MURCHISON MINERALS LTD.
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2024 AND 2023
(Expressed in Canadian Dollars)
Page 1
Independent Auditor’s Report
To the Shareholders of Murchison Minerals Ltd.
Opinion
We have audited the consolidated financial statements of Murchison Minerals Ltd. and its
subsidiary (the “Company”), which comprise the consolidated statements of financial position as
at December 31, 2024 and 2023, and the consolidated statements of loss and comprehensive
loss, consolidated statements of changes in shareholders’ equity and consolidated statements
of cash flows for the years then ended, and notes to the consolidated financial statements,
including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Company as at December 31, 2024 and
2023, and its consolidated financial performance and its consolidated cash flows for the years
then ended in accordance with 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. We have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the consolidated financial statements, which indicates that the
Company incurred a net loss during the year ended December 31, 2024 and, as of that date,
has an accumulated deficit. As stated in Note 1, these events or conditions, along with other
matters as set forth in Note 1, indicate that material uncertainties exist that cast significant doubt
on the Company’s ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
Page 2
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Except for the matter described in the Material uncertainty related to going concern section, we
have determined that there were no additional key audit matters to communicate in our report.
Other information
Management is responsible for the other information. The other information comprises
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 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.
Page 3
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
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 judgement 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 risks 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.
Page 4
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
The engagement partner of the audit resulting in this independent auditor’s report is Jessica Di
Rito.
McGovern Hurley LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Ontario
February 25, 2025
The accompanying notes are an integral part of these consolidated financial statements
- 1 -
MURCHISON MINERALS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian Dollars)
As at December 31,
2024
2023
ASSETS
Current Assets
Cash
$
718,166 $
1,823,972
Amounts receivable and prepaid expenses (Note 6)
71,460
393,495
Total current assets
789,626
2,217,467
Property and equipment (Note 7)
94,713
134,545
Total assets
$
884,339 $
2,352,012
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities (Note 13)
$
37,410 $
91,939
Loan payable (Note 15)
10,578
10,578
Flow-through share premium liability (Note 14)
103,164
82,360
Total current liabilities
151,152
184,877
Loan payable (Note 15)
4,373
13,356
Total liabilities
155,525
198,233
SHAREHOLDERS’ EQUITY
Share capital (Note 9)
43,830,896
43,424,724
Reserves (Notes 10 and 11)
1,981,348
2,188,718
Deficit
(45,083,430)
(43,459,663)
Total shareholders’ equity
728,814
2,153,779
Total liabilities and shareholders’ equity
$
884,339 $
2,352,012
Nature and Continuance of Operations (Note 1)
Commitments and Contingencies (Note 14)
Approved on Behalf of the Board:
"signed"
"signed"
Jean-Charles Potvin
Denis Arsenault
Director
Director
The accompanying notes are an integral part of these consolidated financial statements
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MURCHISON MINERALS LTD.
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in Canadian Dollars)
For the years ended December 31,
2024
2023
EXPENSES
Exploration expenses (Note 8)
$
1,503,975
$
1,495,359
Professional fees
50,113
58,952
Management fees and salaries (Note 13)
233,414
456,715
Office and general
67,295
94,451
Regulatory and transfer agent
20,564
50,703
Investor relations
204,224
407,283
Share-based payments (Notes 11 and 13)
-
177,366
Loss before other income and expenses
2,079,585
2,740,829
Interest income
(25,252)
(47,538)
Other income
(22,830)
(6,750)
Flow-through share premium (Notes 9 and 14)
(104,196)
(97,558)
Loss and comprehensive loss for the year
$
1,927,307 $
2,588,983
Loss per share - basic and diluted
$
0.01
$
0.01
Weighted average number of common shares
outstanding - basic and diluted
263,641,874
228,279,877
MURCHISON MINERALS LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Expressed in Canadian Dollars)
For the years ended December 31, 2024 and 2023
Reserves
Equity settled
share-based
Share
payments
Warrants
Capital
reserve
reserve
Deficit
Total
Balance, December 31, 2022
$ 41,612,477
$ 1,732,899
$
678,890 $ (41,694,180) $
2,330,086
Loss for the year
-
-
-
(2,588,983)
(2,588,983)
Issuance of common shares (net of issue costs) (Note 9)
1,812,247
-
-
-
1,812,247
Issuance of stock options / share-based compensation (Note 11)
-
177,366
-
-
177,366
Issuance of warrants (Note 10)
-
-
423,063
-
423,063
Expiry of warrants (net of issue costs) (Note 10)
-
-
(678,890)
678,890
-
Expiry of stock options (Note 11)
-
(144,610)
-
144,610
-
Balance, December 31, 2023
$ 43,424,724
$ 1,765,655
$
423,063 $ (43,459,663) $
2,153,779
Balance, December 31, 2023
$ 43,424,724
$ 1,765,655
$
423,063 $ (43,459,663) $
2,153,779
Loss for the year
-
-
-
(1,927,307)
(1,927,307)
Issuance of common shares (net of issue costs) (Note 9)
406,172
-
-
-
406,172
Issuance of warrants (net of issue costs) (Note 10)
-
-
96,170
-
96,170
Expiry of stock options (Note 11)
-
(303,540)
-
303,540
-
Balance, December 31, 2024
$ 43,830,896
$ 1,462,115
$
519,233 $ (45,083,430) $
728,814
`
The accompanying notes are an integral part of these consolidated financial statements
- 3 -
The accompanying notes are an integral part of these consolidated financial statements
- 4 -
MURCHISON MINERALS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
For the years ended December 31
2024
2023
CASH (USED IN) PROVIDED BY:
OPERATING ACTIVITIES
Loss for the year
$ (1,927,307) $ (2,588,983)
Share-based payments
-
177,366
Flow-through share premium
(104,196)
(97,558)
Amortization
39,832
49,232
(1,991,671)
(2,459,943)
Net change in non-cash working capital items:
Amounts receivable and prepaid expenses
322,035
477,020
Accounts payable and accrued liabilities
(54,529)
(265,956)
Net cash flows used in operating activities
(1,724,165)
(2,248,879)
FINANCING ACTIVITIES
Issuance of units
687,500
2,537,008
Units issuance costs
(60,158)
(121,780)
Loan repayments
(8,983)
(49,329)
Net cash flows provided by financing activities
618,359
2,365,899
NET CHANGE IN CASH
(1,105,806)
117,020
CASH, BEGINNING OF THE YEAR
1,823,972
1,706,952
CASH, END OF THE YEAR
$
718,166
$ 1,823,972
SUPPLEMENTAL CASH FLOW INFORMATION
Finders’ warrants issued
$
9,100
$
24,573
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 5 -
1.
