Annual Report
September 30, 2021
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 .................................................................................................................................... 8
Exploration Activities ..................................................................................................................................... 9
Working Capital ........................................................................................................................................... 36
Selected Annual Information ...................................................................................................................... 37
Summary of Results per Quarters .............................................................................................................. 37
Fourth Quarter ............................................................................................................................................. 37
Related Party Transactions ......................................................................................................................... 38
Events Subsequent to Year End ................................................................................................................. 38
Stock Option Plan ....................................................................................................................................... 39
Off-balance Sheet Arrangements ............................................................................................................... 39
Commitment ................................................................................................................................................ 39
Critical Accounting Estimates...................................................................................................................... 39
New Accounting Standards ......................................................................................................................... 39
Financial Instruments .................................................................................................................................. 39
Risk Factors ................................................................................................................................................ 39
Foward Looking Information........................................................................................................................ 43
Financial Statement
Independant Auditor’s Report ..................................................................................................................... 44
Consolidated Statements of Financial Position........................................................................................... 48
Consolidated Statements of Comprehensive Loss ..................................................................................... 49
Consolidated Statements of Change in Equity ........................................................................................... 50
Consolidated Statements of Cash Flows .................................................................................................... 51
Notes to Consolidated Financial Statements .............................................................................................. 52
Corporate Information ................................................................................................................................. 75
- 2 -
Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2021
Dear Shareholders,
It is a sincere pleasure for me to present the 2021 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 strong reputation in the mining industry and a proven
mine-finding track record. As always, Midland targets the excellent mineral potential and the favourable
investment climate of Quebec to discover new world-class gold and base metal deposits. Despite the fact
that 2021 continued to be marked by the COVID-19 pandemic, we were able to conduct several successful
exploration campaigns following the implementation of very strict COVID protocols within our organization.
Midland continued to deploy its business model based on partnerships this year and is truly proud to count
on reputable partners such as BHP Canada Inc., Rio Tinto Exploration Canada Inc., Agnico Eagle Mines
Limited, Osisko Development Corp., Probe Metals Inc., Wallbridge Mining Company Ltd, SOQUEM Inc.,
the Nunavik Mineral Exploration Fund, and Abcourt Mines Inc. We are currently in discussions with several
potential new partners 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 once again in 2021, with the signing of two new partnership agreements and the discovery of
several new mineralized zones on its various projects. One of the main highlights of the year was certainly
the start of a new partnership with the 2nd largest mining company in the world, Rio Tinto. A new option
agreement was signed in December for the Tête Nord nickel project with Rio Tinto Exploration Canada Inc.
Major exploration work will begin in the coming weeks under this new option agreement.
Among the highlights of our exploration efforts in 2021, the discovery of a new gold-bearing structure on
the Casault project in partnership with Wallbridge certainly stands out. This new discovery yielded a grade
of 6.85 g/t Au over 2.00 metres from 254.40 to 256.50 metres. A drilling program totalling at least 2,000
metres is planned for the winter of 2022. This drilling program will test the strike and depth extensions of
this new gold-bearing structure. Prospecting work was carried out on the new Lewis gold project (generated
and acquired in 2020) during the summer of 2021 and led to the discovery of new gold showings
approximately 10 kilometres northeast of the former Lac Shortt mine. These showings yielded several
anomalous values in grab samples with grades up to 10.1 g/t Au (Golden Nest showing). 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
and may be part of the same ENE-trending corridor. During the winter of 2022, Midland will complete its
first drilling program to test the best geophysical, geological and geochemical targets.
Finally, drilling will resume in 2022 on the high-grade copper system at Mythril, which was traced over more
than 2 kilometres on surface and in drill hole between 2019 and 2021. This drilling program will test new
targets recently generated following 3D modelling on the project. The best drill hole of the summer 2021
drilling campaign, drill hole MYT-21-38, intersected a mineralized zone from 56.50 to 85.00 metres depth,
grading 0.59% Cu, 0.05 g/t Au, 1.87 g/t Ag and 0.025% Mo (0.74% CuEq.) over 28.50 metres, including
1.02% Cu, 0.09 g/t Au, 2.62 g/t Ag and 0.048% Mo (1.29% CuEq.) over 10.50 metres from 56.50 to 67.00
metres. This interval includes two high-grade zones that returned 8.73% Cu, 1.29 g/t Au, 22.4 g/t Ag and
0.87% Mo (13.2% CuEq.) over 0.50 metre from 57.80 to 58.30 metres, and 3.50% Cu, 0.11 g/t Au, 6.17
g/t Ag and 0.04% Mo (3.77% CuEq.) over 1.20 metres from 59.80 to 61.00 metres. This entire zone is
included in a wider interval that graded 0.25% CuEq. over 104.60 metres from 18.0 to 122.60 metres.
Follow-up work including geophysics and drilling will also be completed in the coming months on new
mineralized zones identified on the Mythril Regional project. In August 2021, a prospecting campaign led
to the discovery of two new high-grade boulders on the Chisaayuu block of the Mythril Regional project.
These two gold-bearing boulders are located approximately 75 kilometres east of the Cu-Au-Ag-Mo Mythril
zone. The two mineralized boulders discovered this summer on Chisaayuu yielded respective values of
10.25 g/t Au, 8.02 g/t Ag (Boulder 1) and 7.99 g/t Au, 166 g/t Ag, 0.4% Cu and 0.07% Mo (Boulder 2).
A till sampling program is currently in preparation for the summer of 2022, as a follow-up and to locate the
source of these boulders.
- 3 -
Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2021
Finally, major geophysical programs (VTEM surveys) and prospecting campaigns were carried out over the
summer and fall of 2021 under our new strategic alliances with BHP and SOQUEM in Quebec’s Far North
(Kuujjuaq area).
Here are the main highlights of the past year:
• New option agreement with Rio Tinto Exploration Canada Inc. on the Tête Nord nickel
project
• New syenite-associated gold system identified on Samson
• New acquisition along the extension of the Sunday Lake Fault with the Nomans project
• New acquisition in the Grenville for Ni-Cu
• New Strategic Alliance with SOQUEM in the Labrador Trough
• New high-grade gold showing (Golden Nest) discovered on Lewis
• Drilling programs completed on Samson and Mythril
• Drilling programs starting on Casault (5,000 metres) and Gaudet-Fenelon JV
(4,500 metres)
• New VTEM anomalies identified under the Nickel Alliance with BHP in Nunavik
• Several new biogeochemistry anomalies identified in Abitibi
• New gold-bearing zone on Casault, grading 6.85 g/t Au over 2.0 metres in drill hole CAS-
21-123
• 13 drill holes (5,295 metres) completed on the Casault Option with Wallbridge
• 14 drill holes (4,483 metres) completed on the Gaudet-Fenelon JV with Probe
• 2 new high-grade boulders discovered east of Mythril, grading 10.25 g/t Au, 8.0 g/t Ag,
and 7.99 g/t Au, 166 g/t Ag, 0.4% Cu, 0.07% Mo
• Prospecting campaigns completed in Nunavik under our alliances with BHP and
SOQUEM
• Stripping and channel sampling completed on the Golden Nest showing (10.1 g/t Au)
on Lewis
• More than 7,000 assay results pending
• A total of 13,830 metres drilled (41 drill holes) during Fiscal 2021 (5,451 metres during
Fiscal 2020)
Midland intends to continue aggressively exploring its various projects for gold and base metals in 2022, to
discover world-class deposits. An ambitious exploration program, one of the most substantial 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 and 2021. In addition, we also continued to increase
visibility for Midland throughout 2021 by taking part in numerous promotional events online (given the
pandemic) and through a gradual return in person, to attract new and important shareholders.
Midland also intends to continue assessing interesting business opportunities as they arise in 2022 Midland
has a very strong financial position, with more than $10 million in adjusted working capital and no debt as
at September 30, 2021.
