Annual Report
September 30, 2020
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 ....................................................................................................................... 9
Exploration Activities ...................................................................................................................... 10
Working Capital .............................................................................................................................. 32
Selected Annual Information ......................................................................................................... 32
Summary of Results per Quarter .................................................................................................... 33
Fourth Quarter ................................................................................................................................ 33
Related Party Transactions ............................................................................................................ 34
Events Subsequent to Year End .................................................................................................... 34
Stock Option Plan ........................................................................................................................... 34
Off-balance Sheet Arrangements ................................................................................................... 34
Commitment ................................................................................................................................... 34
Critical Accounting Estimates ......................................................................................................... 34
New Accounting Standards ............................................................................................................ 35
Financial Instruments ..................................................................................................................... 36
Risk Factors .................................................................................................................................... 36
Foward Looking Information ........................................................................................................... 39
Financial Statement
Independant Auditor’s Report ......................................................................................................... 40
Statements of Financial Position .................................................................................................... 43
Statements of Comprehensive Loss............................................................................................... 44
Statements of Change in Equity ..................................................................................................... 45
Statements of Cash Flows .............................................................................................................. 46
Notes to Financial Statements ........................................................................................................ 47
Corporate Information ..................................................................................................................... 79
- 2 -
Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2019
Dear Shareholders,
It is a sincere pleasure for me to present the 2020 Annual Report for Midland Exploration Inc.
(“Midland” or the “Company”).
Midland is a dynamic and proactive mineral exploration company that is led by a highly respected
and experienced management and technical team with a proven mine-finding track record. Despite
a challenging year in 2020 marked by the COVID-19 pandemic, we were able to conduct several
successful exploration campaigns following the implementation of very strict COVID protocols. As
always, 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 BHP Canada Inc., Agnico Eagle Mines
Limited, Osisko Gold Royalties Ltd, Probe Metals Inc., Wallbridge Mining Company Ltd, SOQUEM
INC., the Nunavik Mineral Exploration Fund, and Abcourt Mines Inc. We continue discussions with
several potential new partners in order to quickly conclude new option agreements in the coming
months.
Midland continues to pursue its strategy of exploring in partnership across Quebec and achieved
significant progress in 2020, with the signing of several new agreements and the discovery of
several new mineralized zones on its various projects. The main highlights of the year were
certainly the five new partnerships we entered, including a major strategic alliance with BHP for
nickel exploration in northern Québec. Midland signed two option agreements with Wallbridge and
Probe in the Detour Lake belt, on its Casault and La Peltrie gold projects, respectively. A joint
venture was also formed with Probe to the south of the recent Fenelon gold discovery. Finally,
Midland entered a strategic alliance for zinc exploration in the Gatineau metasedimentary belt in
early 2020 with SOQUEM.
One of the highlights of our exploration efforts in 2020 was the discovery of a new gold zone, named
Golden Delilah, on the Samson project. This new discovery consists of a quartz-albite vein
intersected over a core length of 1.60 metres, which graded 99.1 g/t Au, 71.3 g/t Ag and 0.17%
Pb over 0.40 metre from 106.45 to 106.85 metres. A new drilling campaign to follow up on this
new discovery tested the strike extensions of the new Golden Delilah gold-bearing structure over
a distance of 500 metres on either side of this new showing. All assay results for this second phase
of drilling are expected by the end of December 2020. A drilling program totalling at least 2,000
metres is planned for the winter of 2021. This drilling program is designed to further test the strike
and depth extensions of the gold-bearing structure at Golden Delilah. Prospecting work carried out
on the new Lewis gold project (generated and acquired in 2020) was carried out during the summer
and led to the discovery of a new gold showings approximately 10 kilometres northeast of the
former Lac Shortt mine. These showings yielded several anomalous values in grab samples with
grades ranging from 0.2 g/t Au to 2.1 g/t Au. This promising new gold anomalous zone has never
been drill-tested and extends over more than 400 metres along strike. Stripping and channel
sampling were recently conducted on this zone, and assay results are pending. This new zone is
characterized by the presence of numerous quartz-carbonate veins with pyrite mineralization, may
be part of the same ENE-trending corridor. During the winter of 2021, Midland will complete a
geophysical (IP) survey covering this new discovery. A first drilling program will also be undertaken
to test the best geophysical, geological and geochemical targets. A drilling campaign consisting of
two (2) holes totalling 1,311.0 metres was also completed in the fall of 2020 on the Maritime-
Cadillac JV property in partnership with Agnico Eagle. One of the deepest holes drilled to date on
this project intersected a promising mineralized zone, in an intermediate intrusion some 15 metres
long altered to biotite-carbonate-chlorite and containing up to 2% pyrite-pyrrhotite with trace
arsenopyrite, from 761.5 to 776.5 metres depth. All assay results are pending and are expected by
the end of December 2020.
Finally, drilling is expected to resume during the winter of 2021 on the high-grade copper system
at Mythril, which was traced over more than 2 kilometres on surface and in drill hole in 2019. This
drilling program will test new targets recently generated following 3D modelling on the project.
Follow-up work including geophysics and drilling will also be completed in the coming months on
- 3 -
Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2019
new mineralized zones discovered on the new Komo gold project, located south of the Elmer gold
discovery in the James Bay region, and under our new alliance with BHP in the Kuujjuaq area.
Here are the main highlights of the past year:
• New gold discovery on Samson at the Golden Delilah zone
• New surface gold discovery on Lewis
• New strategic alliance with BHP for Ni in Nunavik
• New option agreement with Wallbridge on Casault
• New option agreement with Probe on La Peltrie
• New joint venture agreement with Probe on Gaudet-Fenelon
• New joint venture agreement with SOQUEM on Gatineau Zn
• A total of 5,451 metres drilled (19 drill holes) during Fiscal 20 (16,195 metres during
Fiscal 19).
Midland intends to continue aggressively exploring its various projects for gold, platinum group
elements and base metals in 2021, 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 quickly conclude additional partnership agreements for properties recently
acquired in 2020. In addition, we also continued to increase visibility for Midland throughout 2020
by taking part in numerous virtual (given the pandemic) promotional events to attract new and
important shareholders.
Midland also intends to continue assessing interesting business opportunities as they arise in 2021.
Midland has a very strong financial position, with more than $11 million in adjusted working capital
and no debt as at September 30, 2020.
On behalf of the management team and the Board of Directors, I would like to express our sincere
acknowledgements for your trust, your patience, and your renewed support throughout 2020. I
would also like to take this opportunity to welcome the new shareholders who joined us during the
year. Midland is a company that relies on a high-calibre Board of Directors and a dynamic,
motivated and talented technical team who will spare no effort in 2021 to make one or many
significant discoveries in Quebec.
(s) Gino Roger
Gino Roger, P. Eng.
President and CEO
- 4 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
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, 2020.
This MD&A should be read in conjunction with the Corporation’s audited financial statements as at
September 30, 2020 (the “Financial Statements”) prepared in accordance with the International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). 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 18
Q1-19
Q2-19
Q3-19
Q4-19
Fiscal 19
Q1-20
Q2-20
Q3-20
Q4-20
Fiscal 20
Fiscal 21
Period
October 1, 2017 to September 30, 2018
October 1, 2018 to December 31, 2018
January 1, 2019 to March 31, 2019
April 30, 2019 to June 30, 2019
July 1, 2019 to September 30, 2019
October 1, 2018 to September 30, 2019
October 1, 2019 to December 31, 2019
January 1, 2020 to March 31, 2020
April 30, 2020 to June 30, 2020
July 1, 2020 to September 30, 2020
October 1, 2019 to September 30, 2020
October 1, 2020 to September 30, 2021
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
2.1 Highlights of exploration work in Fiscal 20
● New gold discovery on Samson; Golden Delilah zone
● New strategic alliance with BHP for Ni in Nunavik
● New option agreement with Wallbridge for Casault
● New option agreement with Probe for La Peltrie
● New JV agreement with Probe for Gaudet-Fenelon
● New partnership (JV) with Soquem for Gatineau Zn
● A total of 5,451 metres (19 holes) were drilled during Fiscal 20 (16 195 metres during Fiscal 19).
More details can be found in section 4.
2.2 Working capital
Midland has a working capital of $10,973,875 as of September 30, 2020 ($14,017,423 as of September
30, 2019, which will allow the Corporation to execute its exploration program for at least the next three
years.
- 5 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
2. OVERALL PERFORMANCE (CONT’D)
2.3 Private placements
On December 4 and 13, 2019, the Corporation completed private placement of 1,402,030 flow-through
shares at $1.10 per share for total gross proceeds of $1,542,233. In connection with the private
placements, the Corporation incurred $111,139 share issue expenses of which $63,457 was paid as
finder’s fees. Directors and officers of the Corporation participated in the flow-through private
placement for a total consideration of $174,900 under the same terms as other investors.
On December 13, 2019, the Corporation completed a private placement of 73,791 shares at a price
of $0.85 per share for total gross proceeds of $62,722. BHP Billiton Canada Inc. (“BHP”) has exercised
its right to maintain its ownership to 5.0% by acquiring 73,791 shares. This right had been granted to
BHP on April 18, 2019 pursuant to an Investor Rights Agreement with the Corporation.
