
targets.
Projects Operated and Funded by Mirasol
Chile
Sobek Cu Project, Northern Chile
In November 2021, Mirasol introduced the Sobek Cu project (“Sobek”). Sobek was staked by Mirasol
prior to 2021 based on prospective local structural architecture hosted within a highly prospective
and productive geological terrain. An important north-northeast trending mineralized structural
corridor encapsulates a large part of the Sobek package and this corridor is crosscut by a series of
north-northwest trending deep seated trans-cordilleran lineaments evident through the entire
property. In addition, the tenure is host to prospective Miocene/Pliocene aged geological units and
intriguing satellite image ASTER alteration responses.
The Sobek land position was expanded in 2021 and 2022 following significant results reported by
Filo Mining Corp. from its Filo del Sol project located 7 km to the east of Sobek, which included a
remarkable intercept of 858m at 1.80% CuEq (including 163m at 5.43% CuEq)2. A new mineralized
district is developing in the Sobek area with multiple deposits located in close proximity, including
the Josemaria and Los Helados porphyry Cu-Au deposits located 10 km east-northeast and 20 km
north of Sobek, respectively. Mirasol controls 11,120 ha of exploration claims in this district in three
blocks, the North, Central and South blocks, that are all on the Chilean side of the border with
Argentina.
In February 2022, Mirasol reported that agreements had been secured with local communities and
landowners to access 100% of the Sobek tenure. An extensive field campaign has been completed
to evaluate the principal prospects across the entire property package. This field campaign was
designed to assess the potential for porphyry Cu-Au and epithermal Au-Ag mineralization with
geochemical sampling and detailed geological mapping over priority targets (news release February
28, 2022).
This program followed up on a high resolution 2,690 line-km helicopter-supported airborne Mag
survey completed in mid-2021. The Mag survey detected multiple highly prospective geophysical
2 Filo Mining Corp. – 05/13/2021 Press Release
9
magnetic targets across the entire Sobek property package. This has improved understanding of the
structural architecture of the property and formed an important base for the ongoing field exploration
at Sobek (news release November 4, 2021).
The maiden field campaign in the Sobek Central Block confirmed the presence of a volcanic complex
hosting rhyodacitic and andesite volcanics underlain and flanked by igneous intrusive rocks of dioritic
composition. These igneous intrusive rocks host localized zones of strong hydraulic “crackle
brecciation” with a gypsum matrix infill, disseminated magnetite/tourmaline and FeOx veinlets. Within
the high topographic elevation levels, significant and widespread areas of strong argillic clay
alteration have been identified, which were further evaluated during the most recent campaign and
will be one of the main areas of focus for this season’s exploration campaigns. All of these geologic
features are considered promising and support the exploration model for Sobek.
At the Sobek South Block, a scouting campaign identified a large hypabyssal dacitic dome complex
emplaced within the older Paleocene-aged granitic to granodioritic host rocks. The margins of this
dome commonly display autobrecciation textures and host low temperature silicification and
argillized alteration halos. Initial observations suggest these domes occupy a large part of the South
Block. The eastern part of this block also hosts a very attractive magnetic low (magnetite destruction)
anomaly which sits between the eastern dome edge and the Argentine border. These peripheral
areas of the dome are considered highly prospective and will be further evaluated.
The Sobek North Block, which was recently expanded and now encompasses 6,961 ha, was also
evaluated during the most recent campaign. Several compelling Mag anomalies exist within this
block, including both magnetic highs and lows, which were one of the areas of focus.
Results of the most recent field campaign are pending. Mirasol is planning and aggressive
exploration campaign this season (October 2022 thru April 2023) which will include additional
prospecting, geological mapping, detailed soil geochemical sampling, geophysics (both ground mag
and IP) to aid in drill targeting.
Inca Gold Au-Ag Project, Northern Chile
In early 2020 Mirasol announced the signing of an option agreement with subsidiaries of Newmont
Mining Corporation (“NEM”) to acquire the Inca Gold project in northern Chile (news release January
13, 2020). Mirasol was granted the option to earn 100% of the project over five years, subject to a
1.5% NSR royalty, by drilling 1,000m over two years and incurring US$3 million in exploration
expenditures over five years. Mirasol may terminate the agreement at any time after the completion
of the initial 1,000m drilling commitment (news release January 13, 2020).
Upon completion of this option, NEM will have the right to earn back 70% of the project in two stages.
In stage 1, NEM will have to make a cash payment of US$3 million to Mirasol and fund $6 million in
exploration over three years. In stage 2, NEM will have to deliver a NI 43-101 compliant Prefeasibility
Study on a resource of no less than two million ounces of Au equivalent using agreed upon cut-off
grades or incur an additional US$21 million in exploration expenditures over six years. If NEM
completes stage 1 but not stage 2, Mirasol will retain 100% of the project and NEM will be granted
an additional 0.5% NSR royalty, which may be bought back by Mirasol at fair market value.
Exploration Results
The 16,300 ha Inca Gold project is located in Region III of Chile approximately 100 km north of
Copiapo, and within the Inca Del Oro mining district that hosts both Santiago Metals Delirio Cu-Au
mine and PanAust/Codelco’s Inca de Oro porphyry Cu-Au deposit. Inca Gold lies between 2,000 to
3,000m ASL and has good access allowing for year-round exploration.
Local geology on the southern portion of the project is characterized by a thick volcanic-sedimentary
sequence consisting of ignimbrites, lava flows, and volcanic breccias. The northern portion consists
of an older sequence of intensely folded and faulted ignimbrites and volcanic breccias. These two
geologic domains are separated by a regional NE lineament mostly covered by Atacama gravels.
10
Mirasol’s initial exploration at the Sandra prospect defined five Ag-Au prospects. In addition, the
Company had staked an additional 2,400 ha of exploration claims directly to the south of the Sandra
target to cover prospective ground, although initial prospection did not lead to any new areas of
significant interest being detected.
Following the approval of the Company’s environmental report in early 2021, a 1,714m Phase I drill
program was completed at the Sandra prospect. A total of eight diamond holes were drilled on three
separate targets to test for mineralization below outcropping quartz veins. In general, low-grade Au
and Ag were encountered over narrow (0.5 to 1m) widths. The highest values returned were from
hole IG-DD-004 that intercepted 0.27 g/t Au and 47.8 g/t Ag over 0.5m (see news release June 30,
2021). No further work is planned at the Sandra prospect. Following the completion of the maiden
drill program at Sandra, the Company met the minimum drilling commitment and exploration
expenditures required for the first two years under the option agreement with NEM, and now has
until January 2023 to evaluate the other prospects at Inca Gold.
Two additional prospects, Vania North and Vania South, host separate porphyry/IOCG and/or High-
Sulfidation Epithermal (HSE) targets concealed under transported alluvial/colluvial cover in a very
attractive structural architectural setting. Vania North and South are set within a strong north-
northeast structural corridor which hosts the Inca del Oro porphyry (located 12 km to the southwest)
and the expansive El Salvador mining district (some 50 km to the north). In addition, the Delirio Cu
mine, owned and operated by Santiago Metals, is located 4 km to the west which mines Cu-in-
tourmaline hydrothermal breccias, within an area characterised by abundant historical alluvial Au
workings.
Vania North
Vania North is characterized by several distinct, coincident geochemical and geophysical anomalies
cradled within an attractive structural intersection. A recent Electrical IP Pole-Dipole survey over the
geochemical anomalies has successfully detected compelling coincident IP anomalies. Vania North
is considered a high-quality drill target (news release September 7, 2022).
A strong coherent geochemical Au anomaly was originally identified using Newmont`s proprietary
Deep Sensing Geochemical (DSG) sampling system at Vania North. The DGS system detects
concealed anomalies under transported material by using a highly technical and effective sampling
and analysis procedure, in conjunction with detailed regolith mapping. Coincident with the DGS Au
anomaly is a strong annular geochemical halo of pathfinder elements (Hg, Nb, Cd, Ag, Mo, Ni, As)
within magnetic depletion zone interpreted to be controlled by the intersection of northwest and
northeast trending structural lineaments.