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 2021. 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 2022 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, 2021
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, 2021,
as well as the performance of it’s wholly owned subsidiary Midland Base Metals Inc. This MD&A should be
read in conjunction with the Corporation’s audited consolidated financial statements as at September 30,
2021 (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 19
Q1-20
Q2-20
Q3-20
Q4-20
Fiscal 20
Q1-21
Q2-21
Q3-21
Q4-21
Fiscal 21
Fiscal 22
Period
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 December 31, 2020
January 1, 2021 to March 31, 2021
April 30, 2021 to June 30, 2021
July 1, 2021 to September 30, 2021
October 1, 2020 to September 30, 2021
October 1, 2021 to September 30, 2022
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 21
● New Syenite-Associated gold system identified on Samson
● New gold-bearing zone identified on Maritime-Cadillac
● New acquisition along the extension of Sunday Lake fault zone - Nomans project
● New acquisition for Ni-Cu in Grenville
● New strategic Alliance with SOQUEM in Labrador Trough
● New high-grade gold showing (Golden Nest) discovered on Lewis
● Drilling programs completed on Samson and Mythril
● Drilling programs commencing on Casault (5,000 m) and Gaudet-Fenelon JV (4,500 m)
● New VTEM anomalies identified on the BHP Nickel Alliance in Nunavik
● Several new biogeochem anomalies identified in Abitibi
● New Au-bearing zone on Casault returned 6.85 g/t Au over 2.0 metres in hole CAS-21-123
● 13 drill holes (5,295 metres) completed on the Casault project under option by Wallbridge
● 14 drill holes (4,483 metres) completed on the Gaudet-Fenelon JV project with Probe
● Two (2) new high-grade boulders discovered east of Mythril; 10.25 g/t Au, 8.0 g/t Ag and 7.99 g/t
Au, 166 g/t Ag, 0.4% Cu, 0.07% Mo
● Prospecting programs completed in Nunavik under our Alliances with BHP and SOQUEM
● Stripping and channel sampling completed on the Golden Nest showing on Lewis
● More than 7,000 assay results pending
- 5 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
● A total of 13,830 metres (41 holes) were drilled during Fiscal 21 (5,451 metres during Fiscal 20).
More details can be found in section 4.
2.2 Working capital
Midland has a working capital of $7,505,431 as of September 30, 2021 ($10,973,875 as of September
30, 2020) which will allow the Corporation to execute its exploration program for at least the following
year.
2.3 Private placements
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 $132,343 share issue expenses of which $100,065 was paid as 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 Canada Inc. (“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 2, 2021
Number
72,278,052
5,245,000
-
77,523,052
As at
September 30, 2021
Number
72,278,052
5,245,000
-
77,523,052
On February 18, 2021, the Corporation signed a strategic alliance with SOQUEM Inc. (“SOQUEM”) to
jointly explore the Labrador Trough, for an amount of up to $5,000,000 over 4 years. A joint annual
budget of $1,000,000 over a period of 4 years (firm commitment totalling $2,000,000 for the first
2 years), for a total of up to $4,000,000, will be provided under the SOQUEM alliance for the targeting
and field reconnaissance phase. Midland will be project operator in charge of exploration work during
the targeting and field reconnaissance phase. An additional, firmly committed, joint budget of
$1,000,000 for the 2nd year is provided under the agreement to explore the designated projects. The
joint budgets for exploration work in years 3 and 4 on the designated projects shall be approved by the
management committee. SOQUEM will become project operator on all designated projects.
As at September 30, 2021, the following properties are under agreements with partners:
• Casault
• Gaudet
• La Peltrie
• Laflamme
• Maritime Cadillac
• Gatineau
• Eleonore JV
• BHP Alliance Ni
• Labrador Through
• Soissons
Wallbridge Mining Company Ltd (“Wallbridge”)
Probe Metals Inc. (“Probe”)
Probe
Abcourt Mines Inc. (“Abcourt”)
Agnico Eagle Mines Ltd (“Agnico Eagle”)
SOQUEM
Osisko Development Corp. (“Osisko”)
BHP Group (« BHP »)
SOQUEM
Nunavik Mineral Exploration Funds (« NMEF »)
- 6 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
On December 1, 2021, the Corporation signed an option agreement with Rio Tinto Exploration Canada
Inc. ("RTEC") for its Tete Nord property. Under this new agreement, RTEC may earn an initial 50%
interest (First Option) in the Tete Nord property over a period of four years, by fulfilling the following
conditions:
● Exploration expenditures totalling $4,000,000, including a minimum of $500,000 in the first
year.
● Cash payments totalling $500,000, including $100,000 within 30 days of execution of the
agreement
After earning an initial 50% interest, RTEC may elect to increase its interest to 70% (Second Option)
over a period of four years by fulfilling the following conditions:
● Exploration expenditures totalling up to $10,000,000 and cash payments totalling $500,000,
gaining interest on the following schedule:
● An additional 1% interest (for a total of 51%) by funding an additional $250,000 of exploration
expenditures;
● An additional 1% interest for each additional $500,000 of exploration expenditures (for a total
of up to 69%);
● An additional 1% (for a total of 70%) by funding an additional $750,000 of exploration
expenditures.
RTEC retains right to act as operator for the First and the Second Option; or at its discretion elects to
have the Corporation act as operator on RTEC’s behalf.
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.
2.7 Initiatives in sustainable development, certification, health and safety
Sustainable Development Policy
The Corporation has 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 2723 Certification
In the last 2 years, the Corporation has been in the accreditation process to obtain the Ecologo® UL
2723 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. Throughout 2021, training and
documentation were provided to employees, officers and directors in order to integrate the new
normative requirements. Work continues in order to be ready to pass the audit promptly.
Health and safety at work:
Following the implementation in 2020 of the Emergency Measure Plan, the Prevention Program and
the environmental and safety Field Guide, the external firm Urgence Industrielle Dan Ouellet Inc
continued its mandate in order to carry out the necessary training for employees. During Q2-21 and
Q3-21, the Corporation employees each completed 18 hours of training. In addition, a 3-hour block
was also given to directors and officers.
- 7 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
3. RESULTS OF OPERATIONS
As operator, Midland incurred exploration expenditures totalling $8,579,585 ($3,746,951 in Fiscal 20),
on its properties of which $3,210,281 was recharged to its partners ($290,687 in Fiscal 20).
The operating partners incurred $2,784,334 of exploration expenses ($412,253 in Fiscal 20). Also, the
Corporation invested $793,440 ($487,767 in Fiscal 20) to complete several property acquisitions in
Quebec or maintained them, of which $169,977 was recharged to its partners ($7,554 in Fiscal 20).
The Corporation reported a loss of $1,023,800 in Fiscal 21 compared to $1,345,977 for Fiscal 20.
Project management fees increased to $202,218 ($23,754 in Fiscal 20). The BHP alliance started in
August 2020 and generated most of the project management fees. Also, the Labrador Trough
SOQUEM alliance started in February 2021.
Operating expenses decreased at $1,926,852 for Fiscal 21 compared to $2,138,540 in Fiscal 20, and
following are the explanations for the main variances:
● Conference and investors relations $131,190 ($318,054 in Fiscal 20). Several conferences
were cancelled following the Covid.
● Professional fees: $408,506 ($340,509 in Fiscal 20). Fees of $81,276 ($42,728 in Fiscal 20)
were incurred relating to the mandate given to an external firm to develop rules and
procedures related to health and safety. Fees of $21,544 were incurred (nil in Fiscal 20)
relating to the analysis of management and directors’ compensation, its comparison to market
and recommendations from Perrault Consulting, the Corporation’s external advisor. Finally,
fees were incurred to set up and follow up the BHP alliance.
9Interest income decreased to $98,837 ($253,080 in Fiscal 20). The weighted average interest rate
earned on the investments is half of that earned in Fiscal 20. In addition, considering the magnitude of
the executed exploration programs, the investments balance decreased from $9,716,000 on
September 30, 2020 to $5,940,390 on September 30, 2021.
The Corporation recorded change in fair value – listed shares favorable of $7,765 (favorable of $90,061
in Fiscal 20).