On November 5, 2020, the Corporation completed private placement of 1,827,800 flow-through shares
at $1.25 per share for total gross proceeds of $2,284,750. In connection with the private placements,
the Corporation incurred $101,265 of finder’s fees. Directors and officers of the Corporation
participated in the flow-through private placement for a total consideration of $160,000 under the same
terms as other investors.
On November 9, 2020, the Corporation completed a private placement of 96,209 shares at a price of
$1.00 per share for total gross proceeds of $96,209. BHP has exercised its right to maintain its
ownership to 5.0% by acquiring 96,209 shares. This right had been granted to BHP on April 18, 2019
pursuant to an Investor Rights Agreement with the Corporation.
2.4 Outstanding share data:
Common shares
Options
Warrants
2.5 Update on agreements with partners
As at
December 3, 2020
Number
72,278,052
4,940,000
666,667
77,884,719
As at
September 30, 2020
Number
70,354,043
4,940,000
4,110,667
79,404,710
On February 20, 2020, the Corporation signed a new strategic alliance with SOQUEM Inc.
(“SOQUEM”) in the Grenville Province and an agreement to regain 100% interest in the Casault and
Jouvex gold projects, previously in joint venture with SOQUEM. In exchange, Midland relinquishes
50% interest in its seven (7) properties grouped under the Gatineau Zinc project located in the Grenville
Province, south of the town of Maniwaki, Quebec.
On June 16, 2020, the Corporation signed an option agreement with Wallbridge Mining Company
Limited (“Wallbridge”) whereby Wallbridge may earn a 50% interest in the Casault property in
consideration of cash payments of $600,000 and exploration work of $5,000,000 over 4 years.
On July 9, 2020, the Corporation signed an option agreement with Probe Metals Inc. (“Probe”) whereby
Probe may earn a 50% interest in the La Peltrie property in consideration of cash payments of
$400,000 and exploration work of $3,500,000 over 4 years.
On July 29, 2020, the Corporation signed a joint venture agreement with Probe over the Gaudet and
Samson North West properties from the Corporation as well as the Fenelon-Nantel property of Probe.
- 6 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
2. OVERALL PERFORMANCE (CONT’D)
2.5.1 BHP Alliance
On August 20, 2020, the Corporation signed an agreement with Rio Algom Limited, a wholly-owned
subsidiary of BHP Group plc (“BHP”), for a new strategic alliance (“Alliance”) for the initial funding by
BHP of a generative exploration phase and opportunities for joint contributions to advance nickel
exploration within the Nunavik territory, Quebec.
Generative Phase (I)
During the first phase of the Alliance, BHP will fund at 100% up to $1,400,000 on an annual basis for
a minimum of two years. The Corporation is acting as operator and the main objective is to generate,
identify and secure exploration projects to be advanced to a drill-ready stage through further
exploration work. BHP may propose additional exploration work for up to 700,000 before advancing
an identified project to the second phase.
Following the first phase, one or more specific exploration targets may be advanced to a second phase
to be further developed as a separate designated project.
Testing Phase (II)
During this second phase, each designated project will have its own work program and budget with
the objective, mainly through drilling, to test and further develop the identified targets. The Corporation
will act as operator during the testing phase subject to BHP’s right to become the operator of any
designated project.
For each designated project, the testing phase will last up to four years, with a total budget of up to
$4,000,000 with a minimum of $700,000 to be spent during the first year. During this phase, BHP and
the Corporation will fund 75% and 25%, respectively, for approved work programs.
In addition, for each designated project, BHP will pay to the Corporation a designated project fee,
structured as follows: $250,000 on or before the first anniversary, $250,000 on or before the second
anniversary and $500,000 on or before the third anniversary, of the testing phase, for a maximum of
$1,000,000 per designated project.
BHP has the right to cease contributing its share of the funding of a designated project in which case
the Corporation would have the right to retain a 100% interest of the designated project and BHP
would receive a 1% NSR royalty. The Corporation would have a right to buy-back such royalty for a
one-time cash payment of $1,500,000. Total royalty payments would be capped at $3,000,000 per
designated project.
BHP may decide to advance any designated project to the third phase as a joint venture project (“JV
Project”).
Joint Venture Phase (III)
For this third phase, a formal joint venture would be formed with initial participating interests being
70% BHP and 30% the Corporation. Both parties would contribute to the expenses pro-rata to their
participating interests. BHP would be the operator for all JV Projects.
For each JV Project, BHP will pay to the Corporation a joint venture success fee of $200,000 after the
formation of the joint venture including transfer of tenements, data ownership and any other assets
related to the JV Project to, or for the benefit of, the joint venture.
If a party’s participating interest in the joint venture is diluted below 10%, such interest would be
converted into a 1.5% NSR royalty on the JV Project. The non-diluted party would have a right to buy-
back such royalty for a one-time cash payment of $2,500,000. Total royalty payments would be capped
at $5,000,000 per JV Project.
- 7 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
2. OVERALL PERFORMANCE (CONT’D)
2.6 Covid update
In keeping with the health and safety guidelines, Midland, like most businesses, transitioned itself
starting in March 2020 with its staff working remotely from home remaining operational. Following the
announcement of the resumption of mining exploration works starting May 11, 2020, the Corporation
implemented a protocol to return on the field which includes health prevention measures and
communication plan with the communities.
In addition, the Minister of Energy and Natural Resources of Quebec announced the postponement of
the requirement to carry out field work to renew a claim, for a period of one year. Finally, the Canadian
Government is proposing to protect jobs and safe operations of junior mining exploration and other
flow-through share issuers, by extending the timelines for spending the capital they raise via flow-
through shares by 12 months.
2.7 Initiatives in sustainable development, certification, health and safety
Sustainable Development Policy
The Corporation has implemented a Sustainable Development Policy to create long-term value in
mineral exploration, mineral resource extraction and metal production. The Corporation works in
collaboration with all stakeholders to ensure that the principles of governance, health and safety,
environment, human rights, community, and transparency are respected and exemplary in all our
activities.
UL Certification
For the past year, the Corporation has been in the accreditation process to obtain the new Ecologo
certification for mineral exploration. This certification helps to promote the application of best
environmental, social, and economic practices in the mining exploration industry. All employees are
continually working to review and improve exploration practices. A crucial step in the process has just
been achieved with the writing of the policies and procedures manual since it specifies the guidelines
and the compliance procedures to be followed.
Health and safety at work:
During Q4-20, the Corporation put in place an Emergency Measures Plan, a Prevention Program and
a Field Guide in terms of environment and safety within the framework of asset protection and risks
management. The Corporation has mandated an external specialize firm named Urgence industrielle
Dan Ouellet Inc. so that the development of the various documents be drafted in standards based on
several laws and regulations. In order to put in place the various documents, a vulnerability study, with
the aim of identifying the specific risks of the Corporation's activities, was carried out in accordance
with the industry emergency planning standard, the law on civil security (Law 173) and the ISO 4001
approach. In addition, a new emergency telephone line has been installed and field procedures have
been put in place for all possible contingencies. These new documents ensure that the health and
safety of all employees, contractors and communities are not compromised by Midland's operations.
- 8 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
3. RESULTS OF OPERATIONS
As operator, Midland incurred exploration expenditures totalling $3,746,951 ($8,251,795 in Fiscal 19),
on its properties of which $290,687 was recharged to its partners ($604,753 in Fiscal 19). The
operating partners incurred $412,253 of exploration expenses ($95,142 in Fiscal 19). Also, the
Corporation invested $487,767 ($768,003 in Fiscal 19) to complete several property acquisitions in
Quebec or maintained them, of which $7,554 was recharged to its partners ($11,148 in Fiscal 19).
The Corporation reported a loss of $1,345,977 in Fiscal 20 compared to $1,142,784 for Fiscal 19.
Operating expenses increased at $2,138,540 for Fiscal 20 compared to $2,978,895 in Fiscal 19, and
following are the explanations for the main variances:
● Salaries increased to $798,892 ($620,863 in Fiscal 19). Less salaries were capitalised as
exploration expenses considering the corporate activities amongst other things caused by
the Covid.
● Conference and mining industry involvement $228,353 ($265,555 in Fiscal 19). Several
conferences were cancelled following the Covid.
● Professional fees increased to $340,509 ($231,785 in Fiscal 19). Legal fees increased by
$79,331 following the negotiations of several partnership agreements. Also, a mandate was
given to an external firm to develop rules and procedures in health and safety in Fiscal 20.
Finally, during Fiscal 20 the Compensation and Governance Committee hired Perrault
Consulting to analyse the management and the directors’ compensation, compare it to
market and provide recommendations.
(non-cash item) decreased
Impairment of exploration and evaluation assets
to $194,603 ($1,261,081 in Fiscal 19) and the explanations can be found in the exploration
activities in section 4.
●
A $435,903 ($1,554,552 in Fiscal 19) 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 following the December 2019 private placement (December 2018 in Fiscal 19).
All exploration work imposed by the December 2019 flow-through financing was completed before
September 30, 2020. Also, all the exploration work imposed by the December 2018 flow-through
financings was completed before September 30, 2019. In addition, a $113,124 in Fiscal 19 deferred
income taxes was recorded (non in Fiscal 20); a deferred tax asset relating to share issue expense
recorded in equity was offset by the deferred tax liability on mining properties and exploration
expenses.
