Pediatrix Medical Group, Inc. Annual Report 2018

FY2018 Annual Report · Pediatrix Medical Group, Inc.

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Annual Report
2018

Midland Exploration Inc.
1, Place Ville Marie, Suite 4000, Montreal (Quebec) H3B 4M4
Tel.: 450.420.5977 Fax : 450.420.5978

Midland Exploration inc.
Table of contents

Message to Shareholders
Management’s discussion and Analysis
Nature of Activities ........................................................................................................................................ 5
Overall Performance ..................................................................................................................................... 5
Results of Operations .................................................................................................................................... 7
Exploration Activities ..................................................................................................................................... 8
Financing Activities ..................................................................................................................................... 28
Working Capital ........................................................................................................................................... 29
Summary of Results per Quarter ................................................................................................................ 30
Fourth Quarter ............................................................................................................................................. 30
Related Party Transactions ......................................................................................................................... 31
Subsequent Events ..................................................................................................................................... 31
Outstanding Share Data .............................................................................................................................. 31
Stock Option Plan ....................................................................................................................................... 31
Off-balance Sheet Arrangements ............................................................................................................... 32
Commitment ................................................................................................................................................ 32
Critical Accounting Estimates...................................................................................................................... 32
New Accounting Standards ......................................................................................................................... 33
Financial Instruments .................................................................................................................................. 34
Risk Factors ................................................................................................................................................ 34
Foward Looking Information........................................................................................................................ 37
Financial Statement
Independant Auditor’s Report ..................................................................................................................... 38
Statements of Financial Position ................................................................................................................. 40
Statements of Comprehensive Loss ........................................................................................................... 41
Statements of Change in Equity ................................................................................................................. 42
Statements of Cash Flows .......................................................................................................................... 43
Notes to Financial Statements .................................................................................................................... 44
Corporate Information ................................................................................................................................. 68

- 3 -

Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2018

Dear shareholders,

It is a sincere pleasure for me to present Midland Exploration Inc.’s 2018 annual report.

Midland is a dynamic and pro-active mineral exploration company that is led by a highly respected and
experienced management and technical team with a proven mine-finding track record. During the year
2018, we further improved our exploration team by hiring new and very talented geologists, and
appointed a new valuable member to our Board of Directors with the arrival of Virginia Mines Inc.’s
former VP Exploration, Mr. Paul Archer. Midland targets the excellent mineral potential and the
favourable investment climate of Quebec to discover new world-class deposits of gold, platinum group
elements and base metals. Midland is proud to count on reputable partners such as Agnico Eagle
Mines Limited, Osisko Mining Inc., Altius Minerals Corporation, SOQUEM Inc., NioBay Metals Inc., the
Nunavik Mineral Exploration Fund, and Abcourt Mines Inc.

Midland continues to pursue its strategy of exploring in partnership across Quebec and achieved
significant progress in 2018. Midland discovered new mineralized zones on different projects. The
highlight of the year was certainly the discovery of a significant Cu-Au-Mo-Ag mineralized system on
our Mythril project in the James Bay region. This new high-grade copper system was traced over more
than 2 kilometres on surface and remains open in all directions. Extensive geophysical surveys are
currently underway and a significant exploration budget will be devoted to this project in 2019. We also
signed a new partnership agreement with the Nunavik Mineral Exploration Fund on a new Ni-Cu-Co
project near Kuujjuaq and continued to generate and acquire new gold and polymetallic properties with
very strong potential for discoveries (in the Detour, Eleonore and Mythril areas). In addition, we also
increased Midland’s visibility and exposure in 2018, taking part in a number of major promotional
events throughout the year, which enabled us to attract new and important shareholders. Here are the
main highlights of the past year:

• New significant Cu-Au-Mo-Ag discovery on Mythril, James Bay
• New Vortex gold zone extended over more than 1.5 km strike length on the Casault JV

with SOQUEM

• New significant gold occurrences discovered on Willbob (Ants & Didgeridoo)
• New agreement signed for a Ni-Cu-Co project with the Nunavik Mineral Exploration

Fund

• Generation and acquisition of 100% interest in the Soissons Ni-Cu-Co project
• 14,661 metres drilled in 2018

Midland intends to continue aggressively exploring its various projects for gold, platinum group
elements and base metals in 2019, to discover world-class deposits. An ambitious exploration
program, one of the most significant since the Company was founded, is currently in preparation and
will be deployed on the Company’s best projects. Midland will continue to generate several new
projects and seek to rapidly conclude additional partnership agreements for properties recently
acquired in 2017 and 2018. Midland also intends to continue assessing interesting business
opportunities as they arise in 2019. Midland has a very strong financial position, with an adjusted
working capital of more than $14 million and no debt.

On behalf of the management team and the Board of Directors, I would like to express our most
sincere acknowledgements for your confidence, your patience and your renewed support throughout
the year. I would also like to take this opportunity to welcome the new shareholders who joined us
during 2018. Midland is a company that counts on a high-calibre Board of Directors and a dynamic
and talented technical team who will spare no effort in 2019 to make one or many significant
discoveries in Quebec.

(s) Gino Roger
Gino Roger, P.Eng.
President and CEO

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

The following discussion and analysis (the “MD&A”) of the financial condition and results of the operations
of Midland Exploration Inc. (“Midland” or “the Corporation”) constitutes management’s review of the factors
that affected the Corporation’s financial and operating performance for the year ended September 30, 2018.
This MD&A should be read in conjunction with the Corporation’s audited financial statements as at
September 30, 2018 prepared in accordance with the International Financial Reporting Standards (“IFRS”).
All figures are in Canadian dollars unless otherwise noted.

Further information regarding the Corporation and its operations are filed electronically on the System for
Electronic Document Analysis and Retrieval (SEDAR) in Canada and can be obtained from
www.sedar.com.

Abbreviation
Fiscal 16
Q1-17
Q2-17
Q3-17
Q4-17
Fiscal 17
Q1-18
Q2-18
Q3-18
Q4-18
Fiscal 18
Fiscal 19

Period
October 1, 2015 to September 30, 2016
October 1, 2016 to December 31, 2016
January 1, 2017 to March 31, 2017
April 30, 2017 to June 30, 2017
July 1, 2017 to September 30, 2017
October 1, 2016 to September 30, 2017
October 1, 2017 to December 31, 2017
January 1, 2018 to March 31, 2018
April 30, 2018 to June 30, 2018
July 1, 2018 to September 30, 2018
October 1, 2017 to September 30, 2018
October 1, 2018 to September 30, 2019

1. NATURE OF ACTIVITIES

Midland, incorporated on October 2, 1995 and operating under the Business Corporations Act
(Québec), is a company in the mining exploration business. The Corporation’s operations include the
acquisition and exploration of mining properties. The Corporation’s shares are listed on the TSX
Venture Exchange (the “Exchange”) under the MD ticker.

2. OVERALL PERFORMANCE

Midland has an adjusted working capital of $11,214,039 as of September 30, 2018 ($11,678,771 as
of September 30, 2017) which includes $1,200,000 of investments in guaranteed investment
certificates with expiry dates over 1 year (nil as of September 30, 2017)), which will allow the
Corporation to execute its exploration program for at least the next three years (note: adjusted working
capital is a non-IFRS financial performance measure which has no standard definition under IFRS.
See section 6: Working Capital).

On November 22, 2017 and December 5, 2018, the Corporation completed private placement by
issuing respectively 1,692,854 and 1,969,638 flow-through shares at $1.35 for total gross proceeds of
$2,285,354 and $2,659,012 (see section 5 for details).

On May 3, 2018, 1,522,000 warrants were exercised at $1.15 for total gross proceeds of $1,750,300.

The Corporation signed 50%-50% joint venture agreements with Altius Resources Inc. (“Altius”) for
the following designated projects: Elrond, Gondor, Helms Deep, Isengard, Minas Tirith, Moria, Shire,
Mythril and Fangorn (the “Designated Projects”). On July 13, 2018, the Corporation amended the
James Bay strategic alliance (“Alliance”) memorandum of understanding (“MOU”) signed on March
30, 2017 as follows:

- 5 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

2. OVERALL PERFORMANCE (CONT’D)

•

Altius exchanged its 50% interest in the Designated Projects for 461,487 common shares valued
at $507,636, which corresponds to Altius’ portion of the accumulated expenditures on the
designated projects;
Altius subscribed 198,386 common shares at $1.10 which corresponds to Altius’ portion of the
phase 2 approved exploration budget of 2018;
Altius will subscribe additional common shares for its portion of future work program on the
Designated Projects, at market price;
If further designated projects are declared, Altius will subscribe additional common shares of the
Corporation for its portion of the work programs, at market price;
All designated projects share require the registration of a 2% net smelter return (“NSR”) royalty,
50% 50% to the respective parties (“Alliance Royalty”), with a mutual right of first offer on the sale
of any interest in the Alliance Royalty.

The MOU will expire on December 31, 2019, with an option to continue the Alliance for two additional
years. The duration of this MOU can be reduced or extended by mutual consent.

On July 27, 2018, the Corporation signed a partnership agreement (50%-50%) with the Nunavik
Mineral Exploration fund (“NMEF”), to explore an area of the Soissons property located between 50
and 100 kilometers southeast of Kuujjuaq, Nunavik, Quebec. The NMEF will be the operator of the
partnership.

The Corporation signed an option agreement with Teck Resources Ltd (“Teck”) on September 6, 2013
whereby Teck could have earned, in three options, a maximum interest of 65% in the Patris property.
On March 29, 2018, the Corporation received a termination notice for the Patris option agreement.

On April 27, 2017, the Corporation signed an option agreement with IAMGOLD Corporation
(“IAMGOLD”) whereby IAMGOLD may earn, in three options, a maximum interest of 65% in the Héva
property. On November 20, 2018, the Corporation received a termination notice for the Héva option
agreement.

As operator, Midland incurred exploration expenditures totalling $6,019,773 ($6,243,161 in Fiscal 17),
on its properties of which $1,890,528 was recharged to its partners ($1,274,505 in Fiscal 17). The
operating partners incurred $704,099 of exploration expenses ($631,255 in Fiscal 17). Also, the
Corporation invested $337,741 ($619,147 in Fiscal 17) to complete several property acquisitions in
Quebec of which $35,113 was recharged to its partners ($100,422 in Fiscal 17).

Selected annual information

Project management fees
Loss
Loss per share, basic and diluted

Fiscal 18
$
109,548
(807,530)
(0.01)

Fiscal 17

$
96,193
(1,214,056)
(0.02)

Fiscal 16

$
107,423
(807,158)
(0.01)

2018
$

As at September 30,
2017
$

2016
$

Total assets

29,736,269

26,477,605

24,456,678

- 6 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

3. RESULTS OF OPERATIONS

The Corporation reported a loss of $807,530 in Fiscal 18 compared to $1,214,056 for Fiscal 17.

Operating expenses are stable at $1,821,623 for Fiscal 18 compared to $1,864,707 in Fiscal 17:

•

Salaries decreased to $540,288 ($584,630 in Fiscal 17). A $18,387 refund was received in Fiscal
18 relating to a rate adjustment on benefits of Fiscal 17.
Stock-based compensation (non-cash item) decreased to $192,395 ($285,429 in Fiscal 17).
500,000 options were granted in Fiscal 16 at a weighted average exercise price of $1.10, 695,000
in Fiscal 17 at a weighted average exercise price of $1.13 and 570,000 in Fiscal 18 at an exercice
price of $0.89. Their fair value was estimated at $250,000, $362,250 and $245,100 respectively.
This fair value was accounted for according to its vesting period (up to 18 months) or the period
in which the services were rendered. Part of this fair value was recorded in the statement of
earnings as stock-based compensation ($96,951 in Fiscal 16, $285,429 in Fiscal 17 and $192,395
in Fiscal 2018) and the other part was capitalized within the deferred exploration expenses
($16,162 in Fiscal 16, $164,088 in Fiscal 17 and $104,646 for Fiscal 18). The options vest over
18 months and it should be noted that the main grant of options occurred in August for Fiscal 16
while it occurred in February for Fiscal 17 and Fiscal 18.
to
Impairment of exploration and evaluation assets
$303,610 ($232,075 in Fiscal 17) and the explanations can be found in the investing activities
section found later in this MD&A.

(non-cash item)

increased

Interest income increased to $203,475 ($169,368 in Fiscal 17) due to gradual increase in the interest
rates.

A $694 070 ($382,090 in Fiscal 17) recovery of deferred income taxes (non-cash item) was recognized
to record the amortization, in proportion of the work completed, of the premium related to flow-through
shares renunciation following the November 2017 private placement (November 2016 and March 2017
in Fiscal 17). All exploration work imposed by the November 2016 and March 2017 flow-through
financings was completed before September 30, 2017. Also, all the exploration work imposed by the
November 2017 flow-through financings was completed before September 30, 2018.

- 7 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES

Deferred
exploration
expenses
Fiscal 18

Maritime Cadillac
Laflamme Au
Patris Au
Casault Au
Jouvex Au
Heva Au
Valmond
Samson
La Peltrie
Wawagosic
Adam
Mistaouac
Turgeon
Manthet
Abitibi Gold
Weedon Cu Zn Au
Gatineau Zn
Bay-James Au
Eleonore Au
JV Eleonore AU
Isengard
Minas Tirith
Shire
Elrond
Gondor
Moria
Helms
Mythril
Fangorn
Pallas PGE
Willbob Au
Soissons
Soissons NMEF
Generation

g
n
n
n
g
e
b

e
c
n
a
l
a
B

292,271

2,202,064
221,844
963,965
412,833
261,985
124,314
83,411
1,067,584
-
131,155
-
-
-
203,470
626,897
44,005
362,595
1,723,519
291,282
2,072
27,966
75,404
30,943
5,049
21,223
124
-
-
538,746
2,126,873
-
-
91,166

y
g
o
o
e
G

739
36,663
5,849
198,895

-
5,276
-
31,428
28,205
54,396
18,779
35,998
10,469
8,409
17,065
19,153
4,117
173,713
47,161
190,464
67,123
9,212
232,482
980
47,201
172,866
42,467
38,902
9,346
-
536,299
70,443
7,031
(4,137)

s
c
i
s
y
h
p
o
e
G

-
193,334
-
49,848

-
1,615
-
53,820
62,991
-
104,153
191,885
185,114
-
-
-
23,480
-
-
114,711
-
-
51,889
-
-
21,668
-
-
-
-
-
-
-
-

g
n

i
l
l
i
r
D

$
88,024
9,532
16,742
1,802,180

-
500
-
518
429,008
-
1,097
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,957
-
-
-

-
o
e
G

y
r
t
s
i
m
e
h
c

$
5,357
292
-
173,099

-
-
-
-
26,732
-
-
-
-
-
-
-
-
13,775
292
2,633
6,132
610
16,633
-
4,129
19,488
7,351
7,679
1,643
-
109,080
2,580
-
61

g
n
i
t
t
u
c

e
n
L

-
11,960
-
11,296

-
-
-
-
17,831
-
28,060
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

l
a
t
o
t
b
u
S

94,120
251,781
22,591
2,235,318
-
7,391
-
85,766
564,767
54,396
152,089
227,883
195,583
8,409
17,065
19,153
27,597
187,488
47,453
307,808
73,255
9,822
301,004
980
51,330
214,022
49,818
46,581
10,989
-
679,336
73,023
7,031
(4,076)

d
e
s
a
b
-
k
c
o
t
S

n
o
i
t
a
s
n
e
p
m
o
c

e
g
r
a
h
c
e
R

$
2,719
4,407
-

-
-
(10,379)
19,913 (1,117,659)
-
(6,498)
-
-
(563,739)
-
-
-
-
-
-
-
-
-
-
(1,440)
(36,146)
(966)
(65,831)
(490)
(22,307)
(47,484)
(17,589)
-
-
-
-
-
-
-

129
8,932
-
99
10,402
-
3,798
2,089
2,089
-
99
1,247
-
3,168
2,839
8,670
-
-
4,750
-
-
3,193
-
-
-
1,278
24,825
-
-
-

s
t
i
d
e
r
c

x
a
T

-
(30,414)
-
(221,303)
-
-
-
(1,166)
(91)
(21,447)
(20,379)
(5,470)
(1,007)
-
(1,347)
-
(87)
(35,585)
(3,601)
(23,105)
(2,263)
(3,111)
(88,732)
(27)
(2,648)
(67,410)
(13,434)
(18,366)
(4,332)
-
(206,809)
(25,741)
(2,772)
(2,780)

TOTAL

11,932,760

2,116,994

1,054,508

2,381,558

397,566

69,147

6,019,773

104,646 (1,890,528)

(803,427)

- 8 -

n
o
i
t
p
O

t
n
e
m
y
a
p

f
f
o
-
e
t
i
r

-
-
-
-
-
-
-
-
-
-
-
-
-
-
(134,548)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(194)

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

e
g
n
a
h
c
t
e
N

$
96,839
225,774
12,212
916,269
129
9,825
-
84,699
11,339
32,949
135,508
224,502
196,665
8,409
(118,731)
20,400
27,510
155,071
46,691
291,933
34,846
5,745
151,191
463
26,375
102,321
18,795
28,215
6,657
1,278
497,352
47,282
4,259
(7,050)

d
n
e

e
c
n
a
l
a
B

8
1

l
a
c
s
i
F

$
389,110

2,427,838
234,056
1,880,234
412,962
271,810
124,314
168,110
1,078,923
32,949
266,663
224,502
196,665
8,409
84,739
647,297
71,515
517,666
1,770,210
583,215
36,918
33,711
226,595
31,406
31,424
123,544
18,919
28,215
6,657
540,024
2,624,225
47,282
4,259
84,116

(134,742)

3,295,722

15,228,482

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CON’T)

Deferred
exploration
expenses
Fiscal 17

Abitibi

Maritime Cadillac
Laflamme Au
Patris Au
Casault Au
Jouvex Au
Heva Au
Valmond
Samson
La Peltrie
Adam
Abitibi Gold

Grenville-
Appalaches

Weedon Cu Zn
Au
Gatineau Zn

Bay-James

Bay-James Au
Eleonore Au
JV Eleonore AU
JV BJ Altius

Québec Labrador

Ytterby REE

Northern Quebec

Pallas PGE
Willbob Au

Projects
generation

g
n
n
n
g
e
b

e
c
n
a
l
a
B

236,090
1,893,853
221,646
352,708
351,966
157,076
120,742
78,203
652,484
42,841
173,644

523,230

29,024

261,886
1,629,303
124,692
-

y
g
o
o
e
G

2,380
23,712
3,486
85,689

2,806
52,441
3,572
4,333
54,870
31,420
23,893

61,136

12,381

92,070
113,385
202,506
346,681

183,583

369,500
565,271

60,191
597,926

74,069

23,436

s
c
i
s
y
h
p
o
e
G

-
109,332
-
143,777

97,369
12,157
-
-
312,312
58,410
4,050

7,000

200

40,700
-
-
59,018

-
-

g
n

i
l
l
i
r
D

48,313
183,492
4,827
1,056,768

-
300
-
518
16,654
4,251
114

-
-
533
-

-
o
e
G

y
r
t
s
i
m
e
h
c

3,842
5,778
-
48,958

-
3,609
-
-
-
-
1,376

32,763

3,889
10,650
16,368
24,228

474,576
1,164,421

32,084
328,509

n
o
i
t
p
O

t
n
e
m
y
a
p

f
f
o
-
e
t
i
r

g
n
i
t
t
u
c

e
n
L

l
a
t
o
t
b
u
S

-
-
-
25,523

20,923
35,580
-
-
49,275
-
-

54,535
322,314
8,313
1,358,610
119,695
102,897
3,572
4,851
428,152
94,081
26,627

d
e
s
a
b
-
k
c
o
t
S

n
o
i
t
a
s
n
e
p
m
o
c

1,700
9,692
198
18,247
1,871
11,325
-
1,379
16,409
1,700
1,254

e
g
r
a
h
c
e
R

-
-
(8,313)
(686,997)
(60,549)
(1,193)
-
-
(23,947)
-
-

100,899

4,346

14,981

136,659
124,035
219,407
429,927

-
6,423
18, 280
4,328

-
-
-
(214,964)

s
t
i
d
e
r
c

x
a
T

(54)
(23,795)
-
(80,708)
(1,553)
(9,310)
-
(1,022)
(10,473)
(7,467)
(861)