• An unfavorable change of $10,752 was recorded on the Niobay Metals Inc. (“Niobay”) shares
composed of a realized gain or $87,248 (nil in Fiscal 20) following the sale of 100,000 shares
of Niobay and an unfavorable change in fair value of $98,000 (favorable of $84,000 in Fiscal
20).
• A favorable change in fair value of $18,517 was recorded on the share of Probe ($6,061 in
Fiscal 20).
Those shares were received as part of option agreement on properties.
A $603,174 ($435,903 in Fiscal 20) 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 November 2020 private placement (December 2019 in Fiscal 20). All exploration
work imposed by the November 2020 flow-through financing was completed before June 30, 2021.
Also, all the exploration work imposed by the December 2019 flow-through financings was completed
before September 30, 2020.
- 8 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
4.
EXPLORATION ACTIVITIES
Deferred
exploration
expenses
Fiscal 21
Abitibi
Adam
Casault Au
Coigny
Fleuribleu
Gaudet
Guyberry
Heva Au
Jeremie
Jouvex Au
La Peltrie Au
Lac Esther
Laflamme Au
Lewis
Mar.Cadillac Au
Mistaouac
Nomans
Noyelles
Patris Au
Samson
Turgeon
Wawagosic
Grenville
Gatineau JV
Tete Nord
Weedon Cu Zn Au
James Bay
BJ Eleonore Au
BJ Gold
Elrond
Fangorn
Helms
JV Eleonore Au
Komo
McDuff
Minas Tirith
Balance
Sept. 30,
2020
Geology
Geo-
physics
Drilling
Geo-
chemistr
y
Sub
total
$
$
$
$
$
$
Stock-
based
comp.
$
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
Balance
Sept. 30,
2021
$
$
$
$
$
$
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
80,215
-
755,893
1,779,453
474,613
80,653
15,950
65,026
617,865
52,950
34,138
41,895
36,081
3,740
-
3,915
10,312
8,778
786
17,009
8,714
1,322
14,822
7,716
175,351
1,883
46,303
15,610
675
16,598
164,968
-
-
198,913
79,296
21,138
22,311
41,706
85,471
-
-
-
8,813
1,575
-
-
-
-
-
192,470
55,166
-
-
-
-
32,374
-
110,020
-
63,138
-
-
95,408
215,929
-
-
-
1,275
111,232
-
-
-
-
-
-
-
-
-
-
12,126
-
-
502,266
-
700
-
-
998
-
1,929
-
11,454
-
-
-
4,693
692,691
-
-
704
-
-
-
-
-
-
-
-
-
-
-
119,674
-
-
73,383
-
-
20,127
-
-
46,355
301
14,908
4,252
95,231
849
-
4,024
247,023
-
-
-
1,863
11,799
-
-
18,229
-
-
-
6,517
-
-
155,755
15,866
-
3,915
778,431
63,944
1,486
37,136
8,714
2,320
93,551
9,946
300,279
17,589
204,672
16,459
675
120,723
1,320,611
-
-
199,617
82,434
144,169
22,311
41,706
103,700
-
-
-
15,330
1,575
-
- 9 -
1,900
2,964
-
-
-
-
-
-
-
-
-
735
1,501
1,296
1,339
-
-
885
11,200
-
-
-
-
1,339
400
494
885
-
-
-
-
-
-
-
(15,866)
-
-
(1,610)
-
-
-
-
(998)
-
-
-
-
-
-
-
-
-
-
-
(1,547)
-
-
-
-
-
-
-
-
-
-
-
(19,490)
-
-
-
(297,600)
-
-
(8,871)
(2,184)
(576)
(25,113)
(3,134)
(69,938)
-
(45,228)
(5,247)
-
-
(177,331)
-
-
(3,371)
(1,160)
-
(8,996)
(20,115)
(44,353)
-
-
-
(4,037)
(500)
-
-
(109,190)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,066)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
138,165
(106,226)
(1,066)
3,915
479,221
63,944
1,486
28,265
6,530
746
68,438
7,547
231,842
18,885
160,783
11,212
675
121,608
1,154,480
-
-
415,688
2,164,225
-
3,915
631,744
65,182
278,508
121,140
685,020
1,106,671
74,109
3,118,720
306,302
499,918
414,648
11,212
3,840
362,825
1,959,727
202,050
32,949
-
-
-
194,699
81,274
145,508
274,914
81,274
901,401
-
-
-
-
-
-
-
-
(41,895)
13,715
22,085
60,232
-
-
-
11,293
1,075
(41,895)
1,793,168
496,698
140,885
15,950
65,026
617,865
64,243
35,213
-
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Deferred
exploration
Expenses
Fiscal 21
Moria
Mythril
Shire
Wookie
North
BHP Ni
Labrador Trough
Nachicapau
Pallas PGE
Soissons
Soissons Nmef
Willbob Au
Generation
Balance
Sept. 30,
2020
$
133,830
5,110,948
243,885
22,202
-
-
15,778
542,124
106,746
69,180
3,196,684
37,318
Geology
Geo-
physics
Drilling
Geo-
chemistry
Sub
total
$
1,087
278,600
-
4,500
430,720
404,050
-
525
-
56,517
33,529
-
$
-
142,871
-
-
2,497,849
138,881
-
-
-
-
-
-
$
$
-
658,390
-
-
-
101,786
-
1,616
-
-
-
-
-
-
34,708
-
24,320
4,383
-
-
-
2,288
51
-
$
1,087
1,181,647
-
6,116
2,952,889
547,314
525
58,805
68,288
-
Recharge
Tax
credits
Option
Payment
Write-
off
Net
change
Stock-
based
comp.
$
-
15,210
-
-
$
$
$
-
-
-
-
(344)
(464,000)
-
(1,208)
$
-
(1,706)
-
-
-
-
(15,778)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
743
731,151
-
4,908
-
243,476
(15,778)
525
-
32,818
43,447
-
Balance
Sept. 30,
2021
$
134,573
5,842,099
243,885
27,110
-
243,476
-
542,649
106,746
101,998
3,240,131
37,318
-
-
-
-
-
-
-
-
(2,952,889)
(237,371)
-
-
-
-
-
-
-
(66,467)
-
-
-
(25,987)
(24,841)
-
TOTAL
23,545,289
2,203,334
3,656,613
1,920,659
798,979
8,579,585
40,148
(3,210,281)
(1,320,091)
(109,190)
(60,445)
3,919,726 27,465,015
- 10 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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
Sept. 30,
2019
Geology
Geo-
physics
Drilling
Geo-
chemistr
y
Sub
total
Stock-
based
comp.
Recharge
Tax
credits
Option
Paymen
t
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
- 11 -
-
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, 2021
Deferred
exploration
expenses
Fiscal 20
Shire
Wookie
North
BHP Ni
Nachicapau
Pallas PGE
Soissons
Soissons Nmef
Willbob Au
Generation
Balance
beginning
Fiscal
2020
$
239,620
780
-
14,258
542,124
53,994
47,710
3,104,919
23,232
Geology
Geo-
physics
Drilling
Geo-
chemistr
y
Sub
total
Stock-
based
comp.