- 9 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES
Deferred
exploration
expenses
Fiscal 20
Abitibi
Abitibi Gold
Adam
Casault Au
Coigny
Gaudet
Guyberry
Heva Au
Jeremie
Jouvex Au
La Peltrie Au
Lac Esther
Laflamme Au
Lewis
Mar.Cadillac Au
Mistaouac
Noyelles
Patris Au
Samson
Turgeon
Wawagosic
Grenville
Gatineau Zn
Gatineau JV
Weedon Cu Zn Au
James Bay
BJ Eleonore Au
BJ Gold
Elrond
Fangorn
Helms
JV Eleonore Au
Komo
McDuff
Minas Tirith
Moria
Mythril
Balance
Sep 30,
2019
Geology
Geo-
physics
Drilling
Geo-
chemistry
Sub
total
Stock-
based
comp.
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
Balance
Sept.
30, 2020
$
$
$
$
$
$
$
$
$
$
$
$
$
9,945
273,436
2,188,205
-
-
-
276,312
84,740
623,657
1,098,627
-
2,808,975
-
404,866
229,698
-
236,236
172,346
199,191
32,949
16,070
-
703,918
1,774,421
441,537
69,052
11,685
56,797
616,676
-
4,778
37,631
129,564
4,382,617
5,626
4,062
109,454
1,778
70
1,238
710
8,135
5,568
7,060
7,260
34,352
78,493
7,260
20,087
5,302
3,222
38,080
649
-
8,816
41,948
60,033
5,054
35,142
15,468
4,265
13,462
-
68,077
47,568
4,264
4,266
254,507
-
-
14,420
-
243,777
-
-
-
48,712
-
-
70,065
-
-
4,080
-
-
132,042
2,210
-
12,185
-
-
-
935
-
-
-
-
-
-
-
-
309,548
-
-
19,611
-
-
-
-
-
251
589
-
185,851
-
65,421
-
-
716
818,695
-
-
-
1,203
-
-
2,100
-
-
-
-
-
-
-
-
31,781
-
-
1,976
-
21,571
-
-
-
-
-
-
14,409
7,148
-
-
-
1,285
33,678
-
-
-
-
-
910
-
-
-
580
-
-
4,991
-
-
316,168
5,626
4,062
145,461
1,778
265,418
1,238
710
8,135
54,531
7,649
7,260
304,677
85,641
72,681
24,167
5,302
5,223
1,022,495
2,859
-
21,001
43,151
60,033
5,964
38,177
15,468
4,265
14,042
-
68,077
52,559
4,264
4,266
912,004
- 10 -
-
1,510
11,780
-
-
-
-
-
1,887
-
-
3,718
-
3,486
-
-
-
1,510
-
-
-
-
-
1,079
1,330
-
-
-
1,189
-
-
-
-
32,912
-
-
(2,801)
-
(67,570)
-
-
-
(125)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,485)
(13,706)
(712)
(45,325)
-
-
-
(1,460)
(351)
(1,589)
(6,197)
(11,181)
-
-
(2,137)
(242)
(391,104)
-
-
(7)
-
(8,058)
(2,011)
(6,431)
(3,867)
-
(5,813)
-
(15,127)
(23,199)
-
-
(216,585)
-
-
(58,488)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(15,571)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(9,945)
4,087
82,246
1,066
152,523
1,238
710
8,135
54,833
7,298
5,671
302,198
74,460
76,167
24,167
3,165
4,981
632,901
2,859
-
-
277,523
2,270,451
1,066
152,523
1,238
277,022
92,875
678,490
1,105,925
5,671
3,111,173
74,460
481,033
253,865
3,165
241,217
805,247
202,050
32,949
20,994
43,151
51,975
37,064
43,151
755,893
5,032
33,076
11,601
4,265
8,229
1,189
52,950
29,360
4,264
4,266
728,331
1,779,453
474,613
80,653
15,950
65,026
617,865
52,950
34,138
41,895
133,830
5,110,948
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CON’T)
Deferred
exploration
expenses
Fiscal 20
Shire
Wookie
North
BHP Ni
Nachicapau
Pallas PGE
Soissons
Soissons Nmef
Willbob Au
Generation
Balance
Sep 30,
2019
$
239,620
780
-
14,258
542,124
53,994
47,710
3,104,919
23,232
Geology
Geo-
physics
Drilling
Geo-
chemistry
Sub
total
Stock-
based
comp.
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
$
4,265
25,752
217,911
1,520
-
60,246
35,150
36,649
18,542
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
35,085
-
$
-
-
-
-
-
-
-
43,647
-
$
4,265
25,752
217,911
1,520
-
60,246
35,150
115,381
18,542
$
-
-
$
-
-
-
-
-
-
-
4,554
-
(217,911)
-
-
-
(2,280)
-
-
$
-
(4,330)
-
-
-
(7,494)
(11,400)
(28,170)
(4,456)
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
4,265
21,422
-
1,520
-
52,752
21,470
91,765
14,086
Balance
Sept.
30, 2020
$
243,885
22,202
-
15,778
542,124
106,746
69,180
3,196,684
37,318
TOTAL
20,910,566
1,301,311
837,974
1,161,303
446,363
3,746,951
64,955
(290,687)
(812,437)
(58,488)
(15,571)
2,634,723 23,545,289
- 11 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CON’T)
Deferred
exploration
expenses
Fiscal 19
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
BJ Gold Au
BJ Eleonore Au
JV Eleonore AU
Isengard
Minas Tirith
Shire
Elrond
Gondor
Moria
Helms
Mythril
Fangorn
Pallas PGE
Willbob Au
Soissons
Soissons NMEF
Generation
TOTAL
Balance
beginning
Geology
Geoph
ysics
Drillin
g
$
$
$
$
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
15,228,482
14,981
74,486
4,225
58,297
30,680
2,550
1,257
6,061
6,118
-
6,519
5,110
3,284
-
11,306
25,946
1,257
23,949
5,195
28,109
-
3,920
15,219
59,832
-
7,338
55,009
1,228,112
5,028
2,100
235,634
4,799
57,871
47,482
2,031,674
-
81,507
-
15,950
-
-
-
-
-
-
-
-
-
-
-
22,550
8,500
86,065
-
-
-
-
-
-
-
-
-
527,954
-
-
-
-
-
-
742,526
-
184,052
-
666,642
375,474
-
-
173
12,806
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,998,126
-
-
453,690
-
-
-
4,690,963
Geo-
che
mistr
y
$
-
3,994
-
131,011
5,778
-
-
-
-
-
-
-
-
-
-
-
-
1,788
-
-
-
-
216
-
-
216
3,980
536,521
-
-
27,109
6,782
-
2,185
719,580
Line
cutti
ng
$
-
52,076
-
6,851
-
-
-
-
-
-
-
-
-
-
-
8,125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67,052
- 12 -
Sub total
Stock-
based
compen
sation
Rechar
ge
Tax
credits
Write-off
Net change
Balance end
Fiscal 19
$
$
$
$
$
14,981
396,115
4,225
878,751
411,932
2,550
1,257
6,234
18,924
-
6,519
5,110
3,284
-
11,306
56,621
9,757
111,802
5,195
28,109
-
3,920
15,435
59,832
-
7,554
58,989
5,290,713
5,028
2,100
716,433
11,581
57,871
49,667
8,251,795
775
5,661
-
16,491
5,075
1,952
-
-
2,354
-
1,175
776
776
-
-
-
-
1,176
400
5,352
-
-
2,354
-
-
-
-
42,639
-
-
16,284
-
-
-
103,240
-
-
-
(398,787)
(205,966)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(604,753)
-
(20,639)
(2,045)
(188,484)
(346)
-
-
(1,998)
(1,574)
-
(921)
(690)
(1,534)
-
(1,360)
-
(71)
(3,650)
(1,384)
-
-
-
(4,764)
(22,186)
-
(1,534)
(21,111)
(978,950)
-
-
(252,023)
(4,869)
(14,420)
(15,954)
(1,540,507)
-
-
-
-
-
-
(125,571)
-
-
-
-
-
-
(8,409)
-
-
(65,131)
(185,457)
-
-
(36,918)
-
-
-
(31,424)
-
-
-
-
-
-
-
-
(74,781)
(527,691)
$
15,756
381,137
2,180
307,971
210,695
4,502
(124,314)
4,236
19,704
-
6,773
5,196
2,526
(8,409)
9,946
56,621
(55,445)
(76,129)
4,211
33,461
(36,918)
3,920
13,025
37,646
(31,424)
6,020
37,878
4,354,402
5,028
2,100
480,694
6,712
43,451
(41,068)
5,682,084
$
404,866
2,808,975
236,236
2,188,205
623,657
276,312
-
172,346
1,098,627
32,949
273,436
229,698
199,191
-
94,685
703,918
16,070
441,537
1,774,421
616,676
-
37,631
239,620
69,052
-
129,564
56,797
4,382,617
11,685
542,124
3,104,919
53,994
47,710
43,048
20,910,566
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CON’T)
Exploration and evaluation
expenses
Properties
Actual Fiscal 19
Actual Fiscal 20
Budget Fiscal 20 – modified
Budget Fiscal 21
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
100 % Midland
Abitibi Gold
Adam
Casault
Coigny
Fleuribleu
Gaudet
Guyberry
Heva Au
Jeremie
Jouvex
La Peltrie
Lac Esther
Lewis
Mistaouac
Noyelles
Patris
Samson
Turgeon
Valmond
Wawagosic
Gatineau Zn
Weedon Cu-Zn-Au
BJ Éléonore Au
BJ Gold
Elrond
Fangorn
Helms
Komo
Minas Tirith
Moria
Mythril
Shire
Wookie
Nachicapau
Pallas EGP
Soissons
Willbob
Project generation
11,306
6,519
479,964
-
-
-
-
2,550
-
205,966
18,924
-
-
5,110
-
4,225
6,234
3,284
1,257
-
9,757
56,621
5,195
111,802
59,832
5,028
58,989
-
3,920
7,554
5,296,529
15,435
-
-
2,100
11,581
716, 433
44,335
7,150,450
13,761
11,306
-
4,062
6,519
-
142,660
878,751
398,787
1,778
-
-
-
-
-
156,857
-
-
1,238
-
-
710
2,550
-
-
-
-
54,406
411,932
205,966
7,649
18,924
-
7,260
-
-
85,641
-
-
24,167
5,110
-
5,302
-
-
4,225
5,223
-
6,234 1,022,495
-
2,859
3,284
-
-
1,257
-
-
-
-
21,001
9,757
-
60,033
56,621
-
5,964
5,195
-
38,177
111,802
-
15,468
59,832
-
4,265
5,028
-
14,042
58,989
-
68,077
-
-
4,264
3,920
-