(1,578)

(35,950)
(36,242)
(71,097)
(56,510)

-
-
-
-

-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-

-
-

e
g
n
a
h
c
t
e
N

d
n
e

e
c
n
a
l
a
B

7
1

l
a
c
s
i
F

56,181
308,221
198
611,257
60,867
104,909
3,572
5,208
415,100
88,314
29,826

292,271

2,202,064
221,884
963,965
412,833
261,985
124,314
83,411
1,067,584
131,155
203,470

103,667

626,897

14,981

44,005

100,709
94,216
166,590
162,781

362,595
1,723,519
291,282
162,781

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-

566,851
2,090,856

6,703
60,233

(278,542)
-

(125,766)
(589,487)

23,436

(6,339)

(183,583)

-
-

169,246
1,561,602

538,746
2,126,873

17,097

91,166

TOTAL

8,041,811

1,798,314

844,325

2,954,767

512,054

133,701

6,243,161

164,088 (1,274,505)

(1,058,212)

(183,583)

3,890,949

11,932,760

- 9 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CON’T)
Expenses Exploration and evaluation
Properties

Midland Partners

Actual Fiscal 17

100% owned by Midland
Patris
Heva Au
Valmond
Samson
Wawagosic
Adam
Mistaouac
Turgeon
Manthet
Abitibi Gold
Weedon Cu-Zn-Au
Gatineau Zn
Baie James Au
Éléonore Au
Isengard
Minas Tirith
Shire
Elrond
Gondor
Moria
Helms
Mythril
Fangorn
Willbob
Pallas PGE
Soissons
Générations de projet

-
102,894
3,572
4,851
-
94,081
-
-
-
29,433
100,899
14,981
136,659
124,035
2,809
37,900
98,715
41,934
6,842
26,639
124
-
-
2,090,856
288,309
-
23,436
3,228,969

292,255
71,744
-
-
-
-
-
-
-
-
-
-
-
-
2,810
37,900
98,715
41,934
6,842
26,639
124
-
-
-
278,542
-
-
857,505

Option, operated by Midland and paid by partner
La Peltrie
In joint venture
Maritime-Cadillac- Agnico-Eagle 51%
Vermillon- Soquem 53.4%
Laflamme Au – Abcourt 27.4%
Casault – Soquem 50%
Jouvex – Soquem 50%
JV Eleonore Osisko 50%
Soissons NMEF 50%

54,535
-
322,314
673,718
60,549
219,407
-

56,761
-
-
687,591
60,549
219,407
-
1,330,523 1,024,308
4,968,656 1,881,813

Total
$

292,255
174,638
3,572
4,851
-
94,081
-
-
-
29,433
100,899
14,981
136,659
124,035
5,619
75,800
197,430
83,868
13,684
53,278
248
-
-
2,090,856
566,851
-
23,436
4,086,474

Midland
$

Actual Fiscal 18
Partners
$

Budget Fiscal 18

Budget Fiscal 19

Total
$

Midland Partners

Total
$

Midland Partners

Total
$

12,212
893
-
85,766
54,396
152,089
227,883
195,583
8,409
17,065
19,153
27,597
187,488
47,453
37,109
8,856
235,173
490
29,023
166,538
32,229
46,581
10,989
679,336
-
73,023
9,765
2,365,099

10,379
282,303
-
-
-
-
-
-
-
-
-
-
-
-
36,146
966
65,831
490
22,307
47,484
17,589
-
-
-
-
-
-
292,682

22,591
283,196
-
85,766
54,396
152,089
227,883
195,583
8,409
17,065
19,153
27,597
187,488
47,453
73,255
9,822
301,004
980
51,330
214,022
49,818
46,581
10,989

-
-
5,000
100,000
-
100,000
-
-
-
30,000
60,000
5,000
300,000
100,000
-
-
300,000
-
-
-
-
-
-
379,336 2,000,000
5,000
-
120,000
2,657,781 3,125,000

-
73,023
9,765

5,000
15,000
15,000
5,000
500,000
500,000
5,000
5,000
-
5,000
100,000
-
5,000
-
-
5,000
100,000
-
5,000
-
-
5,000
-
-
5,000
-
-
25,000
30,000
-
50,000
60,000
-
5,000
5,000
-
200,000
300,000
-
100,000
100,000
-
5,000
-
-
5,000
-
-
5,000
600,000
300,000
-
-
-
5,000
-
-
5,000
-
-
-
-
-
- 2,000,000
-
5,000
-
-
475,000
- 2,000,000
5,000
5,000
-
5,000
-
-
30,000
120,000
-
815,000 3,940,000 2,970,000

5,000
-
5,000
-
5,000
-
5,000
-
5,000
-
5,000
-
5,,000
-
5,000
-
5,000
-
25,000
-
50,000
-
5,000
-
200,000
-
100,000
-
5,000
-
5,000
-
5,000
-
-
-
5,000
-
5,000
-
-
-
- 2,000,000
5,000
-
475,000
-
5,000
-
5,000
-
-
30,000
- 2,970,000

111,296
-
322,314
1,361,309
121,098
438,814
-
2,354,831
6,946,160

94,120
236
251,781
1,117,659
-
306,368
7,031
1,777,195
4,143,322

97,888
270
-
1,117,659
-
324,545
7,031
1,547,393
2,403,814

- 10 -

100,000
192,008
-
506
150,000
251,781
900,000
2,235,318
350,000
-
300,000
630,913
100,000
14,062
3,324,588
875,000 1,900,000
6,547,136 4,105,000 2,095,000 6,200,000 4,000,000 1,000,000 5,000,000

50,000
-
150,000
450,000
175,000
150,000
50,000
780,000 1,760,000 1,025,000

100,000
5,000
200,000
300,000
100,000
275,000
-
980,000

200,000
10,000
200,000
600,000
200,000
550,000
-

100,000
5,000
-
300,000
100,000
275,000
-

50,000
-
-
450,000
175,000
150,000
50,000

409,164

23,947

457,058

1 028

563,739

564,767

500,000

5,000

125,000

130,000

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

When the work is done and paid by the partners, the expenses are not included in the Midland
accounts. The previous table shows all the work being done on Midland’s properties including work
done and paid by operating partners. This table excludes stock-based compensation that has been
capitalized.

Gino Roger, geological engineer, president and chief executive officer of Midland, qualified person
under NI 43-101, has reviewed the following technical disclosure.

HIGHLIGHTS

Vortex zone extended to 1.5 km long on Casault JV

• New significant Cu-Au-Mo-Ag discovery on Mythril, James Bay
•
• New significant gold showings found on Willbob ( Ants & Didgeridoo)
• A total of 14,661 metres were drilled during Fiscal 18 (10,357 metres during Fiscal 17).

Moreover, an additional 2,850 metres were drilled in October and November 2018.

ABITIBI

4.1 Maritime-Cadillac (Au) in partnership with Agnico Eagle and operated by Agnico Eagle

Property Description
The property is located in the Abitibi region in Quebec, along the Cadillac-Larder break and is
composed of 7 claims. The Corporation holds 49% of the Maritime-Cadillac property located south of
the Lapa mine. This property is subject to a 2% net smelter return (“NSR”) royalty; half of the royalty
can be bought back for a payment of $1,000,000.

As per the agreement signed in June 2009 and amended in November 2012 and May 2013,
Agnico Eagle Mines Limited (“Agnico Eagle”) and the Corporation are in a joint venture and future work
are shared 51% Agnico Eagle - 49% the Corporation.

Exploration work on the property
During the year, two (2) drill holes were completed on Maritime-Cadillac for a total of 1,485.0 metres.
This program was testing the possible extension at depth of the gold-bearing zone intersected in hole
141-17-36 on the historic Maritime-Cadillac showing. This drill hole had intersected an interval grading
1.46 g/t Au over 31.6 metres, from 112.80 to 144.40 metres, including 2.2 g/t Au over 15.6 metres at
a vertical depth of approximately 100 metres. This zone included several higher-grade sections,
namely 4.3 g/t Au over 0.9 metre (124.1 to 125.0 m), 3.4 g/t Au over 1.0 metre (126.0 to 127.0 m), and
5.7 g/t Au over 0.6 metre (135.0 to 135.6 m).

Hole 141-18-38 was completed at a final depth of 654.0 metres. This hole intersected the Maritime-
Cadillac zone between 486.3 and 493.0 metres. The zone consists in a felsic-intermediate dyke
mineralized with traces to 1% pyrite and arsenopyrite. The best assay results returned 0.83 g/t Au over
7.60 m (485.4 to 493.0 m) including 1.3 g/t Au over 2.0 m and 1.58 g/t Au over 3.30 m (497.2 to
500.5 m).

Hole 141-18-39 was completed during the summer and ended at a depth of 831.0 metres. The best
interval returned 1.6 g/t Au over 3.0 metres between 363.7 and 366.7 metres.

- 11 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

4.2 Laflamme (Au-Ni-Cu-PGE), in partnership with Abcourt Mines Inc. and operated by Midland

Property Description
In 2009, the Corporation staked claims by map staking about 25 kilometres west of Lebel-sur-Quévillon
in the Abitibi region. As at September 30, 2018, the Laflamme property consists of a total of 636 claims
covering an area of approximately 33,752 hectares and Midland holds 74.3% of the property.

On August 17, 2009, the Corporation signed an agreement with Aurbec Mines Inc., (previously a
subsidiary of North American Palladium Ltd.). As of July 31, 2011, Aurbec had earned its 50% interest
in the Laflamme property but no longer contributed in the exploration programs and therefore was
diluted. On June 17, 2016, Abcourt Mines Inc. acquired the property following the bankruptcy of
Aurbec.

Some claims were dropped in Fiscal 18, therefore the Corporation impaired partially for $5,874 the
exploration property cost ($6,846 in Fiscal 17).

Exploration work on the property
Three (3) geophysics surveys were completed during the year on the Laflamme. These surveys
include an heliborne magnetic survey over the southern block, a ground SQUID-EM survey in the
Copernick area and finally an IP-OreVision survey to the west of the NW Comtois zone held by Osisko.

The heliborne magnetic survey identified several lineaments that were interpreted as structural
features within the felsic intrusion. The ground SQUID-EM survey covered the ultramafic unit identified
east of the Copernick zone. A weak conductor was identified to the east of Copernick on the
preliminary data and could be related to weakly connected or veinlets of sulphides. A weak conductor
oriented SW-NE has been interpreted to the northeast of Copernick associated with the ultramafic
rocks. Finally, the IP-OreVision survey identified several new interesting chargeability anomalies
interpreted to be surrounding a small felsic intrusion.

Midland is currently planning a winter drilling program in order to test these new geophysical anomalies
near Copernick and NW Comtois.

4.3 Patris (Au), operated by Midland

Property Description
The Patris property is located about 30 kilometres to the north-east of Rouyn-Noranda and as at
September 30, 2018 consists in 307 claims covering an area of approximately 13,031 hectares. Some
claims are subject to the following NSR royalties:
• 1.5%, the Corporation can buy it back for $500,000 per 0.5% tranche for a total of $1,500,000.
• 1%, the Corporation can buy it back for $500,000 per 0.5% tranche for a total of $1,000,000;
• 2%, the Corporation can buy it back for $1,000,000 per 1% tranche for a total of $2,000,000;
• 2%, the Corporation can buy it back for $500,000 the first 1% tranche and for $1,000,000 for the

second 1% tranche, for a total of $1,500,000.

The Corporation signed an option agreement with Teck on September 6, 2013 whereby Teck could
have earned, in three options, a maximum interest of 65% in the Patris property. On March 29, 2018,
the Corporation received a termination notice for the Patris option agreement.

Exploration work on the property
No exploration work conducted on Patris during Fiscal 18. Midland is currently looking for a new
partner for this project.

- 12 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

4.4 Casault (Au), in partnership with SOQUEM and operated by Midland

Property Description
The Casault property is located about 40 kilometres to the east of the Detour Lake gold project located
north of the city of La Sarre, Abitibi and as at September 30, 2018, this property consists in 316 claims
covering an area of approximately 17,393 hectares.

On October 10, 2014, the Corporation signed a letter of intent with SOQUEM to grant SOQUEM the
option to acquire a 50% undivided interest in its Casault and Jouvex properties. By October 10, 2016,
SOQUEM completed the $4,500,000 work commitment, acquired a 50% undivided interest in the
Casault Jouvex property and is now in joint venture with Midland.

Exploration work on the property
During Fiscal 18, three (3) drilling programs comprising twenty-two (22) drill holes were completed on
the Casault, for a total meterage of 8,209.0 metres. These drilling programs resulted in the discovery
and the follow-up of a new significant gold-bearing zone named Vortex. This system includes four (4)
parallel gold zones, named Vortex 475, 450, 435 and 425. The envelope encompassing these
mineralized zones forms a corridor approximately 50 metres wide. The system is now interpreted as
a Syenite-Associated Gold system because of the presence of alkaline dykes.

The Vortex zone is a major gold-bearing structure located at about 100 metres north of the regional
Sunday Lake deformation zone. It is characterized by a strongly foliated and folded unit of block and
lapillis tuff altered with hematite, albite and ankerite. Mineralization consists in finely disseminated
pyrite (0.5 to 5%). So far, the best grades are obtained in altered and mineralized breccias within the
main Vortex structure.

The most important gold zone identified to date at Vortex, Zone 450, was intersected in all the drill
holes, over a strike length of at least 1.5 kilometres and locally down to 600 metres. The zone trends
east-west and is steeply dipping to the north and remains open in all directions.

Results 2017-2018 – Vortex Zone 450

CAS-17-92 (Section 628200) Vertical depth : -100 m

•

0.46 g/t Au over 13.5 m ; incl. 2.83 g/t Au over 1.3 m ; incl. 5.52 g/t Au over 0.3 m

CAS-17-93 (Section 628000) Vertical depth : -160 m

•

2.10 g/t Au over 6.7 m ; incl. 6.82 g/t Au over 0.4 m & 5.58 g/t Au over 0.4 m

CAS-17-94 (Section 628100) Vertical depth : -230 m

•

1.91 g/t Au over 7.2 m ; incl. 5.18 g/t Au over 1.4 m ; incl. 7.71 g/t Au over 0.8 m

CAS-17-95 (Section 628300) Vertical depth : -75 m

•

1.30 g/t Au over 23.5 m ; incl. 3.46 g/t Au over 6.0 m ; incl. 23.86 g/t Au over 0.5 m

CAS-17-96 (Section 628500) Vertical depth : -120 m

•

1.38 g/t Au over 26.2 m ; incl. 7.87 g/t Au over 2.2 m ; incl. 14.55 g/t Au over 0.8 m

CAS-18-97 (Section 628400) Vertical depth : -160 m

• No significant results (Faulted Out)

CAS-18-98 (Section 628400) Vertical depth : -240 m

•

0.23 g/t Au over 6.0 m

CAS-18-99 (Section 628300) Vertical depth : -220 m

•

0.56 g/t Au over 12.55 m ; incl. 2.26 g/t Au over 0.75 m

- 13 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

CAS-18-100 (Section 628500) Vertical depth : -220 m

•

0.74 g/t Au over 8.8 m ; incl. 2.0 g/t Au over 0.75 m & 1.69 g/t Au over 2.25 m

CAS-18-101 (Section 628000) Vertical depth : -250 m

•

12.4 g/t Au over 1.05 m

CAS-18-102 (Section 628600) Vertical depth : -150 m

• Hole abandonned

CAS-18-103 (Section 628600) Vertical depth : -250 m

• Hole abandonned

CAS-18-104 (Section 627800) Vertical depth : -170 m

•

0.51 g/t Au over 5.25 m; incl. 3.29 g/t Au over 0.5 m

CAS-18-105 (Section 627800) Vertical depth : -250 m

•

0.20 g/t Au over 5.7 m

CAS-18-106 (Section 628700) Vertical depth : -80 m

•

0.35 g/t Au over 0.6 m

CAS-18-108 (Section 629100) Vertical depth : -80 m

•

0.34 g/t Au over 21.45 m ; incl. 0.98 g/t Au over 2.85 m

CAS-18-109 (Section 627850) Vertical depth : -600 m

•

0.31 g/t Au over 18.05 m

CAS-18-110 (Section 627600) Vertical depth : -200 m

•

0.46 g/t Au over 25.7 m ; incl. 1.1 g/t Au over 6.2 m ; incl. 3.8 g/t Au over 1.15 m

CAS-18-111 (Section 628250) Vertical depth : -525 m

•

0.77 g/t Au over 12.0 m

CAS-18-112 (Section 628650) Vertical depth : -530 m

•

0.22 g/t Au over 5.55 m

Best Results 2017-2018 – Vortex Zone 475

CAS-17-92 (Section 628200) Vertical depth : -75 m

•

0.29 g/t Au over 16.7 m ; incl. 1.72 g/t Au over 1.0 m

CAS-17-93 (Section 628000) Vertical depth : -110 m

•

0.23 g/t Au over 12.85 m ; incl. 1.16 g/t Au over 1.05 m

CAS-17-94 (Section 628100) Vertical depth : -200 m

•

0.36 g/t Au over 8.0 m ; incl. 2.72 g/t Au over 0.5 m

CAS-17-96 (Section 628500) Vertical depth : -100 m

•

18.7 g/t Au over 0.5 m

CAS-18-98 (Section 628400) Vertical depth : -195 m

•

0.44 g/t Au over 1.9 m

CAS-18-100 (Section 628500) Vertical depth : -200 m

•

0.16 g/t Au over 1.0 m

CAS-18-101 (Section 628000) Vertical depth : -210 m

•

0.16 g/t Au over 14.25 m

- 14 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

CAS-18-104 (Section 627800) Vertical depth : -150 m

•

0.23 g/t Au over 18.5 m ; incl. 2.72 g/t Au over 0.5 m

CAS-18-105 (Section 627800) Vertical depth : -225 m

•

0.51 g/t Au over 26.0 m ; incl. 2.09 g/t Au over 2.3 m

CAS-18-109 (Section 627850) Vertical depth : -550 m

•

0.14 g/t Au over 21.0 m

CAS-18-110 (Section 627600) Vertical depth : -170 m

•

0.34 g/t Au over 2.95 m

CAS-18-111 (Section 628250) Vertical depth : -480 m

•

0.18 g/t Au over 12.0 m

CAS-18-112 (Section 628650) Vertical depth : -510 m

•

0.28 g/t Au over 3.1 m

Best Results 2017-2018 – Vortex Zones 435 & 425

CAS-17-93 (Section 628000) Vertical depth : -180 m

•

3.45 g/t Au over 2.8 m ; incl. 5.0 g/t Au over 0.95 m (Zone 435)

CAS-17-93 (Section 628000) Vertical depth : -200 m

•

0.29 g/t Au over 7.3 m (Zone 425)

CAS-17-94 (Section 628100) Vertical depth : -250 m

•

0.34 g/t Au over 10.9 m ; incl. 5.18 g/t Au over 1.4 m ; incl. 7.71 g/t Au over 0.8 m (Zone 435)

CAS-18-110 (Section 627600) Vertical depth : -300 m

•

1.42 g/t Au over 6.2 m (Zone 425)

CAS-18-112 (Section 628650) Vertical depth : -550 m

•

0.71 g/t Au over 7.25 m (Zone 435)

Holes CAS-18-113, 114 and 115 were drilled outside the Vortex zone on other IP-OreVision targets.
No significant results were obtained

A new drilling program (8 ddh; 2,850 m) is commencing in order to test the eastern and western
extensions of the Vortex zone as well as a newly identified potential area located about 1 kilometre
north of Vortex.

4.5 Jouvex (Au), in partnership with SOQUEM and operated by Midland

Property Description
The Jouvex property is located about 50 kilometres to the southwest of Matagami and as at September
30, 2018 is composed of 268 claims covering an area of approximately 14,956 hectares. Some claims
were dropped therefore the Corporation impaired partially for $3,303 ($7,707 in Fiscal 17).

See the Casault section for the details on the agreement signed with SOQUEM.