NATURE AND CONTINUANCE OF OPERATIONS
Murchison Minerals Ltd. (the "Company" or “Murchison”) was incorporated under the Canada Business Corporations Act on
July 25, 2001. The principal business of the Company is the acquisition, exploration and evaluation of mineral property
interests. The primary office is located at 5063 North Service Road, Suite 100, Burlington, Ontario, Canada, L7L 5H6.
The consolidated financial statements were approved by the Board of Directors on February 25, 2025.
The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that planned
exploration and evaluation programs will result in profitable mining operations. The continuance of the Company is dependent
upon completion of the acquisition of the exploration and evaluation properties, the discovery of economically recoverable
reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain
necessary financing to complete the development and future profitable production or, alternatively, upon disposition of such
property at a profit.
Although the Company has taken steps to verify title to its exploration and evaluation properties in accordance with industry
standards for the current stage of exploration of such property, these procedures do not guarantee the Company's title. Property
title may be subject to unregistered prior agreements and noncompliance with regulatory and, environmental requirements. The
Company's assets may also be subject to increases in taxes and royalties, renegotiation of contracts, currency exchange
fluctuations and restrictions and political uncertainty.
As at December 31, 2024, the Company has a cumulative deficit of $45,083,430 (December 31, 2023 - $43,459,663),
continuing losses and is not yet generating positive cash flows from operations. These factors indicate the existence of a
material uncertainty that may cast significant doubt about the Company’s ability to continue its operations as a going concern.
These consolidated financial statements were prepared on a going-concern basis in accordance with International Financial
Reporting Standards ("IFRS"). Funding for operations has been obtained primarily through private share offerings. Future
operations are dependent upon the Company's ability to finance expenditure requirements and upon the achievement of
profitable operations. Management believes it will be successful in raising the necessary funding to continue operations in the
normal course of operations; however, there is no assurance that these funds will be available on terms acceptable to the
Company or at all. These consolidated financial statements do not include adjustments to the amounts and classification of
assets and liabilities that might be necessary should the Company be unable to continue operations. Such adjustments could be
material.
2.
MATERIAL ACCOUNTING POLICIES
Statement of compliance
These consolidated financial statements, including comparatives, have been prepared in accordance with IFRS.
Basis of presentation
These consolidated financial statements have been prepared on a historical cost basis. In addition, these consolidated financial
statements have been prepared using the accrual basis of accounting except for cash flow information.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 6 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Basis of consolidation
Subsidiaries are entities over which the Company has control, where control is defined to exist when the Company is exposed
to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Subsidiaries are fully consolidated from the date control is transferred to the Company, and are de-consolidated from
the date control ceases.
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. All
intercompany transactions, balances, income and expenses are eliminated upon consolidation.
The following companies have been consolidated within these consolidated financial statements:
Company
Registered
Principal activity
Murchison Minerals Ltd.
Ontario, Canada
Parent company
Flemish Gold Corp.
Ontario, Canada
Exploration company
Exploration and evaluation properties
The acquisition costs of exploration and evaluation properties are expensed in the consolidated statements of loss in the period
incurred, as permitted under IFRS 6, Exploration for and Evaluation of Mineral Resources.
The acquisition costs of exploration and evaluation properties include the cash consideration and the estimated fair market
value of share-based payments issued for such property interests.
Exploration costs are expensed in the period incurred. Option payments which are solely at the Company’s discretion are
recorded as acquisition costs as they are made. Administrative expenditures are expensed in the period incurred.
Government grants and assistance
The Company expects to be entitled to a refundable tax credit on qualified mining exploration expenses incurred in the province
of Quebec and to a refundable duties credit for losses, which are estimated and recorded against the exploration and evaluation
expenses to which they relate.
Government grants and assistance are transfers of resources to an entity by government in return for past or future compliance
with certain conditions relating to the operating activities of the entity. Government assistance is action by government designed
to provide an economic benefit that is specific to an entity or range of entities qualifying under certain criteria.
Government grants and assistance are recognized where there is a reasonable assurance that the grants and assistance will be
received, and conditions will be complied with. Government grants and assistance are recognized as an offset to the expenses
to which they relate.
Property and equipment
Property and equipment are carried at cost, less accumulated amortization and accumulated impairment losses.