Mirasol’s subsequent reprocessing and reinterpretation of the Newmont magnetic data clearly
delineates a prominent northeast-southwest trend of magnetic depletion, coincident within a long,
shallow topographic valley. The magnetic depletion and low resistivity, identified from the recent IP
survey, suggests that the rocks along this trend may have been subjected to acid-sulphate leaching
and may contain sections of vuggy silica, which are deemed to be prospective zones for late-stage
mineralizing Au events.
On the western edge of the concealed anomaly, within the outcropping wall rocks at the edge of
cover, alteration is seen in the form of locally hornfelsed rocks hosting Cu mineralization in small
restricted structures.
The recent electrical IP geophysical campaign has highlighted several compelling concealed targets
at Vania North. The geophysical interpretation suggests the potential existence of HSE-type
anomalies, which may represent diatreme and vein-type structures, possibly underlain by a deeper
more porphyry-like geophysical response, which warrants further evaluation, including drilling. Prior
to drilling, which is scheduled to commence in Q1 2023, Mirasol plans to complete infill DSG lines at
Vania North to assist in vectoring into the best areas for the maiden drill program.
11
Vania South
A compelling prospect 3 km south of Vania North, Vania South, was identified by Mirasol through
the reprocessing and reinterpretation of historical Newmont magnetic data. At the Vania South target
a strong, intriguing magnetic high feature is shallowly concealed below transported alluvial
sediments within the southeast corner of the Mag grid, that shows a notably smoother magnetic
texture surrounding the main anomaly. This strong magnetic high anomaly could represent a
concealed Cu/Au porphyry target, with the magnetic high representing the potassic-altered core of a
porphyry system, and the smooth magnetic border representing the envelope of hydrothermal
alteration (news release September 7, 2022).
Mirasol has completed an electrical IP Pole-Dipole survey over the magnetic body described above
to assist in defining drill targets, processing and interpretation is pending. As was completed by
Newmont at Vania North, Mirasol will also complete a new DSG survey at Vania South to test for
geochemical anomalies within the surface regolith cover over the magnetic high feature and also
potential areas of interest on either side to the northwest and southeast.
Both the IP geophysical data and the DSG geochemical data will be compiled and interpreted prior
to the end of 2022 and used to better define drill targets at Vania South.
Altazor Au Project, Northern Chile
In 2017 Mirasol signed an option and farm-in agreement with Newcrest Mining (“NCM”) for the
Altazor project, which was later terminated on August 18, 2021. During the term of this agreement,
NCM spent more than US$3M on the project defining two highly prospective drill-ready targets, which
remain untested by drilling. Due to the prospective nature of these targets and the intention to
aggressively progress the project Mirasol is considering whether to self-fund an initial 2,000m drill
program, or to bring in a funding partner. Engagement with the local community in respect to
exploration plans is progressing.
Exploration Results
Altazor is a HSE Au project covering 33,000 ha located in an underexplored section of the Mio-
Pliocene age mineral belt. Mirasol completed a first-pass of reconnaissance sampling over
approximately 50% of the project area in 2017. These results showed comparable geology, alteration
patterns and Au ppb-level anomalous assays in soil and rock chip samples to those reported from
surface sampling at Gold Fields’ Au-Ag HSE Salares Norte development stage project. Salares Norte
has a geological setting analogous to Altazor and is also located in the Mio-Pliocene mineral belt of
Chile (news release October 11, 2017).
Altazor has favourable infrastructure situated just 20 km south of 345 kV powerlines that follow
International Highway Route 23, a paved road connecting northern Chile and Argentina. In common
with other Mio-Pliocene mines and projects, Altazor is located at high altitude of between 4,000 and
5,200m; however, Altazor has good “drive-up access” via an open valley and a network of easily
passable gravel tracks.
During Mirasol’s initial reconnaissance sampling, a total of 216 stream sediment, 395 soil and 933
rock chip samples were collected and returned significantly anomalous Au, Ag, Cu, Pb, Zn and
epithermal path finder elements, from sampling in the vicinity of mapped breccia bodies (news
release October 11, 2017).
In late 2018, Mirasol reported the results from the 2017/18 exploration program completed under the
exploration agreement with NCM to define targets for drill testing (news release November 12, 2018).
The program included alteration analysis of soils, radiometric age dating,1,035 line-km ground
magnetic geophysical survey, geological mapping, geochemical rock chip sampling over an area of
128 km2, a 2,030-sample low detection limit soil grid covering 85.6 km2 and a 66.9 line-km Controlled-
source Audio-frequency Magnetotellurics (“CSAMT”) resistivity geophysical survey. Integrated
analysis of the combined data sets indicated Altazor to be a district-scale, zoned alteration system
12
preserved at a level that could conceal HSE Au deposits beneath “barren” steam-heated cap rocks
and post mineral cover. This program successfully identified multiple compelling large-scale drill
targets in three principal prospects that have alteration, geochemical and geophysical characteristics
in common with the predrill target signatures of the Salares Norte and Alturas Au HSE discoveries.
During the first half of 2019 fieldwork of the large Altazor alteration system was reinitiated to explore
extensions of the prospects identified in the previous season’s program; to undertake first pass
exploration of new claims staked at the end of last season; and to cover interpreted extensions of
the alteration system. Fieldwork consisted of rock chip and alteration sampling as well as detailed
geologic mapping. The defined, highly prospective drill-ready targets remain to be drill tested.
Mirasol continues to actively engage with the community in the vicinity of Altazor to secure an
exploration agreement for a drilling program. The concerns of the community are being addressed
to achieve a mutually beneficial agreement.
Gorbea Au Project, Northern Chile
The Gorbea project (“Gorbea”) comprises a package of mineral claims totaling 33,000 ha located in
the Mio-Pliocene age mineral belt of northern Chile. The project is located approximately 70 km north
of Gold Fields Salares Norte development stage project, at an altitude of 4,100 to 4,500m ASL, and
is easily accessible by seasonally maintained roads and gravel tracks.
Gorbea was subject to previous joint ventures with Newcrest Mining Limited “Newcrest” that was
terminated in August 2022 and Yamana Gold Inc. (“Yamana”) that was terminated in April 2018.
Under the partnership, Yamana incurred exploration expenditures in excess of US$8 million.
Yamana’s exploration identified a significant body of HSE Au mineralization at the Atlas zone, which
returned a best drill intercept of 114m grading 1.07 g/t Au, including 36m grading 2.49 g/t Au (news
release September 11, 2017). Newcrest invested over US$11.6 million in exploration on the Gorbea
Project, completed nearly 7,500 meters of drilling and made payments of US$600,000 to Mirasol.
Over the last exploration season, in addition to the 2,072 meters of drilling (reported February 28,
2022), Newcrest completed surface exploration, mapping and geochemical sampling on the Project.
Once the latest data has been received and reviewed by Mirasol, all options to continue advancing
exploration at Gorbea will be considered, including the potential to identify new partners.
Exploration Results
The Atlas prospect is centred on a sizable +20 km2 HSE alteration system that hosts multiple Au and
Ag targets. The system exhibits many of the key geological and mineralization features characteristic
of economic systems in the area, such as at the Salares Norte development stage project (Gold
Fields - Reserves: 3.5 Moz Au and 39 Moz Ag3), Alturas advanced stage project (Barrick Gold -
Inferred Resource: 8.9 Moz Au4) and La Coipa mine (Kinross Gold – Reserves: 0.9 Moz Au and 41.7
Moz Ag / Resources: 1.4 Moz Au and 35.3 Moz Ag5), supporting its potential to host large-scale Au
mineralization.