Exploration work on the property
No exploration work conducted on Jouvex during Fiscal 18. Midland is currently preparing a drilling
program for next winter in order to test the best remaining targets on the property.

- 15 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

4.6 Heva (Au), operated by Midland

Property Description
The Heva West block consists of 4 contiguous claims adjacent to the west of the Maritime-Cadillac
property, currently a 49% Midland / 51% Agnico Eagle. The Heva East block is located about
4 kilometres to the southeast and consists of 30 contiguous claims largely covering sedimentary rocks
of the Cadillac Group just north of the Piché Group. Some claims are subject to a 2% NSR royalty to
the original holders, half of the royalty can be bought back for a payment of $1,000,000.

On April 27, 2017, the Corporation had signed an option agreement with IAMGOLD whereby
IAMGOLD could have earned, in three options, a maximum interest of 65% in the Héva property, On
November 20, 2018, the Corporation received from IAMGOLD a termination notice for the Héva option
agreement.

Exploration work on the property
During Fiscal 18, IAMGOLD completed a drilling program consisting in five (5) holes totalling
1,390 metres. This program tested the best structural, geological and geophysical (IP-Mag) targets
identified during the compilation phase.

Unfortunately, no significant results were obtained but some small anomalous intervals were
intersected. The best result returned 2.28 g/t Au over 1.15 metre in hole HV-17-04 and 0.97 g/t Au
over 2.30 metres in hole HV-17-03.

4.7 Valmond (Au), operated by Midland

Property Description
The Corporation acquired claims by map staking about 50 kilometres to the west of the town of
Matagami, Abitibi. As at September 30, 2018, this property consists in 80 claims covering an area of
approximately 4,453 hectares. Some claims were dropped therefore the Corporation impaired partially
for $1,831 in Fiscal 17.

Exploration work on the property
A ground magnetic survey was completed on Valmond during Q2-18. This survey covered the NW
extension of the main showing. No significant magnetic feature was identified.

4.8 Samson Ni-Cu-PGE operated by Midland

Property Description
As at September 30, 2018, the Samson property consists of 264 claims covering a surface area of
about 14,654 hectares about 50 kilometres west of the town of Matagami, in Abitibi. Some claims were
dropped therefore the Corporation impaired partially for $1,332 in Fiscal 18.

Exploration work on the property
A ground Armit-EM survey was completed on three grids during Q2-18 in order to cover three
structurally complex areas having week airborne conductors. One weak conductor has been identified
on each of the three grids.

4.9 La Peltrie (Au), operated by Midland

Property Description
As at September 2018, the La Peltrie property comprises 419 claims covering a surface area of about
23,110 hectares and encompasses possible subsidiary faults to the south of the regional Lower Detour
Fault over a distance of more than 10 kilometres.

- 16 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

On August 24, 2017, the Corporation acquired 4 claims from Globex Mining Enterprises Inc. (“Globex”)
by granting a 1% Gross Metal royalty to Globex.

On August 29, 2017, the Corporation signed an option agreement (amended August 3, 2018) with
Niobay Metals Inc. (“Niobay”) whereby Niobay may earn, in two options, a maximum interest of 65%
in the La Peltrie property, by fulfilling the following conditions:

First Option for a 50% initial interest
Upon signature (completed, 200,000 shares of Niobay received, valued
at $30,000)
On or before December 31, 2017 (completed)
On or before January 31, 2019
On or before August 31, 2019
On or before August 31, 2020
On or before August 31, 2021

Payments in
cash
$

30,000

-
30,000
50,000
70,000
70,000
250,000

Work
$

500,000
-
400,000
600,000
1,500,000
3,000,000

Following the initial earn-in of its 50% interest, NioBay may earn an additional tranche of 15% interest
for an undivided 65% interest in the Properties, by producing a Preliminary Economic Study on or
before August 31, 2023.

The Corporation is the operator.

Exploration work on the property
During Q1-18, a drilling program comprising seven (7) drill holes totalling 1,881.0 metres was
completed. This program tested the best IP-OreVision targets identified on the West and Central grids.

The best results of this campaign come from two drill holes spaced about 300 metres apart, which
tested the gold-bearing iron formation. Drill holes LAP-17-04 and LAP-17-05 yielded 14 gold values
above 0.1 g/t Au with gold intersections ranging from 0.10 g/t Au over 2.0 metres to a maximum of
1.23 g/t Au over 2.50 metres. The auriferous mineralization is hosted by semi-massive to massive
pyrrhotite-bearing sulphide horizons between 10 and 60 metres thick. (Note that true thicknesses
cannot be determined with the information available at this time; intervals are therefore reported in
core length). The remaining drill holes in this campaign, drilled to test areas other than the iron
formation, explained the IP anomalies with the presence of sulphides but no significant values were
obtained.

The massive sulphides occur near the contact between calc-alkaline felsic tuffs (F1-type) to the south
and andesites to the north. The geochemical signature of these felsic tuffs is very similar to that of the
felsic tuff and rhyolite sequences that host the Bousquet-LaRonde volcanogenic gold deposits in the
Southern Abitibi. Moreover, the pyrrhotite-bearing massive sulphides show enrichments in gold, and
also in silver and lead, near the contact with andesites, indicating the presence of a particularly
favourable proximal exhalative horizon in this location. Integration of all the results of this campaign
has led to the identification of a high-priority exploration target at the intersection between an
interpreted synvolcanic fault and the favourable felsic tuff-andesite contact. This target remains to be
drill-tested.

An interpretation of the VTEM survey was completed by consultant Marc Boivin. He proposed ten (10)
targets to be followed-up with TDEM ground surveys. Following internal discussions, one grid (VTEM
LAP-1-2-4) was selected and extended for a follow-up. The TDEM survey was completed during
December and a strong conductor was detected.

- 17 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

4.10 Wawagosic (Au), operated by Midland

Property Description
The Wawagosic property is wholly owned by Midland and is located 30 kilometres east of Detour Lake.
As at September 30, 2018, it consists of 81 claims covering a surface area of about 4,493 hectares in
the Abitibi region of Quebec. Some claims were dropped therefore the Corporation impaired partially
for $2,143 in Fiscal 18.

Exploration work on the property
An heliborne High-Resolution magnetic survey was completed during the summer 2018. Several
structural lineaments were interpreted.

4.11 Adam (Cu-Au), operated by Midland

Property Description
The Adam property is wholly owned by Midland and is located about 65 kilometres west of the town of
Matagami. As at September 30, 2018, it consists of 205 claims covering a surface area of about 11,397
hectares in the Abitibi region of Quebec. Some claims were dropped therefore the Corporation
impaired partially for $2,632 in Fiscal 18.

The Adam property has strong gold and copper potential located about 15 kilometres east of the B26
zone held by SOQUEM and about 20 kilometres east of the former Selbaie mine, which historically
produced 56.5 Mt grading 1.9% Zn, 0.9% Cu, 38.0 g/t Ag and 0.6 g/t Au.

Exploration work on the property
During Q2-18, an IP-OreVision survey was completed on Adam. The three grids covered the southern
portion of the property where historical till gold anomalies had been identified. The survey also targeted
some unexplained VTEM conductors. Two strong IP- chargeability anomalies were identified and
represent new drilling targets in the southern portion of the main block east of the B26 deposit owned
by SOQUEM.

During Q4-18, two (2) grids were covered with ground TDEM surveys. One strong conductor was
identified on Grid A while no conductor was detected on Grid B.

4.12 Mistaouac (Au), operated by Midland

Property Description
The Mistaouac property is wholly owned by Midland and is located about 75 kilometres to the south-
west of Matagami. As at September 30, 2018, it consists of 390 claims covering a surface area of
about 20,023 hectares in the Abitibi region of Quebec. Some claims were dropped therefore the
Corporation impaired partially for $1,253 in Fiscal 18.

Exploration work on the property
An important VTEM survey was completed over the Mistaouac and Turgeon properties located in the
vicinity of the Casa Berardi mine. Some new conductors have been identified on the Mistaouac West
survey. For the main Mistaouac block, the VTEM detected almost the same anomalies as the previous
Input surveys.

- 18 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

4.13 Turgeon (Au), operated by Midland

Property Description
The Turgeon property is wholly owned by Midland and is located 150 kilometres to the south-west of
Matagami. As at September 30, 2018, it consists of 246 claims covering a surface area of about 13,786
hectares in the Abitibi region of Quebec.

Exploration work on the property
An important VTEM survey was completed over the Mistaouac and Turgeon properties located in the
vicinity of the Casa Berardi mine. For the Turgeon block, a few new conductors were identified.

4.14 Manthet (Au), operated by Midland

Property Description
The Manthet property is wholly owned by Midland and is located about 30 kilometres north-east of
Detour Lake. As at September 30, 2018, it consists of 7 claims covering a surface area of about 386
hectares in the Abitibi region of Quebec.

Exploration work on the property
No exploration work conducted during Fiscal 18.

4.15 Abitibi Gold (Au) operated by Midland

Property Description and exploration work on the property
As at September 2018, the Abitibi Gold property comprises 17 claims covering a surface area of about
943 hectares. Some projects included in Abitibi Gold were dropped therefore the Corporation wrote off
$264,944 during Fiscal 18 ($130,396 in acquisition costs and $134,548 in exploration work).

On May 28, 2018, the Corporation signed a letter of intent, formalized by a definitive agreement signed
on July 16, 2018, whereby it sold 17 claims for $8,000 cash and a 1% NSR royalty.

Exploration work on the property
No exploration work conducted during Fiscal 18.

GRENVILLE-APPALACHES

4.16 Weedon (Cu-Zn-Au) operated by Midland

Property Description
This property is located in the Eastern Townships, about 120 km south of Quebec City and as at
September 30, 2018 is comprised of 153 claims covering an approximate area of 7 859 hectares.
Some claims are subject to NSR royalties of:
• 1%, the Corporation can buy it back the royalty for $500,000 per 0.5% tranche for a total of

$1,000,000;

• 0.5%, the Corporation can buy it back this royalty for $500,000;
• 1.5% on all metals except gold and silver, the Corporation can buy it back for $500,000 per 0.5%

tranche for a total of $1,500,000.

Some claims were dropped therefore the Corporation impaired partially for $7,091 in Fiscal 17 the
exploration property cost.

- 19 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

Exploration work on the property
A till geochemical survey was completed during Q1-18 to the north-east of the Weedon mine.

The till survey identified a new unexplained gold and zinc anomaly to the northwest of the Lingwick
deposit. A field follow-up program is in preparation for November-December.

4.17 Gatineau Zinc (Zn), operated by Midland

Property Description
Midland owns a 100% interest in a land position for zinc, including as at September 30, 2018, 168
claims covering 9,883 hectares distributed in the Gatineau Area, approximately 200 kilometres
northwest of the city of Montreal. Some claims were dropped therefore the Corporation impaired
partially for $3,808 in Fiscal 17.

Exploration work on the property
A gravimetric survey was completed during Q2-18 on the Bouchette property. Results show two nice
anomalies coincident with dolomitic marbles to the SE of the Bouchette showing and also further to
the east.

4.18 Vermillon (Cu-Au), in partnership with SOQUEM and operated by SOQUEM

Property Description
The Vermillon property is located some 90 km southwest of the town of La Tuque, Quebec and
consists as at September 30, 2018 of 16 contiguous claims covering a total surface area of 934
hectares in joint venture 53.4% SOQUEM/ 46.6% Midland. Some claims are subject to a 1% NSR
royalty and the Corporation can buy it back the royalty for $500,000 per 0.5% tranche for a total of
$1,000,000.

Exploration work on the property
No exploration work conducted on Vermillon for Fiscal 18.

JAMES BAY

4.19 James Bay Gold JV (Au), operated by Osisko

Property Description
On June 13, 2016, a joint-venture agreement (50%-50%) was signed with Osisko Exploration James
Bay Inc. (“Osisko”) whereby Osisko and the Corporation will cooperate and combine their efforts to
explore the JV Eleonore property recently staked by the two corporations. The property is located 12
kilometres southeast and northwest of Goldcorp’s Eleonore deposit. The property regroups several
properties for a total of 246 claims covering a surface area of about 12,868 hectares.

Each partner obtained a 0.5% NSR royalty as a mutual consideration for the constitution of the joint-
venture.

Exploration work on the property
During Q3-18 the IP survey was completed and covered an area where a field of copper-rich, glacially
transported, sub-angular diorite boulders were discovered (see the September 26, 2017 press
release). Four (4) diorite boulders sampled in 2016 and 2017 returned 8.28% Cu, 6.85% Cu, 4.54%
Cu and 3.45% Cu in grab samples (note that grab samples are selective by nature and values reported
may not be representative of mineralized zones). The Cu±Mo±Ag±Bi geochemical signature of the
boulders and the dioritic host rock suggest a porphyry copper system. These boulders are all found
within a 100-meter diameter zone, which suggests a local source.

- 20 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

The IP survey revealed two strong zones of chargeability anomalies that could indicate areas of
disseminated copper or iron sulfides within the bedrock. The first strong IP chargeability anomaly is
located less than 100 metres north-east (up-ice) from the copper-bearing boulder field and is a prime
target for follow-up. The second strong IP chargeability anomaly, located about 600 metres north of
the boulders, is also very interesting because it is also associated with a preeminent magnetic high
and an electromagnetic anomaly that were delineated by a historical Mag-EM airborne survey
performed in the area. Such a combination of magnetic and chargeability anomalies is typical of the
copper-rich core zones of porphyry copper deposits, which contain both sulfides and magnetite.

Trenching and channeling of the IP anomaly closest to the boulder field has revealed a significant
copper-bearing mineralized horizon in TR-004. Channels yielded the following significant values: (note
that all thicknesses reported in this press release are apparent thicknesses; true thicknesses cannot
be determined at this time)

• 2.10% Cu and 44.1 g/t Ag over 0.9 m (TR-004-G2)
• 1.33% Cu and 81.2 g/t Ag over 2.0m, including 2.47% Cu and 159 g/t Ag over 1.0m (TR-004-R3)
• 0.892% Cu and 10.7 g/t Ag over 0.5 m (TR-004-G3)

Copper mineralization in TR-004 is hosted in a diorite that is strongly altered in epidote and mineralized
in chalcopyrite-pyrite. It is very similar to the mineralization found in the nearby boulders.

Trenches TR-007 and TR-008, located about 750 meters northwest of TR-004, also exposed a very
significant porphyry-style quartz stockwork in a diorite/granodiorite with strong chlorite, K-feldspar,
hematite, pyrite and epidote alterations. Anomalous copper grades (up to 0.05% Cu) were also found
in these trenches. The trenches targeted an IP anomaly but could not explain it because of thick
overburden.

In addition, a grab sample of a coarse-grained granodiorite outcrop located about 1 km southeast of
TR-004 also yielded 0.31% Cu, 0.32 g/t Au and 5.6 g/t Ag, hinting at the presence of additional copper
mineralization as well as gold in that area. Finally, an outcrop of a felsic dyke located about 800 km
meters southeast of TR-004 with massive molybdenite clusters also yielded >1 % Mo in a grab sample.

4.20 JV JB Altius (Au), operated by Midland

Properties description
On February 10, 2017, the Corporation signed a letter of intent creating a strategic alliance with Altius,
whereby Altius and the Corporation will combine their efforts to jointly explore the gold potential of the
extensive James Bay region. The Corporation is the operator.

The following projects were identified as designated projects (with number of claims and hectares
disclosed as at September 30, 2018): Elrond (109 claims on 5 649 hectares), Gondor (41 claims on
2 107 hectares), Helms Deep (70 on 3,699 hectares), Isengard (132 claims on 6 758 hectares), Minas
Tirith (152 claims on 8,110 hectares), Moria (104 claims on 5,495 hectares), Shire (573 claims on
30,474 hectares), Mythril (66 claims on 3,378 hectares) et Fangorn (16 claims on 816 hectares).

On July 13, 2018, the Corporation amended, subject to the Exchange approval, the James Bay
strategic alliance (“Alliance”) memorandum of understanding (“MOU”) signed on March 30, 2017 as
follow:
•

•

- 21 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

•

Altius will subscribe additional common shares for its portion of future work program on the
Designated Projects, at market price;
If further designated projects are declared, Altius will subscribe additional common shares of the
Corporation for its portion of the work programs, at market price;
All designated projects share require the registration of a 2% NSR, 50% 50% to the respective
parties (“Alliance Royalty”), with a mutual right of first offer on the sale of any interest in the Alliance
Royalty.

The MOU will expire on December 31, 2019, with an option to continue the Alliance for two additional
years. The duration of this MOU can be reduced or extended by mutual consent.

Exploration work on the properties
During Fiscal 18, Midland completed prospecting over a new generation of reccy targets that were
generated earlier this year. Prospecting was carried out on Mythril (formerly Lothlorien), Fangorn, Hel’s
Deep, Minas Tirith while trenching and channel sampling was completed on Shire and Moria.

The main highlight of this project is the discovery of a new significant Cu-Au-Mo-Ag mineralized system
called Mythril. The mineralized system is interpreted based on outcrops and locally sourced, angular
float fields. It is interpreted to be of the “Cu-Au-Mo porphyry” type. The full dimensions of the
mineralization are not known yet. Midland significantly increased its land position around the discovery
and plans to start geophysical surveys in the coming weeks.

September 2018 Phase of Work

The Cu-Au-Mo-Ag mineralized system is at least 700 meters long on surface, oriented east-west, open
in both directions.

Highlights

• Fifty-four (54) new high-grade Cu-Au-Mo-Ag mineralized floats; average values of 2.61% Cu, 1.25
g/t Au, 0.13% Mo, 28.7 g/t Ag over the 54 floats (grab samples); maximum values of: 13.2% Cu;
16.8 g/t Au; 0.58% Mo; 112 g/t Ag. Float are concentrated in five major fields. Most of the float are
angular and are interpreted to be locally derived (<100m transport distance).

• Channel result of 2.74% Cu, 0.44 g/t Au, 0.06% Mo, and 24.3 g/t Ag over 2.7 meters, including
4.52% Cu, 0.65 g/t Au, 0.1% Mo, and 40.1 g/t Ag over 1.5 meters on the Celeborn showing.
Mineralization open in all directions.

• New “Arwen” Cu-Au-Mo-Ag mineralized float field, that returned high-grade gold values, with up to

16.8 g/t Au. It is the easternmost float field.

• New “Legolas” showing with grab sample of 4.89% Cu, 1.5 g/t Au, 46 g/t Ag.

October 2018 Phase of Work

The copper-gold-molybdenum-silver mineralized system is now identified over 2 kilometers strike
length on surface (E-W), up from 0.7 kilometers in September, and is still open in both directions. The
mineralized system is interpreted based on surface Cu-Au-Mo-Ag showings. The full dimensions of
the mineralization are not known yet.

Highlights

• Discovery of several new Cu-Au-Mo-Ag showings and one new Mo-only showing (3.04% Mo),
extending the mineralized system from 0.7 kilometers to more than 2 kilometers strike length, open
east and west.

- 22 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

• Average values over 45 mineralized (>0.1 % Cu) grab samples from these new showings are:
2.04 % Cu, 0.36 g/t Au, 0.11 % Mo, 17.6 g/t Ag (2.85 % Cu Eq*). Maximum values of : 12.65 % Cu;
1.7 % Mo ; 1.51 g/t Au ; 69.8 g/t Ag.

• Fifty-six (56) new Cu-Au-Mo-Ag mineralized floats (>0.1 % Cu) discovered in the eastern and
western extensions of the system. Average values of 1.33 % Cu, 0.52 g/t Au, 0.09 % Mo, 13.3 g/t
Ag (2.12 % Cu Eq*) over 56 floats (grab samples). Maximum values of : 16.95 % Cu; 4.91 g/t Au;
0.44 % Mo; 49.4 g/t Ag. Most of the floats are angular and are interpreted to be locally derived
(<100m transport distance).

4.21 Éléonore Gold Properties (Au) operated by Midland

Property Description
The Éléonore new property is divided in three distinct blocks with two of them within 25 kilometres
from the Éléonore gold discovery of Goldcorp and one southeast 30 km further along strike. It
encompasses a group of 258 claims covering an area of approximately 13,532 hectares as at
September 30, 2018.