The cost of an item of property and equipment consists of the purchase price, any costs directly attributable to bringing the
asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing
the item and restoring the site on which it is located. Repairs and maintenance costs are charged to profit or loss during the
period in which they are incurred. An asset's residual value, useful life and amortization method are reviewed, and adjusted if
appropriate, on an annual basis.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 7 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Property and equipment (Continued)
An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the
net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss.
Where an item of property and equipment consists of major components with different useful lives, the components are
accounted for as separate items of property and equipment. Expenditures incurred to replace a component of an item of property
and equipment that is accounted for separately, including major inspection and overhaul expenditures, are capitalized.
Amortization is recognized based on the cost of an item of property and equipment, less its estimated residual value, over its
estimated useful life at the following rates:
Detail
Rate
Method
Exploration equipment
3 years
Straight-line
Computer equipment
5 years
Straight-line
Buildings
20 years
Straight-line
Financial instruments
Financial assets at amortized cost are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, they are measured using the effective interest method, less any impairment losses.
A financial asset is classified as fair value through profit and loss (“FVPL”) if it is classified as held for trading or is designated
as such upon initial recognition. Financial assets are designated as FVPL if the Company manages such investments and makes
purchases and sale decisions based on their fair value in accordance with the Company’s documented risk management or
investment strategy. Realized and unrealized gains and losses are reflected in the consolidated statement of loss. Transaction
costs associated with FVPL financial assets are expensed as incurred, while transaction costs associated with all other financial
assets are included in the initial carrying amount of the asset.
Financial liabilities at amortized cost are recognized initially at fair value net of any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest and
any transaction costs over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial liability or (where appropriate) to the net carrying amount on initial
recognition. Financial liabilities are de-recognized when the obligations are discharged, cancelled or expired.
Impairment of financial assets:
The Company recognizes a loss allowance for expected credit losses on financial assets not reported as FVTPL. The amount
of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the
respective financial instrument. The Company recognizes lifetime ECLs for accounts receivable. The expected credit losses on
these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted
for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate. For all other financial
instruments, the Company recognizes the loss allowance for that financial instrument at an amount equal to 12-month ECLs.
However, when there has been a significant increase in credit risk on these other financial instruments since initial recognition,
lifetime ECLs are recognized.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 8 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Financial instruments (Continued)
Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a
financial instrument. In contrast, 12-month ECLs represents the portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months after the reporting date.
Financial instruments recorded at fair value:
Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value
hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the
following levels:
•
Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
•
Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
There are no financial instruments subsequently recorded at fair value.
Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets with finite lives to
determine whether there is any indication that those assets have suffered an impairment loss. Where such an indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount
is the higher of an asset’s fair value less cost to sell or its value in use. In addition, long-lived assets that are not amortized are
subject to a periodic impairment assessment. The Company evaluates impairment losses for potential reversals when events
or circumstances warrant such consideration.
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at banks, on hand and short-term
money market investments with original maturities of 90 days or less which are readily convertible into a known amount of
cash. The Company’s cash and cash equivalents are invested with major financial institutions in business accounts and are
available on demand by the Company. As at December 31, 2024 and 2023, the Company had no cash equivalents.
Interest income
Interest income is recognized when it is probable that the economic benefits will flow to the Company and the amount of
income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset’s net carrying amount on initial recognition.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 9 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Provisions
A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is
probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be
reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are
lower than the unavoidable cost of meeting its obligations under the contract.
The Company had no material provisions as at December 31, 2024 and 2023.
Share-based payment transactions
The fair value of stock options granted to employees is recognized as an expense over the vesting period with a corresponding
increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes
(direct employee) or provides services similar to those performed by a direct employee, including directors of the Company.
The fair value is measured at the grant date and recognized over the period during which the options vest. The fair value of the
options granted is measured using the Black-Scholes option-pricing model, taking into account the terms and conditions upon
which the options were granted. At each reporting date, the amount recognized as an expense is adjusted to reflect the actual
number of stock options that are expected to vest.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had
not been modified. An additional expense is recognized for any modification which increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.
Unexercised expired and modified stock option values are transferred to deficit.
Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received
in the statement of comprehensive loss. When the value of goods or services received in exchange for the share-based payment
cannot be reliably estimated, the transaction is measured at the fair value of the equity instrument granted.
Income taxes
Income tax on the profit or loss for the periods presented comprises 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 it is recognized in equity.
Current tax expense is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively
enacted at period end, adjusted for amendments to tax payable with regards to previous years.
Deferred tax is for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible
for tax purposes and the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount
of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the financial position reporting date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilized.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 10 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Equity
Share capital, stock options, warrants and broker units are classified as equity. Incremental costs directly attributable to the
issuance of shares, warrants and broker units are recognized as a deduction from equity and allocated between share capital
and warrants. Expired stock options and warrants are transferred to deficit.
Flow-through shares
The Company finances some exploration expenditures through the issuance of flow-through shares. The resource expenditure
deductions for income tax purposes are renounced to investors in accordance with the appropriate income tax legislation. When
the common shares are offered, the difference (“premium”) between the amount recognized in common shares and the amount
the investors pay for the shares is recognized as a flow-through share premium liability which is reversed into the consolidated
statement of loss when the eligible expenditures are incurred. The amount recognized as a flow-through share premium liability
represents the difference between the quoted price of the common shares and the amount the investor pays for the flow-through
shares. The liability is then reduced proportionally as the Company incurs eligible expenditures. The Company indemnifies the
subscribers of flow-through shares for additional taxes payable by the subscribers if the Company does not meet its expenditure
requirements.