In late 2021, NCM completed five reverse circulation drill holes for 2,072m with two holes at the Atlas
prospect and three holes at the previously untested El Dorado prospect. No meaningful
mineralization was encountered in these holes. To date, thirty-seven drill holes (16,905m) have been
completed at the Atlas prospect by both NCM and Mirasol’s previous partner Yamana.
At Atlas, hole ATLT0011A targeted the extension to the southeast of a silicified polymictic breccia
body outcropping on surface (Apollo Breccia) coinciding with a high-resistivity feature. Although
vuggy silica texture, quartz alunite alteration and pathfinder elements were intersected, the lack of
3 Goldfields Limited - Mineral Resources and Mineral Reserves Supplement to the Integrated Annual Report
2021
4 Barrick Gold Corporation - Mineral Reserves and Mineral Resources in Q4 Report for the year ended
December 31, 2021
5 Kinross Gold Corporation - 2021 Annual Mineral Reserve and Resource Statement
13
Au values indicates a peripheral position to the mineralized centre. Hole ATLT0012 was drilled to
test for potential continuation to the north in the Atlas Central zone. The results limit the potential of
the mineralized body in a northerly direction. However, potential remains to extend the mineralization
to both the east and west to and explore for higher-grade mineralization (news release February 28,
2022).
Notably a potential HSE Au target located to the east-southeast of the Apollo Breccia/Atlas Central
Zone, defined by coincident anomalous zones of multiple pathfinder elements, alunite composition,
high Au values and a high-resistivity anomaly, remains to be drill tested.
At El Dorado, the drill holes targeted a combination of positive features, including a high-resistive
feature, a polymictic breccia body with vuggy silica fragment and a steam-heat zone, all associated
with elevated pathfinder elements. No further work is planned at El Dorado in the near term.
Nord Polymetallic Project, Northern Chile
The Nord project was originally staked by Mirasol as part of its Atacama-Puna generative program
and lies adjacent to the Ciclon-Exploradora polymetallic-epithermal project, which is currently being
advanced to production. The 1,967-ha project is located in Region III of Chile within the Exploradora
District, which lies on the western side of the north-south trending regional scale Domeyko fault zone
and within the world class Eocene-Oligocene porphyry Cu belt.
Control of the Nord project was recently returned to Mirasol and the option agreement signed with
Encantada SpA (“Encantada”), an affiliate of Mineria (news release September 8, 2020) has been
terminated. Encantada was unable to secure financing to advance the project and 100% control was
returned to Mirasol.
Exploration Results
Based on Mirasol’s initial surface exploration, the project has the potential to host two main styles of
mineralization. The first style is characterized by large vein-type mineralization injected into fault
structures hosting polymetallic (Cu, zinc (“Zn”), lead (“Pb”), Ag, Au) mineralization, as seen in the
active small-scale mines located near the northeast corner of the claim boundary and at Mineria’s
Ciclon-Exploradora polymetallic development project, which is located adjacent to the eastern blocks
of the project. While surface geochemistry has returned only low to anomalous precious and base
metal results, Mineria’s understanding will be valuable to define drill targets for potential extensions
or parallel structures to the known mineralization (news release October 31, 2019).
In addition, the project also hosts the potential for porphyry Cu-Au style mineralization. In the central
part of the property a large alteration zone displays patterns of quartz-sericite and advanced argillic
alteration with thin tourmaline veinlets, which are characteristic of some porphyry-style alteration
assemblages.
In the first half of 2021, Encantada completed an initial fieldwork program, which included geological
mapping, geochemistry and geophysical surveys to define targets. A scout diamond drill program
was completed largely on a property controlled by Encantada (Target 1) and adjacent to Nord, with
one initial drill hole completed within the Nord tenure to test a Au-Cu mineralized corridor.
Follow up drilling took place at Nord in October and November 2021 to test the multiple north-
northeast trending mineralized corridors identified on the property. Encantada completed five drill
holes totaling 1,192m on Target 3 in the center of the Nord project. Narrow zones of Zn mineralization
(sphalerite - pyrrhotite) were encountered in the northern holes with higher temperature (garnet-
pyroxene-magnetite) skarn carrying narrow zones of Cu-Au mineralization intercepted in the south.
The skarn and increasing Cu-Au+Mo values may indicate a vector towards a porphyry target to the
southeast.
At Target 2, geological mapping at 1:2,000 and 1:5,000 scale has been completed on a porphyry
prospect interpreted to be of similar Mid Eocene-Oligocene (33-36 Ma) age to the Exploradora
14
complex, which is located 4 km to the northeast. Three porphyry intrusives with potassic (secondary
biotite) alteration, overprinted by strong sericite-clay alteration with local alunite, limonite and Cu
oxides, occur in two elongated 200 x 500m and 150 x 300m zones. Porphyry-type veining includes
early biotite-magnetite (“EB”) veins and scarce A veins along a north-northwest trend near the
contacts of the porphyry with the monzodiorite intrusive host rock. An Induced Polarization (“IP”)
geophysical survey completed over the area has defined a strong and broad chargeability anomaly
from 100-500m depth associated with the altered porphyry intrusions.
New attractive porphyry drill targets have been defined and following evaluation Mirasol will consider
advancing exploration, including drill testing, potentially with the participation of a new partner.
Argentina
Tefnut Prospect – San Juan Porphyry Cu Projects
Tefnut, staked by Mirasol through its project generation program, comprises approximately 4,500
hectares of exploration claims. It is located within the fertile Mio-Pliocene copper-belt in the province
of San Juan, Argentina, which hosts several high-profile advanced projects including Filo del Sol,
Josemaria, Altar, Los Azules and El Pachon. The Company’s preliminary reconnaissance program
of prospecting, high level geological mapping, geochemical sampling and alteration analysis,
successfully defined a large 1.5 by 1.5 kilometres porphyry related phyllic alteration system with
outcropping copper-mineralization (news release June 9, 2022).
Tefnut is located at the intersection of a major orogenic parallel north-south structure and a lesser
defined north-northwest trans-orogenic lineament which is the common structural configuration that
has localized other major deposits and development projects in the province of San Juan. In close
proximity to the west and in Chile, advanced projects such as Novicio, West Wall and Pimenton
represent good analogies for the prospectivity of the immediate area.
Within the large 1.5 x 1.5 kilometre intensely altered phyllic footprint at Tefnut, discrete outcropping
exposures of porphyry-style copper-mineralization occur in the deeply incised creeks. This
mineralization is associated with high-density stockworks of quartz magnetite and fine magnetite
only stringers, within strongly potassic altered (biotite-feldspar-magnetite) intrusive dioritic porphyry
hosting disseminated chalcopyrite and Cu-oxides. Initial grab samples from these mineralized
outcrops have returned 0.14% and 0.19% Cu. In addition, anomalous molybdenum values of 42 ppm
hosted in type B veinlets, with the four highest values (from a population of 15) ranging from 17-42
ppm, were recovered from the overlying rhyolites that exhibit intense phyllic alteration.
These initial geological and geochemical results indicate the presence of an underexplored and
potentially substantive porphyry Cu-Mo system. Potassically altered dioritic intrusive rocks, hosting
disseminated Cu mineralization, are exposed in discrete erosional windows through an extensive
area of phyllic alteration with local remnant advanced argillic altered sections. It is considered that
Tefnut has been eroded to an optimal level for the exploration with the prospective copper
mineralized potassic zone preserved at shallow levels and extending to depth.
Given the encouraging results from the initial reconnaissance campaign, Mirasol is planning to
progress its exploration efforts during the upcoming southern hemisphere exploration season
(October 2022 - April 2023). Detailed grid-based geochemical sampling, geological/structural
mapping and geophysical surveys will be required to advance this new and exciting prospect to a
drill ready stage.