4,266
-
7,554
964,563
- 5,296,529
4,265
15,435
-
25,752
-
-
1,520
-
-
-
2,100
-
60,246
11,581
-
115,381
716,433
-
18,542
44,335
-
604,753 7,755,203 2,961,894
13,761
-
4,062
-
145,461
2,801
1,778
-
-
-
224,427
67,570
1,238
-
710
-
-
-
54,531
125
7,649
-
7,260
-
85,641
-
24,167
-
5,302
-
-
5,223
- 1,022,495
2,859
-
-
-
-
-
21,001
-
60,033
-
5,964
-
38,177
-
15,468
-
4,265
-
14,042
-
68,077
-
4,264
-
4,266
-
964,563
-
4,265
-
25,752
-
1,520
-
-
-
60,246
-
115,381
-
18,542
-
70,496 3,032,390
25,000
10,000
160,000
-
-
185,000
5,000
8,000
-
60,000
20,000
15,000
135,000
30,000
-
10,000
580,000
10,000
5,000
5,000
20,000
65,000
16,000
645,000
15,000
5,000
15,000
120,000
5,000
5,000
1,070,000
5,000
-
-
5,000
50,000
120,000
75,000
3,499,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000
25,000
150,000
10,000
-
160,000
5,000
-
5,000
-
-
185,000
40,000
5,000
5,000
8,000
10,000
-
20,000
60,000
-
20,000
40,000
15,000
40,000
135,000
100,000
30,000
5,000
-
100,000
10,000
75,000
580,000
50,000
10,000
-
5,000
5,000
-
-
5,000
-
-
20,000
-
150,000
65,000
-
80,000
16,000
-
90,000
645,000
-
100,000
15,000
-
5,000
5,000
-
5,000
15,000
-
15,000
120,000
-
5,000
5,000
-
5,000
-
5,000
690,000
- 1,070,000
5,000
5,000
-
5,000
-
-
5,000
-
-
5,000
-
5,000
5,000
50,000
-
50,000
120,000
-
-
30,000
75,000
- 3,499,000 1,910,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000
150,000
-
5,000
5,000
-
40,000
5,000
10,000
20,000
-
40,000
40,000
100,000
5,000
100,000
75,000
50,000
5,000
-
-
150,000
80,000
90,000
100,000
5,000
5,000
15,000
5,000
5,000
690,000
5,000
5,000
5,000
5,000
5,000
50,000
30,000
1,910,000
- 13 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CON’T)
Exploration and evaluation
expenses
Properties
Option
Casault - Wallbridge
La Peltrie – Probe
Joint venture
Gaudet-Fenelon – Probe 50%
Laflamme Au– Abcourt 22,1%
Maritime-Cadillac AEM 51$
Gatineau JV 50%
JV Eleonore Osisko 50%
BHP Ni - Alliance
Soissons NMEF 50%
Grand total
Actual Fiscal 19
Actual Fiscal 20
Budget Fiscal 20 - modified
Budget Fiscal 21
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
15,017
206,855
221,872
15,017
206,855
221,872
750,000
500,000
750,000
-
-
500,000
- 1,250,000 1,250,000
750,000
-
-
500,000
- 1,250,000
750,000
500,000
1,250,000
-
-
125,000
250,000
-
-
50,000
-
310,000
125,000
250,000
-
-
50,000
735,000
500,000
-
100,000
200,000
50,000
- 1,000,000
50,000
950,000 1,900,000
4,234,000 1,675,000 5,909,000 2,860,000 3,150,000
-
310,000
250,000
500,000
-
-
100,000
425,000 1,160,000
500,000
50,000
100,000
200,000
50,000
50,000
1,000,000
50,000
200,000
400,000
100,000
1,000,000
100,000
2,850,000
6,010,000
-
396,115
14,981
-
28,109
-
57,871
497,076
7,647,526
-
-
2,430
-
28,110
-
64,602
95,142
40,991
-
304,677
396,115
72,681
17,411
43,151
-
-
56,219
-
-
32,870
122,473
494,370
592,218
699,895 8,347,421 3,456,264
81,983
40,992
304,677
-
148,329
75,648
86,302
43,151
-
-
217,911
217,911
65,740
32,870
904,942
410,572
702,940 4,159,204
- 14 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Concerning the table in the previous page:
● 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.
ABITIBI
4.1 Abitibi Gold (Au)
Property Description
On July 16, 2018, the Corporation signed a definitive agreement whereby it sold 17 claims for $8,000
cash and a 1% NSR royalty. The Corporation wrote off the project included in Abitibi Gold for $14,455
during Q1-20.
4.2 Adam (Cu-Au)
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, 2020, it consists of 168 claims covering a surface area of about 9,343
hectares in the Abitibi region of Quebec. Some claims were dropped therefore the Corporation
impaired partially for $3,804 ($2,632 in Fiscal 19).
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
No exploration work on the ground was conducted on Adam during Fiscal 20. Midland is currently
looking for a new partner for this project.
- 15 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
4.3 Casault (Au), option agreement with Wallbridge, operated by Wallbridge
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, 2020, this property consists in 322 claims
covering an area of approximately 17,726 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.
On February 20, 2020, the Corporation signed a strategic alliance with SOQUEM, in which SOQUEM
transferred to the Corporation its 50% interest in the Casault and Jouvex properties in exchange for:
● A 1% net smelter return (“NSR”) royalty; Midland may, at any time, buy back the royalty, in all
or in part, by making a cash payment of $1,000,000 per tranche of 0.5% NSR; and
● 50% undivided interest in a joint venture relating to seven existing mining properties forming
the Gatineau project.
On June 16, 2020, the Corporation signed an option agreement with Wallbridge whereby Wallbridge
may earn a 50% interest in the Casault property in consideration of the following:
Upon signature
On or before June 30, 2021
On or before June 30, 2022
On or before June 30, 2023
On or before June 30, 2024
Total
Wallbridge is the operator.
Cash payments
Commitment Completed
$
100,000
110,000
110,000
130,000
150,000
600,000
$
100,000
-
-
-
-
100,000
Exploration work
Commitment
$
Completed
$
-
750,000
1,000,000
1,250,000
2,000,000
5,000,000
-
15,017
-
-
-
15,017
After exercising this first option to earn a 50% interest, Wallbridge may increase its interest to 65%
(the second option) over a period of 2 years in consideration of exploration expenditures or cash
payment totalling $6,000,000.
Exploration work on the property
Because of the COVID-19 and of the new option agreement signed with Wallbridge, the planned 2,400
metres drilling program was cancelled. A technical meeting was held during September in order to
discuss the next drilling program to be conducted by Wallbridge in 2021. Wallbridge is completing a
review of the project historical data in order to generate the best possible drilling targets for the
beginning of 2021.
- 16 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
4.4 Coigny (Au)
Property Description
The new Coigny property (100% Midland) consists of 40 claims (2,225 hectares) is located about 20
km to the southeast of the Geant Dormant mine.
Exploration work on the property
No exploration work on the ground was conducted on Coigny during Fiscal 20.
4.5 Fleuribleu (Au)
Property Description
The new Fleuribleu property consists in one claim block totalling 196 claims (10,880 hectares) as at
September 30, 2020. It covers, over a strike length of more than 15 kilometres, the interpreted
eastward extension of the Sunday Lake Fault, approximately 40 kilometres east of the new Wallbridge
discovery. The Fleuribleu property covers a major contact zone between the Manthet and Brouillan-
Fenelon groups, marked by a series of electromagnetic Input anomalies.
Exploration work on the property
No exploration work on the ground was conducted on Fleuribleu during Fiscal 20. Midland is currently
looking for a new partner for this project.
4.6 Gaudet (Au), in partnership avec Probe, operated by Probe
Property Description
The new Gaudet-Fenelon property consists of one claim block totalling 226 claims (12,530 hectares
) as at September 30, 2020. The claim block is located less than 5 kilometres south of the Area 51-
Fenelon discovery. This claim block is located south of the Sunday Lake Fault and mainly covers a
volcano-sedimentary sequence of the Rivière Turgeon Formation, as well as a 10-kilometre-long
segment of the Lower Detour Fault.