Restoration, rehabilitation and environmental obligations
A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental
disturbance is caused by the exploration, development or ongoing production of a property interest. Such costs arising from the
decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized
at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount
rates using a pretax rate that reflects the time value of money are used to calculate the net present value. These costs are charged
against profit or loss over the economic life of the related asset, through amortization using either a unit-of-production or the
straight-line method as appropriate. The related liability is adjusted for each period for the unwinding of the discount rate and
for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the
obligation. Costs for restoration of subsequent site damage that is created on an ongoing basis during production are provided
for at their net present values and charged against profits as extraction progresses.
The Company has no material restoration, rehabilitation and environmental costs as at December 31, 2024 and December 31,
2023 as the disturbance to date is minimal.
Loss per share
The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable
to common shareholders of the Company by the weighted average number of common shares outstanding during the period.
The diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average
number of common shares outstanding for the effects of all warrants, finders’ warrants and stock options outstanding that may
add to the total number of common shares. Diluted loss per share does not include the effect of stock options, warrants and
finders’ warrants as they are anti-dilutive. See Notes 10 and 11.
Warrants
Warrants are recognized at fair value on the date of grant and are measured using the Black-Scholes option pricing model.
Unexercised expired warrants are transferred to deficit.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 11 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Significant accounting judgments and estimates
The preparation of financial statements in conformity with IFRS requires the Company’s management to make judgments,
estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and
related notes to the financial statements. Although these estimates are based on management’s best knowledge of the amounts,
events or actions, actual results may differ from those estimates.
The areas which require management to make significant judgments, estimates and assumptions in determining carrying values
include, but are not limited to:
- Assets’ carrying values and impairment charges
In the determination of carrying values and impairment charges, management looks at the recoverable amount, being the
higher of value in use and fair value less costs to sell in the case of non-financial assets and at objective evidence, significant
or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual
assumptions require that management make a decision based on the best available information at each reporting period.
- Income and other taxes
The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining
the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based
on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding
and other tax liabilities requires interpretation of complex laws and regulations. The Company's interpretation of taxation
law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related
filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will
impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.
- Share-based payments and warrants
Management determines costs for share-based payments and warrants using market-based valuation techniques. The fair
value of the market-based and performance-based non-vested share awards and warrants are determined at the date of grant
using generally accepted valuation techniques. Assumptions are made and judgment is used in applying valuation techniques.
These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future
employee turnover rates and future employee stock option exercise behaviors and corporate performance. Such judgments
and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates. The Company
currently estimates the expected volatility of its common shares based on historical volatility taking into consideration the
expected life of the options and warrants.
- Tax credit receivable
The Tax credit receivable for resources for the current and prior periods are measured at the amount expected to be recovered
from the taxation authorities using the tax rates and tax laws that have been enacted or substantively enacted at the statement
of financial position date. Uncertainties exist with respect to the interpretation of tax regulations, including the mining duties
credit and the tax credit for resources for which certain expenditures could be disallowed by the taxation authorities in the
calculation of credits, and the amount and timing of their collection. The calculation of the Company’s mining duties credit
and tax credit for resources necessarily involves a degree of estimation and judgment in respect of certain items whose tax
treatment cannot be finally determined until a notice of assessments and payments has been received from the relevant
taxation authority. Differences arising between the actual results following the final resolution of some of these items and
the assumptions made. or future changes to such assumptions, could necessitate adjustments to the mining duties credit and
tax credit for resources and the exploration and evaluation expenses in future periods.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 12 -
2.
MATERIAL ACCOUNTING POLICIES (Continued)
Significant accounting judgments and estimates (continued)
- Contingencies
See Note 14.
New and future accounting policies
During the year ended December 31, 2024, the Company adopted a number of amendments and improvements of existing
standards. These included amendments to IAS 1. These new standards and amendments did not have any material impact on
the Company’s consolidated financial statements.
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or
after January 1, 2025. Many are not applicable or do not have a significant impact to the Company and have been excluded.
The Company will adopt these pronouncements as of their effective date and is currently assessing the impacts of adoption.
IFRS 18 – In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting
of financial performance. The new standards replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new
categories and required subtotals in the statement of profit and loss and also requires disclosure of management-defined
performance measures. It also includes new requirements for the location, aggregation and disaggregation of financial
information. The standard is effective for annual reporting periods beginning on or after January 1, 2027, including interim
financial statements. Retrospective application is required and early adoption is permitted.
3.
CAPITAL MANAGEMENT
The Company manages its capital with the following objectives:
•
to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth
opportunities, and pursuit of accretive acquisitions; and
•
to maximize shareholder return through enhancing the share value.
The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its
objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by
issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is
reviewed by management and the Board of Directors on an ongoing basis.
The Company considers its capital to consist of equity, comprising share capital, reserves and deficit which at December 31,
2024 totalled $728,814 (December 31, 2023 - $2,153,779). The Company manages capital through its financial and operational
forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating
expenditures, and other investing and financing activities. The forecast is regularly updated based on its exploration and
development activities. Selected information is regularly provided to the Board of Directors of the Company. The Company’s
capital management objectives, policies and processes have remained unchanged during the years ended December 31, 2024
and 2023. The Company is not subject to any capital requirements imposed by a regulator or lending institution.
4.