15
Libanesa Au/Ag Project, Santa Cruz
The option agreement on the Libanesa project with Golden Arrow Resources Corporation was
terminated (news release July 21, 2022). Golden Arrow exceeded its contractual minimum
commitment by spending over US$500,000 on exploration (news release dated October 12, 2021).
The exploration program included field mapping, surface sampling, trenching and 1,716 meters of
drilling at the Cerro Plomo/Cerro Rodonda and the Lagunita prospects. Mirasol firmly believes that
quality drill targets remain at Libanesa (Cerro Plomo) and is currently reviewing this data and
evaluating how to best test these remaining targets.
Exploration Results
Libanesa is a 14,500 ha Ag-Au (Pb) project discovered by Mirasol. It is located at the northeastern
margin of the Deseado Massif Au-Ag metallogenic province, approximately 70 km west of the port
of Puerto Deseado, 40 km northwest of the Cerro Moro Au-Ag Mine operated by Yamana Gold and
100 km northeast of the Don Nicolas Au-Ag mine operated by Cerrado Gold.
Libanesa hosts several diversified geological, geochemical and geophysical-supported drill targets.
Cerro Plomo is the principal prospect and is characterized by a well-mineralized Au/Ag hydrothermal
breccia that is exposed at surface and supported by both chargeability and resistivity geophysical
anomalies at depth. Peripheral polymetallic veins at the Libanesa Main prospect represent
secondary targets and are supported by strong base metal and Au mineralization. The Lagunita
prospect is a third prospective zone, which has reported encouraging rock chip Au values from more
typical low sulfidation-type epithermal veins and breccias. This prospect warrants additional surface
exploration to vector into the potentially better mineralized parts of this extensive vein system, where
intermittent vein occurrences, outcropping/sub-cropping through post mineral cover, have been
mapped over a strike length of more than 2.3 km. (see news release June 1st, 2021 for a summary
on previous work completed at Libanesa).
In April 2022, under the option agreement with Golden Arrow a 1,716m maiden drill program at
Libanesa was completed. Drilling was focused at the Cerro Redondo prospect with nine holes being
completed and another two holes completed at the Lagunita targets (news release March 24, 2022).
The drill results are pending.
Sascha – Marcelina Au-Ag Project, Santa Cruz
Mirasol staked the Sascha project in 2003 to secure the 5 km-long Sascha Vein Zone, which was
partially drill-tested while under an exploration agreement with Coeur Mining (“Coeur”) from 2006 to
2009. Coeur terminated the agreement in 2009 and returned 100% of the project to Mirasol.
On January 23, 2019, Mirasol signed an option-to-purchase agreement with a private mining
company for the 5,700 ha Marcelina exploration claims, consolidating the full district under the
Company. The agreement was amended in January 2022 to extend the option period by two years.
Under the amended agreement, Mirasol can acquire 100% of the Marcelina claims by making staged
option payments totalling US$3.75 million (of which $150,000 has been paid) over six years and
granting a 1.5% NSR royalty. Cash payments for US$50,000, US$100,000 and US$ 3.45M are due
in January 2023, 2024 and 2025, respectively.
Following the consolidation of Sascha-Marcelina, Mirasol completed an integrated interpretation of
Mirasol’s district-scale exploration data sets collected prior to 2009. Anomalous rock chip Au-Ag
assays and Aster satellite alteration anomalies define a 16.5 x 4.0 km (65 km2) hydrothermal
“footprint” to the district, showing a large-scale, zoned alteration system characteristic of a sizable
Au-Ag LSE system. Five multi-kilometre-long mineralized vein and silicified breccia trends have been
recognized to date across the consolidated district. The trends traverse the Pellegrini Silica Cap, or
outcrop through post-mineral gravel and basalt cover that surrounds the Silica Cap (news release
January 25, 2019).
16
The geologic and geomorphic setting of the Pellegrini Silica Cap and related silica structures and
veins is analogous to the setting of the Cerro Negro mine operated by Newmont, which is a high-
grade, low-cost, Au-Ag underground mine located approximately 100 km to the north of Sascha-
Marcelina (Proven and Probable Reserves: 2.56 Moz Au and 16.55 Moz Ag / Measured and
Indicated Resource: 0.57 Moz Au and 2.99 Moz Ag / Inferred Resource: 1.66 Moz Au and 9.42 Moz
Ag6).
In the first half of 2019 Mirasol completed additional surface exploration activities on the Sascha-
Marcelina project (news release July 18, 2019), which included geological mapping, detailed rock
chip geochemical sampling, extensive soil grid geochemical sampling (with PXRF sourced
geochemistry) and the acquisition of alteration data using in-house handheld ASD technology on all
the rock chips and soil samples collected. This work has defined a large alteration footprint located
in the immediate vicinity of the Marcelina claims, hosting an epithermal silica vein system with
multiple mineralized trends. Within this area, new prospects have been recognized with the Estancia
Trend and the Igloo Trend, both located in close proximity to an extensive Pellegrini Silica Cap, which
is interpreted as representing the preserved fossil paleosurface of a low sulfidation system.
Mirasol followed up with a total of 40 line-km of IP geophysics surveys completed over the three
principal areas - the Estancia Trend (20.5 line-km), the Pellegrini silica cap (14.2 line-km) and the
Igloo trend (5.35 line-km). Significant chargeability and resistivity anomalies were defined, indicating
the possible presence of sulphides and silica bodies, which could represent zones of hydrothermal
alteration and mineralization at shallow depths. Mirasol incorporated this geophysical data with the
results from the surface exploration to define a series of large-scale drill targets supported by a
prospective geological setting, widespread indications of Au and Ag mineralization, and near surface,
coincident geophysical anomalies (news release April 15, 2021).
A 2,814m drilling program completed in 2021, focused on three prioritized target areas, returned
encouraging results. The Pellegrini Trend drilling defined a broad zone of Au and Ag mineralization
overprinting a younger Pb and Zn rich base metal pulse, that is interpretated to represent the high-
level expression in this epithermal system. Drilling on the Igloo and Estancia Trends also returned a
number of anomalous Au and Ag intercepts and improved the understanding of the local geological
settings, so assisting in vectoring towards higher-grade zones at depth and within a more permissive
stratigraphic horizon in potential follow-up drill programs t (see news release August 9, 2021).
At the Estancia Trend, six holes (1,011m) were completed. Three of these holes located in the
southern part of the prospect (Estancia Sur) returned anomalous Au results. This drilling
demonstrated that Estancia Sur is located in the lower part of the Matilda formation or upper part of
the Chon Aike formation, neither of which are good, competent host rocks for productive fissure
veins. Instead of concentrating mineralization, their physical characteristics allow for wider
intersections of lower grade and dispersed mineralization as illustrated by the results from drill hole
EST-DDH-003 (8.7m at 0.32 g/t Au). However, with focused deeper drilling, it is considered likely
that stronger mineralization could be encountered in the more permissive rock type (mid to lower
Chon Aike formation).
At the Igloo Trend, limited initial drilling intercepted mineralization very similar to that of Estancia Sur,
related to narrow veinlets, zones of pseudo-stockwork and fluidized channels hosting brecciation,
with Au grades up to 0.57 g/t. This mineralization is associated with a pronounced and widespread
“cloud” of pathfinder elements characterised by As, Sb, Hg and Ba. Such zones of anomalous
pathfinder elements typically reside above productive systems in several low sulfidation Au-Ag
epithermal mines and deposits in Santa Cruz and provide a strong vector to depth for stronger
mineralization.
At the Pellegrini Trend, four diamond drill holes were completed within the main target area to test a
structurally controlled IP resistivity anomaly, with an additional two scout holes competed outboard
6 Newmont Corporation - 2/24/2022 Press Release
17
of the main target area that were collared to drill test two other major northwest-trending fault
structures to the west and north, for a combined total of 1,431m.