Recharge
Tax
credits
Option
Paymen
t
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
end
Fiscal
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
- 12 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Exploration and evaluation
expenses
Properties
Actual Fiscal 20
Actual Fiscal 21
Budget Fiscal 21 – modified
Budget Fiscal 22
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
Nomans
Noyelles
Patris
Samson
Turgeon
Valmond
Gatineau Zn
Ski
Tête Nord
Weedon Cu-Zn-Au
BJ Éléonore Au
BJ Gold
Elrond
Fangorn
Helms
Komo
McDuff
Minas Tirith
Moria
Mythril
Shire
Wookie
Nachicapau
Pallas EGP
Soissons
Willbob
Project generation
13,761
4,062
142,660
1,778
-
156,857
1,238
710
-
54,406
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
2,961,894
13,761
4,062
145,461
1,778
-
224,427
1,238
710
-
54,531
7,649
7,260
85,641
24,167
-
5,302
5,223
-
-
-
155,755
2,801
-
-
-
-
3,915
67,570
-
-
63,944
-
1,486
-
37,136
125
8,714
-
1,322
-
93,551
-
300,279
-
204,672
-
16,459
-
675
120,723
-
- 1,022,495 1,320,611
-
-
-
-
-
-
-
-
82,434
-
144,169
-
22,311
-
41,706
-
103,700
-
-
-
-
-
15,330
-
1,575
-
-
-
1,087
-
964,563 1,181,647
-
-
-
6,116
-
-
-
525
-
-
-
68,288
-
-
-
3,998,130
4,265
25,752
1,520
-
60,246
115,381
18,542
70,496 3,032,390
2,859
-
21,001
-
-
60,033
5,964
38,177
15,468
4,265
14,042
68,077
-
4,264
4,266
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
155,755
-
-
3,915
-
63,944
1,486
37,136
8,714
1,322
93,551
300,279
204,672
16,459
675
120,723
-
150,000
-
-
5,000
-
40,000
2,000
30,000
5,000
2,000
80,000
285,000
200,000
10,000
-
2,000
120,000
-
- 1,320,611 1,320,000
-
-
-
-
-
-
-
-
85,000
-
140,000
-
95,000
-
60,000
-
110,000
-
-
-
-
-
20,000
-
1,000
-
-
-
-
- 1,181,647 1,250,000
-
-
-
-
6,116
-
-
-
-
1,000
525
-
-
-
-
50,000
68,288
-
-
-
-
4,063,000
- 3,998,130
-
-
-
-
82,434
144,169
22,311
41,706
103,700
-
-
15,330
1,575
-
1,087
- 13 -
-
-
-
150,000
-
-
-
-
-
5,000
-
-
-
40,000
-
2,000
-
30,000
-
5,000
-
2,000
-
80,000
-
285,000
-
200,000
-
10,000
-
2,000
120,000
-
- 1,320,000
-
-
-
-
-
-
-
-
85,000
-
140,000
-
95,000
-
60,000
-
110,000
-
-
-
-
-
20,000
-
1,000
-
-
1,250,000
-
-
-
1,000
-
50,000
-
4,063,000
-
-
-
-
-
-
-
-
-
-
-
30,000
73,000
-
-
143,000
-
6,000
8,000
8,000
-
-
48,000
453,000
19,000
290,000
173,000
-
154,000
-
17,000
-
5,000
-
10,000
107,000
80,000
132,000
-
5,000
83,000
5,000
4,000
5,000
280,000
55,000
-
-
10,000
-
42,000
4,000
2,249,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
73,000
-
-
143,000
-
6,000
8,000
8,000
-
-
48,000
453,000
19,000
290,000
173,000
-
154,000
-
17,000
-
5,000
-
10,000
107,000
80,000
132,000
-
5,000
83,000
5,000
4,000
5,000
280,000
55,000
-
-
10,000
-
42,000
4,000
2,249,000
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Exploration and evaluation
expenses
Properties
Option
Casault - Wallbridge
La Peltrie – Probe
Tête Nord – Rio Tinto
Actual Fiscal 20
Actual Fiscal 21
Budget Fiscal 21 - modified
Budget Fiscal 22
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
-
-
-
-
15,017
206,855
-
221,872
15,017
206,855
-
221,872
- 1,230,338 1,230,338
447,245 447,245
-
-
-
1,677,583 1,677,583
-
-
-
-
-
-
1,250,000
500,000
-
1,750,000
1,250,000
500,000
-
1,750,000
-
-
-
-
500,000
700,000
500,000
1,700,000
500,000
700,000
500,000
1,700,000
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
Lab.Trought – SOQUEM 0%
Soissons NMEF 50%
Grand total
40,991
304,677
72,681
43,151
-
-
40,992
-
75,648
43,151
-
217,911
81,983
304,677
148,329
86,302
-
217,911
32,870
494,370
3,456,264
65,740
32,870
410,572
904,942
702,940 4,159,204
-
18,306
776,821
779,019 1,555,840
9,946
9,946
17,589
35,895
198,070
198,070 396,140
-
-
-
2,952,889 2,952,889
309,943 619,886
58,805 117,610
4,317,032 5,688,206
5,994,615 11,363,919
309,943
58,805
1,371,174
5,369,304
800,000
800,000 1,600,000
5,000
-
5,000
17,000
18,000
35,000
250,000
250,000
500,000
-
-
-
1,950,000 1,950,000
500,000 1,000,000
120,000
5,210,000
250,000
250,000
63,000
-
9,000
10,000
50,000
50,000
-
-
- 1,600,000
500,000
30,000
60,000
3,578,000
902,000 2,440,000
5,328,000 11,023,000 3,151,000 4,140,000
500,000
60,000
1,632,000
5,695,000
500,000
30,000
500,000
63,000
19,000
100,000
-
1,600,000
1,000,000
60,000
3,342,000
7,291,000
- 14 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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, 2021, it consists of 188 claims covering a surface area of about 10,457
hectares in the Abitibi region of Quebec. Some claims were dropped therefore the Corporation
impaired partially for $3,804 in Fiscal 2020.
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
In the spring of 2021, a black spruce bark biogeochemistry survey covering the entire Adam property
was completed. The results highlighted several areas with anomalous Au, As, Cu and Zn values, some
of which are located along the same stratigraphic level as the B26 deposit, i.e., just north of the regional
fault marking the contact between the Enjalran and Brouillan groups. In addition, several of these
anomalies coincide with new untested helicopter-borne VTEM-type electromagnetic anomalies.
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, 2021, 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.
- 15 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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
110,000
-
-
-
210,000
Exploration work
Commitment
$
Completed
$
-
750,000
1,000,000
1,250,000
2,000,000
5,000,000
-
750,000
479,489
-
-
1,229,489
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
A drilling program consisting of thirteen (13) drill holes totalling 5,295 metres was recently completed
to test a series of NW-SE-trending structures interpreted from the magnetic survey. These targets are
located a few kilometres north of the Sunday Lake Fault and west of the Martiniere and Bug Lake
deposits.
Hole CAS-21-123, the first drill hole of the program, was testing a prominent NW-SE oriented structure
interpreted from airborne magnetics and intersected 6.85 g/t Au over 2.00 metres from 254.50 to
256.50 metres. This new intersection is associated with a mineralized zone consisting of chalcopyrite,
pyrite, pyrrhotite, and electrum, a gold-silver mineral phase, within deformed and heavily carbonate-
altered host rocks. This NW-SE structural orientation remains untested over more than 3 kilometres
on the Casault property and is known to control gold mineralization at Fenelon and Martiniere. A series
of large structures of this trend also transects the Casault property. Complete assay results are
pending.
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. On September 2021, the Corporation decided to drop
the claims and wrote-off the property for $4,183.
Exploration work on the property
No exploration work on the ground was conducted on Coigny during Fiscal 21.
- 16 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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, 2021. 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
A compilation of historical works was completed at the property scale in preparation for a high-
resolution magnetic survey to be conducted in 2022. 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, 2021. 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
The final results of a high-resolution magnetic survey that covered the Samson NW block of this
partnership were received. During Q3-21, the results of the IP survey and the bark sampling were
received.
Over the course of August and September 2021, fourteen (14) drill holes totalling 4,483 metres were
completed to test induced polarization anomalies coinciding with biogeochemical anomalies and
structures interpreted from the magnetic survey. Assay 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, 2021. See section 4.4 on the property acquisition agreement.
- 17 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Exploration work on the property
A magnetic survey (Drone Mag) was completed over the property during Q4-21. The high-resolution
of this survey led to the identification of new structures.
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.
Exploration work on the property
No exploration work on the ground was conducted on Heva during Fiscal 21. 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).
Exploration work on the property
During Q3-21, Midland completed a biogeochemical survey covering a portion of the Jeremie property.
The final results of the bark sampling were received but no obvious anomaly has been identified.