FINANCIAL RISK FACTORS
The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest
rate, foreign exchange rate and commodity price risk).
Risk management is carried out by the Company’s management team under policies approved by the Board of Directors. The
Board of Directors also provides regular guidance for overall risk management. There have been no changes in the risks,
objectives, policies and procedures during the years ended December 31, 2024 and 2023.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 13 -
4.
FINANCIAL RISK FACTORS (Continued)
Credit risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company’s credit
risk is primarily attributable to cash balances and amounts receivable. Cash is held with reputable banks, from which
management believes the risk of loss to be remote. Financial instruments included in amounts receivable consist of sales tax
receivable and refundable tax credits from government authorities in Canada. Management believes that the credit risk
concentration with respect to financial instruments included in amounts receivable is remote.
Liquidity risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when
due. As at December 31, 2024, the Company had a cash balance of $718,166 (December 31, 2023 - $1,823,972) to settle
accounts payable, accrued liabilities and loan payable of $52,361 (December 31, 2023 - $115,873). All of the Company’s
financial liabilities generally have contractual maturities of less than 30 days and are subject to normal trade terms, except for
the loan payable as disclosed in Note 15.
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and
commodity prices.
Interest rate risk
The Company has cash balances and no interest-bearing debt other than the loan payable at a fixed interest rate. The Company’s
current policy is to invest excess cash in certificates of deposit or interest bearing accounts at major Canadian chartered banks.
The Company periodically monitors the investments it makes and is satisfied with the creditworthiness of its Canadian chartered
banks. Management believes that interest rate risk is minimal.
Commodity price risk
Commodity price risk could adversely affect the Company. In particular, the Company’s future profitability and viability of
development depends upon the world market price of commodities. Commodity prices have fluctuated widely in recent years.
There is no assurance that, even as commercial quantities of base and/or precious metals may be produced in the future, a
profitable market will exist for them. A decline in the market price of commodities may also require the Company to reduce
its mineral resources, which could have a material and adverse effect on the Company’s value. As at December 31, 2024, the
Company is not a commodities producer. As a result, commodity price risk may affect the completion of future equity
transactions such as equity offerings and the exercise of stock options and warrants. This may also affect the Company’s
liquidity and its ability to meet its ongoing obligations.
Sensitivity analysis
Based on management’s knowledge and experience, the Company believes the following movements are “reasonably possible”
over a one-year period:
(i) Based on cash balances earning interest at December 31, 2024, a 1% change in interest rates would result in a
corresponding interest income change of approximately $7,200 for the one-year period.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 14 -
5.
CATEGORIES OF FINANCIAL INSTRUMENTS
December
December
2024
2023
Financial assets:
Amortized cost
Cash
$
718,166 $
1,823,972
Financial liabilities:
Amortized cost
Accounts payable and accrued liabilities
$
37,410 $
91,939
Loan payable
14,951
23,934
As of December 31, 2024 and December 31, 2023, the fair value of all the Company's current financial instruments
approximates the carrying value, due to their short-term nature.
6.
AMOUNTS RECEIVABLE AND PREPAID EXPENSES
December
December
2024
2023
Sales tax receivable
$
18,621 $
87,250
Tax credits receivable (Note 8)
-
188,118
Prepaid expenses and other receivables
52,839
118,127
$
71,460 $
393,495
7.
PROPERTY AND EQUIPMENT
Computer
Exploration
equipment
Buildings
equipment
Total
COST
Balances, December 31, 2022 and 2023
$
6,602 $
98,866
$
170,954 $
276,422
Additions
-
-
-
-
Balance, December 31, 2024
$
6,602 $
98,866
$
170,954 $
276,422
AMORTIZATION
Balance, December 31, 2022
$
(1,210) $
(7,656)
$
(83,779) $
(92,645)
Additions
(1,320)
(4,940)
(42,972)
(49,232)
Balance, December 31, 2023
$
(2,530) $
(12,596)
$ (126,751) $ (141,877)
Additions
$
(1,320)
(4,940)
(33,572)
(39,832)
Balance, December 31, 2024
$
(3,850) $
(17,536)
$ (160,323) $ (181,709)
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 15 -
7.
PROPERTY AND EQUIPMENT (Continued)
NET BOOK VALUE
Net book value, December 31, 2023
$
4,072
$
86,270
$
44,203
$
134,545
Net book value, December 31, 2024
$
2,752
$
81,330
$
10,631
$
94,713
Exploration equipment with a net book value of $nil as at December 31, 2024 (December 2023 - $5,781) is used as security
for the loan payable described in Note 15.
8.
EXPLORATION AND EVALUATION PROPERTIES
Brabant Lake Property – Saskatchewan
As at December 31, 2024 and 2023, the Company holds a 100% interest in certain claims forming the Brabant Lake property
in Saskatchewan.
HPM Property - Quebec
As at December 31, 2024 and 2023, the Company holds a 100% interest in certain claims forming the HPM property in Quebec.
Barraute-Landrienne Property - Quebec
On April 28, 2021, the Company entered into an agreement with Gestion Aline Leclerc Inc. (“GAL”) granting Murchison an
option to earn 100% in 75 mineral claims, by making payments totaling $500,000 and property expenditures of $1.0 million
over a 6-year period. The first annual payment of $20,000 was due and paid on April 28, 2022. GAL would retain a royalty of
1% of net smelter returns (NSR) on future production. The 1% NSR could be acquired anytime by the Company for
$1.0 million. On February 3, 2023, the Company terminated the GAL agreement.