Holes PEL-DDH-001, PEL-DDH-002 and PEL-DDH-005 at the Pellegini main target area all
encountered, within their upper levels, restricted zones of anomalous mineralization associated with
hydrothermal brecciation. Hole PEL-DDH-005, which was drilled deeper below PEL-DDH-002,
exhibits the best mineralized intersection to date. A wide zone of peripheral crackle brecciation starts
at 170m vertically below surface and continues into an inner core of hydrothermal polymictic
brecciation for a total intercepted width of brecciation >25 m. This inner zone returned an intersection
of 20.4m at 0.24 g/t Au and 39 g/t Ag (58 g/t AgEq7) from 242.5m, including 10.5m at 0.28 g/t Au
and 66 g/t Ag (87 g/t AgEq) from 249m. High Zn and Pb base metal results are also associated with
this brecciated body with 0.82% Pb and 0.7% Zn over the broader 20.4m interval, including 1.3m
with 3.19% Pb and 2.56% Zn.
In late 2021 Mirasol drilled hole PEL-DDH-007 behind and under PEL-DDH-005 to test the depth
and lateral extent of the breccia body previously intercepted. No significant Au or Ag mineralization
was encountered apart from isolated values of 0.4 g/t Au and 140 g/t Ag from narrow veinlet zones.
These veinlets are generally sub-parallel to the core axis and potentially have an antithetic structural
configuration. However, broad Pb and Zn mineralization was intercepted returning:
• 33.9m at 1.3% Pb and 0.5% Zn from 298.6m (250 ppm Pb cut-off)
o
o
including 15.85m at 2.1% Pb and 0.8% Zn from 285.15m (1,000 ppm Pb cut-off)
Including a higher-grade section of 7.2m at 4.1% Pb and 1.4% Zn from 289m (1% Pb cut-off)
Evaluation of the three holes drilled at Pellegrini in the breccia zone (PEL-DDH-002, 005 and 007)
suggests that the mineralized zone may have a west-dipping orientation. A scissor drill hole oriented
from west to east is recommended to better test the potential of the target. Furthermore, it appears
that the three holes have not adequately tested the coincident chargeability/resistivity anomaly
defined from the recent deep penetrating IP geophysics located to the west of holes PEL-DDH-005
and 007 and directly at depth below PEL-DDH-002. The mineralization also appears to decrease in
intensity, most notably in Au/Ag, further to the east, outboard and distal to this remaining untested
central target.
Other Properties
Mirasol holds several additional drill-ready and early-stage exploration properties prospective for Au,
Ag and Cu mineralization in southern Argentina and northern Chile. The Company has also
completed initial field programs to advance a number of early-stage porphyry prospects in the
Argentinian Cordillera. In addition, Mirasol has signed confidentiality agreements, distributed data
sets and conducted field reviews with selected companies with the objective of securing potential
new partnerships for these properties.
In September 2021, Mirasol introduced and reported initial exploration results from its 100% owned
Osiris Cu project (“Osiris”) located within the fertile Miocene belt of Chile which hosts several high-
profile advanced projects such as Altar, Los Azules, El Pachon and the Pelambres Mine. Osiris was
staked by Mirasol and comprises approximately 10,000 ha of exploration claims. Mirasol’s detailed
surface exploration, which included geological mapping, geochemical sampling and alteration
analysis, has defined two drill-ready concealed porphyry Cu-Mo-(Au) targets (Filo Gordito and
Northern Osiris). Mirasol has initiated a search for an exploration partner to advance and drill test
Osiris (news release September 29, 2021).
7 Silver equivalent (“AgEq”) is calculated using metal prices of US$ 1800/oz for Au and US$ 24/oz for Ag. Recoveries
are assumed to be 100% as no metallurgical test data is available. The equation used is: AgEq g/t = Ag g/t + (Au g/t x
75)
18
HIGHLIGHTS FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
FINANCIAL CONDITION
The Company’s cash and cash equivalents was $5,698,539 and working capital $6,234,606 as of
June 30, 2022.
During the year ended June 30, 2022, the Company incurred total company-wide net cash
expenditures of $4,414,666. The financial statements show a total expenditure of $5,089,895 of
which non-cash items such as share-based payments and depreciation totalled $675,229.
For the year ended June 30, 2022, the total net cash expenditure was distributed between head
office corporate spending of $1,172,657, inclusive of officer’s salaries, board fees, business
development, corporate administration, investor relations and regulatory compliance; and a total net
exploration expenditure of $3,242,009 (table 1).
The annual level of spending by the Company is determined by its ability to secure financing through
the sale of its securities, sales of assets and concluding exploration agreements with its industry
partners.
EXPLORATION FINANCIAL SUMMARY
The Company’s total exploration costs include exploration, property retention costs, costs associated
with preparing projects for joint venture, in-country operations and management, and local value
added taxes (“VAT”). For the year ended June 30, 2022, Mirasol invested $1,881,097 on exploration
in Chile and $1,360,912 in Argentina (table 1).
The Company received $3,156,807 in cost recoveries during the year ended June 30, 2022, including
claims fees, salaries of Mirasol employees seconded to the partner-funded programs and other
operating costs that are covered by the partners under the terms of agreements. Mirasol earned
$153,300 of management fee income during the period. The Company also received $343,397 in
option payments from its Coronación and Nord projects (table 1).
CORPORATE MATTERS
On September 15, 2021, the Company announced the appointment of Mr. Timothy C. Moody, B.Sc.
(Hon), to the Board of Directors of the Company. Mr. Moody has over 30 years of experience in the
mining industry, with expertise in mineral exploration, resource assessment, business development
and corporate strategy. The Company also announced the grant of a total of 3,100,000 incentive
stock options to directors, officers, employees, consultants, and contractors. The options are for a
five-year term at an exercise price of $0.34 per share and will vest over a period of three years.
On November 22, 2021, the Company granted a total of 165,000 restricted share units (“RSU’s”) to
certain officers and employees of the Company under the short-term incentive plan approved by the
board.
On November 25, 2021, the Company announced its intention to renew its normal course issuer bid
(the "Bid") to purchase for cancellation, from time to time, as it considers advisable, up to 3,500,000
of its issued and outstanding common shares. The Bid commenced on December 15, 2021, and will
terminate on December 14, 2022, or such earlier time as the Bid is completed or at the option of the
Company.
19
On January 4, 2022, the Company announced the promotion of Ms. Carmen Cazares to Chief Financial
Officer. Ms. Cazares joined Mirasol in 2019 and previously served as the Company’s Corporate
Controller. Ms. Cazares, CPA, CGA, is a member of the Chartered Professional Accountants of British
Columbia and has a broad operational and accounting background with more than 30 years of
experience.
On May 2, 2022, the Company announced the appointment of Mr. Troy Shultz as Vice President Investor
Relations to increase understanding and support for the Company. Mr. Shultz has more than 15 years
of investor relations experience in the mining industry. Mirasol also announced the resignation of
Jonathan Rosset, Vice President Corporate Development to pursue other opportunities.
RESULTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2022 AND 2021
The Company’s net loss for the year ended June 30, 2022 (“2022”) was $5,081,013 or $0.10 per
share compared to a net loss of $5,962,584 or $0.11 per share for the year ended June 30, 2021
(“2021”), a decrease of $881,571.
The decrease in net loss during 2022 is due to a combination of a decrease in exploration
expenditures, administration costs, overhead costs related to the exploration activities, and foreign
exchange loss, and an increase in interest income, investment income, and share-based payments.
The Company’s total loss before other items was $5,089,895 and $5,361,037 for the years ended
June 30, 2022 and 2021, respectively.
The Company recorded interest income of $523,497 from its investments during the year ended
June 30, 2022, compared to $614,748 during the same period in 2021. The Company also recorded
an unrealized loss on its marketable securities of $739,691 compared to $149,586 during the same
period in 2021.