On March 18, 2020, the Corporation signed an agreement with Ingrid Martin CPA inc. (“IMCPA”) (a
company controlled by Ingrid Martin, officer of the Corporation) whereby it acquired a bloc of claims
contiguous to the Gaudet property for $5,000 and the Guyberry property for $3,000, for a total amount
of $8,000. IMCPA acquired these claims from a third party for that same amount of $8,000. The Gaudet
claims are subject to a 1% NSR royalty relating to a prior third party agreement.
On July 29, 2020, the Corporation signed a joint venture agreement with Probe over the Gaudet and
Samson North West properties from the Corporation as well as the Fenelon-Nantel property of Probe.
Probe is the operator.
Exploration work on the property
During Q3-20, a Drone High Resolution Mag survey was completed on Gaudet to the South of Fenelon.
This survey helped to identify a magnetic corridor as well as a series of structures oriented NW-SE
similarly to the ones identified at Fenelon/Tabasco owned by Wallbridge.
- 17 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
An induced polarization (IP) survey totaling more than 40 km was completed during Q4-20. This survey
with a line spacing of 100 metres will help to define the next drilling targets. Three areas were identified
and have been prioritized. These areas are characterized by high chargeability anomalies coupled
with high resistivity anomalies. A biogeochemical survey is also in progress and the results are
expected during Q2-21. A high-resolution magnetic survey is also in progress on the eastern block
(Samson NW). Final results are pending.
4.7 Guyberry (Au)
Property Description
The new Guyberry property consists of one claim block totaling 49 claims (1,931 hectares) as at
September 30, 2020. See section 4.4 on the property acquisition agreement.
Exploration work on the property
No exploration work on the ground was conducted on Guyberry during Fiscal 20. Midland is currently
looking for a new partner for this project.
4.8 Heva (Au)
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
No exploration work on the ground was conducted on Heva during Fiscal 20. Midland is currently
looking for a new partner for this project.
4.9 Jeremie (Au)
Property Description
The Jeremie block now totals 42 claims (2,173 hectares), including 40 new cells, and covers a surface
area of approximately 30 square kilometres. It is located approximately 10 kilometres northwest of
Wallbridge’s new Area 51-Fenelon gold discovery. The Jeremie property covers the northwest contact
of the Jeremie Pluton. In October 2019, Wallbridge reported drill results from its Fenelon property
(Tabasco zone), with grades reaching 27.0 g/t Au over 38.39 metres, 20.89 g/t Au over 8.54 metres,
and 17.58 g/t Au over 11.04 metres (see press release by Wallbridge dated October 21, 2019).
- 18 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Exploration work on the property
No exploration work on the ground was conducted on Jeremie during Fiscal 20. Midland is currently
looking for a new partner for this project.
4.10 Jouvex (Au)
Property Description
The Jouvex property is located about 50 kilometres to the southwest of Matagami and as at September
30, 2020 is composed of 345 claims covering an area of approximately 19,253 hectares. Some claims
were dropped therefore the Corporation impaired partially for $3,702 in Fiscal 19).
See the Casault section for the details on the agreement signed with SOQUEM.
Exploration work on the property
The IP report and the final interpretation have been received. For both grids, we note the presence of
chargeability anomalies coupled with low resistivity anomalies. These anomalies remain untested by
drilling and represent drilling targets.
4.11 La Peltrie (Au), option agreement with Probe, operated by Probe
Property Description
As at September 2020, the La Peltrie property comprises 482 claims covering a surface area of about
26,056 hectares and encompasses possible subsidiary faults to the south of the regional Lower Detour
Fault over a distance of more than 10 kilometres. During Fiscal 19, some claims were dropped
therefore the Corporation impaired partially for $20,146. Some claims are subject to a 1% Gross Metal
royalty.
On August 29, 2017, the Corporation had signed an option agreement with Niobay whereby Niobay
could have earned, in two options, a maximum interest of 65% in the La Peltrie property. On January
15, 2019, the Corporation received from Niobay a termination notice for the option agreement.
On July 9, 2020, the Corporation signed an option agreement with Probe whereby Probe may earn a
50% interest in the La Peltrie property in consideration of the following:
Upon signature
On or before July 31, 2021
On or before July 31, 2022
On or before July 31, 2023
On or before July 31, 2024
Total
Cash payments
Commitment Completed
$
50,000
55,000
70,000
100,000
125,000
400,000
$
50,000 1)
-
-
-
-
50,000
Exploration work
Commitment
$
Completed
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
-
206,855
-
-
-
206,855
1)
In July 2020, the Corporation received 37,879 shares of Probe based on a 5 days VWAP calculation to total $50,000.
Probe is the operator.
- 19 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
After exercising this first option to earn a 50% interest, Probe may increase its interest to 65% (the
second option) over a period of 2 years in consideration of exploration expenditures or cash payment
totalling $5,000,000.
Exploration work on the property
A high-resolution magnetic survey was completed in the northern portion of the property. Results of
this survey are pending. Also, a biogeochemical survey was started and will be completed during Q2-
21. Following the reception of those results, a geophysical program (IP) and drilling will be planned
during Q2-21 and Q3-21.
4.12 Lac Esther (Au)
Property Description
The Lac Esther property is located less than 30 kilometres to the north of the municipality of Lebel-
sur-Quevillon, in Quebec and as at September 30, 2020 comprises 261 claims (14,634 hectares) .
This important land position covers a strategic area straddling the southern contact of the syntectonic
Waswanipi-South Pluton and the junction between two major regional faults, namely the Casa Berardi
and Lamarck regional fault zones. These fault zones host several historical gold showings and deposits
located near the Lac Esther property.
On May 11, 2020, the Corporation signed an agreement with Exiro Minerals Corp. whereby it acquired
a bloc of claims contiguous to the Lac Esther property for a $10,000 cash payment, $35,000 work
commitment to be completed before June 2021 and a 2% NSR royalty of which 1% can be bought
back for a cash payment of $1,000,000.
On May 14, 2020, the Corporation signed an agreement with Goldseek Resources Inc. (“Goldseek”)
whereby it swapped a bloc of claims of the Adam property with a bloc of claims contiguous to the lac
Esther property. The Corporation received a 2% NSR royalty on Adam bloc of claims and this royalty
can be bought back by Goldseek for a cash payment of $1,000,000 to the Corporation. On the other
hand, the Corporation assumes a 2% NSR royalty on the Lac Esther bloc of claims relating to a prior
agreement and half of this royalty can be bought back by the Corporation for a cash payment of
$1,000,000. A $14,328 value was estimated for the blocs of claims exchanged, based on the historical
cost incurred on the Adam property.
Exploration work on the property
Compilation of historical works was completed and five (5) new target areas have been selected for a
field follow-up to be conducted during Q2-21.
4.13 Laflamme (Au-Ni-Cu-PGE), in partnership with Abcourt Mines Inc. and operated by Midland
Property Description
The Laflamme property is located about 25 kilometres west of Lebel-sur-Quévillon in the Abitibi region.
As at September 30, 2020, the Laflamme property consists of a total of 491 claims covering an area
of approximately 26,344 hectares and Midland holds 77.9% of the property.
- 20 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
On August 17, 2009, the Corporation signed an agreement with Aurbec Mines Inc. (“Aurbec”),
(previously a subsidiary of North American Palladium Ltd.) and on June 17, 2016, Abcourt Mines Inc.
(“Abcourt”) acquired the interest in the property following the bankruptcy of Aurbec. Abcourt does not
contribute to the exploration programs and is therefore being diluted.
Some claims were dropped in Fiscal 19, therefore the Corporation impaired partially for $43,542 the
exploration property cost.
Exploration work on the property
A drilling program consisting in five (5) holes totalling 1074 metres was completed during Q1-20 on
Laflamme. This program was testing IP-Gradient anomalies identified during the July survey which
covered the diorite intrusion hosting the Longshot showing discovered in 2019.
Assay results for the drilling program were received. Even though the IP anomalies were clearly
explained by the presence of sulphides, no significant value was obtained. The best result returned
1.27 g/t Au over 0.30 metre (92.30 to 92.60 m) in hole LAF-20-50.
4.14 Lewis (Au)
Description de la propriété
The Lewis property consists of 172 claims (9,593 hectares) and covers a strategic position
characterized by a regional flexure proximal to the Guercheville-Opawica deformation zone. The Lewis
project is located approximately 60 kilometres northwest of the Nelligan deposit, jointly held by Iamgold
Corporation (75%) and Vanstar Mining Resources (25%).
Exploration work on the property
During Q3-20, a three weeks field campaign, including prospecting, was completed over the entire
Lewis property. The main highlight of this program is the discovery of a new gold-bearing showing
located about 10 km to the northeast of the former Lac Shortt mine.
This new showing returned values ranging from 0.2 g/t Au to 2.1 g/t Au in grab samples. This new
gold-bearing anomalous area extends over 400 metres laterally and has never been drilled.
During Q4-20, five (5) days of mechanical stripping were conducted over three trenches to clear the
main showing and its possible extensions towards the east. Few metric zones consisting in quartz-
carbonate veins mineralized with pyrite were observed. The results are expected later during Q1-21.