Exploration work on the property
During Q4-17 a prospecting program was completed on the Eleonore Centre property. No significant
result was obtained during this program.

4.22 James Bay Gold (Au), operated by Midland

Property Description
Midland owns a 100% interest on 321 claims as at September 30, 2018 covering 15,587 hectares in
the James Bay Area. Some claims were dropped therefore the Corporation impaired partially for
$1,657 the exploration property cost ($12,002 in Fiscal 17).

Exploration work on the property
Last fall on the Lasalle property, a grab sample of a silicified and foliated amphibolite containing about
1% pyrite, located in a 100 meters thick shear zone, had returned 22.6 g/t Au, as well as strongly
anomalous copper, bismuth and molybdenum (note that grab samples are selective by nature and
values reported may not be representative of mineralized zones). Along the same shear zone, 750
meters east, another grab sample of foliated amphibolite had returned 7.03 g/t Au and anomalous
copper and bismuth. Finally, a further 800 meters east in the same shear zone, a grab sample of
paragneiss with pyrite, galena and sphalerite stringers had returned 2.35 g/t Au, 105 g/t Ag, 3.32% Pb
and 5.53% Zn, along with strongly anomalous bismuth and antimony. The shear zone that hosts these
showings is located at the contact between metavolcanic and metasedimentary rocks, is about 100
meters thick and is now interpreted to be more than 8 kilometers long.

On Galinée, prospection focussed on the northeastern part of the block, where interesting gold values
were obtained in 2015 (3.63 g/t Au; 1.07 g/t Au; 0.76 g/t Au). In the same area, a shear zone about 3
meters wide containing quartz-tourmaline veins with pyrite stringers yielded gold values of 14.85 g/t
Au, 4.35 g/t Au and 0.67 g/t Au (“Elsa” showing) in grab samples (note that grab samples are selective
by nature and values reported are not representative of mineralized zones). This mineral assemblage
and mineralization style are typical of orogenic gold deposits. Four (4) of seven (7) samples collected
in the shear zone yielded more than 0.1 g/t Au. The zone is still open to the east and west.

- 23 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

On Lasalle, the trenches mainly targeted a silicified and foliated amphibolite that had returned 22.6 g/t
Au in a grab sample in 2017, as well as strongly anomalous copper, bismuth and molybdenum. Two
channels separated by 3 meters yielded 3.08 g/t Au / 1.25 m, and 1.87 g/t Au / 1.25 m (note that all
thicknesses reported in this press release are apparent thicknesses; true thicknesses cannot be
determined at this time). The gold-bearing intervals occur in a one-meter wide sheared and altered
zone within amphibolites, with disseminated chalcopyrite, pyrrhotite and pyrite. Some trenches also
targeted a strong gold grain anomaly in till, but did not return any significant results.

NORTHERN QUEBEC

4.23 Pallas (PGE), operated by Midland

Property Description
As at September 30, 2018, the property totals 576 claims covering approximately 26,139 hectares in
the Labrador Trough («Trough») some 80 kilometres west of Kuujjuak, Québec. Some claims were
dropped therefore the Corporation impaired partially for $5,923 the exploration property cost in
Fiscal 17.

On March 28, 2017, JOGMEC withdrew from the option agreement signed on January 21, 2014 and
abandoned its right to exercise its option to acquire a 50% interest in the Pallas PGE property.

Exploration work on the property
No exploration work conducted on Pallas during Fiscal 18.

4.24 Willbob (Au), operated by Midland

Property Description
The Willbob property in the Labrador Trough consists of 1,498 claims covering about 68,789 hectares
as of September 30, 2018, and is located approximately 66 kilometres west-southwest of Kuujjuaq
(Québec), near and in a geological environment similar to Midland’s Pallas Project which is currently
being worked in partnership with JOGMEC.

On October 2, 2017, the Corporation signed an acquisition agreement whereby it acquired 8 claims
for a $10,000 cash payment and a 2% NSR royalty of which 1% can be bought back for a payment of
$1,000,000.

Exploration work on the property
During Q1-18, Midland received the complete and final assay results of the fall prospecting program
and released the results of the drilling campaign.

Prospecting Highlights

The Wayne showing was first identified in August 2017, with two grab samples separated by about
200 meters that returned 32.7 g/t Au and 2.47 g/t Au, in an area that was not explored previously. First,
an elevated value of 250.10 g/t Au was obtained from a single, isolated sample located about
225 meters south-east of the initial 32.7 g/t Au value. Re-sampling of the original 32.7 g/t Au sample
yielded 6.54 g/t Au, while values of 40.10 g/t Au, 24.80 g/t Au, 1.94 g/t Au, 1.81 g/t Au, 1.56 g/t Au
were obtained from grab samples collected in a 10 meters radius around the original sample. Another
grab sample collected about 25 meters south also yielded 1.15 g/t Au. Mineralisation in the Wayne
showing area consists in a quartz diorite that contains numerous mm- to cm-thick quartz veinlets; the
veinlets and the wallrock are mineralized in pyrrhotite with usually no arsenopyrite. Ten (10) samples
out of 29 samples collected from the Wayne area yielded more than 1 g/t Au, with three additional
ones yielding between 0.1 and 1 g/t Au.

- 24 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

The new Didgeridoo gold zone is located about 15 kilometers southeast of Osisko/Barrick’s Pump Pad
Ridge gold showing, and about 70 kilometers south of Midland’s Golden Tooth zone. It is part of a new
claim block staked in January 2017. Channel samples on Didgeridoo yielded 1.37 g/t Au / 6.1 m.
Several grab samples collected north and south of this channel along the zone also yielded significant
gold values: 2.77 g/t Au, 1.82 g/t Au and 0.62 g/t Au located between 15 and 40 meters north of the
channel, and 2.35 g/t Au, 1.35 g/t Au, 1.235 g/t Au, 1.20 g/t Au and 0.63 g/t Au from 15 to 25 meters
south. Note that grab samples are selective by nature and values reported may not be representative
of mineralized zones. The Didgeridoo zone appears to be at least 60 meters long by 5 to 10 meters
wide, and is open to the south. It is a shear zone with abundant fault-filling quartz-calcite veins and
veinlets, along with minor disseminated pyrrhotite within the veins and in the strongly chloritized host
gabbro. Six (6) grab samples out of 19 at Didgeridoo yielded more than 1 g/t Au, and four (4) samples
also yielded between 0.1 and 1.0 g/t Au. Following the discovery, Midland acquired 8 adjacent claims
that contain an historical gold showing that returned up to 2.8 g/t Au in grab sampling, located on-strike
about 500 meters northwest of Didgeridoo.

Several additional gold showings were also discovered in the Fall 2017 campaign and include (grab
samples): the Cross Lake Showing (8.82 g/t Au, 39.20 g/t Ag; 1.28 g/t Au; 1.03 g/t Au), the Nak showing
(6.26 g/t Au), the Lac H showing (1.75 g/t Au) and the West Smokey Bear showing (2.35 g/t Au;
2.21 g/t Au; 2.16 g/t Au; 1.23 g/t Au).

Highlights of the 2017 drilling campaign

The objective of the 2017 drilling campaign was primarily to test several arsenopyrite-bearing gold
showings within shear zones, found in the northern corner of the project (Golden Tooth, Polar Bear,
GTN, Kuni and Kuurok showings). A total of ten (10) holes totalling 3116 meters tested these shear
zones. One (1) hole 189 meters deep tested the quartz-ankerite brittle veins and breccias of the
Sunshine showing. Three (3) more holes also tested the Stars gold-bearing volcanogenic massive
sulfide prospect at a very shallow depth (less than 25m vertical depth), for a total of 186 meters.

shears. WB-17-18

Drillhole WB-17-18 tested the Sunshine showing (up to 7.16 g/t Au in surface grab sampling in 2016).
Sunshine represents a different mineralization style compared to the arsenopyrite-bearing shear zones
mentioned previously; it contains no arsenopyrite and is hosted within brittle structures and breccias
instead of ductile-brittle
intervals:
36.40 g/t Au / 0.50 m, 1.99 g/t Au / 0.45 m, and 0.50 g/t Au / 1.05 m, all found between 96.35 and
107.55 meters. Unless otherwise stated, all drill intersections reported in this report are apparent
thicknesses; true thicknesses cannot be determined at this time for most intersections. Mineralization
consists in a non-sheared, altered diorite containing un-mineralized quartz veins, with pyrite and
pyrrhotite in the wallrock of the veins. Hole WB-17-18 confirms that the Sunshine showing is a newly
recognized mineralization style that has the potential for high gold grades. The mineralized zone
intersected in WB-17-18 is still open in all directions.

three gold-bearing

intersected

Holes WB-17-09, 10 and 11 tested the extensions of the Golden Tooth gold-arsenopyrite shear zone
that returned up to 3.1 g /t Au / 1.7 m in 2016 drilling. All three holes successfully intersected the zone.
Hole WB-17-11 tested the zone on a section located 100m northwest of WB-16-05, and yielded
2.23 g/t Au / 1.25 m (0.91 m true width). Hole WB-17-09 tested the southwestern extension of the zone
at depth, and returned 0.422 g/t Au / 2.15 m (1.32 m true width) between 280.85 and 283 meters.
Finally, hole WB-17-10 tested the zone on a section 100 meters southeast of WB-16-07; it yielded
0.81 g/t Au / 1.95 m (1.43 m true width). The Golden Tooth zone was demonstrated to be at least
250 meters long on surface, continuous over more than 300 meters downdip, and is still open in all
directions. Field and core observations indicate it is a classic, orogenic-style, gold-arsenopyrite shear
zone, typical of many major gold deposits worldwide.

- 25 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

Hole WB-17-13 tested the Kuurok arsenopyrite-bearing shear zone (up to 14.5 g/t Au in grab sample);
it yielded 3.50 g/t Au / 0.35 m. In the Polar Bear area, hole WB-17-14 intersected an arsenopyrite-
bearing shear zone near a diorite/mudstone contact that yielded 0.73 g/t Au / 2.7 m. In the Kuni area,
numerous quartz-arsenopyrite tension veins scattered over tens of meters yielded 1.82 g/t Au / 0.55 m,
2.54 g/t Au / 0.35 m meters as well as many weakly anomalous Au values.

Holes WB-17-20, 21 and 22 tested the Stars gold-bearing massive sulfide prospect at a very shallow
depth (maximum of 25 meters vertical depth). Holes WB-17-21 and 22 were drilled from the same drill
setup but at different angles. Both holes intersected the massive sulfide lens. WB-17-21 yielded
0.40 g/t Au, 0.79% Cu and 0.046% Co / 1.9 m, in pyrrhotite-rich massive sulfides. WB-17-22 yielded
0.49 g/t Au, 0.59% Cu and 0.042% Co / 4.55 m, including 2.56 g/t Au, 0.51% Cu and 0.153% Co over
0.45 m in pyrite-rich massive sulfides. A section of sulfides-rich black shales further down also yielded
0.28 g/t Au / 5.65 m. Hole WB-17-20, drilled on a section 25 meters to the southeast, narrowly missed
the massive sulfide lens because of a surface erosion feature.

Summer 2018 program

During Q3-18, Midland completed a new prospecting on Willbob including channel sampling program
of the Didgeridoo and Ants showings.

Didgeridoo Zone

Channel sampling conducted on the Didgeridoo Zone returned several gold results including an
interval grading 2.30 g/t Au over 8.95 metres, including 3.56 g/t Au over 3.15 metres. This channel
sample is located at the northwestern edge of trench DJ-05; the zone thus remains open to the
northwest. (Note that true thicknesses of the channels cannot be determined at this time with the
information available).

The Didgeridoo Zone is located in the south part of the Willbob project, approximately 15 km southeast
of the main gold showings found on the Kan project held by Osisko Mining and currently optioned by
Barrick Gold. The Didgeridoo Zone consists of a 5 to 10-metre-wide shear zone trending NW-SE that
hosts abundant fault-filling quartz-calcite veins, occurring in gabbros and quartz diorites. Up to six (6)
occurrences of visible gold were observed within this zone, which was stripped over a distance of
approximately 100 metres in length and which remains open at both ends.

Best results – 2018 channel sampling – Didgeridoo Zone

Channel DJ-05: 2.30 g/t Au over 8.95 m incl. 3.56 g/t Au over 3.15 m (open to the NW)

Channel DJ-02: 4.71 g/t Au over 2.90 m incl. 9.30 g/t Au over 1.30 m

Channel DJ-01: 1.67 g/t Au over 8.80 m (extension of the 2017 channel)

Channel DJ-04: 1.45 g/t Au over 6.70 m

Several other new promising results on Willbob

The prospecting campaign has also revealed a new gold-bearing zone (“Ants”), located near the
junction between the Mélèzes and Caniapiscau rivers. The Ants zone occurs as disseminated
pyrrhotite-chalcopyrite and minor quartz veins in a strongly chloritized and ankeritized quartz diorite.
The mineralized zone is observed on outcrop to be 70 meters long and 5 to 25 meters wide and is
open to the east. A channel cut in the western part of the zone returned 0.81 g/t Au / 5.8 m, including
1.48 g/t Au / 2.8 m. Of the fourteen (14) grab samples collected on the zone, eleven (11) returned
more than 0.1 g/t Au, and seven (7) returned more than 0.5 g/t Au, with a maximum of 1.8 g/t Au. The
average grade of the grab samples is 0.66 g/t Au. Another grab sample of a strongly altered diorite
with disseminated pyrrhotite, collected about 100 meters east of the zone, also yielded 4.27 g/t Au.
It could represent a higher-grade eastern extension of the zone.

- 26 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

The Wayne showing is located in the northern part of the project and was found during the 2017
prospection campaign. Several high-grade gold values were found in grab samples, including
40.1 g/t Au, 32.7 g/t Au, 24.8 g/t Au and 6.5 g/t Au, as well as several lower grade values between
1 and 2 g/t Au. The Wayne showing was trenched and channeled in 2018. Many gold-bearing intervals
were found in channel sampling: 2.70 g/t Au / 0.7 m, 1.76 g/t Au / 0.5 m, 1.37 g/t Au / 1.4 m, 1.34 g/t Au
/ 0.7 m, 0.84 g/t Au / 1.4 m, 0.59 g/t Au / 0.7 m and 0.56 g/t Au / 0.5 m. Mineralization at Wayne occurs
as tension quartz veins and fractures and with strong chlorite-ankerite-pyrrhotite alteration of the host
quartz diorite.

A grab sample of a 5 cm thick quartz-galena tension vein about 250 meters southeast of the Wayne
showing yielded 140.5 g/t Au (“Janet” showing). The quartz diorite wallrock, mineralized in pyrrhotite-
arsenopyrite, also returned 1.06 g/t Au in a grab sample. This vein is located about 25 meters west of
another similar vein that returned 250.1 g/t Au in 2017.

The new “Roméo” showing is located about 4 km west of the Wayne showing, in an area that was not
previously explored. It is a 50 cm thick quartz vein within a quartz diorite mineralized in pyrrhotite. The
vein returned 3.15 g/t Au while the host diorite yielded 1.94 g/t Au in grab samples.

Finally, the Lac H showing (1.75 g/t Au in a 2017 grab sample) was revisited and manually trenched.
Further grab sampling revealed the following gold grades: 4.25 g/t Au, 3.81 g/t Au, 2.05 g/t Au,
1.37 g/t Au and 0.51 g/t Au. The Lac H showing occurs as tension fractures and quartz veinlets with
pyrrhotite mineralization within a quartz diorite. (Note that gold values obtained from selected grab
samples during this program are not representative of mineralized zones).

During October 2018, Midland returned for an additional channel sampling program on Ants. Final
results are still pending.

4.25 Soissons (Ni-Cu-Co), operated by Midland

Exploration work on the property

During Q2-18, Midland announced the acquisition by map staking of a new, 100% owned, nickel-
copper-cobalt project in the Churchill geological province, Quebec. This new project consists of a total
of 175 claims covering about 8,226 hectares and is located approximately 150 kilometers southeast
of the town of Kuujjuaq, Quebec.

The new project, called Soissons, covers a series of Ni-Cu-Co showings associated with two distinct
troctolite to olivine-bearing gabbronorite intrusions (Soissons intrusive suite). Work done in 2000 and
2001 by previous explorers revealed the following Ni-Cu-Co grades in grab samples: 1.22% Ni, 0.5%
Cu, 0.06% Co; 1.03% Ni, 0.47% Cu, 0.05% Co (Papavoine showing); 0.63% Ni, 0.15% Cu, 0.04% Co
(A14-1W showing); 0.67% Ni, 0.43% Cu, 0.05% Co (A14-1E showing); 0.30% Ni, 0.29% Cu, 0.03%
Co (A17-1 showing) (note that grab samples are selective by nature and may not be representative of
mineralized zones). A limited drilling campaign in 2001 (9 drill holes) also revealed the following
intersections: 1.07% Ni, 0.23% Cu, 0.09% Co / 0.75m; 0.55% Ni, 0.43% Cu, 0.03% Co / 1.7m
(Papavoine); 0.57% Ni, 0.29% Cu, 0.03% Co / 1.0m (Papavoine West) (note that the true thicknesses
of the mineralized intervals are still undetermined). Drilling also returned several significant intervals
of disseminated sulfides with Ni values between 0.1% and 0.2% over tens of meters. Re-examination
of historical borehole geophysical surveys
that several very promising off-hole
electromagnetic anomalies remain untested in the extensions of these mineralized intervals.

indicates

During Q4-18, Midland completed a prospecting and channel sampling program on Soissons, final
results are pending.

- 27 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

4. EXPLORATION ACTIVITIES (CONT’D)

4.26 Soissons-NMEF (Ni-Cu-Co), operated by NMEF

Property Description
On July 27, 2018, the Corporation signed a partnership agreement (50%-50%) with NMEF, to explore
an area of the Soissons property located between 50 and 100 kilometers southeast of Kuujjuaq,
Nunavik, Quebec. The NMEF will be the operator of the partnership. As at September 30, 2018, this
project consists of a total of 31 claims covering about 1 431 hectares

Exploration work on the property
A small 8 days prospecting and mapping program was conducted by the NMEF. Results of the 50
collected samples are pending.

QUEBEC / LABRADOR

4.27 Ytterby (REE), operated by Midland

Property Description
On December 2, 2017, the last 31 claims of Ytterby Quebec were dropped while all the claims in
Labrador were dropped during Fiscal 2017. The Corporation wrote off entirely the Labrador claims for
$185,625. Therefore, as of December 2, 2017, the February 23, 2010 memorandum of agreement
signed with JOGMEC is de facto terminated and JOGMEC has lost its 49.4% interest.

Exploration work on the property
No exploration work conducted during Fiscal 18.

PROJECTS GENERATION

Midland continued some geological compilation programs in Quebec for the acquisition of new
strategic gold and base metal properties.

Some projects included in Projects Generation were dropped therefore the Corporation wrote off
$20,472 during Fiscal 18 ($20,278 in acquisition costs and $194 in exploration work).

Other Activities

Midland is pro-active in the acquisition of new mineral exploration properties in Quebec. Management
is constantly reviewing other opportunities and other projects to improve the portfolio of the
Corporation. Acquisition opportunities outside of Quebec will also be considered. Midland prefers to
work in partnership and fully intends to secure new partnerships for its properties and its 100% owned
properties.

FINANCING ACTIVITIES

The Corporation finances itself mainly through share issuance.

On November 17 and 24, 2016, the Corporation completed a private placement by issuing 1,284,354
flow-through shares at $1.35 per share, for total gross proceeds of $1,733,876. In connection with the
private placement, the Corporation paid finder’s fees of $60,650. Directors and officers of the
Corporation participated in this placement for a total consideration of $136,100.

On March 16, 2017, the Corporation completed a private placement by issuing 614,000 flow-through
shares at $1.35 per share, for total gross proceeds of $828,900.

- 28 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

FINANCING ACTIVITIES (CONT’D)

On November 22, 2017, the Corporation completed a private placement by issuing a total of 1,692,854
flow-through shares at $1.35 per share, for total gross proceeds of $2,285,354. In connection with the
private placement, the Corporation paid finder’s fees of $64,572. Directors and officers of the
Corporation participated in this placement for a total consideration of $131,625 under the same terms
as other investors.