4.10 Jouvex (Au)
Property Description
The Jouvex property is located about 50 kilometres to the southwest of Matagami and as at September
30, 2021 is composed of 374 claims covering an area of approximately 20,871 hectares. See the
Casault section for the details on the agreement signed with SOQUEM.
On April 7, 2021, the Corporation completed the acquisition from SOQUEM of two blocs of claims
contiguous to the Jouvex property by paying $60,000 and by issuing a 1% NSR royalty; the Corporation
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% royalty.
Exploration work on the property
No exploration work on the ground was conducted on Jouvex during Fiscal 21. Midland is currently
looking for a new partner for this project.
- 18 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
4.11 La Peltrie (Au), option agreement with Probe, operated by Probe
Property Description
As at September 2021, 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. Some claims are subject to a 1% Gross Metal royalty.
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)
55,000 2)
-
-
-
105,000
Exploration work
Commitment
$
Completed
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
-
500,000
153,102
-
-
653,102
1)
2)
In July 2020, the Corporation received 37,879 shares of Probe based on a 5 days VWAP calculation to total $50,000.
In July 2021, the Corporation received 32,544 shares of Probe based on a 5 days VWAP calculation to total $55,000.
Probe is the operator.
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
The final results of a high-resolution magnetic survey that covered the northern portion of the property
were received. The final results of the bark sampling were received. At least four (4) Au and Cu
anomalies were identified in the vicinity of the syntectonic pluton and were selected for IP surveys to
be completed.
Three (3) induced polarization grids were surveyed this summer to cover biogeochemical anomalies
identified along the perimeter of a syntectonic intrusion. The final results and interpretation of the three
surveys are pending. A follow-up campaign, including a drilling program, is in preparation for 2022.
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, 2021 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.
- 19 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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
During Q3-21, Midland completed a Mag Drone survey covering a small block of claims in the western
portion of the Lac Esther property.
A soil survey (B-horizon) was completed during Q3-21 east of the former Lac Rose mine. A few new
local gold anomalies were identified.
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, 2021, the Laflamme property consists of a total of 436 claims covering an area
of approximately 23,411 hectares and Midland holds 77.9% of the property.
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 2021, therefore the Corporation impaired partially for $12,865 the
exploration property cost.
Exploration work on the property
No exploration work on the ground was conducted on Laflamme during Fiscal 21.
4.14 Lewis (Au)
Property Description
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%). Some claims were dropped in Fiscal 2021,
therefore the Corporation impaired partially for $1,505 the exploration property cost.
Exploration work on the property
In October 2020, a mechanical stripping program was conducted to further assess the Red Giant
showing discovered by prospecting in the summer of 2020 in the northwest part of the Lewis project,
approximately 8 kilometres northeast of the former Lac Shortt mine. These occurrences yielded
several anomalous gold values in grab samples, with grades ranging from 0.2 g/t Au to 2.1 g/t Au.
- 20 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Stripping and channel sampling completed in October have confirmed the presence of a new gold-
bearing structure over a width of more than 9 metres and a lateral distance of at least 25 metres. The
gold-bearing zone is oriented east-west, shows increasing grade/thickness values westward, and
remains completely open in this direction. Pyrite mineralization (3-5%) and quartz-carbonate veins are
hosted in a mafic volcanic rock with strong ankerite and chlorite alteration. A total of four channel
samples spaced 7 to 10 metres apart were collected on this structure over a lateral distance of
25 metres.
From west to east, the channel samples yielded the following results:
• Channel #1: 0.35 g/t Au over 9.0 metres, including 1.28 g/t Au over 1.0 metre
• Channel #2: 0.38 g/t Au over 8.0 metres, including 1.10 g/t Au over 1.0 metre
• Channel #3: 0.68 g/t Au over 3.0 metres, including 1.52 g/t Au over 1.0 metre
• Channel #5: 0.30 g/t Au over 2.0 metres
An IP survey totalling about 30 km was completed. Several anomalies were detected, mainly east of
the new showing found in 2020.
The 2021 prospecting program was completed during Q3-21. A total of 76 samples were collected and
led to the discovery of a new gold showing named Golden Nest. Grab samples from the new Golden
Nest showing yielded gold grades of 10.2 g/t Au and 2.1 g/t Au. These values are located
approximately 1.1 kilometres east of the Red Giant showing discovered by prospecting in 2020, where
channel samples yielded values up to 0.35 g/t Au over 9.0 metres.
This new high-grade gold showing was discovered during prospecting work conducted in May 2021.
The prospecting campaign was designed to cover high-priority induced polarization (IP) anomalies
that were identified during the winter 2021 survey along the extensions of the Red Giant gold-bearing
structure.
The Golden Nest showing is directly associated with a moderate chargeability anomaly (5-10 mv/V)
coinciding with a sharp increase in resistivity. The gold-bearing zone corresponds to a small outcrop
of approximately 10 square metres exhibiting 5 to 10% pyrite mineralization. The IP anomaly
associated with this gold-bearing zone may be traced over a distance of at least 400 metres to the
west. The gold-bearing zone is entirely new and has never been drill-tested.
Following the discovery made this past summer by prospecting at the Golden Nest showing, where
grab samples yielded grades of 10.2 g/t Au and 2.1 g/t Au, mechanical stripping and channel sampling
were completed in September. Approximately 50 samples are currently in the laboratory and assay
results are pending.
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, 2021
Exploration work on the property
During Q1-21, assays for two (2) drill holes totalling 1,311.0 metres that were completed during the
month of September 2020 were received. Drill hole 141-20-41, totalling 879.0 metres and mainly
designed to test the down-plunge extension of the Dyke East zone, intersected, near the end of the
drill hole, a new gold-bearing zone associated with quartz veins and chlorite-biotite alteration in
sediments of the Cadillac Group. This new gold zone yielded an interval grading 9.69 g/t Au over
1.0 metre from 847.3 to 848.3 metres. The Dyke East zone was also intersected, with an interval
grading 0.33 g/t Au over 15.3 metres from 761.4 to 776.7 metres, including 1.44 g/t Au over 1.0 metre
from 774.5 to 775.5 metres. In addition, a few gold values above 1 g/t Au were also intersected higher
up in the drill hole.
The other drill hole (141-20-40) completed during this campaign totalled 432.0 metres and was drilled
to test two parallel gold-bearing zones (the South and North zones). No significant results were
intercepted.
Agnico Eagle and Midland are reviewing results to evaluate the possibility of conducting further drilling
to test this new gold-bearing zone identified in Cadillac sediments in drill hole 141-20-41.
4.16 Mistaouac (Au)
Property Description
The Mistaouac property is located about 75 kilometres to the south-west of Matagami in Abitibi,
Quebec and consists of 232 claims (11,579 hectares) as at September 30, 2021. 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 $5,673 in Fiscal 2021.
Exploration work on the property
A black spruce bark biogeochemistry survey was completed to cover the entire property. Several
anomalies were identified, one of which is of particular interest along the contact of the Orvilliers pluton.
This kilometre-scale anomaly is characterized by elevated values in Au, Ag, Cu, Mo, Sb and Te.
4.17 Nomans (Au)
Property Description
The Nomans property was acquired by map designation and consists of 776 claims (42,062 hectares)
located approximately 60 kilometres east of the town of Matagami, Abitibi, Quebec, and adjacent to
the west of the Chebistuan property held by Kenorland Minerals and currently optioned to Newmont
Corporation.
This new gold project, named Nomans, consolidates a new strategic position acquired by Midland
along the possible extension of the Sunday Lake Fault in northern Abitibi, approximately
130 kilometres east of the Fenelon and Tabasco deposits held by Wallbridge.
Exploration work on the property
During Q3-21, Midland completed a compilation of historical works conducted on this new property.
A 3 -day prospecting campaign was completed during Q3-21. No significant anomaly was obtained.
A till survey (1 kg) is currently ongoing in the western portion of the property. These results will be
received in early 2022 and will be used to prioritize the areas to be covered with additional till sampling
and prospecting during the summer of 2022.