The following table sets out the exploration expenses for the years ended December 31, 2024 and 2023:
HPM
2024
2023
Drilling
$
-
$
129,153
Geology and prospecting
143,543
445,645
Geophysics
88,093
313,490
Acquisition and staking
79,612
73,606
General administrative and permitting
41,611
120,578
Amortization
27,791
29,096
Tax credits receivable
-
(108,957)
Total HPM
$
380,650
$
1,002,611
Brabant Lake
2024
2023
Amortization
$
10,721
$
18,816
Drilling
961,644
-
General administrative
11,759
4,000
Geology
174,497
270,080
Geophysics
98,947
170,686
Government assistance – Drilling incentive
(150,000)
-
Acquisition and staking
15,757
8,242
Total Brabant Lake
$
1,123,325
$
471,824
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 16 -
8.
EXPLORATION AND EVALUATION PROPERTIES (Continued)
Barraute-Landrienne
2024
2023
Geology
$
-
$
3,737
Acquisition and staking
-
18,387
Tax credits receivable
-
(1,200)
Total Barraute-Landrienne
$
-
$
20,924
Total Exploration Expenses
$
1,503,975
$
1,495,359
Government Assistance and Tax Credits
The Company is entitled to a credit on duties refundable for losses under the Quebec Mining Duties Act. This credit on duties
refundable for losses on mineral exploration expenses incurred in the Province of Quebec at the rate of 8% has been applied
against the costs incurred. These amounts have been recorded as a reduction of the HPM exploration expenditures.
Also, the Company is entitled to the refundable tax credit for resources for mineral companies on qualified expenditures
incurred in the Province of Quebec. The refundable tax credit for resources may reach 35% or 38.75% of qualified expenditures
incurred. This tax credit has been applied against the costs incurred. These amounts have also been recorded as a reduction of
the HPM exploration expenditures. The Company has recorded $nil in expected tax credits against exploration activity for the
year ended December 31, 2024 (December 31, 2023 - $110,157). During the year ended December 31, 2024, the Company
received $188,118 in tax credits applied against the receivable (December 31, 2023 - $182,282). As at December 31, 2024, the
Company was carrying a tax credit receivable balance of $nil (December 31, 2023 - $188,118).
The Saskatchewan Targeted Mineral Exploration Incentive (“TMEI”) supports the diversification of Saskatchewan's mineral
sector by encouraging exploration for base metals, precious metals, and diamonds as well as other components such as airborne
geophysical data and complementary ground-based geoscience investigations.
The TMEI provides up to $150,000 financial assistance in the form of a grant to eligible exploration companies that undertake
exploration drilling for base metals, precious metals, or diamonds. For 2024, the Company received $150,000 (2023 - $nil)
under the TMEI program.
9.
SHARE CAPITAL
(a)
Authorized Share Capital
The Company’s authorized share capital consists of an unlimited number of common shares.
(b)
Issued
Number
Amount
Balance - December 31, 2022
218,211,957
$
41,612,477
Private placement (i) (ii)
42,561,065
2,537,008
Issue costs – private placement (i) (ii)
-
(121,780)
Flow-Through Premium (i) (ii)
-
(179,918)
Warrants issued (i) (ii)
-
(423,063)
Balance – December 31, 2023
260,773,022
$
43,424,724
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 17 -
9.
SHARE CAPITAL (Continued)
Number
Amount
Balance - December 31, 2023
260,773,022
$
43,424,724
Private placement (iii)
37,500,000
687,500
Issue costs – private placement (iii)
-
(60,158)
Flow-Through Premium (iii)
-
(125,000)
Warrants issued (iii)
-
(96,170)
Balance – December 31, 2024
298,273,022
$
43,830,896
(i) On July 26, 2023, the Company completed a non-brokered private placement and issued 9,000,000 units at a price of $0.06
per unit, 11,500,715 Quebec flow-through units at a price of $0.07 and 2,383,850 national flow-through units at a price of
$0.065 for aggregate gross proceeds of $1,500,000. A director of the Company acquired 7,000,000 units for gross proceeds
of $420,000. An amount of $126,280 was allocated to flow-through share premium.
Each unit, Quebec flow-through unit and national flow-through unit was comprised of one common share of the Company and
one-half of a common share purchase warrant. Each whole warrant is exercisable to acquire one additional common share at
a price of $0.10 for a period of 24 months expiring July 26, 2025.
The fair value of the warrants was estimated at $236,690 using the Black-Scholes option model pricing with the following
assumptions: expected dividend yield of 0%, expected volatility of 108%, risk-free interest rate of 4.65%, expected life of 2.0
years and share price of $0.05. Issue costs of $12,160 were allocated to the warrants.
Finder’s fees totaling $57,005 were paid under the private placement and 636,994 finders’ warrants valued at $13,173 with
the same terms as described above were issued.
(ii) On December 28, 2023, the Company completed a non-brokered private placement and issued 9,040,000 units at a price of
$0.05 per unit and 10,636,500 national flow-through units at a price of $0.055 for aggregate gross proceeds of $1,037,008. A
director of the Company acquired 8,500,000 units for gross proceeds of $425,000. An amount of $53,638 was allocated to
flow-through share premium.
Each unit and national flow-through unit was comprised of one common share of the Company and one-half of a common
share purchase warrant. Each whole warrant is exercisable to acquire one additional common share at a price of $0.08 for a
period of 24 months expiring December 28, 2025.