4.15 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.
- 21 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Exploration work on the property
The Leapfrog 3D modelling and targeting effort conducted by InnovExplo, based in Val-d’Or, led to the
definition of six (6) new drilling targets at shallow to moderate vertical depths, for a total of 2,585 metres
of drilling including the following:
● Dyke West Zone (2 drill holes; 900 m)
● Dyke East Zone (2 drill holes; 840 m)
● Maritime Extension Zone (2 drill holes; 845 m)
These new drilling targets all correspond to significant gaps ranging from 200 to 300 metres wide,
along the extensions of the Maritime-Cadillac, Dyke West and Dyke East zones, where historical
drilling carried out between 2010 and 2017 yielded significant gold intercepts including:
● DDH 141-10-26 (Dyke West): 8.6 g/t Au over 5.5 metres, incl. 13.8 g/t Au over 3.0 metres.
● DDH 141-11-31 (Dyke East): 1.7 g/t Au over 46.4 metres, incl. 21.0 g/t Au over 1.2 metre.
● DDH 141-10-23 (Dyke East): 1.7 g/t Au over 37.85 metres, incl. 12.6 g/t Au over 1.5 metre.
● DDH 141-17-36 (Maritime-Cadillac): 1.46 g/t Au over 31.6 metres, incl. 2.22 g/t Au over
15.6 metres.
During Q4-20, a drilling program consisting in two (2) holes totalling 1,280.0 metres was completed on
the Maritime-Cadillac JV property in partnership with Agnico Eagle. This program included one drillhole
(121-20-41) of a length of 848.0 metres which tested the depth extension and plunge of the Dyke East
zone at a vertical depth of 600 metres. This hole cut the targeted intermediate dyke over a core length
of approximately 15 metres. The dyke is altered with biotite-Carbonates-chlorite and is mineralized
with up to 2 % Py-Po, traces of arsenopyrite between 761.5 and 776.5 metres.
The second hole of this program was completed at a final depth of 432.0 metres and was aiming to
test two parallel gold-bearing zones ( South and North zones), which have been identified by drilling
in a poorly worked area South of the Maritime-Cadillac zone. Hole 121-40-40 intersected an alternance
of mafic volcanic rocks with sediments that are locally altered with biotite and mineralized with up to
2-3% Py-Po over metric to decametric widths.
Assay results are expected later during Q1-21.
4.16 Manthet (Au)
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, 2020, it consists of 7 claims covering a surface area of about 386
hectares in the Abitibi region of Quebec. The Company wrote off the property in Fiscal 19 and incurred
an impairment change of $16,185.
4.17 Mistaouac (Au)
Property Description
The Mistaouac property is located about 75 kilometres to the south-west of Matagami in Abitibi,
Quebec and consists of 213 claims (11,579 hectares) as at September 30, 2020. This bloc is located
less than 5 kilometres to the northeast of the Estrades Zn-Cu-Au deposit to the east of Casa Berardi.
Some claims were dropped therefore the Corporation impaired partially for $11,340 in Fiscal 19.
- 22 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Exploration work on the property
Compilation work was completed with the objective to make the selection of the best VTEM anomalies
from the 2018 survey. Two (2) areas were selected for a ground TDEM follow-up during Q2-21.
4.18 Noyelles (Au)
Property Description
The Noyelles property is located approximately 20 kilometres south of the town of Matagami, in Abitibi,
Quebec and consists of 172 claims (9,616 hectares) as at September 30, 2020. This property provides
control over more than 30 kilometres of structures with strong gold potential, within and proximal to the
northern contact of the sedimentary Taibi Group along the Casa Berardi deformation zone.
Exploration work on the property
This new acquisition is located approximately 8 kilometres northeast of the Vezza gold deposit, held
by Nottaway Resources Inc. and hosted in the southern part of the Taibi sediments, along the Douay-
Cameron deformation zone. The latter also hosts the Douay deposit held by Maple Gold Mines Ltd.
The Douay deposit is located approximately 25 kilometres west of Vezza and contains indicated
resources estimated at 8.6 million tonnes grading 1.52 g/t Au (422,000 ounces of gold) and inferred
resources of 71.2 million tonnes grading 1.03 g/t Au for 2.35 million ounces of gold (Source: NI 43-101
report by RPA dated December 6, 2019).
The Noyelles property covers, over a distance of more than 15 kilometres, the northern contact of the
Taibi Group sediments along the Casa Berardi North deformation zone. A felsic intrusion,
approximately 4 kilometres long, lies near this contact. The intrusion causes a structural complexity
and potential gold traps associated with low-pressure zones along the lateral extensions of the
intrusion. A few historical gold occurrences are reported near this contact, namely the historical Ludger
gold showing, located approximately 3 kilometres east of Noyelles, where grades reaching 7.6 g/t Au
over 2.3 metres in channel sample and up to 2.2 g/t Au over 3.9 metres in drill hole are reported
(Source: MERN-SIGEOM NTS sheet 32F11; GM 57119).
A compilation of historical works is in progress and a field program is possible during Q2-21.
4.19 Patris (Au)
Property Description
The Patris property is located about 30 kilometres to the north-east of Rouyn-Noranda and as at
September 30, 2020 consists of 277 claims (11,289 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.
Some claims were dropped in Fiscal 19, therefore the Corporation impaired partially for $13,558 the
exploration property cost.
- 23 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Exploration work on the property
No exploration work conducted on Patris during Fiscal 20. Midland is currently looking for a new
partner for this project.
4.20 Samson (Au)
Property Description
As at September 30, 2020, the Samson property consists of 280 claims covering a surface area of
about 15,545 hectares about 50 kilometres west of the town of Matagami, in Abitibi.
Exploration work on the property
During Q4-20, a diamond drilling campaign consisting of five (5) drill holes totalling 1,287.0 metres
was completed on the Samson project. This drilling program was mainly designed to test induced
polarization (IP) anomalies characterized by chargeability highs located in the heart of a folded
magnetic structure and associated with resistivity lows. The program also included two drill holes
testing chargeability IP anomalies coinciding with resistivity highs located immediately to the east of
the fold nose.
A new gold-bearing zone, named Golden Delilah, was discovered in drill hole SAM-20-10 during the
drilling program. This new discovery consists of a quartz-albite vein intersected over a core length of
1.60 metres long, hosted in ultramafic intrusive rocks, which graded 99.1 g/t Au, 71.3 g/t Ag and 0.17%
Pb over 0.40 metre, from 106.45 to 106.85 metres. This section of the vein is characterized by the
presence of at least 13 visible gold grains some 1-2 mm in diameter over 40 centimetres; the rest of
the vein yielded gold values ranging between 1.57 g/t Au and 2.23 g/t Au. The vein is cut by a late fault
with no core recovered over 1.05 metre (see Table 1). This zone was intersected in two holes drilled
on the same section, along the north limb of the folded magnetic structure.
Drill hole SAM-20-11, testing approximately 50 metres below drill hole SAM-20-10, intersected 2.21 g/t
Au over 0.45 metre from 120.70 to 121.15 metres. This new gold-bearing structure is interpreted as a
possible subsidiary of the regional Lower Detour Fault.
The three remaining holes drilled during this campaign successfully explained the IP anomalies with
the presence of disseminated and stringer sulphides, composed of variable amounts of pyrite,
pyrrhotite, chalcopyrite and arsenopyrite.
Again, during Q4-20, a second drilling program consisting in seven (7) holes totalling 1,810.0 metres
was completed. During this program, three (3) holes tested the extensions of the Golden Delilah zone
over a 50 metres spacing while three other holes tested the possible extensions of the Golden Delilah
zone respectively 500 m to the west and 350-550 metres to the south-east. The other drillhole tested
an IP anomaly approximately 850 metres to the south-east of Golden Delilah. All assay results are
pending and are expected later during Q1-21.
4.21 Turgeon (Au)
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, 2020, it consists of 244 claims (13,675 hectares) in the Abitibi region
of Quebec.
- 24 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Exploration work on the property
No exploration work on the ground was conducted on Turgeon during Fiscal 20. Midland is currently
looking for a new partner for this project.
4.22 Valmond (Au)
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, 2020, this property consists in 48 claims covering an area of
approximately 2,672 hectares. The Corporation wrote off the property for $143,106 in Fiscal 19.
Exploration work on the property
No exploration work on the ground was conducted on Valmond during Fiscal 20. Midland is currently
looking for a new partner for this project.
4.23 Vezza (Au)
Property Description
The Vezza property is wholly owned by Midland and is located 3 kilometres west of the Vezza mine.
As at September 30, 2020, it consists of 6 claims (2 blocks of 3 claims) covering a surface area of
about 335 hectares in the Abitibi region of Quebec.
Exploration work on the property
No exploration work conducted on Vezza during Fiscal 20. Midland is currently looking for a new
partner for this project.
4.24 Wawagosic (Au)
Property Description
The Wawagosic property is wholly owned by Midland and is located 30 kilometres east of Detour Lake.
As at September 30, 2019, it consists of 57 claims covering a surface area of about 3,162 hectares in
the Abitibi region of Quebec.
Exploration work on the property
No exploration work conducted on Wawagosic during Fiscal 20. Midland is currently looking for a new
partner for this project.