The Company recorded a gain of $249,022 on foreign exchange from conversion of funds during the
year ended June 30, 2022, compared to a loss of $1,075,835 during the year ended June 30, 2021.
Share-based payments increased to $578,477 in 2022 from a recovered amount of $25,968 in 2021.
The recovered amount in 2021 was due to the reversal of previously recognized share-based
payments from options that were cancelled during the period. Depreciation expense decreased to
$96,752 in 2022 from $106,237 in 2021. Both are non-cash items.
Other notable variances include a decrease in net exploration expenditures to $3,242,009 in 2022
as compared to $3,935,809 in 2021 (table 1); a decrease in business development, marketing and
investor relations expenses to $233,053 in 2022 from $276,034 in 2021; a decrease of management
and directors fees to $537,047 in 2022 as compared to $697,144 in 2021; an increase in office
administration, filing fees, and travel expenses to $253,311 in 2022 compared to $234,308 in 2021;
and an increase in professional fees to $149,246 in 2022 compared to $137,473 in 2021 from various
consultants.
Please refer to the Company’s audited consolidated financial statements for a breakdown of the
Company’s general and administration expenses for the years ended June 30, 2022 and 2021.
20
The following table provides changes in exploration expenditures and cost recoveries for the years
ended June 30, 2022, and 2021:
Table 1: Summary of exploration expenditures for the years ended June 30, 2022 and 2021.
Table 1 - Exploration summary
Twelve months Jun 30,
Exploration costs
Exploration costs recovery
Corporate operation costs
Total exploration costs
Option income
Management fees
Net Exploration expenses
Total Chile
Total Argentina
Total Mirasol
2022
1,979,167
(560,681)
806,008
2,224,494
(343,397)
-
1,881,097
2021
2,632,369
2022
3,086,516
2021
4,062,099
2022
5,065,683
2021
6,694,468
(936,080)
(2,596,126)
(1)
(2,832,227)
(3,156,807)
(3,768,307)
856,385
1,023,822
1,066,180
1,829,830
1,922,565
2,552,674
(750,719)
-
1,801,955
1,514,212
-
(153,300)
1,360,912
2,296,052
-
(162,198)
2,133,854
3,738,706
(343,397)
(153,300)
3,242,009
4,848,726
(750,719)
(162,198)
3,935,809
(1) During the year ended June 30, 2022, the Company received USD$1,433,869 from Silver Sands as
part of the option agreement (2021 - $1,742,879). Funds were received in Canada and transferred to
the Company’s subsidiary in Argentina. Once the funds were received in Argentina, the Company used
a mechanism whereby the US funds are used to buy and then sell government bonds denominated in
pesos. The buy and sell of the bond create an implied exchange rate, which diverges significantly
above Argentina’s official fixed exchange rate. Accordingly, a recovery of $2,596,126 has been
recorded under Virginia project in Argentina (2021 - $2,832,227), (note #1 in the breakdown by projects
for Argentina’s exploration and evaluation expenses table).
FOURTH QUARTER ANALYSIS
The Company’s net loss for the three months ended June 30, 2022 (“2022”) was $1,435,174 or $0.03
per share compared to a net loss of $1,824,030 or $0.03 per share for the three months ended June
30, 2021 (“2021”), a decrease of $388,856.
The decrease in net loss during 2022 is due to a combination of a decrease in exploration
expenditures, administration costs, overhead costs related to the exploration activities, and interest
income, and an increase in foreign exchange gain and investment loss, and share-based payments.
The Company’s total loss before other items was $1,343,887 and $2,158,364 for the three months
ended June 30, 2022 and 2021, respectively.
The Company recorded interest income of $81,583 from its investments during the three months
ended June 30, 2022, compared to $522,855 during the same period in 2021. The Company also
recorded an unrealized loss on its marketable securities of $281,157 compared to $130,860 during
the same period in 2021.
The Company recorded a gain of $94,723 on foreign exchange from conversion of funds during the
three months ended June 30, 2022, compared to a loss of $45,166 during the same period in 2021.
Share-based payments increased to $123,771 in 2022 from $16,513 in 2021. Depreciation expense
decreased to $19,195 in 2022 from $27,358 in 2021. Both are non-cash items.
Other notable variances during the three months ended June 30, 2022 include a decrease in net
exploration expenditures to $876,701 in 2022 compared to $1,822,750 during the same period in
2021 (Table 2); an increase in business development, marketing and investor relations expenses to
$84,718 in 2022 from $64,533 in 2021; a decrease of management and directors fees to $129,600
in 2022 as compared to $143,896 in 2021; an increase in office administration, filing fees, and travel
21
expenses to $76,649 in 2022 compared to $52,493 in 2021; and a increase in professional fees to
$33,253 in 2022 compared to $30,281 in 2021 from various consultants.
The following table provides changes in exploration expenditures and cost recoveries for the three
months ended June 30, 2022, compared to the same period in 2021:
Table 2: Summary of exploration expenditures for the three months ended June 30, 2022, and 2021.
Table 2 - Exploration summary
Three months Jun 30,
Exploration costs
Exploration costs recovery
Corporate operation costs
Total exploration costs
Management fees
Net Exploration expenses
Total Chile
Total Argentina
Total Mirasol
2022
308,289
(93,229)
297,781
512,841
-
512,841
2021
809,249
2022
852,644
(894,659)
(781,147)
269,303
183,893
-
183,893
342,745
414,242
(50,382)
363,860
2021
1,287,406
(180,012)
539,341
1,646,735
(7,878)
1,638,857
2022
1,160,933
2021
2,096,655
(874,376)
(1,074,671)
640,526
927,083
(50,382)
876,701
808,644
1,830,628
(7,878)
1,822,750
A breakdown by country and group of projects of the Company’s exploration and evaluation
expenses for the twelve and three months ended June 30, 2022 and 2021:
22
CHILE
Altazor
Camp and general
Contractors and consultants
Exploration costs recovered
Environmental
Mining rights and fees
Travel & accommodation
Gorbea Package
Camp and general
Contractors and consultants
Exploration costs recovered
Mining rights and fees
Option Income
Coronation
Camp and general
Contractors and consultants
Option income
Mining rights and fees
Travel & accommodation
Rubi
Assays and sampling
Camp and general
Contractors and consultants
Exploration costs recovered
Drilling
Environmental
Mining rights and fees
Resource Studies
Travel & accommodation
Nord
Contractors and consultants
Exploration costs recovered
Mining rights and fees
Option income
For the Twelve Months
Ended June 30,
2022
2021
For the Three Months
Ended Jun 30,
2022
2021
11,162
54,318
(91,532)
4,088
83,586
10,656
72,278
-
20,635
(221,626)
296,477
-
95,486
2,411
12,333
(93,615)
31,989
1,801
(45,081)
20,546
18,434
168,187
(181,530)
115,080
8,332
69,409
-
17,936
236,394
5,571
(65,993)
50,556
(249,782)
(259,648)
14,395
32,579
(98,168)
-
159,705
13,762
122,273
159
11,090
(229,986)
263,428
(618,527)
(573,836)
-
6,869
(66,422)
12,870
-
(46,683)
1,792
45,657
152,591
(607,926)
275,644