The fair value of the warrants was estimated at $185,770 using the Black-Scholes option model pricing with the following
assumptions: expected dividend yield of 0%, expected volatility of 117%, risk-free interest rate of 3.92%, expected life of 2.0
years and share price of $0.04. Issue costs of $9,660 were allocated to the warrants.
Finder’s fees totaling $41,250 were paid under the private placement and 518,190 finders’ warrants valued at $11,400 were
issued. Each whole warrant is exercisable to acquire one additional common share at a price of $0.055 for a period of 24 months
expiring December 28, 2025. Issue costs of $2,150 were allocated to the finders’ warrants.
(iii) On December 3, 2024, the Company completed a non-brokered private placement and issued 12,500,000 units at a price of
$0.015 per unit, 5,000,000 Quebec flow-through units at a price of $0.02 and 20,000,000 national flow-through units at a price
of $0.02 for aggregate gross proceeds of $687,500. A director of the Company acquired 12,500,000 units for gross proceeds
of $187,500. An amount of $125,000 was allocated to flow-through share premium.
Each unit, Quebec flow-through unit and national flow-through unit was comprised of one common share of the Company and
one-half of a common share purchase warrant. Each whole warrant is exercisable to acquire one additional common share at
a price of $0.05 for a period of 24 months expiring December 3, 2026.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 18 -
9.
SHARE CAPITAL (Continued)
The fair value of the warrants was estimated at $97,500 using the Black-Scholes option model pricing with the following
assumptions: expected dividend yield of 0%, expected volatility of 136%, risk-free interest rate of 3.07%, expected life of 2.0
years and share price of $0.012. Issue costs of $10,430 were allocated to the warrants.
Finder’s fees totaling $40,625 were paid under the private placement and 1,750,000 finders’ warrants valued at $9,100 with
the same terms as described above were issued.
10. WARRANTS AND FINDERS’ WARRANTS
The following summarizes the warrants and finders’ warrants activity for the year ended December 31, 2024 and 2023:
Number of
Grant Date
Weighted Average
Warrants
Fair Value
Exercise Price
Balance – December 31, 2022
30,019,054
$
678,890
$
0.18
Issued
22,435,717
423,063
0.09
Expired
(30,019,054)
(678,890)
0.18
Balance - December 31, 2023
22,435,717
423,063
$
0.09
Balance – December 31, 2023
22,435,717
$
423,063
$
0.09
Issued
20,500,000
96,170
0.05
Balance - December 31, 2024
42,935,717
519,233
$
0.07
As at December 31, 2024, the Company had warrants and finders’ warrants outstanding as follows:
Exercise
Remaining
Number of
Price
Fair Value
Contractual Life
Date of Issue
Warrants
($)
($)
Expiry Date
(years)
July 26, 2023
12,079,277
0.10
237,703
July 26, 2025
0.57
December 28, 2023
518,190
0.055
9,250
December 28, 2025
0.99
December 28, 2023
9,838,250
0.08
176,110
December 28, 2025
0.99
December 3, 2024
20,500,000
0.05
96,170
December 3, 2026
1.93
42,935,717
519,233
1.32
11.
STOCK OPTIONS
The Company maintains a stock option plan whereby certain key employees, officers, directors and consultants may be granted
stock options for common shares of the Company. The maximum number of common shares that is issuable under the plan
was fixed at 10% of the number of common shares issued and outstanding (a maximum of 5% of the number of common shares
issued and outstanding may be held by any one person). Options expire after a maximum period of five years following the
date of grant. Vesting provisions are determined at the time of each grant.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 19 -
11.
STOCK OPTIONS (Continued)
The following summarizes the stock option activity for the years ended December 31, 2024 and 2023:
Number of
Weighted Average
Stock Options
Exercise Price
Balance - December 31, 2022
21,495,000
$
0.10
Expired
(1,110,000)
0.16
Granted(i)
4,725,000
0.05
Balance - December 31, 2023
25,110,000
$
0.09
Balance - December 31, 2023
25,110,000
$
0.09
Expired
(3,945,000)
0.09
Balance – December 31, 2024
21,165,000
$
0.09
(i) On December 29, 2023, the Company granted 4,725,000 stock options exercisable at $0.05 for 5 years to directors, officers,
employees and consultants of the Company. The grant date fair value of these options of $174,825 was estimated using the
Black Scholes valuation model with the following weighted average assumptions: share price - $0.05, risk free interest rate –
3.17%, expected volatility – 120%, expected dividend yield – 0%, expected forfeiture rate of – 0% and expected life – 5 years.
The options vested immediately and the fair value was recorded as share-based payment on the consolidated statement of loss
for the year ended December 31, 2023.
As at December 31, 2024, the Company had incentive stock options issued to directors, officers, employees and key consultants
of the Company outstanding as follows:
Weighted Average
Remaining
Options
Exercise
Grant Date
Contractual Life
Date of Grant
Outstanding(1)
Price ($)
Fair Value ($)
Expiry Date
(years)
December 31, 2020
3,700,000
0.095
284,900
December 31, 2025
1.00
April 14, 2021
200,000
0.095
9,800
April 14, 2026
1.28
May 25, 2021
500,000
0.095
26,000
May 25, 2026
1.40
July 2, 2021
200,000
0.095
10,800
July 2, 2026
1.50
October 11, 2021
1,000,000
0.08
59,000
October 11, 2026
1.78
December 20, 2021
3,625,000
0.13
351,625
December 20, 2026
1.97
January 24, 2022(1)
200,000
0.135
19,600
January 24, 2027
2.07
July 29, 2022
4,700,000
0.09
314,900
July 29, 2027
2.58
December 15, 2022
2,315,000
0.12
210,665
December 15, 2027
2.96
December 29, 2023
4,725,000
0.05
174,825
December 29, 2028
4.00
21,165,000
0.09
1,462,115
2.46
(1) All options are exercisable.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 20 -
12.