- 25 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
GRENVILLE-APPALACHES
4.25 Gatineau (Zn), in partnership with SOQUEM, operated by SOQUEM
Property Description
The Gatineau property is a land position for zinc, including as at September 30, 2020, 259 claims
(15,282 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 $96,627 in
Fiscal 19.
On February 20, 2020, the Corporation signed a strategic alliance with SOQUEM, in which SOQUEM
transferred to the Corporation its 50% interest in the Casault and Jouvex properties in exchange for:
● A 1% NSR royalty; Midland may, at any time, buy back the royalty, in all or in part, by making
a cash payment of $1,000,000 per tranche of 0.5% NSR; and
● 50% undivided interest in a joint venture relating to seven existing mining properties forming
the Gatineau project.
As part of this new strategic alliance:
● The projects acquired under the target generation program will be declared designated
projects once the mining rights have been acquired.
● Each designated project will be the object of a distinct joint venture agreement, the terms of
which will be similar to the joint venture agreements to be signed relating to the active
properties.
● The parties are not subject to budgetary obligations under the target generation program.
● The target generation program will last for a period of 2 years, unless it is extended by mutual
written consent of both parties.
● SOQUEM will be project manager under the target generation program and for all joint
ventures formed on designated projects; the Corporation may assign up to 30% of personnel.
Exploration work on the property
A compilation of historical works is currently in progress for a possible field follow-up during Q2-21.
4.26 Ski
Property Description
The Ski property, recently staked, consists of 5 claims as of September 30 2020 and is located in the
31J02 NTS sheet in the Vallee de la Gatineau.
4.27 Weedon (Cu-Zn-Au)
Property Description
This property is located in the Eastern Townships, about 120 km south of Quebec City and as at
September 30, 2020 is comprised of 156 claims covering an approximate area of 8,922 hectares.
Some claims are subject to NSR royalties of:
- 26 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
●
●
●
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 $7,728 in Fiscal 19 the
exploration property cost.
Exploration work on the property
A till sampling survey was completed to the east of the Lingwick deposit during Q1-20. The area
explored returned interesting values in gold, copper and zinc. The lack of high-quality information
(geology, geochemistry, geophysics) do not help to define a precise target. However, the strong
presence of quartz fragments and the gold value of 136 ppb Au in concentrate, could lead towards an
IP anomaly in the vicinity of the Lingwick deposit. It is recommended to make a follow-up of these
anomalies with a drilling program using a tight spacing.
4.28 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, 2019 of 16 contiguous claims covering a total surface area of 934
hectares in joint venture 53.4% SOQUEM/ 46.6% Midland. On February 6, 2020, the parties jointly
decided not renew the claims due to the property’s weak economic potential. The property costs were
written off already in the fiscal year ended September 30, 2010.
JAMES BAY
4.29 BJ Gold (Au)
Property Description
Midland owns a 100% interest on 199 claims as at September 30, 2020 covering 10,219 hectares in
the James Bay Area. Some claims were dropped therefore the Corporation impaired partially for
$262,798 the exploration property cost.
4.30 BJ Éléonore (Au)
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 Newmont and one southeast 30 km further along strike. It
encompasses a group of 264 claims covering an area of approximately 13,846 hectares as at
September 30, 2020.
4.31 Elrond (Au)
Property Description
The Elrond property consists as at September 30, 2020 of 197 contiguous claims covering a total
surface area of 10,175 hectares.
- 27 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
4.32 Fangorn (Au)
Property Description
The Fangorn property consists as at September 30, 2020 of 16 contiguous claims covering a total
surface area of 816 hectares.
4.33 Gondor (Au)
Property Description
The Corporation decided to drop the claims of the Gondor property since, amongst other reasons, no
gold anomaly was found. The Corporation wrote off the property for $47,022 during Fiscal-19.
4.34 Helm’s Deep (Au)
Property Description
The Helm’s Deep property consists as at September 30, 2020 of 70 contiguous claims covering a total
surface area of 3,699 hectares.
4.35
Isengard (Au)
Property Description
The Corporation decided to drop the claims of the Isengard property since, amongst other reasons, no
gold or base metals anomalies were found. The Corporation wrote off the property for $64,468 during
Fiscal 19.
Exploration work on the property
4.36 JV Eleonore (Au), in partnership with Osisko, operated by Osisko
Property Description
On June 13, 2016, a joint-venture agreement (50%-50%) was signed with Osisko Mining Inc. (“Osisko”)
whereby Osisko and the Corporation cooperate and combine their efforts to explore the JV Eleonore.
The property is located 12 kilometres southeast and northwest of Newmont’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.
The property is located 12 kilometres southeast and northwest of Newmont’s Eleonore deposit. The
property regroups several properties for a total of 578 claims covering a surface area of about 30,281
hectares.
4.37 Komo (Au)
Property Description
The Corporation acquired by map designation the Komo project with strong gold potential totalling 393
claims (20,743 hectares), located near the recent Patwon gold discovery made by Azimut Exploration
Inc. (“Azimut”) on its Elmer project (Eeyou Istchee James Bay, Quebec). The western part of the project
lies approximately 7 kilometres south of the Azimut discovery.
- 28 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
The Komo project covers, over nearly 40 kilometres, the same volcanic belt that hosts the Patwon
discovery. Azimut recently announced several significant gold-bearing drill intercepts on Patwon,
namely 3.15 g/t Au over 102.0 metres, including 10.1 g/t Au over 20.5 metres (press release by Azimut
dated January 14, 2020).
The Komo project also covers, over approximately 30 kilometres, the highly prospective contact
between the La Grande and Opinaca/Nemiscau geological subprovinces. This contact hosts most of
the known gold deposits in the James Bay region, namely the Eleonore mine (Newmont) and the
La Pointe and Cheechoo deposits. The portion of the project located nearest the Patwon discovery
shows a structural setting highly favourable for gold, with a folded gabbro unit located in the pressure
shadow of a large-scale intrusion. A historical molybdenum-copper occurrence on the project also
indicates potential for porphyry-type mineralization on Komo.
Exploration work on the property
Few days of prospection were conducted during Q4-20 and final assay results are pending.
4.38 McDuff (Cu-Au-Mo-Ag)
Property Description
The McDuff property consists as at September 30, 2020 of 159 (8,394 hectares).
Exploration work on the property
A prospection campaign on the Macduff project was held in September 2019. The best results returned
0.74 g/t Au and 0.65 g/t Au in grab samples.
4.39 Minas Tirith
Property Description
The Minas Tirith property consists as at September 30, 2020 of 4 claims (213 hectares). Some claims
were dropped therefore the Corporation impaired partially for $56,994 in Fiscal-19.
4.40 Moria (Ni-Cu)
Property Description
The Moria property consists as at September 30, 2020 of 110 claims (5,812 hectares).
4.41 Mythril (Au-Cu-Mo)
Property Description
The Mythril property consists as at September 30, 2020 of 2,197 (112,035 hectares). The Corporation
impaired partially the property for the claims that were dropped for $150,690 in Q2-20 YTD.
Exploration work on the property
During the 2020 winter, induced polarization (IP) surveys were conducted on Mythril (main block) as
well as on three other regional grids. However, because of the COVID-19, those three regional surveys
could not be totally completed. Results for the IP surveys on Mythril led to the identification of weak
chargeability anomalies in the most eastern part of the survey near the conglomerates. These
anomalies will be followed-up during the Q4-20 field program.
- 29 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
On the grid covering the Boromir boulder field, few IP lines only were completed before the COVID-19
outbreak. The last surveyed line to the south identified a possible deep and weak anomaly closely
associated with the NW-SE structure. This area will be visited during the prospecting program in Q4-
20.
A 3D-Model of the Mythril mineralized zone was completed in Leapfrog in Q3-20 and some drilling
target areas with potential for high grade copper were identified.
Prospecting was carried out during Q4-20 on the main Mythril block and on the regional project. Assays
results are pending.
4.42 Shire (Zn-Cu)
Property Description
The Shire property consists as at September 30, 2020 of 148 contiguous claims covering a total
surface area of 7,870 hectares. Some claims were dropped therefore the Corporation impaired partially
for $204,017 in Fiscal-19.
4.43 Wookie (Au)
Property Description
The Corporation acquired by map designation the Wookie project with strong gold potential totalling
246 claims (12,881 hectares), located near the recent Patwon gold discovery made by Azimut
Exploration Inc. (“Azimut”) on its Elmer project (Eeyou Istchee James Bay, Quebec).
Exploration work on the property
Few days of prospecting were completed on Wookie during Q4-20 and assay results are pending.
4.44 JV JB Altius (Au)
On February 10, 2017, the Corporation had 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.
On February 12, 2019, the parties jointly decided to terminate the Alliance. The designated projects
as per the Alliance (Elrond, Gondor, Helms Deep, Isengard, Minas Tirith, Moria, Shire, Mythril and
Fangorn) maintain their 1% NSR royalty in favor of Altius, on the claims that were active at the time of
their designation.
NORTHERN QUEBEC
4.45 BHP Alliance (NI)
Alliance Description (see section 2.4.1)
Exploration work in the area of interest
During Q4-20, two weeks of prospecting were completed within the area of interest. Assay results are
pending.