43,864
68,784
19,581
60,736
60,723
25,438
-
45,815
(65,770)
5,483
-
2,893
-
-
63,041
-
65,934
-
3,755
(221,626)
8,945
-
(208,926)
1,027
4,588
-
4,465
482
10,562
-
-
957
194,390
-
-
47
-
-
195,394
2,076
(65,993)
4,168
-
(59,749)
719
8,967
(98,168)
-
6,042
1,979
(80,461)
-
1,501
(229,986)
20,504
-
(207,981)
-
605
-
7,730
-
8,335
-
37,409
121,675
(566,505)
275,644
14,418
68,506
-
54,186
5,333
716
-
1,950
-
2,666
Total - Properties joint ventured to other companies
99,429
(432,040)
3,215
(272,108)
Chile Pipeline Projects
Assays and sampling
Camp and general
Contractors and consultants
Geophysics
Mining rights and fees
Professional fees
Travel & accommodation
-
-
12,927
117,043
13,817
-
-
143,787
15,905
2,925
45,418
-
19,845
1,400
2,304
87,797
-
-
1,991
117,043
9,486
-
-
128,520
23,187
60,932
252,112
290,475
101,032
1,400
18,680
747,818
23
CHILE (Cont'd…)
Los Amarillos (Brahma)
Contractors and consultants
Drilling preparation
Mining rights and fees
Zeus
Contractors and consultants
Mining rights and fees
Professional fees
For the Twelve Months
Ended June 30,
2022
2021
For the Three Months
Ended Jun 30,
2022
2021
1,673
9,046
34
10,753
315
3,504
-
3,819
5,073
-
13,627
18,700
2,681
20,925
1,612
25,218
1,673
9,046
-
10,719
315
389
-
704
-
-
1,670
1,670
-
2,142
-
2,142
Total - 100% owned properties
762,390
187,705
99,220
132,332
Inca
Assays and sampling
Camp and general
Contractors and consultants
Drilling
Drilling preparation
Environmental
Geophysics
Mining rights and fees
Resource studies
Travel & accommodation
Ladera - Joint Venture
Contractors and consultants
Join Venture Payments
Mining rights and fees
2,454
20,789
31,442
-
1,290
-
102,857
51,248
-
-
210,080
-
-
-
-
50,868
104,587
359,640
343,999
-
10,904
-
50,739
8,580
84,448
1,013,765
7,134
64,398
5,211
76,743
-
12,494
3,125
-
1,290
-
77,794
16,085
-
-
110,788
-
-
-
-
20,081
8,436
31,626
(11,917)
-
4,119
-
1,250
-
(1,452)
52,143
-
-
-
-
Total - Earn-in joint venture on third party projects
210,080
1,090,508
110,788
52,143
Project Generation
Corporate Operation & Management - Chile
3,190
806,008
99,397
856,385
1,837
297,781
2,223
269,303
Total Chile
1,881,097
1,801,955
512,841
183,893
ARGENTINA
Virginia - Joint Venture
Assays and sampling
Camp and general
Contractors and consultants
Drilling
Drilling preparation
Exploration costs recovered (1)
Geophysics
Mining rights and fees
Travel & accommodation
Total - Properties joint ventured to other companies
215,017
770,519
527,057
926,674
11,524
(2,596,126)
770
48,520
39,400
(56,645)
(56,645)
301,829
712,270
449,432
1,199,579
35,658
(2,832,227)
15,893
32,039
43,586
(41,941)
(41,941)
71,008
233,916
141,200
312,442
500
(781,147)
-
16,572
9,723
4,214
4,214
81,328
42,349
33,327
5,187
-
(180,012)
-
9,099
3,935
(4,787)
(4,787)
24
ARGENTINA (Cont'd…)
Argentina Pipeline Projects
Assays and sampling
Camp and general
Contractors and consultants
Environmental
Mining rights and fees
Claudia
Camp and general
Contractors and consultants
Environmental
Mining rights and fees
La Curva
Camp and general
Contractors and consultants
Environmental
Mining rights and fees
Travel & accommodation
Sasha
Contractors and consultants
Mining rights and fees
For the Twelve Months
Ended June 30,
2022
2021
For the Three Months
Ended Jun 30,
2022
2021
5,725
93,333
43,576
2,103
12,209
156,946
-
8,868
13,388
119,496
141,752
8,270
15,396
6,619
22,247
1,376
53,908
709
8,969
9,678
3,685
4,463
24,654
372
13,372
46,546
3,375
1,316
-
116,966
121,657
5,142
792
134
19,234
1,072
26,374
1,128
3,615
4,743
2,700
178
5,483
-
5,216
13,577
-
3,815
-
34,534
38,349
1,303
664
-
5,287
-
7,254
-
2,226
2,226
3,685
4,026
20,344
-
3,393
31,448
-
845
-
31,878
32,723
5,142
760
134
4,551
1,072
11,659
126
628
754
Total - 100% owned properties
362,284
199,320
61,406
76,584
Marcelina - Joint Venture
Assays and sampling
Camp and general
Contractors and consultants
Drilling
Drilling preparation
Environmental
Mining rights and fees
Travel & accommodation
Total - Earn-in joint venture on third party projects
30,414
13,739
62,892
63,341
-
4,580
8,842
943
184,751
184,751
141,967
183,021
111,611
588,869
5,818
2,606
26,479
12,122
1,072,493
1,072,493
-
-
4,504
-
-
-
1,373
-
5,877
5,877
141,967
182,525
88,526
582,139
5,818
-
22,500
12,122
1,035,597
1,035,597
Management Fee Income
Corporate Operation & Management - Argentina
(153,300)
1,023,822
(162,198)
1,066,180
(50,382)
342,745
(7,878)
539,341
Total Argentina
1,360,912
2,133,854
363,860
1,638,857
Total Exploration and Evaluation Costs
3,242,009
3,935,809
876,701
1,822,750
25
SELECTED ANNUAL INFORMATION
Sales
Loss for the year
Loss per share – basic and diluted
Total assets
Total long-term liabilities
2022
$
-
(5,081,013)
(0.10)
8,474,274
(115,048)
2021
$
-
(5,962,584)
(0.11)
13,475,668
(163,642)
2020
$
-
(5,902,479)
(0.11)
19,233,887
(205,043)
Dividends declared
-
-
-
SUMMARY OF QUARTERLY RESULTS
The following table sets out selected unaudited quarterly financial information of the Company and
is derived from unaudited quarterly consolidated financial statements prepared by management in
accordance with IAS 34 and accounting policies consistent with IFRS.
Income (Loss)
from Continued
Operations
$
(1,435,174)
(1,856,893)
(955,790)
(833,156)
(1,824,030)
(1,733,447)
(1,062,288)
(1,342,819)
Basic Income
(Loss) per Share
from Continued
Operations
$
(0.03)
(0.03)
(0.02)
(0.02)
(0.03)
(0.03)
(0.02)
(0.02)
Diluted Income
(Loss) per Share
from Continued
Operations
$
(0.03)
(0.03)
(0.02)
(0.02)
(0.03)
(0.03)
(0.02)
(0.02)
Revenues
$
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Period
4th Quarter 2022
3rd Quarter 2022
2nd Quarter 2022
1st Quarter 2022
4th Quarter 2021
3rd Quarter 2021
2nd Quarter 2021
1st Quarter 2021
The Company’s quarterly results will vary depending on exploration and business development
activities. The Company also grants incentive stock options to its directors, management, employees
and consultants, which cause a variation in the Company’s results.
The movement in the value of the US dollar relative to the Canadian dollar can also have an impact
on the Company’s results from one period to the next as the Company holds its working capital
primarily in US dollars.
INVESTING ACTIVITIES
The Company continued to invest Canadian and US dollars in interest-bearing financial instruments
maturing up to one year. The total amount invested in 2022 was $4,543,650 compared to $7,825,180
in the same period in 2021. Excluding the interest income from the bond premium in Argentina, the
Company received interest income of $10,959 during the year ended June 30, 2022, compared to
$73,998 for the year ended June 30, 2021.
26
CAPITAL RESOURCES AND LIQUIDITY
In order to finance the Company’s exploration programs and to cover administrative and overhead
expenses, the Company primarily raises money through equity sales and from the exercise of
convertible securities (share purchase options and warrants). Many factors influence the Company’s
ability to raise funds, including the health of the resource market, the climate for mineral exploration
investment, the Company’s track record and the experience and calibre of its management.