On December 5, 2018, the Corporation completed a private placement of 1,969,637 flow-through
shares at $1.35 per share for total gross proceeds of $2,659,012. In connection with the private
placement, the Corporation paid finder’s fees of $127,414. Directors and officers of the Corporation
participated in this placement for a total consideration of $141,750 under the same terms as other
investors.

On May 3, 2018, 1,522,000 warrants were exercised at $1.15 for total gross proceeds of $1,750,300.

6. WORKING CAPITAL

6.1 Non-IFRS Financial Performance Measure

Midland has included a non-IFRS measure, “Adjusted working capital”, to supplement its financial
statements, which are presented in accordance with IFRS.

Midland believes that this measure, together with measures determined in accordance with IFRS,
provide investors with an improved ability to evaluate the underlying performance of the Corporation.
Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore
they may not be comparable to similar measures employed by other companies. The data is intended
to provide additional information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.

Midland has an adjusted working capital of $11,214,039 as of September 30, 2018 ($11,678,771 as
of September 30, 2017) which is calculated as follows:

Current assets
Investments – non-current portion
Current liabilities
Adjusted working capital

6.2 Cash flow required

Fiscal 18
$
10,639,766
1,200,000
(625,727)
11,214,039

Fiscal 17
$
12,497,871
-
(819,100)
11,678,771

Management is of the opinion that it will be able to maintain the status of its current exploration
obligations and to keep its properties in good standing. Advanced exploration of some of the mineral
properties would require substantially more financial resources. In the past, the Corporation has been
able to rely on its ability to raise financing in privately negotiated equity offerings. There is no assurance
that such financing will be available when required, or under terms that are favourable to the
Corporation. The Corporation may also elect to advance the exploration and development of mineral
properties through joint-venture participation.

- 29 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

6. WORKING CAPITAL (CONT’D)

Cash flow required
Operating expenses, excluding non-cash items
Project management fees and interest income
Exploration budget paid by Midland (covering the exploration work requirements
following the December 2018 flow-through private placement of $2,659,012)

Mining credits of preceding years
Staking and property maintenance
Total

Annualized
$
1 400 000
(240 000)

4 000 000
(920 000)
250 000
4 490 000

7. SUMMARY OF RESULTS PER QUARTERS

For the eight most recent quarters:

Project management
fees
Net earnings (loss)
Loss per share
Total assets

Q4-18
$

Q3-18
$

Q2-18
$

Q1-18
$

27,085
(450,974)
(0.01)
29,736,269

29,361
139,272
-
29,690,768

7,589
(233,834)
-
27,692,038

45,513
(261,994)
(0.01)
27,955,415

Q4-17
$

Q3-17
$

Q2-17
$

Q1-17
$

Project management

fees
Net loss
Loss per share
Total assets

25,587
(550,307)
(0.01)
26,477,605

12,850
(110,435)
-
26,956,987

24,997
(261,195)
-
27,010,601

32,759
(292,119)
(0.01)
25,846,801

No adjustments were required following the adoption of IFRS 15 (see Section 16).

A $360,900 recovery of deferred income taxes (non-cash item) was recognized in Q3-18 ($169,110 in
Q3-17) to record the amortization, in proportion of the work completed, of the premium related to flow-
through shares renunciation following the November 2017 private placement (November 2016 and
March 2017 in Q3-17).

FOURTH QUARTER

The Corporation reported a loss of $450,947 for Q4-18 compared to a loss of $550,307 for Q4-17.

The Corporation earned project management fees are stable at $27,085 in Q4-18 ($25,587 in Q4-17).

Total expenses are stable at $594,630 in Q4-18 compared to $615,532 in Q4-17:
• Stock-based compensation (non-cash item) decreased to $35,094 ($65,705 in Q4-17). See section

•

3 for the detailed explanation that influence this expense.
Impairment of exploration and evaluation assets (non-cash items) increased to $281,885 ($227,584
in Fiscal 17). See section 4 for the detailed explanations.

- 30 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

FOURTH QUARTER (CONT’D)

In Fiscal 18, a $62,450 ($15,960 in Q4-17) recovery of deferred income taxes (non-cash item) was
recognized. See detailed exploration in section 3

The Corporation incurred $2,162,786 ($2,261,784 in Q4-17) in exploration expenses of which
$423,688 ($354,964 in Q4-17) was recharged to the partners. The exploration expenses incurred in
Q4-18 were mostly executed on Willbob, Casault, Shire and Moria whereas in Q4-17, the exploration
expenses were mostly executed on Willbob, Casault and BJ Altius. The Corporation acquired
properties for $592,886 net mostly to buy back the 50% interest of Altius in the BJ Altius properties by
issuing 461,487 common share valued at $507,636 ($99,071 net in Q4-17 mostly on BJ Altius).

9. RELATED PARTY TRANSACTIONS

The following are the related party transactions that occurred in Fiscal 18:

In the normal course of operations:
• A firm in which René Branchaud (director and corporate secretary) is a partner charged legal fees

amounting to $69,469 ($76,821 in Fiscal 17);

• A company controlled by Ingrid Martin (chief financial officer) charged accounting fees totaling
$131,102 ($120,964 in Fiscal 17) of which $47,634 ($51,508 in Fiscal 17) relates to her staff;
• As at September 30, 2018, the balance due to the related parties amounted to $4,681 ($7,861 as

at September 30, 2017).

10. SUBSEQUENT EVENTS

See section 5 on financing activities.

11. OUTSTANDING SHARE DATA

Common shares
Options
Warrants

12. STOCK OPTION PLAN

As at
December 6, 2018
Number
63,005,922
3,760,000
-
66,765,922

As at
September 30, 2018

Number

61,036,284
3,760,000
-
64,796,284

The purpose of the stock option plan is to serve as an incentive for the directors, officers and service
providers who will be motivated by the Corporation’s success as well as to promote ownership of
common shares of the Corporation by these people. There is no performance indicator relating to
profitability or risk attached to the plan.

The number of common shares granted is determined by the Board of Directors. On February 15,
2018, the board of directors approved an increase in the number of common shares reserved for
issuance under the Corporation's fixed number stock option plan from 5,400,000 to 5,790,000. In
addition, the Plan was amended to allow the extension of the exercise period during a black-out period.
Such amendment to the plan was approved by the Exchange. The exercise price of any option granted
under the plan shall be fixed by the Board of Directors at the time of grant and shall not be lower than
the closing price on the day preceding the grant. The term of the option will not exceed ten years from
the date of grant. The options normally vest 1/6 per 3 months from the grant date, or otherwise as
determined by the Board of Directors.

- 31 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

13. OFF-BALANCE SHEET ARRANGEMENTS

The Corporation does not have any off-balance sheet arrangements.

14. COMMITMENT

15. CRITICAL ACCOUNTING ESTIMATES

When preparing the financial statements, management undertakes a number of judgments, estimates
and assumptions about recognition and measurement of assets, liabilities, income and expenses. The
actual results could differ from the judgments, estimates and assumptions made by management, and
will seldom equal the estimated results. Information about the significant judgments that have the most
significant effect on the recognition and measurement of assets, liabilities, income and expenses are
discussed below.

JUDGMENTS

15.1 Impairment of exploration and evaluation (“E&E”) assets

Determining if there are any facts and circumstances indicating impairment loss or reversal of
impairment losses is a subjective process involving judgment and a number of estimates and
interpretations in many cases.

Determining whether to test for impairment of E&E assets requires management’s judgment, among
others, regarding the following: the period for which the entity has the right to explore in the specific
area has expired during the period or will expire in the near future, and is not expected to be renewed;
substantive expenditure on further E&E of mineral resources in a specific area is neither budgeted nor
planned; exploration for and evaluation of mineral resources in a specific area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided to
discontinue such activities in the specific area; or sufficient data exists to indicate that, although a
development in a specific area is likely to proceed, the carrying amount of the E&E asset is unlikely to
be recovered in full from successful development or by sale.

When an indication of impairment loss or a reversal of an impairment loss exists, the recoverable
amount of the individual asset must be estimated. If it is not possible to estimate the recoverable
amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset
belongs must be determined. Identifying the cash-generating units requires considerable management
judgment. In testing an individual asset or cash-generating unit for impairment and identifying a
reversal of impairment losses, management estimates the recoverable amount of the asset or the
cash-generating unit. This requires management to make several assumptions as to future events or
circumstances. These assumptions and estimates are subject to change if new information becomes
available. Actual results with respect to impairment losses or reversals of impairment losses could
differ in such a situation and significant adjustments to the Corporation’s assets and earnings may
occur during the next period.

The total impairment loss of the E&E assets recognized is $303,610 for Fiscal 18 ($232,075 for
Fiscal 17). No reversal of impairment losses has been recognized for the reporting periods.

- 32 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

15. CRITICAL ACCOUNTING ESTIMATES (CONT’D)

15.2 Deferred taxes

The assessment of availability of future taxable profits involves judgment. A deferred tax asset is
recognized to the extent that it is probable that taxable profits will be available against which deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilized. Judgment is also involved in the determination of the expected manner of realisation or
settlement of the carrying amount of the Corporation's assets and liabilities which is expected to be
through the sale of the Corporation's assets.

15.3 Valuation of credit on duties refundable for loss and the refundable tax credit for resources.

Refundable credit on mining duties and refundable tax credit related to 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 credit
on mining duties and tax credit related to 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 Corporation’s credit on mining duties and tax credit related to resources
necessarily involves a degree of estimation and judgment in respect of certain items whose tax
treatment cannot be finally determined until notice of assessments and payments have been received
from the relevant taxation authority.

Differences arising between the actual results following final resolution of some of these items and the
assumptions made, or future changes to such assumptions, could necessitate adjustments to credit
on mining duties and tax credit related to resources, exploration and evaluation assets and expenses,
and income tax expense in future periods. The amounts recognized in the financial statements are
derived from the Corporation’s best estimation and judgment as described above. However, the
inherent uncertainty regarding the outcome of these items means that eventual resolution could differ
from the accounting estimates and therefore impact the Corporation’s financial position and its financial
performance and cash flows.

16. NEW ACCOUNTING STANDARDS

The most relevant standards, amendments and interpretations issued up to the date of the issuance
of these financial statements are listed below.

16.1 Accounting standards adopted

IFRS 15, Revenue from contracts with customers (“IFRS 15”)

IFRS 15 replaces all previous revenue recognition standards, including IAS 18, Revenue, and related
interpretations. The standard sets out the requirements for recognizing revenue. Specifically, the new
standard introduces a comprehensive framework with the general principle being that an entity
recognizes revenue to depict the transfer of promised goods and services in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services.
The standard introduces more prescriptive guidance than was included in previous standards and may
result in changes to the timing of revenue for certain types of revenues. The new standard will also
result in enhanced disclosures about revenue that would result in an entity providing comprehensive
information about the nature, amount, timing and uncertainty of revenue and cash flows arising from
the entity’s contracts with customers. As of October 1, 2017, the Company has adopted IFRS 15 on a
full retrospective basis. Management has concluded that, based on its current operations, the adoption
of IFRS 15 had no significant impact on the Corporation’s financial statements.

- 33 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

16. NEW ACCOUNTING STANDARDS (CONT’D)

16.2 Accounting standards issued but not yet effective

IFRS 16 Leases
In January 2016, the IASB issued IFRS 16. IFRS 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases for both parties to a contract, which is the
customer (“lessee”) and the supplier (“lessor”). IFRS 16 replaces IAS 17, Leases (“IAS 17”), and
related interpretations. Save for short term leases and leases of low value assets, all leases result in
the lessee obtaining the right to use an asset at the start of the lease and, if lease payments are made
over time, also obtaining financing. Accordingly, IFRS 16 will eliminates the classification of leases as
either operating leases or finance leases as is required by IAS 17 and, instead, introduces a single
lessee accounting model. Applying that model, a lessee is required to recognize:
• assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset

is of low value; and

• depreciation of lease assets separately from interest on lease liabilities in the statement of loss and

comprehensive loss.

The new standard is effective for annual periods beginning on or after January 1, 2019 with an early
adoption permitted if IFRS 15 Revenue from contracts with customers is also applied.

The Corporation has presently only one lease affected by IFRS 16, described in Section 14.
Management has not yet evaluated the impact that this new standard will have on its financial
statements.

17. FINANCIAL INSTRUMENTS

For a description of the financial instruments and the risk associated, please refer to notes 2.5 and 14
of the September 30, 2018 financial statements.

18. RISK FACTORS

The following discussions review a number of important risks which management believes could
impact the Corporation’s business. There are other risks, not identified below, which currently, or may
in the future exist in the Corporation’s operating environment.

18.1 Exploration and Mining Risks

The business of exploration for minerals and mining involves a high degree of risk. Few properties
that are explored are ultimately developed into producing mines.

Currently, there are no known bodies of commercial ore on the mineral properties of which the
Corporation intends to acquire an interest and the proposed exploration program is an exploratory
search for ore. Unusual or unexpected formations, formation pressures, fires, power outages, labor
disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery,
equipment or labor are other risks involved in the conduct of exploration programs. The Corporation,
from time to time, increases its internal exploration and operating expertise with due advice from
consultants and others as required.

The economics of developing gold and other mineral properties is affected by many factors including
the cost of operations, variation of the grade of ore mined and fluctuations in the price of any minerals
produced. There are no underground or surface plants or equipment on the Corporation’s mineral
properties.

- 34 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

18. RISK FACTORS (CONT’D)

18.2 Titles to Property

While the Corporation has diligently investigated title to the various properties in which it has interest,
and to the best of its knowledge, title to those properties are in good standing, this should not be
construed as a guarantee of title. The properties may be subject to prior unregistered agreements or
transfer, or native or government land claims, and title may be affected by undetected defects.

18.3 Permits and Licenses

The Corporation’s operations may require licenses and permits from various governmental authorities.
There can be no assurance that the Corporation will be able to obtain all necessary licenses and
permits that may be required to carry out exploration, development and mining operations at its
projects.

18.4 Metal Prices

Even if the Corporation's exploration programs are successful, factors beyond the control of the
Corporation may affect marketability of any minerals discovered. Metal prices have historically
fluctuated widely and are affected by numerous factors beyond the Corporation's control, including
international, economic and political trends, expectations for inflation, currency exchange fluctuations,
interest rates, global or regional consumption patterns, speculative activities and worldwide production
levels. The effect of these factors cannot accurately be predicted.

18.5 Competition

The mining industry is intensely competitive in all its phases. The Corporation competes with many
companies possessing greater financial resources and technical facilities than itself for the acquisition
of mineral interests as well as for recruitment and retention of qualified employees.

18.6 Environmental Regulations

The Corporation's operations are subject to environmental regulations promulgated by government
agencies from time to time. Environmental legislation provides for restrictions and prohibitions of spills,
release or emission of various substances produced in association with certain mining industry
operations, such as seepage from tailing disposal areas, which could result in environmental pollution.

A breach of such legislation may result in imposition of fines and penalties. In addition, certain types
of operations require submissions to and approval of environmental impact assessments.
Environmental legislation is evolving in a manner, which means stricter standards, and enforcement,
fines and penalties for non-compliance are more stringent. Environmental assessments of proposed
projects carry a heightened degree of responsibility for companies and directors, officers and
employees. The cost of compliance with changes in governmental regulations has a potential to reduce
the profitability of operations. The Corporation intends to fully comply with all environmental
regulations.

- 35 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

18. RISK FACTORS (CONT’D)

18.7 Conflicts of Interest

Certain directors and officers of the Corporation are also directors, officers or shareholders of other
companies that are similarly engaged in the business of acquiring, developing and exploiting natural
resource properties. Such associations may give rise to conflicts of interest from time to time. The
directors or officers of the Corporation are required by law to act honestly and in good faith with a view
to the best interests of the Corporation and to disclose any interest, which they may have in any project
or opportunity of the Corporation. If a conflict of interest arises at a meeting of the board of directors,
any director in a conflict will disclose his interest and abstain from voting on such matter. In determining
whether or not the Corporation will participate in any project or opportunity, the directors will primarily
consider the degree of risk to which the Corporation may be exposed and its financial position at that
time.

18.8 Stage of Exploration

The Corporation's properties are in the exploration stage and to date none of them have a proven ore
body. The Corporation does not have a history of earnings or return on investment, and there is no
assurance that it will produce revenue, operate profitably or provide a return on investment in the
future.

18.9 Industry Conditions

Mining and milling operations are subject to government regulations. Operations may be affected in
varying degrees by government regulations such as restrictions on production, price controls, tax and
mining duty increases, expropriation of property, pollution controls or changes in conditions under
which minerals may be mined, milled or marketed. The marketability of minerals may be affected by
numerous factors beyond the control of the Corporation, such as government regulations. The
Corporation undertakes exploration in areas that are or could be the subject of native land claims.
Such claims could delay work or increase exploration costs. The effect of these factors cannot be
accurately determined.

18.10 Uninsured Hazard

Hazards such as unusual geological conditions are involved in exploring for and developing mineral
deposits. The Corporation may become subject to liability for pollution or other hazards, which cannot
be insured against or against which the Corporation may elect not to insure because of high premium
costs or other reasons. The payment of any such liability could result in the loss of Corporation assets
or the insolvency of the Corporation.

18.11 Capital Needs

The exploration, development, mining and processing of the Corporation’s properties will require
substantial additional financing. The only current source of future funds available to the Corporation is
the sale of additional equity capital. There is no assurance that such funding will be available to the
Corporation or that it will be obtained on terms favourable to the Corporation or will provide the
Corporation with sufficient funds to meet its objectives, which may adversely affect the Corporation’s
business and financial position. Failure to obtain sufficient financing may result in delaying or indefinite
postponement of exploration, development or production on any or all of the Corporation’s properties
or even a loss of property interest.

- 36 -

Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2018

18. RISK FACTORS (CONT’D)

18.12 Key Employees

Management of the Corporation rests on a few key officers, the loss of any of whom could have a
detrimental effect on its operations.

18.13 Canada Revenue Agency and provincial agencies

No assurance can be made that Canada Revenue Agency and provincial agencies will agree with the
Corporation's characterization of expenditures as Canadian exploration expenses or Canadian
development expense or the eligibility of such expenses as Canadian exploration expense under the
Income Tax Act (Canada) or any provincial equivalent.

19. FORWARD LOOKING INFORMATION

Some statements contained in this MD&A, specially the opinions, the projects, the objectives, the
strategies, the estimates, the intent and the expectations of Midland that are not historical data, are
forward looking statements. Such statements can be recognized by the terms “forecast”, “anticipate”,
“consider”, “foresee” and other terms and similar expressions. These statements are based on
information available at the time they are made, on assumptions established by the management and
on the management expectation, acting in good faith, concerning future events and concerning, by
their nature, known and unknown risks and uncertainties mentioned herein (see the section 17 Risks
factors). The real results for Midland could differ in an important way of those which state or that these
forward looking statements show the possibility for. Consequently it is recommended not to trust unduly
these statements. These statements do not reflect the potential incidence of special events which
could be announced or take place after the date of this MD&A. These statements speak only as of the
date of this MD&A. Midland undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, other than as required
by applicable law.

December 6, 2018

(s) Gino Roger
Gino Roger
President and CEO

(s) Ingrid Martin
Ingrid Martin
CFO

- 37 -

December 6, 2018

Independent Auditor’s Report

To the Shareholders of
Midland Exploration Inc.

We have audited the accompanying financial statements of Midland Exploration Inc., which comprise the
statements of financial position as at September 30, 2018 and 2017 and the statements of comprehensive
loss, changes in equity and cash flows for the years then ended, and the related notes, which comprise a
summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a
basis for our audit opinion.

PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l.
1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1
T: +1 514 205 5000, F: +1 514 876 1502

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

- 38 -

Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Midland Exploration Inc. as at September 30, 2018 and 2017 and its financial performance and its cash
flows for the years then ended in accordance with International Financial Reporting Standards.