- 22 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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, 2021. 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 has been completed and a high-resolution magnetic survey is
currently in preparation to begin in early 2022.
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, 2021 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.
Exploration work on the property
During the spring of 2021, a Drone magnetic survey was completed in the southern half of the property.
These results allowed to better define the structural pattern and to identify new folded structures never
interpreted before.
- 23 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
New exploration targets were identified following a new lithogeochemical interpretation of the entire
property. These new targets include the depth extension of drill holes PAT-15-05 and PAT-16-08,
which identified an extensive hydrothermal alteration zone (Au-Ag-Pb-Mo-Te) more than 80 metres
wide. In addition, two new target areas associated with Camflo-type alkaline intrusions were identified
near the La Pause Fault, where turbidites of the Kewagama Group are in contact with volcanic rocks
of the Malartic Group.
4.20 Samson (Au)
Property Description
As at September 30, 2021, 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
As a follow-up to the new gold discovery made in July 2020 at Golden Delilah on the Samson property,
a second drilling campaign consisting of seven (7) drill holes totalling 1,810 metres was completed in
September 2020.
Drill hole SAM-20-15, collared approximately 350 metres southeast of the Golden Delilah zone,
intersected a new gold-bearing zone grading 23.0 g/t Au over 1.05 metre from 317.10 to
318.15 metres. This new zone is included within a wider interval with anomalous gold and arsenic over
more than twenty metres, from 314.95 to 337.25 metres. This new zone, hosted at the contact of
ultramafic rocks with pyrite and arsenopyrite mineralization, coincides with a fold nose clearly outlined
by the magnetic survey and remains open in all directions.
Upon reception and interpretation of analytical results in early 2021, the geochemical affinity of
numerous dykes and an intrusive stock was confirmed as being alkaline. Compositions range from
monzonites to quartz monzonites, monzodiorites and monzogabbros. All of the main mineralized
zones observed in 2020 drill holes are intimately associated with these dykes of alkaline affinity. The
mineralized zones also exhibit brecciated textures and brittle faulting, typical of mineralization
emplaced at shallow depths, in epithermal conditions. The Golden Delilah zone (see below) shows an
uncommon metal assemblage with silver-gold-lead-antimony-arsenic, also typical of neutral
epithermal mineral deposit types. These observations strongly suggest that mineral occurrences
observed on Samson in 2020 represent the external parts of a magmatic-hydrothermal system
associated with alkaline dykes, either of the syenite-associated disseminated gold (Robert, 2001) or
of the intrusion-related gold (Hart et al., 2007) variety.
A biogeochemical and an IP survey were completed. The results of the IP survey were received as
well as the results of the bark sampling. A new biogeochem anomaly (Au) was identified about 2 km
to the south-east of Golden Delilah. This area has never been drilled. Moreover, a new IP anomaly
was identified about 2 km north-east of Golden Delilah. This new area located along the Lower Detour
fault has never been drilled either.
A seven (7) holes drilling program totalling 2,405 metres was completed during Q3-21. The best results
came from a porphyry intrusion in hole SAM-21-18 to the north-east of Golden Delilah that returned
3.2 g/t Au over 0.50 metre from 65.05 to 65.55 metres. A new Au-bearing structure /breccia was
identified near surface in hole SAM-21-22 and near the fold hinge. That zone returned 0.3 g/t Au over
5.05 metres from 101.95 to 107.00 metres. The other best results include 0.47 g/t Au over 0.45 metres
in hole SAM-21-23 from 140.5 to 140.95 metres and 0.26 g/t Au over 3.0 metres from 245.0 to
248.0 metres in hole SAM-21-24.
- 24 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
A black spruce bark biogeochemistry survey was conducted in the winter of 2021 in the vicinity of the
new high-grade gold discovery at Golden Delilah, which graded up to 99.1 g/t Au over 0.40 metre
(DDH SAM-20-10; 106.45-106.85 m) and 23.0 g/t Au over 1.05 metres (DDH SAM-20-15;
317.10-318.15 m). This biogeochemistry survey identified a new gold anomaly located approximately
2 kilometres southeast of the Golden Delilah showing. This new area has never been drill-tested and
is located near the western contact of a felsic pluton, where identified gold anomalies are aligned along
structures mainly trending NW-SE and N-S.
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, 2021, it consists of 85 claims (4,730 hectares) in the Abitibi region of
Quebec.
Some claims were dropped therefore the Corporation impaired partially for $35,256 in Fiscal 2021.
Exploration work on the property
No exploration work on the ground was conducted on Turgeon during Fiscal 21. 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, 2021, this property consists in 48 claims covering an area of
approximately 2,672 hectares.
Exploration work on the property
No exploration work on the ground was conducted on Valmond during Fiscal 21. 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, 2021, 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 21. Midland is currently looking for a new
partner for this project.
- 25 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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, 2021, 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 21. Midland is currently looking for a new
partner for this project.
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, 2021, 259 claims
(15,282 hectares) distributed in the Gatineau Area, approximately 200 kilometres northwest of the city
of Montreal.
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 within the area of interest and targeting was completed. Soil sampling
and prospecting over the properties started during Q3-21 and the results are still pending.
4.26 Ski
Property Description
The Ski property staked, consists of 5 claims as of September 30, 2021 and is located in the 31J02
NTS sheet in the Vallee de la Gatineau.
- 26 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
4.27 Tête Nord (Ni-Cu)
Property Description
The Corporation assembled the Tête Nord property through map staking and acquisition. This property
is located about 15 km east of the town of La Tuque and comprises a total of 935 claims forming five
(5) separate blocks and covering approximately 52,261 hectares. 56 of these claims were acquired by
purchase on November 13th, 2020 from Les Ressources Tectonic Inc. ($100,000 of which $30,000 is
payable upon signature, $35,000 on the first anniversary and $35,000 on the second anniversary) and
are subject to 2% NSR royalty, the Corporation can buy it back the royalty for $1,500,000 per 1.0%
tranche for a total of $3,000,000.
In March 2021, the Corporation signed four agreements with different prospectors whereby it acquired
blocs of claim for cash payments totalling $41,050. The Corporation issued three 2% NSR royalties to
the prospectors. The Corporation may, at any time, buy back each royalty, in all or in part, by making
a cash payment of $2,000,000 per royalty, $1,000,000 per tranche of 1% royalty. For the fourth
agreement, the Corporation agreed to make a $25,000 payment if a resources estimate is completed
on the bloc acquired or on the 40 contiguous claims owned by the Corporation.
See section 2.5 for option agreement signed with RTEC.
Exploration work on the property
Midland is compiling the historical works on the property. A one-week prospecting program took place
in July 2021 in the vicinity of the Savane and Rochette showings. Several new Ni-Cu anomalies were
identified in the vicinity of the Savane showing.
4.28 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, 2021 is comprised of 149 claims covering an approximate area of 7,280 hectares.
Some claims are subject to NSR royalties of:
●
●
●
1%, the Corporation can buy it back the royalty for $500,000 per 0.5% tranche for a total of
$1,000,000;
0.5%, the Corporation can buy it back this royalty for $500,000;
1.5% on all metals except gold and silver, the Corporation can buy it back for $500,000 per
0.5% tranche for a total of $1,500,000.
Some claims were dropped therefore the Corporation impaired partially for $31,588 in Fiscal 2021 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.
During the summer of 2021, a Drone magnetic survey covered the most part of the property (Weedon
and Lingwick sectors). These works led to the identification of a possible volcanic rock enclave within
the intrusion that cuts the Weedon deposit. This newly identified area is also characterized by the
presence of VTEM conductors from the 2008 survey that will have to be covered with additional
geophysical and geochemical works.
- 27 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
JAMES BAY
4.29 BJ Gold (Au)
Property Description
Midland owns a 100% interest on 194 claims as at September 30, 2021 covering 9,961 hectares in
the James Bay Area. Some claims were dropped therefore the Corporation impaired partially for
$6,960 ($262,798 in Fiscal 20) the exploration property cost.