INCOME TAXES
(a) Provision for income taxes
Major items causing the Company’s income tax to differ from the combined Canadian federal and provincial statutory rate of
26.5% (2023 – 26.5%) were as follows:
2024
2023
$
$
Combined Canadian statutory income tax rate
26.5%
26.5%
Loss before income taxes
(1,927,307)
(2,588,984)
Expected income tax recovery based on the statutory rate
(511,000)
(686,000)
Adjustment to expected income tax benefit:
Permanent differences and other
(16,000)
15,000
Deferred tax assets not recognized
527,000
671,000
Deferred income tax provision (recovery)
-
-
(b) Deferred income tax
Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:
2024
2023
$
$
Capital losses
20,209,000
20,209,000
Non-capital losses
22,022,000
21,302,000
Resource properties
7,094,000
6,488,000
Share issue costs
305,000
440,000
Other
199,000
160,000
Total
49,829,000
48,599,000
(c) As at December 31, 2024, the Company had approximately $7,094,000 (2023 - $6,488,000) of Canadian development and
exploration expenses and foreign exploration and development expenses, which, under certain circumstances, may be utilized
to reduce taxable income of future years.
(d) Tax loss carry-forwards
As at December 31, 2024, the Company had approximately $22,022,000 of non-capital losses in Canada, which may be used
to reduce taxable income in future years. These losses expire from 2025 to 2044.
Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will
be available against which the Company can use the benefits.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 21 -
13.
RELATED PARTY TRANSACTIONS
a) Remuneration of directors and officers was as follows:
2024
2023
Salaries and benefits
$
400,418
$
575,000
Share-based payments
-
137,825
$
400,418
$
712,825
For the year ended December 31, 2024, the salaries and benefits above include $84,375 (2023 - $187,500) for fees invoiced by
a corporation controlled by the CEO of the Company for his services as CEO and also include $104,808 (2023 - $140,600) for
fees invoiced by a corporation controlled by the CFO of the Company for his services as CFO. Included in accounts payable
and accrued liabilities at December 31, 2024 is $nil (2023 - $10,500) owed to the CFO. The amounts payable are unsecured,
non-interest bearing and have no fixed terms of repayment.
b) Private placements
A director of the Company acquired 12,500,000 units for gross proceeds of $187,500 in the private placement closed on
December 3, 2024. On July 26, 2023 and December 28, 2023, a director of the Company acquired 7,000,000 units for gross
proceeds of $420,000 and 8,500,000 units for gross proceeds of $425,000, respectively.
14.
COMMITMENTS AND CONTINGENCIES
Management Contracts
The Company entered into consulting and employment agreements for the services of its key executives. Under the
agreements, additional payments totalling $1,402,300 are be made upon the occurrence of a change of control. As a triggering
event has not taken place, the contingent payments have not been reflected in the consolidated financial statements. The
commitment upon termination of the agreements is $380,650, in aggregate. The minimum commitment due within one year
under the terms of the agreements is $690,600, in aggregate.
Flow-Through Indemnification
As at December 31, 2024, the Company has to incur $412,659 in qualifying exploration expenditures by December 31, 2025
to meet its flow-through commitments. At this time, management anticipates meeting that obligation and as a result, no
additional provisions are required.
The flow-through agreements require the Company to renounce certain tax deductions for Canadian exploration expenditures
incurred on the Company’s mineral properties to flow-through participants. The Company indemnified the subscribers for any
related tax amounts that become payable by the subscribers as a result of the Company not meeting its expenditure
commitments.
MURCHISON MINERALS LTD.
Notes to the Consolidated Financial Statements
December 31, 2024 and 2023
(Expressed in Canadian Dollars)
- 22 -
14.
COMMITMENTS AND CONTINGENCIES (Continued)
Flow-through
funding and
expenditure
requirements
Flow-through
share
premium
liability
$
$
Balance, December 31, 2022
-
-
Flow-through funds raised and premium recorded as a liability
1,545,008
179,918
Flow-through expenditures incurred and reduction of liability
(768,939)
(97,558)
Balance, December 31, 2023
776,069
82,360
Flow-through funds raised and premium recorded as a liability
500,000
125,000
Flow-through expenditures incurred and reduction of liability
(863,410)
(104,196)
Balance, December 31, 2024
412,659
103,164
Environmental
The Company's mining and exploration activities are subject to various laws and regulations governing the protection of the
environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company
believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and
expects to make in the future, expenditures to comply with such laws and regulations.
15.
LOAN PAYABLE
In June 2021, the Company financed the purchase of an exploration vehicle in the amount of $43,586. The loan bears an
interest rate of 7.89% and is repayable over 60 monthly payments of $881 and is secured by the vehicle. The balance payable
at December 31, 2024 was $14,951 of which $10,578 is due within the next 12 months.
Undiscounted payments over successive years are as follows:
Vehicle
2025
$
10,578
2026
5,289
Total contractual cash flows
$
15,867
Less: interest
(916)
Obligation at December 31, 2024
$
14,951
End of Notes to Financial Statements