1 CPA auditor, CA, public accountancy permit No. A123642

- 39 -

Midland Exploration Inc.
Statements of Financial Position
As at September 30, 2018 and 2017

Assets
Current assets
Cash and cash equivalents (note 5)
Investments (note 6)
Accounts receivable
Sales tax receivable
Tax credits and mining rights receivable
Prepaid expenses
Total current assets

Non-current assets
Investments - non-current portion (note 6)
Tax credits and mining rights receivable – non-current portion
Listed shares

Exploration and evaluation assets (note 7)

Exploration properties
Exploration and evaluation expenses

Total non-current assets

Total assets

Liabilities
Current liabilities
Accounts payable and accrued liabilities
Advance received for exploration work
Total liabilities

Equity
Capital stock
Warrants (note 8)
Contributed surplus
Deficit
Total equity

As at September 30
2017
2018
$
$

2,752,286
6,550,000
123,188
295,262
830,776
88,254
10,639,766

4,628,896
6,503,910
105,995
279,945
922,454
56,671
12,497,871

1,200,000
90,274
40,000

-
117,623
33,000

2,537,747
15,228,482
17,766,229

1,896,351
11,932,760
13,829,111

19,096,503

13,979,734

29,736,269

26,477,605

625,727
-
625,727

477,838
341,262
819,100

39,352,127
-
4,756,224
(14,997,809)
29,110,542

35,142,832
1,922,031
2,679,002
(14,085,360)
25,658,505

Total liabilities and equity

29,736,269

26,477,605

The accompanying notes are an integral part of these financial statements.

On behalf of the Board of Directors

(s) Jean-Pierre Janson
Jean-Pierre Janson
Director

(s) Gino Roger
Gino Roger
President, Director

- 40 -

Midland Exploration Inc.
Statements of Comprehensive Loss
For the years ended September 30, 2018 and 2017

Revenues
Project management fees

Operating Expenses
Salaries
Stock-based compensation
Travel
Rent and insurance
Office expenses
Regulatory fees
Conferences and mining industry involvement
Press releases and investors relations
Professional fees
General exploration
Gain on disposal of mining assets
Impairment of exploration and evaluation assets (note 7)
Operating expenses

Other gains or losses
Interest income
Change in fair value - listed shares

Loss before income taxes

Fiscal 18
$

Fiscal 17
$

109,548

96,193

540,288
192,395
59,702
59,935
151,595
50,658
160,203
78,264
229,973
3,000
(8,000)
303,610
1,821,623

584,630
285,429
64,091
55,988
133,918
43,404
173,937
67,665
216,730
6,840
-
232,075
1,864,707

203,475
7,000
210,475

169,368
3,000
172,368

(1,501,600)

(1,596,146)

Recovery of deferred income taxes (note 11)

694,070

382,090

Loss and comprehensive loss

Basic and diluted loss per share (note 10)

(807,530)

(1,214,056)

(0.01)

(0.02)

The loss and comprehensive loss are solely attributable to Midland Exploration Inc. shareholders.

The accompanying notes are an integral part of these financial statements.

- 41 -

Midland Exploration Inc.
Statements of Changes in Equity
For the years ended September 30, 2018 and 2017

Number of
shares
outstanding

Capital
stock
$

Warrants
$

Contributed
surplus
$

Deficit
$

Balance at October 1, 2017
Loss and comprehensive loss

57,161,557
-

35,142,832
-

Private placement

198,386

218,225

Flow-through private placement
Less: premium

1,692,854
-
1,692,854

2,285,354
(694,070)
1,591,284

1,922,031 2,679,002 (14,085,360)
(807,530)

-
-
-

Warrants exercised
Warrants expired
Acquisition of mining assets
Stock-based compensation
Share issue expenses

1,522,000
-
461,487
-
-

1,892,150
-
507,636
-
-

(141,850)

-
(1,780,181) 1,780,181
-
-
297,041
-
-
-

-
-
-
-
(104,919)

Total
equity
$

25,658,505
(807,530)

218,225

2,285,354
(694,070)
1,591,284

1,750,300
-
507,636
297,041
(104,919)

Balance at Sept. 30, 2018

61,036,284

39,352,127

- 4,756,224 (14,997,809)

29,110,542

Number of
shares
outstanding

Capital
stock
$

Warrants
$

Contributed
surplus
$

Deficit
$

Balance at October 1, 2016
Loss and comprehensive loss

54,674,417
-

32,332,811
-

1,997,093 2,224,411 (12,759,167)
(1,214,056)

Total
equity
$

23,795,148
(1,214,056)

Flow-through private placement
Less: premium

1,898,354
-
1,898,354

2,562,776
(382,090)
2,180,686

-
-
-

2,562,776
(382,090)
2,180,686

Warrants exercised
Warrants expired
Stock-based compensation
Share issue expenses

588,786
-
-
-

629,335
-
-
-

(69,988)
(5,074)
-
-

-
5,074
449,517
-

-
-
-
(112,137)

559,347
-
449,517
(112,137)

Balance at Sept. 30, 2017

57,161,557

35,142,832

1,922,031 2,679,002 (14,085,360)

25,658,505

The accompanying notes are an integral part of these financial statements.

- 42 -

Fiscal 18
$

Fiscal 17
$

(807,530)

(1,214,056)

192,395
303,610
(7,000)
(694,070)
(1,012,595)

(17,193)
(15,317)
-
(31,583)
380,957
(341,262)
(24,398)
(1,036,993)

218,225
2,285,354
1,750,300
(104,919)
4,148,960

(7,750,000)
6,503,910
(320,970)
-
-
(4,343,971)
922,454
(4,988,577)

(1,876,610)
4,628,896

2,752,286

285,429
232,075
(3,000)
(382,090)
(1,081,642)

(8,562)
(22,295)
5,320
6,439
(360,755)
326,226
(53 627)
(1,135,269)

-
2,562,776
559,347
(112,137)
3,009,986

(3,425,000)
8,729,000
(465,274)
50,000
344,624
(4,830,008)
883,423
1,286,765

3,161,482
1,467,414

4,628,896

Midland Exploration Inc.
Statements of Cash Flows
For the years ended September 30, 2018 and 2017

Operating activities
Loss
Adjustment for:

Stock-based compensation
Impairment of exploration and evaluation assets
Variation – fair value of listed shares
Recovery of deferred income taxes

Changes in non-cash working capital items

Accounts receivable
Sales tax receivable
Tax credits and mining rights receivable
Prepaid expenses
Accounts payable and accrued liabilities
Advance received for exploration work

Financing activities
Private placement
Flow-through private placement
Exercise of warrants
Share issue expenses

Investing activities
Additions to investments
Disposals or maturities of investments
Additions to exploration properties
Option payments on exploration properties
Advance paid for exploration expenses
Additions to exploration and evaluation expenses
Tax credits and mining rights received

Net change in cash and cash equivalents
Cash and cash equivalents – beginning (note 5)

Cash and cash equivalents – ending (note 5)

Additional disclosure (see note 15)

The accompanying notes are an integral part of these financial statements.

- 43 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

1. STATUTE OF INCORPORATION AND NATURE OF ACTIVITIES

Midland Exploration Inc. (“the Corporation”), incorporated in Canada on October 2, 1995 and operating
under the Business Corporations Act (Québec), is a company in the mining exploration business. The
Corporation’s operations include the acquisition and exploration of mining properties. Its head office is
located at 1, Place Ville Marie, suite 4000, Montreal, Quebec, H3B 4M4. The Corporation’s shares are
listed on the TSX Venture Exchange (the “Exchange”) under the MD ticker.

Until it is determined that properties contain mineral reserves or resources that can be economically
mined, they are classified as exploration properties. The recoverability of exploration and evaluation
assets is dependent upon: the discovery of economically recoverable reserves and resources; securing
and maintaining title and beneficial interest in the properties; the ability to obtain the necessary financing
to complete exploration and the profitable sale of the assets. The Corporation will periodically have to
raise additional funds to continue operations, and while it has been successful in doing so in the past,
there can be no assurance it will be able to do so in the future.

Although the Corporation has taken steps to verify title to mineral properties in which it has an interest,
in accordance with industry standards for the current stage of exploration of such properties, these
procedures do not guarantee the Corporation's title. Property title may be subject to unregistered prior
agreements and non-compliance with regulatory requirements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of presentation

The accompanying financial statements have been prepared in accordance with the International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”). Except for the adoption of IFRS 15 – Revenue from contracts with customers as further
described in note 3, the accounting policies, method of computation and presentation applied to these
financial statements are consistent with those of the previous financial year. These financial statements
were approved and authorized for issue by the Board of Directors on December 6, 2018.

2.2 Basis of measurement

These financial statements have been prepared on a historical cost basis except for certain assets at
fair value.

2.3 Functional and presentation currency

The financial statements are presented in Canadian dollars, which is the Corporation’s functional
currency.

2.4 Jointly controlled assets and exploration activities

A jointly controlled asset involves joint control and offers joint ownership by the Corporation and other
venturers of assets contributed to or acquired for the purpose of the joint venture, without the formation
of a corporation, partnership or other entity.

Where the Corporation’s activities are conducted through jointly controlled assets and exploration
activities, the financial statements include the Corporation’s share in the assets and the liabilities as well
as in the income and the expenses from the joint operations.

2.5 Financial instruments

Financial assets and financial liabilities are recognized when the Corporation becomes a party to the
contractual provisions of the financial instrument.

- 44 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

a) Financial assets

Financial assets are derecognized when the contractual rights to receive the cash flows from the financial
asset have expired, or when the financial asset and all substantial risks and rewards have been
transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it
expires.

Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted
for at fair value through profit or loss, then the initial measurement includes transaction costs that are
directly attributable to the asset’s acquisition or origination. On initial recognition, the Corporation
classifies its financial instruments in the following categories depending on the purpose for which the
instruments were acquired.

Fair value through profit and loss listed shares:
Listed shares at fair value through profit and loss are equity investments recognized initially at fair value
and subsequently measured at fair value. Gains or losses arising from changes in fair value are recorded
in the statement of loss and comprehensive loss. Dividend income on those investments are recognized
in the statement of loss and comprehensive loss.

Amortized cost:
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable
payments constituted solely of payments of principal and interest that are held within a “held to collect”
business model. Financial assets at amortized cost are initially recognized at the amount expected to be
received, less, when material, a discount to reduce the financial assets to fair value. Subsequently,
financial assets at amortized cost are measured using the effective interest method less a provision for
expected losses. The Corporation’s cash and cash equivalents, investments and accounts receivable
are classified within this category.

b) Financial liabilities

Financial liabilities measured at amortized cost
Accounts payable and accrued liabilities and advance received for exploration work are initially
measured at the amount required to be paid, less, when material, a discount to reduce the payables to
fair value. Subsequently, financial liabilities are measured at amortized cost using the effective interest
method.

Impairment of financial assets

Amortized cost:
The expected loss is the difference between the amortized cost of the financial asset and the present
value of the expected future cash flows, discounted using the instrument’s original effective interest rate.
The carrying amount of the asset is reduced by this amount either directly or indirectly through the use
of an allowance account. Provisions for expected losses are adjusted upwards or downwards in
subsequent periods if the amount of the expected loss increases or decreases. For trade receivables,
the Corporation applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognized from initial recognition of the receivables.

2.6 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, bank balances and short-term liquid investments
with original maturities of three months or less or cashable at any time without penalties.

- 45 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.7 Taxes credits and mining rights receivable

The Corporation is entitled to a refundable tax credit on qualified exploration expenditures incurred and
a refundable credit on duties for losses under the Mining Tax Act. These tax credits are recognized as a
reduction of the exploration and evaluation expenses incurred. As management intends to realize the
carrying value of its assets and settle the carrying value of its liabilities through the sale of its exploration
and evaluation assets, the related deferred tax has been calculated accordingly.

2.8 Exploration and evaluation assets

Exploration and evaluation (“E&E”) assets are comprised of exploration properties and E&E expenses.
All costs incurred prior to obtaining the legal rights to undertake E&E activities on an area of interest are
expensed as incurred.

E&E assets include rights in exploration properties, paid or acquired through a business combination or
an acquisition of assets, and costs related to the initial search for mineral deposits with economic
potential or to obtain more information about existing mineral deposits.

Mining rights are recorded at acquisition cost less accumulated impairment losses. Mining rights and
options to acquire undivided interests in mining rights are depreciated only as these properties are put
into commercial production.

E&E expenses for each separate area of interest are capitalized (net from E&E expenses recharged to
partners) and include costs associated with prospecting, sampling, trenching, drilling and other work
involved in searching for ore like topographical, geological, geochemical and geophysical studies. They
also reflect costs related to establishing the technical and commercial viability of extracting a mineral
resource identified through exploration or acquired through a business combination or asset acquisition.

E&E expenses include the cost of:
•

establishing the volume and grade of deposits through drilling of core samples, trenching and
sampling activities in an ore body;
determining the optimal methods of extraction and metallurgical and treatment processes;
studies related to surveying, transportation and infrastructure requirements;
permitting activities; and
economic evaluations to determine whether development of the mineralized material is commercially
justified, including scoping, prefeasibility and final feasibility studies.

•
•
•
•

E&E expenses include overhead expenses directly attributable to the related activities.

Cash flows attributable to capitalized E&E costs are classified as investing activities in the statement of
cash flows.

From time to time, the Corporation may acquire or dispose of a property pursuant to the terms of an
option agreement. Due to the fact that options are exercisable entirely at the discretion of the option
holder, the amounts payable or receivable are not recorded.

Option payments are recorded when they are made or received. Proceeds on the sale of exploration
properties are applied by property in reduction of the exploration properties, then in reduction of the E&E
expenses and any residual is recorded in the statement of comprehensive loss unless there is
contractual work required in which case the residual gain is deferred and will reduce the contractual
disbursements when done.

- 46 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Funds received from partners on certain properties where the Corporation is the operator in order to
perform exploration work as per agreements, are accounted for in the statement of financial position as
advances received for upcoming exploration work. These advances are reduced gradually when the
exploration work is performed. The project management fees received when the Corporation is the
operator are recorded in the statement of comprehensive loss when the E&E expenses are charged
back to the partner. When the partner is the operator, the management fees are recorded in the
statement of financial position as E&E expenses.

2.9 Operating lease agreements

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments under an operating lease are charged to the statement of
comprehensive loss or capitalized in the E&E expenses on a straight-line basis over the period of the
lease. Related expenses, such as maintenance and insurance expenses, are charged as incurred.

2.10 Impairment of non-financial assets

E&E assets are reviewed for impairment, by area of interest, if there is any indication that the carrying
amount may not be recoverable. If any such indication is present, the recoverable amount of the asset
is estimated in order to determine whether impairment exists. Where the asset does not generate cash
flows that are independent from other assets, the Corporation estimates the recoverable amount of the
cash generating unit (“CGU”) to which the asset belongs.

An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value, using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset for which estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the
carrying amount is reduced to the recoverable amount. Impairment is recognized immediately in the
statement of comprehensive loss. Where an impairment subsequently reverses, the carrying amount is
increased to the revised estimate of recoverable amount but only to the extent that this does not exceed
the carrying value that would have been determined if no impairment had previously been recognized.
A reversal is recognized as a reduction in the impairment charge for the period.

2.11 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 year, using tax rates
enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to
previous years. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Temporary differences are not provided for if they arise from the initial recognition of goodwill or the initial
recognition of an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss. 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.

- 47 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

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.

Deferred income tax assets and liabilities are presented as noncurrent and are offset when there is a
legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.12 Equity

Capital stock represents the amount received on the issue of shares. Warrants represent the allocation
of the amount received for units issued as well as the charge recorded for the broker warrants relating
to financing. Contributed surplus includes charges related to stock options until they are exercised and
the warrants that are expired and not exercised. Deficit includes all current and prior period retained
profits or losses and share issue expenses.

Proceeds from unit placements are allocated between shares and warrants issued on a pro-rata basis
of their value within the unit using the Black-Scholes pricing model.

2.13 Flow-through shares

The Corporation finances some E&E expenses 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. The difference between the amount recorded as common share
and the amount paid by the investors for the shares (the “premium”), measured with the residual value
method, is accounted for as flow-through share premium, which is reversed to income as recovery of
deferred income taxes when the eligible expenses are incurred. The Corporation recognizes a deferred
tax liability for flow-through shares and a deferred tax expense, at the moment the eligible expenditures
are incurred.

2.14 Share and warrant issue expenses

Share and warrant issue expenses are accounted for in the year in which they are incurred and are
recorded as a deduction to equity in the deficit in the year in which the shares are issued.

2.15 Stock-based compensation

The Corporation operates an equity-settled share-based remuneration plan (share options plan) for its
eligible directors, officers, employees and consultants. The Corporation's plan does not feature any
options for a cash settlement.

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 Corporation. The expense is recorded over the vesting period for employees and over
the period covered by the contract for non-employees.

All goods and services received in exchange for the grant of any share-based payment are measured at
their fair values, unless that fair value cannot be estimated reliably. If the Corporation cannot estimate
reliably the fair value of the goods or service received, the Corporation shall measure their value
indirectly by reference to the fair value of the equity instruments granted. Where employees are rewarded
using share-based payments, the fair values of employees' services are determined indirectly by
reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date
using the Black Scholes option pricing model and excludes the impact of non-market vesting conditions.

- 48 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

All equity-settled share-based payments (except warrants to brokers) are ultimately recognized as an
expense in the statement of comprehensive loss or capitalized as E&E expenses on the statement of
financial position, depending on the nature of the payment with a corresponding credit to contributed
surplus, in equity. Warrants to brokers, in respect of an equity financing are recognized as share issue
expense reducing the equity in the deficit with a corresponding credit to warrants.

If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Non-market
vesting conditions are included in assumptions about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is any indication that the number of share
options expected to vest differs from previous estimates.

Upon exercise of share options, the proceeds received net of any directly attributable transaction costs
are recorded as capital stock. The accumulated charges related to the share options recorded in
contributed surplus are then also transferred to capital stock.

2.16 Loss per share

Loss per share is calculated using the weighted average number of shares outstanding during the year.
Diluted loss per share is calculated using the weighted average number of shares outstanding during
the year for the calculation of the dilutive effect of warrants and stock options unless they have an anti-
dilutive effect.

2.17 Revenue recognition

The project management fees received when the Corporation is the operator are recorded in the
statement of comprehensive loss when the exploration work recharged to the partners are incurred.

2.18 Segment disclosures

The Corporation currently operates in a single segment – the acquisition, exploration and evaluation of
exploration properties. All of the Corporation’s activities are conducted in Canada.

3. NEW ACCOUNTING STANDARDS

The most relevant standards, amendments and interpretations issued up to the date of the issuance of
these financial statements are listed below.

3.1 Accounting standards adopted

IFRS 15, Revenue from contracts with customers (“IFRS 15”)
IFRS 15 replaces all previous revenue recognition standards, including IAS 18, Revenue, and related
interpretations. The standard sets out the requirements for recognizing revenue. Specifically, the new
standard introduces a comprehensive framework with the general principle being that an entity
recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. The
standard introduces more prescriptive guidance than was included in previous standards and may result
in changes to the timing of revenue for certain types of revenues. The new standard will also result in
enhanced disclosures about revenue that would result in an entity providing comprehensive information
about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s
contracts with customers. As of October 1, 2017, the Company has adopted IFRS 15 on a full
retrospective basis. Management has concluded that, based on its current operations, the adoption of
IFRS 15 had no significant impact on the Corporation’s financial statements.

- 49 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

3. NEW ACCOUNTING STANDARDS (CONT’D)

3.2 Accounting standards issued but not yet effective

IFRS 16 Leases
In January 2016, the IASB issued IFRS 16. IFRS 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases for both parties to a contract, which is the customer
(“lessee”) and the supplier (“lessor”). IFRS 16 replaces IAS 17, Leases (“IAS 17”), and related
interpretations. Save for short term leases and leases of low value assets, all leases result in the lessee
obtaining the right to use an asset at the start of the lease and, if lease payments are made over time,
also obtaining financing. Accordingly, IFRS 16 will eliminates the classification of leases as either
operating leases or finance leases as is required by IAS 17 and, instead, introduces a single lessee
accounting model. Applying that model, a lessee is required to recognize:
•

assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset
is of low value; and
depreciation of lease assets separately from interest on lease liabilities in the statement of loss and
comprehensive loss.