Exploration work on the property
Prospecting work carried out in August on the Galinée gold project identified several new gold-bearing
boulders that yielded values in grab samples up to 1.43 g/t Au, 1.40 g/t Au and 1.08 g/t Au south of
the Elsa showing. Other boulders were also discovered approximately 2 kilometres further west,
grading up to 0.96 g/t Au and 0.50 g/t Au (grab samples). Several induced polarization anomalies
remain unexplained to the north of these gold-bearing boulders.
4.30 BJ Eleonore (Au)
Property Description
The Eleonore new property is divided in three distinct blocks with two of them within 25 kilometres
from the Eleonore 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, 2021.
Exploration work on the property
A soil survey was completed on the property during Q4-21 and the results are pending.
4.31 Elrond (Au)
Property Description
The Elrond property consists as at September 30, 2021 of 197 contiguous claims covering a total
surface area of 10,175 hectares.
Exploration work on the property
The final results of the 80 till samples collected over the summer, southwest of Harfang Exploration
Inc.’s Serpent gold project, have been recently received but the final interpretation is ongoing.
4.32 Fangorn (Au)
Property Description
The Fangorn property consists as at September 30, 2021 of 16 contiguous claims covering a total
surface area of 816 hectares.
Exploration work on the property
No exploration work conducted on Fangorn during Fiscal 21. Midland is currently looking for a new
partner for this project.
- 28 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
4.33 Helm’s Deep (Au)
Property Description
The Helm’s Deep property consists as at September 30, 2021 of 70 contiguous claims covering a total
surface area of 3,699 hectares.
Exploration work on the property
No exploration work conducted on Helm’s Deep during Fiscal 21. Midland is currently looking for a
new partner for this project.
4.34 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.
Exploration work on the property
No exploration work conducted on JV Eleonore during Fiscal 21.
4.35 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.
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.
Some claims were dropped therefore the Corporation impaired partially for $9,369 in Fiscal 21 the
exploration property cost.
- 29 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Exploration work on the property
The highlight of the Q4-20 exploration program on Komo is the identification of a new area with
anomalous gold based on the results of a prospecting campaign and a soil geochemistry survey
conducted in the late summer of 2020.
This new gold-bearing area, which extends for approximately 500 metres along a northeast strike, is
characterized by five (5) anomalous gold values in soils (B horizon) ranging from 24 ppb Au to
123 ppb Au, whereas background values in the area are generally below 10 ppb Au. This cluster of
gold values in soils, combined with two (2) new gold values obtained in grab samples, at 0.15 g/t Au
and 0.22 g/t Au, mark this area as a new unexplored high-priority exploration target. The gold
occurrences are characterized by the presence of fractured felsic to mafic volcaniclastic host rocks
altered to epidote and containing quartz veins and trace to 1% disseminated pyrite.
Less than 1 kilometre southwest of this anomalous area, another grab sample yielded values of
0.25 g/t Au and 0.1% Cu in rhyolites containing 1% disseminated pyrite-pyrrhotite with trace
chalcopyrite. The rhyolites exhibit calc-silicate alteration with the presence of amphiboles, which may
be indicative of a metamorphosed distal orogenic alteration.
4.36 McDuff (Cu-Au-Mo-Ag)
Property Description
The McDuff property consists as at September 30, 2021 of 159 (8,394 hectares).
Exploration work on the property
No exploration work conducted on McDuff during Fiscal 21. Midland is currently looking for a new
partner for this project.
4.37 Minas Tirith
Property Description
The Minas Tirith property consists as at September 30, 2021 of 4 claims (213 hectares).
Exploration work on the property
No exploration work conducted on Minas Tirith during Fiscal 21. Midland is currently looking for a new
partner for this project.
4.38 Moria (Ni-Cu)
Property Description
The Moria property consists as at September 30, 2021 of 110 claims (5,812 hectares).
Exploration work on the property
No exploration work conducted on Moria during Fiscal 21. Midland is currently looking for a new
partner for this project.
- 30 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
4.39 Mythril (Au-Cu-Mo)
Property Description
The Mythril property consists as at September 30, 2021 of 2,199 claims (112,035 hectares). The
Corporation wrote off a project included in the Mythril property for $6,096 (partial impairment for
$150,690 in Fiscal 20).
Exploration work on the property
During the winter of 2020, a pole-dipole (n=20) induced polarization survey, designed to test the
deeper bedrock, was initiated in the vicinity of the fault hosting the Faramir showing, to identify
chargeability (IP) anomalies indicative of the more mineralized parts of the Cu-Mo system. About 50%
of the survey was completed before it had to be interrupted due to the COVID-19 crisis.
Within the survey grid, the IP line located furthest to the southeast shows a deep chargeability anomaly
in the fault zone, which may represent a more strongly mineralized part of the system. The remainder
of the IP survey, totalling approximately 20 kilometres, was completed during the winter of 2021, in
preparation for a drilling program in the summer of 2021.
During the past year, a 3D geological model of mineralization in the main area of the Mythril project
was built using Leapfrog, to improve our understanding of the controls of the mineralized system at
Mythril. Modelling of the mineralized envelope was carried out to determine where additional
Cu-Au-Mo-Ag mineralization may be discovered. In addition, new drilling targets were identified by
studying relationships between geology, alteration and geophysics. Some of these targets consist of
untested areas where a favourable geological and geophysical setting was identified. These settings
include IP anomalies characterized by chargeability highs and/or magnetic anomalies near the
southern contact with the conglomerate unit. Other targets consist of possible extensions of higher-
grade mineralized zones.
During Q3-21, a drilling program consisting in seven (7) holes totalling 1,647 metres was completed.
The program targeted mainly untested IP targets near the contact with the conglomerates in favorable
areas highlighted by the 3D-Model.
Drill hole MYT-21-38, collared on line 5+00E, tested a lateral gap of approximately 300 metres between
drill holes MYT-19-01 and MYT-19-03. Drill hole MYT-21-38 intersected a mineralized zone from 56.50
to 85.00 metres grading 0.59% Cu, 0.05 g/t Au, 1.87 g/t Ag and 0.025% Mo (0.74% CuEq*) over 28.50
metres including 1.02% Cu, 0.09 g/t Au, 2.62 g/t Ag and 0.048% Mo (1.29% CuEq*) over 10.50 metres
from 56.50 to 67.00 metres. This interval includes two high-grade zones that returned values of 8.73%
Cu, 1.29 g/t Au, 22.4 g/t Ag and 0.87% Mo (13.2% CuEq*) over 0.50 metre from 57.80 to 58.30 metres,
as well as 3.50% Cu, 0.11 g/t Au, 6.17 g/t Ag and 0.04% Mo (3.77% CuEq*) over 1.20 metres from
59.80 to 61.00 metres. This zone is also included within a larger interval grading 0.25% CuEq* over
104.6 metres from 18.0 to 122.6 metres.
Drill hole MYT-21-39, collared on line 6+00E, intersected a Cu-Au zone grading 1.34% Cu, 3.14 g/t
Au, 10.14 g/t Ag and 0.005% Mo ( 3.55% CuEq*) over 3.10 metres between 227.60 and 230.70 metres
including 2.32% Cu, 13.75 g/t Au, 40.3 g/t Ag and 0.002% Mo (11.90% CuEq*) over 0.70 metre, from
230.00 to 230.70 metres. This interval is included within a large interval that yielded 0.25% CuEq* over
59.70 metres between 171.00 and 230.70 metres.
Drill hole MYT-21-40, collared on line 8+00E, intersected a zone grading 0.63% CuEq* over 5.0 metres
from 21.00 to 26.00 metres, while a second zone returned 0.53% CuEq* over 3.75 metres from 96.75
to 100.50 metres. From 146.50 to 152.00 metres, another mineralized interval graded 0.25% CuEq*
over 5.50 metres. In addition, a gold-bearing interval was also intersected in the same drill hole,
grading 5.95 g/t Au over 1.50 metres from 192.00 to 193.50 metres.