- 30 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
4.46 Pallas (PGE)
Property Description
As at September 30, 2019, the property totals 349 claims covering approximately 15,822 hectares in
the Labrador Trough («Trough») some 80 kilometres west of Kuujjuak, Québec. Some claims were
dropped therefore the Corporation impaired partially for $6,060 the exploration property cost ($49,873
in Fiscal 19).
4.47 Soissons (Ni-Cu-Co)
Property description
The Soissons property consists of a total of 175 claims (8,226 hectares) and is located approximately
150 kilometers southeast of the town of Kuujjuaq, Quebec, in the geological province of Churchill.
4.48 Soissons-NMEF (Ni-Cu-Co)
Property Description
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. As at September 30, 2020, this project consists of a total of 51 claims (2,362 hectares).
Exploration work on the property
Prospecting works were carried out during Q4-20 and assay results are pending.
4.49 Willbob (Au)
Property Description
The Willbob property in the Labrador Trough consists of 1,007 claims (46,097 hectares) as of
September 30, 2020 and is located approximately 66 kilometres west-southwest of Kuujjuaq (Québec),
near and in a geological environment similar to Midland’s Pallas Project.
The Corporation owns the Willbob property and some claims are subject to the following royalties:
● 2% NSR royalty
● 2% NSR royalty of which 1% can be bought back for a payment of $1,000,000.
Some claims were dropped therefore the Corporation impaired partially for $114,391 the exploration
property cost in Fiscal 19.
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
$85,393 during Fiscal 19 (none in Fiscal 20).
- 31 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
4. EXPLORATION ACTIVITIES (CONT’D)
Other Activities
Midland is proactive 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.
5. WORKING CAPITAL
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.
Working capital opening
Operating expenses, excluding non-cash items
Project management fees and interest income
Flow-through private placement
Private placement
Share issue expenses
Exploration budget paid by Midland
Mining credits of preceding years
Property maintenance
Cash used
Working capital ending
6. SELECTED ANNUAL INFORMATION
Fiscal 21
forecast
$
10,966,000
(1,832,000)
225,000
2,285,000
96,000
(150,000)
(2,860,000)
813,000
(417,000)
(1,675,000)
9,291,000
Project management fees
Loss
Loss per share, basic and diluted
Fiscal 20
$
23,754
(1,345,977)
(0.02)
Fiscal 19
$
33,684
(1,142,784)
(0.02)
Fiscal 18
$
109,548
(807,530)
(0.01)
Total assets
38,893,801
38,615,831
29,736,269
2020
$
As at September 30,
2019
$
2018
$
- 32 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
7. SUMMARY OF RESULTS PER QUARTERS
For the eight most recent quarters:
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Q4-20
$
Q3-19
$
Q2-19
$
Q1-19
$
23,230
(290,412)
-
38,615,831
-
(92,179)
-
38,105,912
159
(644,483)
(0.01)
38,247,363
365
(318,903)
(0.01)
39,141,336
Q4-19
$
Q3-19
$
Q2-19
$
Q1-19
$
863
(862,300)
(0.01)
38,615,831
1,084
483,606
0.01
39,668,731
11,609
(216,876)
-
33,371,418
20,128
(547,214)
(0.01)
32,934,533
An important variance in Q3-19 can be explained by a $993,400 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 December 2018 private placement.
8. FOURTH QUARTER
The Corporation reported a loss of $290,412 for Q4-20 compared to a loss of $862,300 for Q4-19.
The Corporation project management fees increased to $23,230 in Q4-20 ($863 in Q4-19) following
the conclusion of the BHP Strategic Alliance in August 2020.
Operating expenses decreased to $472,074 in Q4-20 compared to $984,877 in Q4-19:
●
● Professional fees increased to $178,796 ($78,022 in Fiscal 19). Legal fees increased following
the negotiations of several partnership agreements. Also, a mandate was given to an external
firm to develop rules and procedures in health and safety in Fiscal 20.
Impairment of exploration and evaluation assets (non-cash items) decreased to $1,899
($661,964 in Fiscal 19). In addition, the Minister of Energy and Natural Resources of Quebec
announced the postponement of the requirement to carry out field work to renew a claim, for a
period of one year. See section 4 for the detailed explanations by properties.
The Corporation incurred $1,739,588 ($2,942,656 in Q4-19) in exploration expenses of which
$287,761 ($8,835 in Q4-19) was recharged to the partners. The exploration expenses incurred in Q4-
20 were incurred mailing on Samson, Mythril and as part of the BHP Alliance whereas in Q4-19 they
were mostly executed on Mythril and Willbob.
The Corporation acquired or maintained properties for $26,915 net ($26,417 net in Q4-19)
- 33 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
9. RELATED PARTY TRANSACTIONS
The following are the related party transactions that occurred in Fiscal 20, in the normal course of
operations:
● A firm in which René Branchaud (director and corporate secretary) is a partner charged legal
fees amounting to $146,834 ($147,281 in Fiscal 19) of which $121,446 ($38,626 in Fiscal 19)
was expensed and $25,388 ($108,655 in Fiscal 19) was recorded as share issue expenses;
● A company controlled by Ingrid Martin (chief financial officer) charged accounting fees totaling
$126,292 ($138,976 in Fiscal 19) of which $41,879 ($57,113 in Fiscal 19) relates to her staff;
● As at September 30, 2020, the balance due to the related parties amounted to $9,448 ($5,067
as at September 30, 2019).
10. EVENTS SUBSEQUENT TO YEAR END
See section 2.2 on financing activities.
11. STOCK OPTION PLAN
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. The number of
common shares reserved for issuance under the Corporation's fixed number stock option plan is
5,790,000. 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.
12. OFF-BALANCE SHEET ARRANGEMENTS
The Corporation does not have any off-balance sheet arrangements.
13. COMMITMENT
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 has the option to renew the lease for
an additional 3 year period under the same conditions.
14. CRITICAL ACCOUNTING ESTIMATES
See note 4 of the Financial Statements.
- 34 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
15. 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.
15.1 Accounting standards adopted in Fiscal 20
IFRS 16 Leases
On October 1, 2019, the Company adopted IFRS 16 Leases. IFRS 16 sets out the principles for the
recognition, measurement, presentation and disclosure of leases and requires lessees to account for
all leases under a single on-balance sheet model similar to the accounting for finance leases under
IAS 17. IFRS 16 replaces IAS 17 Leases, and related interpretations. All leases result in the lessee
obtaining the right to use an asset at the start of the lease and incurring a financing obligation
corresponding to the lease payments to be made over time. Accordingly, for lessees, IFRS 16
eliminates the classification of leases as either operating leases or finance leases as was required by
IAS 17 and, instead, introduces a single lessee accounting model. The standard includes two
recognition exemptions for lessees: leases of “low-value” assets; and short-term leases (i.e., leases
with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise
a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use
the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to
separately recognize the interest expense on the lease liability and the depreciation expense on the
right-of-use asset.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events
(e.g., a change in the lease term, a change in future lease payments resulting from a change in an
index or rate used to determine those payments). The lessee will generally recognize the amount of
the remeasurement of the lease liability as an adjustment to the right-of-use asset. IFRS 16 also
requires more extensive disclosures than under IAS 17.
Transition to IFRS 16
The Corporation adopted IFRS 16 using the modified retrospective approach, which means it applied
the standard from October 1, 2019, the cumulative impact of adoption is recognized as at October 1,
2019 and comparatives are not restated. Since the Corporation recognized the right-of-use assets at
the amount equal to the lease liabilities less any lease accruals, there is no impact on the deficit upon
the adoption.
The Corporation has presently only one lease affected by IFRS 16 for its exploration offices. 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 has the option to renew the lease for
an additional three year period under the same conditions.
A right of use asset of $159,422 and an equivalent long term lease liability was recorded as of October
1, 2019, with a 7% incremental borrowing rate and considering that the renewal option would be
exercised..
- 35 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
16. FINANCIAL INSTRUMENTS
See notes 2.5 and 13 of the Financial Statements.
17. 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.
17.1 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.
17.2 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.
17.3 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.
17.4 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.
- 36 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
17. RISK FACTORS (CONT’D)
17.5 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.
17.6 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.
17.7 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.
17.8 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.
17.9 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.
- 37 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
17. RISK FACTORS (CONT’D)
17.10 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.
17.11 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.
17.12 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.
17.13 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.
17.14 Uncertainty due to COVID-19
The duration and full financial effect of the COVID-19 pandemic is unknown at this time, as are the
measures taken by governments, companies and others to attempt to reduce the spread of COVID-
19. Any estimate of the length and severity of these developments is therefore subject to significant
uncertainty, and accordingly estimates of the extent to which the COVID- 19 may materially and
adversely affect the Corporation's operations, financial results and condition in future periods are also
subject to significant uncertainty.
- 38 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2020
18. 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 3, 2020
(s) Gino Roger
Gino Roger
President and CEO
(s) Ingrid Martin
Ingrid Martin
CFO
- 39 -
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To the Shareholders of Midland Exploration Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Midland Exploration Inc. and its subsidiary (the Corporation) as at
September 30, 2020 and 2019, and its financial performance and its cash flows for the years then ended
in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS).
What we have audited
The Corporation’s consolidated financial statements comprise:
"
"
"
"
"
the consolidated statements of financial position as at September 30, 2020 and 2019;
the consolidated statements of comprehensive loss for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to consolidated financial statements, which include a summary of significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Corporation in accordance with the ethical requirements that are relevant to
our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
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