•

The new standard is effective for annual periods beginning on or after January 1, 2019 with an early
adoption permitted if IFRS 15 Revenue from contracts with customers is also applied.

The Corporation has presently only one lease affected by IFRS 16, described in note 13. Management
has not yet evaluated the impact that this new standard will have on its financial statements.

4. CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS AND ASSUMPTIONS

JUDGMENTS

4.1 Impairment of E&E assets

Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment
losses is a subjective process involving judgment and a number of estimates and interpretations in many
cases.

Determining whether to test for impairment of E&E assets requires management’s judgment, among
others, regarding the following: the period for which the entity has the right to explore in the specific area
has expired during the period or will expire in the near future, and is not expected to be renewed;
substantive expenditure on further E&E of mineral resources in a specific area is neither budgeted nor
planned; exploration for and evaluation of mineral resources in a specific area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided to
discontinue such activities in the specific area; or sufficient data exists to indicate that, although a
development in a specific area is likely to proceed, the carrying amount of the E&E asset is unlikely to
be recovered in full from successful development or by sale.

- 50 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

4. CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS AND ASSUMPTIONS (CONT’D)

When an indication of impairment loss or a reversal of an impairment loss exists, the recoverable amount
of the individual asset must be estimated. If it is not possible to estimate the recoverable amount of the
individual asset, the recoverable amount of the cash-generating unit to which the asset belongs must be
determined. Identifying the cash-generating units requires considerable management judgment. In
testing an individual asset or cash-generating unit for impairment and identifying a reversal of impairment
losses, management estimates the recoverable amount of the asset or the cash-generating unit. This
requires management to make several assumptions as to future events or circumstances. These
assumptions and estimates are subject to change if new information becomes available. Actual results
with respect to impairment losses or reversals of impairment losses could differ in such a situation and
significant adjustments to the Corporation’s assets and earnings may occur during the next period.

The total impairment loss of the E&E assets recognized is $303,610 for the year ended September 30,
2018 (“Fiscal 18”) ($232,075 for the year ended September 30, 2017 (“Fiscal 17”)). No reversal of
impairment losses has been recognized for the reporting periods.

4.2 Deferred taxes

The assessment of availability of future taxable profits involves judgment. A deferred tax asset is
recognized to the extent that it is probable that taxable profits will be available against which deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized.
Judgment is also involved in the determination of the expected manner of realisation or settlement of the
carrying amount of the Corporation's assets and liabilities which is expected to be through the sale of
the Corporation's assets.

4.3 Valuation of credit on duties refundable for loss and the refundable tax credit for resources.

The calculation of the Corporation’s credit on mining duties and tax credit related to resources
necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment
cannot be finally determined until notice of assessments and payments have been received from the
relevant taxation authority.

Differences arising between the actual results following final resolution of some of these items and the
assumptions made, or future changes to such assumptions, could necessitate adjustments to credit on
mining duties and tax credit related to resources, exploration and evaluation assets and expenses, and
income tax expense in future periods. The amounts recognized in the financial statements are derived
from the Corporation’s best estimation and judgment as described above. However, the inherent
uncertainty regarding the outcome of these items means that eventual resolution could differ from the
accounting estimates and therefore impact the Corporation’s financial position and its financial
performance and cash flows.

- 51 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

5. CASH AND CASH EQUIVALENTS

Cash
Guaranteed investment certificates bearing interest between
0.80% and 1.15%, maturing between December 5, 2017 and

June 6, 2018

As at September 30
2018
$
2,752,286

2017
$

328,896

-
2,752,286

4,300,000
4,628,896

All the exploration work imposed by the November 2016 and March 2017 flow-through financings was
completed before September 30, 2017. Also, all the exploration work imposed by the November 2017
flow-through financings was completed before September 30, 2018.

INVESTMENTS

Current
Guaranteed investment certificates, not cashable before the expiry

date, between 1.71% and 2.65% interest payable annually,
maturing between December 6, 2018 and July 16, 2019, with a
maturity value of $6,694,220

Guaranteed investment certificates, not cashable before the expiry

date, between 1.40% and 1.95% interest payable annually,
maturing between November 30, 2017 and July 23, 2018, with a
maturity value of $6,605,807

Non-current
Guaranteed investment certificate, not cashable before the expiry
date, 2.84% interest payable annually, maturing July 16, 2020,
with a maturity value of $1,234,080

As at September 30
2018
$

2017
$

6,550,000

6,503,910

1,200,000
7,750,000

-
6,503,910

- 52 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

EXPLORATION AND EVALUATION ASSETS

The following tables disclose the acquisition costs of exploration properties:

Acquisition
costs

Abitibi
Maritime-Cadillac
Laflamme
Patris
Casault
Jouvex
Heva
Valmond
La Peltrie
Wawagosic
Adam
Samson
Mistaouac
Turgeon
Manthet
Abitibi Gold
Grenville-
Appalaches
Weedon
Gatineau
James Bay
James Bay Au
Eleonore
JV Eleonore
Isengard 3)
Minas Tirith3)
Shire3)
Elrond3)
Gondor3)
Moria3)
Helms3)
Mythril
Fangorn
Northern
Quebec
Pallas PGE
Willbob
Soissons
Soissons NMEF
Project
Generation

Undivided
interest
%

As at
Sept. 30,
2017
$

Net
Additions
$

Share
issuance
$

Impairment
$

As at
Sept. 30,
2018
$

49
74.3
100
50
50
100
100
100
100
100
100
100
100
100
100

100
100

100
100
50
100
100
100
100
100
100
100
100
100

100
100
100
50

100

290,838
122,347
87,072
26,995
45,432
57,906
10,756
101,601
-
16,830
20,166
-
-
-
138,669

36,703
32,102

198,893
141,681
96,972
9 943
1 491
20 511
8 144
3 088
7 721
5 197
-
-

105,028
257,030
-
-

85
13,625
16,982
2,989
5,565
83
4,961
(4,578)
8,678
12,695
17,593
26,240
29,386
7,776
(2,433)

2,709
2,483

6,260
21,275
45,170
733
3,743
8,088
271
229
-
-
9,057
1,188

21,523
31,939
23,706
4,100

53,235

(19,493)

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-

-
-
-
16,244
53,302
234,020
61,932
12,183
101,527
28,428
-
-

-
-
-
-

-
(5,874)
-
-
(3,303)
-
-
-
(2 143)
(2,632)
(1,332)
(1,253)
-
-
(130,396)

-
-

(1,657)
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-

290,923
130,098
104,054
29,984
47,694
57,989
15,717
97,023
6 535
26,893
36,427
24,987
29,386
7,776
5,840

39,412
34,585

203,496
162,956
142,142
26,920
58,536
262,619
70,347
15,500
109,248
33,625
9,057
1,188

126,551
288,969
23,706
4,100

(20,278)

13,464

1,896,351

302,628

507,636

(168,868)

2,537,747

1)
2)

Some claims were dropped and the Corporation impaired partially the property.
The Company wrote off some projects included in this property since no exploration program is planned for the near future
and/or dropped all the claims.

Balance was grouped in BJ Altius property in Fiscal 17.

- 53 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

7. EXPLORATION AND EVALUATION ASSETS (CONT’D)

Acquisition
costs

Undivided
interest
%

As at
Sept. 30,
2016
$

Net
Additions
$

Option
payments
$

Impairment
$

Abitibi
Maritime-Cadillac
Laflamme
Patris
Casault
Jouvex
Heva
Valmond
La Peltrie
Adam
Samson
Abitibi Gold
Grenville-
Appalaches
Weedon
Gatineau
James Bay
James Bay Au
Eleonore
JV Eleonore
JV BJ Altius
Northern
Quebec
Pallas PGE
Willbob
Quebec
Labrador
Ytterby
Project
Generation

49
72.6
100
50
50
100
100
100
100
100
100

100
100

100
100
50
50

100
100

50.6

100

290,515
97,400
87,072
17,538
44,998
106,009
7,259
103,593
11,975
17,406
149,902

30,016
8,349

178,881
105,232
96,217
-

323
31,793
-
9,457
8,141
1,897
5,328
28,008
4,855
2,760
(11,233)

13,778
27,561

32,014
36,449
755
56,095

72,443
55,842

38,508
201,188

2,042

23,429

31,048

-
-
-
-
-
(50,000)
-
(30,000)
-
-
-

-
-

-
-
-
-

-
-

1,506,118

518,725

(80,000)

As at
Sept. 30,
2017
$

290,838
122,347
87,072
26,995
45,432
57,906
10,756
101,601
16,830
20,166
138,669

36,703
32,102

198,893
141,681
96,972
56,095

-
(6,846) 1)
-
-
(7,707) 1)
-
(1,831) 1)
-
-
-
-

(7,091) 1)
(3,808) 1)

(12,002) 1)
-
-
-

(5,923) 1)
-

105,028
257,030

(2,042) 2)

(1,242) 1)
(48,492)

53,235

1,896,351

1)
2)

Some claims were dropped and the Corporation impaired partially the property.
The Company wrote off this property since no exploration program is planned for the near future and/or dropped all the claims.

- 54 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

7. EXPLORATION AND EVALUATION ASSETS (CONT’D)

The following two tables disclose details of exploration and evaluation expenses:

E&E expenses

Undivided
interest
%

As at
Sept. 30,
2017
$

Net
Additions
$

Abitibi
Maritime-Cadillac
Laflamme
Patris
Casault
Jouvex
Heva
Valmond
Samson
La Peltrie
Wawagosic
Adam
Mistaouac
Turgeon
Manthet
Abitibi Gold
Grenville-
Appalaches
Weedon
Gatineau
James Bay
James Bay Au
Eleonore
JV Eleonore
Isengard2)
Minas Tirith2)
Shire2)
Elrond2)
Gondor2)
Moria2)
Helms2)
Mythril
Fangorn
Northern
Quebec
Pallas PGE
Willbob
Soissons
Soissons NMEF
Project
Generation

49
74.3
100
50
50
100
100
100
100
100
100
100
100
100
100

100
100

100
100
50
100
100
100
100
100
100
100
100
100

100
100
100
50

100

96,839
292,271
256,188
2,202,064
221,844
12,212
963,965 1,137,572
129
412,833
9,825
261,985
124,314
-
85,865
83,411
11,430
1,067,584
54,396
-
155,887
131,155
229,972
-
197,672
-
8,409
-
17,164
203,470

626,897
44,005

20,400
27,597

362,595
1,723,519
291,282
2,072
27,966
75,404
30,943
5,049
21,223
124
-
-

190,656
50,292
315,038
37,109
8,856
239,923
490
29,023
169,731
32,229
46,581
10,989

538,746
2,126,873
-
-

1,278
704,161
73,023
7,031

91,166

(4,076)

11,932,760 4,233,891

Option

payments Tax credits Impairment
$

As at
Sept. 30,
2018
$

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-

-
-
-
-
-
-
-
-
-
-
-
-

-
-
-

-
(30,414)
-
(221,303)
-
-
-
(1,166)
(91)
(21,447)
(20,379)
(5,470)
(1,007)
-

389,110
-
- 2,427,838
-
234,056
- 1,880,234
412,962
-
271,810
-
124,314
-
-
168,110
- 1,078,923
32,949
-
266,663
-
224,502
-
196,665
-
8,409
-
(1,347) (134,548)1)
84,739

-
(87)

(35,585)
(3,601)
(23,105)
(2,263)
(3,111)
(88,732)
(27)
(2,648)
(67,410)
(13,434)
(18,366)
(4,332)

-
(206,809)
(25,741)
(2,772)

-
-

647,297
71,515

-
517,666
- 1,770,210
583,215
-
36,918
-
33,711
-
226,595
-
31,406
-
31,424
-
123,544
-
18,919
-
28,215
-
6,657
-

-
540,024
- 2,624,225
47,282
-
4,259
-

(2,780)

(194)1)

84,116

(803,427)

(134,742) 15,228,482

The Company wrote off some projects included in this property since no exploration program is planned for the near future
and/or dropped all the claims.
Balance was grouped in BJ Altius property in Fiscal 17.

- 55 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

7. EXPLORATION AND EVALUATION ASSETS (CONT’D)

E&E expenses

Undivided
interest
%

49
72.6
100
50
50
100
100
100
100
100
100

100
100

100
100
50
50

100
100

Abitibi
Maritime-Cadillac
Laflamme
Patris
Casault
Jouvex
Heva
Valmond
Samson
La Peltrie
Adam
Abitibi Gold
Grenville-
Appalaches
Weedon
Gatineau
James Bay
James Bay Au
Eleonore
JV Eleonore
JV BJ Altius
Northern
Quebec
Pallas PGE
Willbob
Quebec
Labrador
Ytterby
Project
Generation

As at
Sept. 30,
2016
$

236,090
1,893,853
221,646
352,708
351,966
157,076
120,742
78,203
652,484
42,841
173,644

Net
Additions
$

56,235
332,006
198
691,965
62,420
114,219
3,572
6,230
425,573
95,781
30,687

523,230
29,024

105,245
14,981

261,886
1,629,303
124,692
-

136,659
130,458
237,687
219,291

369,500
295,012
565,271 2,151,089

Option

payments Tax credits Impairment
$

As at
Sept. 30,
2017
$

-
-
-
-
-
-
-
-
-
-
-

-
-

-
-
-
-

-
-

(54)
(23,795)
-
(80,708)
(1,553)
(9,310)
-
(1,022)
(10,473)
(7,467)
(861)

(1,578)
-

(35,950)
(36,242)
(71,097)
(56,510)

-
292,271
- 2,202,064
221,844
-
963,965
-
412,833
-
261,985
-
-
124,314
83,411
-
- 1,067,584
131,155
-
203,470
-

-
-

626,897
44,005

-
362,595
- 1,723,519
291,282
-
162,781
-

(125,766)
(589,487)

-
538,746
- 2,126,873

- (183,583)1)

(6,339)

(1,058,212)

91,166
(183,583) 11,932,760

50.6

183,583

100

74,069

23,436

8 041,811 5,132,744

1) The Company wrote off this property since no exploration program is planned for the near future.

- 56 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

7. EXPLORATION AND EVALUATION ASSETS (CONT’D)

ABITIBI

7.1 Maritime-Cadillac

The Corporation holds 49% of the Maritime-Cadillac property. The property is subject to a 2% net smelter
return (“NSR”) royalty; half of the royalty can be bought back for a payment of $1,000,000. As per the
agreement signed in June 2009 and amended in November 2012 and May 2013, Agnico Eagle Mines
Limited (“Agnico Eagle”) and the Corporation are in a joint venture and future work are shared 51%
Agnico Eagle - 49% the Corporation.

7.2 Laflamme Au-Cu

On August 17, 2009, the Corporation signed an agreement with Aurbec Mines Inc. (“Aurbec”), (previously
a subsidiary of North American Palladium Ltd.) that was sold to Maudore Minerals Ltd in March 2013.
As of July 31, 2011, Aurbec had earned its 50% interest in the Laflamme property but no longer
contributed in the exploration programs from December 2012 and was therefore being diluted. On June
17, 2016, Abcourt Mines Inc. acquired the property following the bankruptcy of Aurbec. The Corporation
holds 74.3% of the Laflamme property.

7.3 Patris

The Corporation holds the Patris property and some claims are subject to the following NSR royalties:
• 1.5%, the Corporation can buy it back for $500,000 per 0.5% tranche for a total of $1,500,000.
• 1%, the Corporation can buy it back for $500,000 per 0.5% tranche for a total of $1,000,000;
• 2%, the Corporation can buy it back for $1,000,000 per 1% tranche for a total of $2,000,000;
• 2%, the Corporation can buy it back for $500,000 the first 1% tranche and for $1,000,000 for the

second 1% tranche, for a total of $1,500,000.

7.4 Casault and Jouvex

On October 10, 2014, the Corporation signed a letter of intent with SOQUEM INC. ("SOQUEM") to grant
SOQUEM the option to acquire a 50% undivided interest in its Casault and Jouvex properties. By
October 10, 2016, SOQUEM completed the $4,500,000 work commitment, acquired a 50% undivided
interest in the Casault Jouvex property and is now in joint venture with the Corporation. The Corporation
is the operator.

7.5 Heva

The Corporation owns the Heva property and some claims are subject to a 2% NSR royalty to the original
holders, half of the royalty can be bought back for a payment of $1,000,000.

On April 27, 2017, the Corporation had signed an option agreement with IAMGOLD Corporation
(“IAMGOLD”) whereby IAMGOLD could have earned, in three options, a maximum interest of 65% in
the Héva property. On November 20, 2018, the Corporation received from IAMGOLD a termination
notice for the Héva option agreement.

7.6 La Peltrie

The Corporation owns the La Peltrie property and some claims are subject to a 1% Gross Metal royalty.

On August 29, 2017, the Corporation signed an option agreement (amended August 3, 2019) with Niobay
Metals Inc. (“Niobay”) whereby Niobay may earn, in two options, a maximum interest of 65% in the La
Peltrie property, by fulfilling the following conditions:

- 57 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

7. EXPLORATION AND EVALUATION ASSETS (CONT’D)

First Option for a 50% initial interest
Upon signature (completed, 200,000 shares of Niobay received, initially
valued at $30,000)
On or before December 31, 2017 (completed)
On or before January 31, 2019
On or before August 31, 2019
On or before August 31, 2020
On or before August 31, 2021

Payments
in cash
$

Work
$

30,000
-
30,000
50,000
70,000
70,000
250,000

-
500,000
-
400,000
600,000
1,500,000
3,000,000

Following the initial earn-in of its 50% interest, NioBay may earn an additional tranche of 15% interest
for an undivided 65% interest in the Properties, by producing a preliminary economic study on or before
August 31, 2023.

7.7 Abitibi Gold

On May 28, 2018, the Corporation signed a letter of intent, formalized by a definitive agreement signed
on July 16, 2018, whereby it sold 17 claims for $8,000 cash and a 1% NSR royalty.

GRENVILLVE-APPALACHES

7.8 Weedon

The Corporation holds the Weedon property and some claims are subject to NSR royalties of:
• 1%, the Corporation can buy it back for $500,000 per 0.5% tranche for a total of $1,000,000;
• 0.5%, the Corporation can buy it back for $500,000;
• 1.5%, on all metals except gold and silver the Corporation can buy it back for $500,000 per 0.5%

tranche for a total of $1,500,000.

JAMES BAY

7.9 James Bay Gold JV (Au)

On June 13, 2016, a joint-venture agreement (50%-50%) was signed with Osisko Mining Inc. (previously
Osisko Exploration James Bay Inc.) (“Osisko”) whereby Osisko and the Corporation cooperate and
combine their efforts to explore the JV Eleonore property recently staked by the two corporations. The
property is located 12 kilometres southeast and northwest of Goldcorp’s Eleonore deposit. Osisko is the
operator. Each partner obtained a 0.5% NSR royalty as a mutual consideration for the constitution of the
joint-venture.

7.10 JV JB Altius (Au)

On February 10, 2017, the Corporation signed a letter of intent creating a strategic alliance with Altius
Minerals Corporation (“Altius”), whereby Altius and the Corporation will combine their efforts to jointly
explore the gold potential of the extensive James Bay region. The Corporation is the operator.

The following projects were identified as designated projects: Elrond, Gondor, Helms Deep, Isengard,
Minas Tirith, Moria, Shire, Mythril et Fangorn.

- 58 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

7. EXPLORATION AND EVALUATION ASSETS (CONT’D)

On July 13, 2018, the Corporation amended the James Bay strategic alliance (“Alliance”) memorandum
of understanding (“MOU”) signed on March 30, 2017 as follows:
•

Altius exchanged its 50% interests in the Designated Projects for 461,487 common shares valued
at $507,636, which corresponds to Altius’ portion of the accumulated expenditures on the designated
projects;
Altius subscribed 198,386 common shares at $1.10 which corresponds to Altius’ portion of the phase
2 approved exploration budget of 2018;
Altius will subscribe additional common shares for its portion of future work program on the
Designated Projects, at market price;
If further designated projects are declared, Altius will subscribe additional common shares of the
Corporation for its portion of the work programs, at market price;
All designated projects share require the registration of a 2% NSR, 50% 50% to the respective
parties (“Alliance Royalty”), with a mutual right of first offer on the sale of any interest in the Alliance
Royalty.