The Company has no operations that generate cash flow and its long-term financial success is
dependent on management’s ability to discover economically viable mineral deposits. The Company
applies the project generator model where it seeks and presents partners with an option to joint venture
the Company’s projects, in order to have those partners fund the exploration to earn an interest. In
some agreements, the Company receives cash option payments or common stock of the joint venture
partner, as a portion of the partner’s cost to earn an interest. If any of its exploration programs are
successful and the partners complete their earn-ins, the Company would have to provide its share of
ongoing exploration and development costs in order to maintain its interests; and, if not, reduce its
equity interest through a monetization transaction or dilution of its ownership interest or conversion to
a royalty interest. The Company does not anticipate mining revenues from sale of mineral production
in the foreseeable future.
With working capital of approximately $6.2 million on June 30, 2022, the Company has sufficient funds
to conduct its administrative, business development, and discretionary exploration activities over the
next twelve months. Actual funding requirements may vary from those planned due to several factors,
including the Company’s joint venture partners encountering difficulty in financing exploration programs
on optioned properties. The Company further believes it has the ability to raise equity capital to meet
its foreseeable longer-term working capital needs but recognizes that the ability to raise capital in the
future involves risks beyond its control.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no significant off-balance sheet arrangements.
PROPOSED TRANSACTIONS
The Company has no proposed transactions.
TRANSACTIONS WITH RELATED PARTIES
Details of the transactions between the Company’s related parties are disclosed below.
a)
Compensation of key management personnel
Key management personnel include persons having the authority and responsibility for planning,
directing, and controlling the activities of the Company as a whole.
27
The remuneration of management and independent directors was as follows:
Management compensation (i)
Share-based payments (ii)
Director’s fees (iii)
Year Ended June 30,
2022
525,580
392,329
95,550
1,013,459
$
$
2021
317,191
(91,051)
83,815
309,955
$
$
i. Management compensation is included in management fees (2022 - $384,443; 2021 - $62,500) and
in exploration expenditures (2022 – $141,137; 2021 - $254,691) in the Company’s consolidated
statements of loss and comprehensive loss.
ii.
Share-based payments are included in the share-based payments expense in the Company’s
consolidated statements of loss for the years ended June 30, 2022, and 2021.
iii.
The independent directors of the Company are paid $2,100 per month (2021 - $1,785 per month).
b)
Transactions with other related parties
Certain of the Company’s officers and directors render services to the Company as sole proprietors
or through companies in which they are an officer, director, or partner.
The following companies are related parties through association of the Company’s directors and
officers:
Max Pinsky Personal Law Corporation
Chase Management Ltd., a Company owned by Nick DeMare
Manning Lee Management Ltd., a Company owned by Mathew Lee
Nature of transactions
Legal fees
Professional fees
CFO services
The Company incurred the following fees and expenses with related parties as follows:
Legal fees (i)
CFO services (ii)
Years Ended June 30,
2022
80,986
15,000
95,986
2021
96,794
30,000
126,794
$
$
$
$
i.
Legal fees are included in professional fees (2022 - $39,286; 2021 - $54,508) and in business
development (2022 – $41,700; 2021 - $42,100) in the Company’s consolidated statements of loss and
comprehensive loss.
ii. CFO services are included in management fees in the Company’s consolidated statements of loss for
the years ended June 30, 2022, and 2021.
Included in accounts payable and accrued liabilities at June 30, 2022, is an amount of $46,819
(2021 - $40,935) owing to directors and officers of the Company and to companies where the
directors and officers are principals.
28
SIGNIFICANT ACCOUNTING POLICIES
The details of the Company’s accounting policies are presented in Note 3 of the Company’s audited
consolidated financial statements for the year ended June 30, 2022. The following policies are
considered by management to be essential to the understanding of the processes and reasoning
that go into the preparation of the Company’s financial statements and the uncertainties that could
have a bearing on its financial results.
RECENT ACCOUNTING ADOPTION
New accounting standards issued but not yet in effect
Classification of liabilities as current or non-current (Amendments to IAS 1)
The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS
1) which clarified the guidance on whether a liability should be classified as either current or non-
current. The amendments:
(i) Clarify that the classification of liabilities as current or non-current should only be based
on rights that are in place “at the end of the reporting period”;
(ii) Clarify that classification is unaffected by expectations about whether an entity will
exercise its right to defer settlement of a liability; and
(iii) Make clear that settlement includes transfers to the counterparty of cash, equity
instruments, other assets or services that result in extinguishment of the liability.
This amendment is effective for annual periods beginning on or after January 1, 2023. Earlier
application is permitted. The extent of the impact of adoption of this amendment has not yet been
determined.
Insurance contracts IFRS 17
IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a
more uniform measurement and presentation approach for all insurance contracts. These
requirements are designed to achieve the goal of a consistent, principle-based accounting for
insurance contracts.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to make judgments, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities,
profit and expenses. The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances, the results of
which form the basis of making the judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and further periods if the review affects both
current and future periods.
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FINANCIAL INSTRUMENTS
The Company’s financial instruments as at June 30, 2022, consist of cash and cash equivalents,
receivables and advances, marketable securities, accounts payable and accrued liabilities and
advances from joint venture partners. The fair value of all these instruments approximates their
carrying value. There are no off-balance sheet financial instruments.
The Company’s financial instruments are exposed to certain financial risks. The risk exposures and
the impact on the Company's financial instruments are summarized below.
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates.
The Company operates in Canada, Argentina and Chile and a portion of its expenses are incurred
in United States dollars, Australian dollars and in Argentine and Chilean Pesos. A significant change
in the currency exchange rates between the US and Australian dollar relative to the Canadian dollar
and the Argentine and Chilean Peso to the Canadian dollar could have an effect on the Company’s
results of operations, financial position or cash flows. The Company has not hedged its exposure to
currency fluctuations.
The Company appointed a special treasury committee comprising of three board members to
consider management’s recommendations to mitigate the exposure to foreign currency risk. The
committee and management maintain a ratio of 75:20:05 for US$: CAD$: AUD$ of the treasury
whenever practical.
MANAGEMENT OF CAPITAL RISK
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue
as a going concern, to pursue the development of its exploration and evaluation assets and to
maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the
management of capital, the Company includes the components of equity.
The Company manages the capital structure and adjusts it considering changes in economic
conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital
structure, the Company may attempt to issue new shares, acquire, or dispose of assets, enter into
joint ventures or obtain debt financing. To facilitate the management of its capital requirements, the
Company prepares annual and quarterly expenditure budgets that are updated as necessary
depending on various factors, including successful capital deployment and general industry
conditions.
To maximize ongoing development efforts, the Company does not pay dividends.
The Company’s investment policy is to invest its cash in highly liquid short-term interest-bearing
investments with maturities of twelve months or less from the original date of acquisition, selected
with regards to the expected timing of expenditures from continuing operations.
The Company does not invest in commercial paper. The Company is not subject to externally
imposed capital requirements.
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ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE
Additional disclosure concerning the Company’s operating expenses is provided above, and in the
Company’s consolidated statements of loss and comprehensive loss of the audited consolidated
financial statements for the year ended June 30, 2022 that is available on the Company’s website at
www.mirasolresources.com or on its SEDAR company page accessed through www.sedar.com.
OUTSTANDING SHARE DATA
As of the date of this MD&A, the Company had 54,030,043 issued and outstanding common shares.
In addition, the Company has 3,785,000 options outstanding that expire through May 1st, 2027. At
the date of this MD&A, no RSU’s were outstanding.
Details of issued share capital are included in Note 14 of the Company’s audited consolidated
financial statements for the year ended June 30, 2022.
APPROVAL
The Audit Committee of the Company has approved the disclosure contained in this MD&A.
ADDITIONAL INFORMATION
Additional information relating to the Company is available on SEDAR at www.sedar.com and on the
Company’s website at www.mirasolresources.com.
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