•

The MOU will expire on December 31, 2019, with an option to continue the Alliance for two additional
years. The duration of this MOU can be reduced or extended by mutual consent.

NORTHERN QUEBEC

7.11 Pallas PGE

On March 28, 2017, JOGMEC withdrew from the option agreement signed on January 21, 2014 and
abandoned its right to exercise its option to acquire a 50% interest in the Pallas PGE property.

7.12 Willbob

The Corporation owns the Willbob property and some claims are subject to a 2% NSR royalty. On
October 2, 2017, the Corporation signed an acquisition agreement whereby it acquired claims for a
$10,000 cash payment and a 2% NSR royalty of which 1% can be bought back for a payment of
$1,000,000.

7.13 Soissons-NMEF property

On July 27, 2018, the Corporation signed a partnership agreement (50%-50%) with the Nunavik Mineral
Exploration fund (“NMEF”), to explore an area of the Soissons property located between 50 and 100
kilometers southeast of Kuujjuaq, Nunavik, Quebec. The NMEF will be the operator of the partnership.

QUEBEC / LABRADOR

7.14 Ytterby

On February 23, 2010, the Corporation signed a memorandum of agreement (and on July 29, 2011 a
definitive agreement) with JOGMEC whereby JOGMEC acquired a right in a 50% interest in the Ytterby
property by funding $2,700,000 exploration work. As of September 30, 2015, JOGMEC had not yet given
its notice to exercise its right. In spring 2015, JOGMEC indicated that it would not participate in the
exploration program and its interest has now been diluted to 49.4%. On December 2, 2017, the last 31
claims of Ytterby Quebec were dropped while all the claims in Labrador were dropped during Fiscal
2017. The Corporation wrote off entirely the Labrador claims for $185,625 (some claims were dropped
in Fiscal 16 therefore the Corporation impaired partially for $7,162 the exploration property cost and all
the Quebec claims had been written off in previous years). Therefore, as of December 2, 2017, the
February 23, 2010 memorandum of agreement signed with JOGMEC is de facto terminated and
JOGMEC has lost its 49.4% interest.

- 59 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

8. EQUITY

Authorized
Unlimited number of common shares without par value, voting and participating.

8.1 Private placements

a) November 2016

On November 17 and 24, 2016, the Corporation completed a private placement by issuing 1,284,354
flow-through shares at $1.35 per share, for total gross proceeds of $1,733,876. On those dates, the
Corporation’s share closed at $1.15 and $1.14 respectively, on the Exchange, therefore the residual
value attributed to the benefit related to flow-through shares renunciation is $0.20 and $0.21 respectively,
for a total value of $259,290, credited to the liability related to the premium on flow-through shares. In
connection with the private placement, the Corporation paid finder’s fees of $60,650. Directors and
officers of the Corporation participated in this placement for a total consideration of $136,100 under the
same terms as other investors.

b) March 2017

On March 16, 2017, the Corporation completed a private placement by issuing 614,000 flow-through
shares at $1.35 per share, for total gross proceeds of $828,900. On that date, the Corporation’s share
closed at $1.15 on the Exchange, therefore the residual value attributed to the benefit related to flow-
through shares renunciation is $0.20, for a total value of $122,800, credited to the liability related to the
premium on flow-through shares.

c) November 2017

On November 22, 2017, the Corporation completed a private placement by issuing 1,692,854 flow-
through shares at $1.35 per share, for total gross proceeds of $2,285,354. On that date, the
Corporation’s share closed at $0.94 on the Exchange, therefore the residual value attributed to the
benefit related to flow-through shares renunciation is $0.41 for a total value of $694,070, credited to the
liability related to the premium on flow-through shares. In connection with the private placement, the
Corporation paid finder’s fees of $64,572. Directors and officers of the Corporation participated in this
placement for a total consideration of $131,625 under the same terms as other investors.

8.2 Warrants

Changes in the Corporation’s number of outstanding warrants were as follows :

Fiscal 18

Fiscal 17

Number

Amount
$

Number

Amount
$

Balance – Beginning of year
Exercised
Expired
Balance – End of year

20,622,569
(1,522,000)
(19,100,569)
-

(141,850)
(1,780,181)

1,922,031 21,254,213 1,997,093
(69 988)
(5 074)
- 20 622 569 1 922 031

(588 786)
(42 858)

8.3 Policies and processes for managing capital

The capital of the Corporation consists of the items included in equity of $29,110,542 as of
September 30, 2018 ($25,658,505 as of September 30, 2017). The Corporation’s objectives when
managing capital are to safeguard its ability to continue its operations as well as its acquisition and
exploration programs. As needed, the Corporation raises funds in the capital markets. The Corporation
does not use long term debt since it does not generate operating revenues. There is no dividend policy.
The Corporation does not have any externally imposed capital requirements neither regulatory nor
contractual requirements to which it is subject, unless the Corporation closes a flow-through private
placement in which case the funds are reserved in use for exploration expenses (and the Corporation
was in compliance during the year).

- 60 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

9. EMPLOYEE REMUNERATION

9.1 Salaries

Salaries
Director fees
Benefits

Less : salaries and benefits capitalized in E&E assets
Salaries disclosed on the statement of comprehensive loss

9.2 Stock-based compensation

Stock-based compensation
Less : stock-based compensation capitalized in the E&E assets
Stock-based compensation disclosed on the statement of

comprehensive loss

Fiscal 18
$
1,153,221
64,500
73,585
1,291,306
(751,018)
540,288

Fiscal 17
$
1,023,499
51,000
129,666
1,204,165
(619,535)
584,630

Fiscal 18
$
297,041
(104,646)

Fiscal 17
$
449,517
(164,088)

192,395

285,429

The Corporation has a stock option plan (the “Plan”). The number of common shares granted is
determined by the Board of Directors. On February 15, 2018, the board of directors approved an increase
in the number of common shares reserved for issuance under the Corporation's fixed number stock
option plan from 5,400,000 to 5,790,000. In addition, the Plan was amended to allow the extension of
the exercise period during a black-out period. Such amendment to the plan was approved by the
Exchange. The exercise price of any option granted under the plan shall be fixed by the Board of
Directors at the time of grant and shall not be lower than the closing price on the day preceding the grant.
The term of the option will not exceed ten years from the date of grant. The options normally vest 1/6
per 3 months from the grant date, or otherwise as determined by the Board of Directors.

On February 21, 2017, the Corporation granted to its directors, officers, employees and consultants
545,000 options exercisable at $1.14, valid for 10 years. Those options were granted at an exercise price
equal to the closing market value of the shares the previous day of the grant. Total stock-based
compensation costs amount to $288,850 for an estimated fair value of $0.53 per option. The fair value
of the options granted was estimated using the Black-Scholes model with no expected dividend yield,
48% expected volatility, 1.33% risk-free interest rate and 6 years options expected life. This expected
life was estimated by benchmarking comparable situations for companies that are similar to the
Corporation. The expected volatility was determined by calculating the historical volatility of the
Corporation’s share price back from the date of grant and for a period corresponding to the expected life
of the options.

On May 10, 2017, the Corporation granted to a director 100,000 options exercisable at $1.04, valid for
10 years. Those options were granted at an exercise price equal to the closing market value of the shares
the previous day of the grant. Total stock-based compensation costs amount to $48,000 for an estimated
fair value of $0.48 per option. The fair value of the options granted was estimated using the Black-
Scholes model with no expected dividend yield, 48% expected volatility, 1.27% risk-free interest rate and
6 years options expected life. This expected life was estimated by benchmarking comparable situations
for companies that are similar to the Corporation. The expected volatility was determined by calculating
the historical volatility of the Corporation’s share price back from the date of grant and for a period
corresponding to the expected life of the options.

- 61 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

9. EMPLOYEE REMUNERATION (CONT’D)

On February 15, 2018, the Corporation granted to its directors, officers, employees and consultants
570,000 options exercisable at $0.89, valid for 10 years. Those options were granted at an exercise price
equal to the closing market value of the shares the previous day of the grant. Total stock-based
compensation costs amount to $245,100 for an estimated fair value of $0.43 per option. The fair value
of the options granted was estimated using the Black-Scholes model with no expected dividend yield,
48% expected volatility, 2.22% risk-free interest rate and 6 years options expected life. This expected
life was estimated by benchmarking comparable situations for companies that are similar to the
Corporation. The expected volatility was determined by calculating the historical volatility of the
Corporation’s share price back from the date of grant and for a period corresponding to the expected life
of the options.

A summary of changes in the Corporation’s common share purchase options is presented below:

Fiscal 18

Fiscal 17

Weighted
average
exercise
price
$
1.10
0.89
1.07
1.09

Number of
options

3,190,000
570,000
3,760,000
3,363,334

Number of
options

2,495,000
695,000
3,190,000
2,551,668

Weighted
average
exercise
price
$
1.10
1.13
1.10
1.10

Balance – Beginning of year
Granted
Balance – End of year
Balance – End of year exercisable

The following table summarizes information about common share purchase options outstanding and
exercisable as at September 30, 2018:

Expiry date

February 17, 2021
February 16, 2022
February 27, 2022
February 19, 2023
February 20, 2024
August 13, 2025
August 11, 2026
November 23, 2026
February 21, 2027
May 10, 2027
February 15, 2028

Number of options
outstanding

Number of options
exercisable

260,000
315,000
20,000
345,000
605,000
450,000
500,000
50,000
545,000
100,000
570,000
3,760,000

260,000
315,000
20,000
345,000
605,000
450,000
500,000
50,000
545,000
83,334
190,000
3,363,334

Exercise
price
$
1.76
1.54
1.61
1.25
0.85
0.60
1.10
1.13
1.14
1.04
0.89

- 62 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

10. LOSS PER SHARE

The calculation of basic loss per share is based on the loss for the year divided by the weighted average
number of shares in circulation during the year. In calculating the diluted loss per share, potential
common shares such as share options and warrants have not been included as they would have the
effect of decreasing the loss per share. Decreasing the loss per share would be antidilutive. Details of
share options and warrants issued that could potentially dilute earnings per share in the future are given
in Notes 8 and 9.

Loss
Weighted average number of basic and diluted outstanding shares
Basic and diluted net loss per share

Fiscal 18
$

(807,530)
59,302,366
(0.01)

Fiscal 17
$

(1,214,056)
56,669,706
(0.02)

11.

INCOME TAXES

The income tax expense is made up of the following component:

Recovery of deferred income taxes

Premium on flow-through share issuance
Total recovery of deferred income taxes

Fiscal 18
$

Fiscal 17
$

694,070
694,070

382,090
382,090

The provision for income taxes presented in the financial statements is different from what would have
resulted from applying the combined Canadian Statutory tax rate as a result of the following:

Loss before income taxes

Combined federal and provincial income tax at 26.70% (26.90%)
Non-deductible expenses
Tax effect of renounced flow-through share expenditures
Amortization of flow-through share premiums
Unrecognized temporary differences
Other elements
Expired tax attributes
Recovery of deferred income taxes

Fiscal 18
$
(1,501,600)

Fiscal 17
$
(1,596,146)

(400,927)
51,369
605,619
(694,070)
(262,911)
6,850
-
(694,070)

(428,000)
84,500
679,100
(382,090)
(330,900)
4,700
-
(382,090)

The ability to realize the tax benefits is dependent upon a number of factors, including the sale of
properties. Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable
profits will be available to allow the asset to be recognized. Accordingly, some deferred tax assets have
not been recognized; these deferred tax assets not recognized amount to $639 000.

- 63 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

11.

INCOME TAXES (CONT’D)

Significant components of the Corporation’s deferred income tax assets and liabilities are as follows:

Deferred income tax assets

Non-capital losses
Donations
Share and warrant issue expenses

Total deferred income tax assets

Deferred income tax liabilities

E&E assets

Total deferred income tax liabilities

Fiscal 18
$

Fiscal 17
$

2,599,000
25,000
98,000
2,722,000

2,162,000
25,000
145,000
2,332,000

2,083,000
2,083,000

1,432,500
1,432,500

Deferred income tax assets not recognized

639,000

899,500

As of September 30, 2018, expiration dates of losses available to reduce future years’ income tax are:

Federal
$
84,000
126,000
177,000
540,000
645,000
726,000
677,000
748,000
906,000
760,000
820,000
1,062,000
1,360,000
1,259,000

Provincial
$
69,000
112,000
183,000
514,000
631,000
713,000
663,000
736,000
891,000
749,000
811,000
1,048,000
1,343,000
1,241,000

2026
2027
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038

- 64 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

12. COMPENSATION TO KEY MANAGEMENT AND RELATED PARTY TRANSACTIONS

12.1 Compensation to key management

The Corporation’s key management personnel are members of the board of directors, as well as the
president, the vice-president exploration and the chief financial officer. Key management remuneration
is as follows:

Short-term benefits

Salaries including bonuses and benefits
Professional fees
Professional fees recorded in share issue expenses
Salaries including bonuses and benefits capitalized in E&E expenses

Long-term benefits

Stock-based compensation
Stock-based compensation capitalized in E&E expenses

Total compensation

Fiscal 18
$

Fiscal 17
$

476,712
73,898
9,570
122,947

185,532
25,176
893,835

433,395
61,118
8,338
134,403

279,618
42,370
959,242

On January 1, 2015, the Corporation entered into amended employment agreements with members of
the senior management which, among other things, provide that in the event of a termination without
cause or of a change of control, a compensation equivalent to between 12 to 18 months of salary will be
paid. Also, on January 1, 2015, the Corporation entered into a consulting agreement with another
member of senior management, which provides that in the event of a termination without cause or of a
change of control, a compensation equivalent to 18 months of consulting fees will be paid.

12.2 Related party transactions

In addition to the amounts listed above in the compensation to key management (note 12.1), following
are the related party transactions:

In the normal course of operations:
♦

A firm in which an officer is a partner charged professional fees amounting to $69,469 ($76,821 in
Fiscal 17) of which $51,026 ($49,469 in Fiscal 17) was expensed and $18,443 ($27,352 in Fiscal
17) was recorded as share issue expenses;
A company controlled by an officer charged professional fees of $47,634 ($51,508 in Fiscal 17) for
her staff; and
As at September 30, 2018, the balance due to the related parties amounted to $4,581 ($7,861 in
September 30, 2017).

♦

13. OPERATING LEASE

The Corporation's future minimum operating lease payments are as follows (assuming that the consumer
price index will be the same as the one published in September 2018 by Statistic Canada for a 12-month
period which was 1.7%):

Within 1 year
1 to 5 years
After 5 years
Total

As of September 30, 2018
$
32,689
82,304
-
114,993

- 65 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

13. OPERATING LEASE (CONT’D)

In February 2016, the Corporation extended the lease for five years, from March 2017 to February 2022.
The rent is $31,432 for the first year and thereafter will be indexed annually at the highest of the increase
of the consumer price index or 2.5%. The Corporation is also responsible for its proportionate share of
the non-residential surtax and the water surtax.

Lease payments recognized as an expense during the reporting period amounted to $35,832 ($31,062
in Fiscal 17). This amount consists of minimum lease payments.

14. FINANCIAL INSTRUMENTS AND RISKS

The Corporation is exposed to various financial risks resulting from both its operations and its investment
activities. The Corporation’s management manages financial risks. The Corporation does not enter into
financial instrument agreements including derivative financial instruments for speculative purposes. The
Corporation’s main financial risk exposure and its financial risk management policies are as follows:

14.1 Market Risk

Interest rate fair value risk
Since the guaranteed investment certificates are at fixed rates, the Corporation is not exposed to interest
rate risk on the instruments themselves. The Corporation’s other financial assets and liabilities do not
comprise any interest rate risk since they do not bear interest.

Listed shares risk
Listed shares risk is the risk that the fair value of a financial instrument varies due to the changes in the
Canadian mining sector and equity market. For the Corporation’s listed shares at fair value through profit
and loss, a variation of plus or minus 20% of the quoted market prices as at September 30, 2018 would
result in an estimated effect on the net income (loss) of $8,000.

14.2 Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause
the other party to incur a financial loss. The Corporation is subject to concentrations of credit risk through
cash and cash equivalents, investments and accounts receivable. The Corporation reduces its credit risk
by maintaining part of its cash and cash equivalents and its investments in financial instruments held
with a Canadian chartered bank, with a broker which is a subsidiary of a Canadian chartered bank or
with an independent investment dealer member of the Canadian Investor Protection Fund.

In Fiscal 18, the investments are composed of guaranteed investment certificates issued by Canadian
banks or guaranteed by the Canadian Investor Protection Fund. The Corporation aims at signing
partnership agreements with established companies and follows closely their cash position to reduce its
credit risk on accounts receivable. The carrying amount of cash and cash equivalents and investments
represents the Corporation maximum credit exposure. Nevertheless, the management considers the
credit risk to be minimal and further disclosure are not significant.

14.3 Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet the obligations associated with its
financial liabilities. As of September 30, 2018, the Corporation had enough funds available to meet its
financial liabilities and future financial liabilities from its existing commitments. All accounts payable and
accrued liabilities terms are less than 31 days.

- 66 -

Midland Exploration Inc.
Notes to Financial Statements
For the years ended September 30, 2018 and 2017

14. FINANCIAL INSTRUMENTS AND RISKS (CONT’D)

14.4 Fair value

The carrying value of cash and cash equivalents, accounts receivable, investments and accounts
payable and accrued liabilities and advance received for upcoming exploration work are considered to
be a reasonable approximation of their fair value because of the short-term maturity and contractual
terms of these instruments.

Fair value estimates are made at the statement of financial position date, based on relevant market
information and other information about financial instruments.

The fair value of the listed shares at fair value through profit and loss is established using the closing
price on the most beneficial active market for this instrument that is readily available to the Corporation
and as such are classified as Level 1 in the fair value hierarchy.

15. ADDITIONAL INFORMATION ON CASH FLOWS

Stock-based compensation included in E&E expenses
Additions of exploration properties and E&E expenses included in accounts

payable and accrued liabilities

Acquisition of mining assets by issuing shares
Tax credits receivable applied against E&E expenses
Listed shares received for option payment
Exercise of warrants credited to capital stock
Interest received

Fiscal 2018 Fiscal 2017

$
104,646

437,789
507,636
803,427
-
141,850
159,215

164,088

204,721
-
1,058,212
30,000
69,988
213,399

16. SUBSEQUENT EVENT

On December 5, 2018, the Corporation completed a private placement of 1,969,638 flow-through shares
at $1.35 per share for total gross proceeds of $2,659,012. In connection with the private placement, the
Corporation paid finder’s fees of $127,414. Directors and officers of the Corporation participated in this
placement for a total consideration of $141,750 under the same terms as other investors.

- 67 -

Midland Exploration Inc.
Corporate Information

Directors
Paul Archer 2) 3)
René Branchaud 2)
Germain Carrière 1) 2)
Jean-Pierre Janson, Chairman of the board 1) 2)
Gino Roger 3)
Robert I. Valliant 1) 3)

Notes:

1) Member of the Audit committee
2) Member of the Compensation and Governance Committee
3) Member of the Technical Committee

Officers
Gino Roger, President and Chief Executive Officer
Mario Masson, Vice-president Exploration
Ingrid Martin, Chief Financial Officer
René Branchaud, Secretary

Head Office
1 Place Ville Marie, Suite 4000
Montreal, Quebec, H3B 4M4

Exploration Office
132 Labelle Blvd, Suite 220
Rosemere, Quebec, J7A 2H1
Tel. : (450) 420-5977
Fax : (450) 420-5978
Email : info@midlandexploration.com
Website : www.midlandexploration.com

Auditors
PricewaterhouseCoopers, LLP
1250 René-Lévesque Boulevard West, Suite 2500
Montreal, Quebec, H3B 4Y1

Legal counsel
Lavery, de Billy, L.L.P.
1 Place Ville Marie, Suite 4000
Montreal, Quebec, H3B 4M4

Transfer Agent
Computershare Investor Services Inc.
1500 University, Suite 700
Montreal, Quebec, H3A 3S8
Tel.: (514) 982-7888

- 68 -