- 31 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Drill hole MYT-21-41 (line 10+50E) intersected an interval grading 0.40% CuEq* over 5.0 metres from
72.00 to 77.00 metres, including a zone at 1.82% CuEq* over 0.75 metre from 72.00 to 72.75 metres.
Over the course of August, a prospecting campaign led to the discovery of two new high-grade
boulders on the Chisaayuu claim block of the Mythril Regional project. These gold-bearing boulders
are located approximately 75 kilometres east of the Cu-Au-Ag-Mo Mythril zone, where the 3D model
is currently being updated to include the results of the 2021 drilling program. Such as hole MYT-21-38
where 0.59% Cu, 0.05 g/t Au, 1.87 g/t Ag and 0.025% Mo over 28.50 metres from 56.50 to 85.00
metres, including 1.02% Cu, 0.09 g/t Au, 2.62 g/t Ag and 0.048% Mo over 10.50 metres from 56.50 to
67.00 metres, was obtained.
The two mineralized boulders discovered this summer on Chisaayuu yielded values of 10.25 g/t Au,
8.02 g/t Ag (in Boulder 1), and 7.99 g/t Au, 166 g/t Ag, 0.4% Cu and 0.07% Mo (in Boulder 2). A till
sampling program is in preparation for the summer of 2022, as a follow-up and to locate the source of
the boulders.
4.40 Shire (Zn-Cu)
Property Description
The Shire property consists as at September 30, 2021 of 148 contiguous claims covering a total
surface area of 7,870 hectares.
Exploration work on the property
No exploration work conducted on Shire during Fiscal 21. Midland is currently looking for a new partner
for this project.
4.41 Wookie (Au)
Property Description
The Corporation holds the Wookie project totalling 185 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). The Corporation impaired partially the property for the claims that were
dropped for $9,656.
Exploration work on the property
No significant result was received for the Wookie prospecting program conducted during Q4-20.
4.42 JV 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.
- 32 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
NORTHERN QUEBEC
4.43 BHP Alliance (NI)
Alliance Description
During 2021, a total of 1,194 claims (52 485 hectares) were map staked by Midland Base Metals
(« MBM ») within the AOI of the strategic alliance with BHP.
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.
- 33 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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.
Exploration work in the area of interest
During Q4-20, two weeks of prospecting were completed within the area of interest. The best grab
samples results returned 0.61% Ni, 0.34% Cu, 0.11% Co and 82 ppb Pd. The sample is a massive
2-10 cm thick sulphide horizon injected in a fracture in a strongly rusted pyroxenite.
During Q3-31 a 5,000 km VTEM survey (2 blocks) was completed within the area of interest. Several
new anomalies were identified and prioritized for the September prospecting program.
A three (3)-week prospecting program was completed in September and October under the Ni-Cu
Alliance with BHP. This program was mainly designed as a ground follow-up of VTEM-type
electromagnetic anomalies identified during the summer 2021 survey. More than 100 samples were
collected, and assay results are pending.
4.44 Labrador Trough alliance - SOQUEM
Alliance Description
On February 18, 2021, the Corporation signed a strategic alliance with SOQUEM to jointly explore the
Labrador Trough, for an amount of up to $5,000,000 over 4 years. A joint annual budget of $1,000,000
over a period of 4 years (firm commitment totalling $2,000,000 for the first 2 years), for a total of up to
$4,000,000, will be provided under the alliance for the targeting and field reconnaissance phase.
Midland will be the project operator in charge of exploration work during the targeting and field
reconnaissance phase. An additional, firmly committed, joint budget of $1,000,000 for the second year
is provided under the agreement to explore the designated projects. The joint budgets for exploration
work in the third and fourth years on the designated projects shall be approved by the project’s
management committee. SOQUEM will become project operator on all designated projects.
During 2021, a total of 138 claims (6,362 hectares) were map staked by Midland and SOQUEM (50%-
50%) within the AOI of the strategic alliance with SOQUEM.
Exploration work in the area of interest
During Q3-21, compilation of historical data and targeting were initiated for the Labrador Trough
alliance with SOQUEM. Several high priority targets were selected for the 2021 prospecting program.
During the summer of 2021, two phases of prospecting totalling three weeks each were conducted in
partnership with SOQUEM under the Labrador Trough Alliance. More than 900 samples were
collected, and assay results are pending.
4.45 Nachicapau
Property Description
As at September 30, 2021, the property totals 49 claims covering approximately 2,324. The
Corporation dropped the claims and wrote off the property for $25,042.
Exploration work on the property
No exploration work conducted on Nachicapau during Fiscal 21. Midland is currently looking for a new
partner for this project.
- 34 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
4.46 Pallas (PGE)
Property Description
As at September 30, 2021, the property totals 330 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 $8,099 the exploration property cost ($6,060
in Fiscal 20).
Exploration work on the property
No exploration work conducted on Pallas during Fiscal 21. Midland is currently looking for a new
partner for this project.
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.
Exploration work on the property
A ground EM survey ( SQUID-LT) was completed on the Papavoine showing during Q3-21. These
works led to the identification of several conductors down to a depth of 600 metres including one that
has never been drill tested.
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, 2021, this project consists of a total of 51 claims (2,362 hectares).
Exploration work on the property
Prospecting works were carried out during Q4-21 and assay results and the final report from NMEF
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, 2021 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.
- 35 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
Exploration work on the property
No exploration work conducted on Willbob during Fiscal 21. Midland is currently looking for a new
partner for this project.
PROJECTS GENERATION
Midland continued some geological compilation programs in Quebec for the acquisition of new
strategic gold and base metal properties.
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 for at least the nest twelve months. 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
Payments received – option agreements and alliances
Property maintenance
Cash used
Working capital ending
Fiscal 22
forecast
$
7,505,000
(1,621,000)
259,000
2,500,000
90,000
(150,000)
(3,151,000)
1,320,000
280,000
(579,000)
(1,052,000)
6,453,000
- 36 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
6. SELECTED ANNUAL INFORMATION
Project management fees
Loss
Loss per share, basic and diluted
Fiscal 21
$
202,218
(1,023,800)
(0.01)
Fiscal 20
$
23,754
(1,345,977)
(0.02)
Fiscal 19
$
33,684
(1,142,784)
(0.02)
Total assets
39,915,196
38,893,801
38,615,831
2021
$
As at September 30,
2020
$
2019
$
7. SUMMARY OF RESULTS PER QUARTERS
For the eight most recent quarters:
Q4-21
$
Q3-21
$
Q2-21
$
Q1-21
$
29,086
(342,253)
(0.01)
39,915,196
110,898
(53,448)
-
40,362,517
56,574
(278,208)
-
39,989,959
5,660
(349,891)
(0.01)
40,047,976
Q4-20
$
Q3-20
$
Q2-20
$
Q1-20
$
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
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Highlights in Fiscal 21:
• Q4-21
o Casault: 5,295 metres drilling
o Gaudet: 4,483 metres drilling
• Q3-21
o Samson: 2,405 metres drilling
o Mythril: 1 647 metres drilling
• Q2-21
o SOQUEM alliance agreement on the Fosse trough property
• Q1-21
o $2,284,750 flow-through financing and $96,209 hard cash financing with BHP
8. FOURTH QUARTER
The Corporation reported a loss of $342,253 for Q4-21 compared to a loss of $290,412 for Q4-20.
Operating expenses decreased to $369,354 in Q4-21 compared to $472,074 in Q4-20:
- 37 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
● Professional fees decreased to $98,282 ($178,796 in Q4-20). Legal fees decreased considering
the negotiations of several partnership agreements that occurred in Q4-20. Also, a mandate
was given to an external firm to develop rules and procedures in health and safety in Q4-20.
Interest income decreased to $15,090 ($55,153 in Q4-20). The weighted average interest rate earned
on the investments is half of that earned in Fiscal 20. In addition, considering the magnitude of the
executed exploration programs, the investments balance decreased from $9,716,000 on September
30, 2020 to $5,940,390 on September 30, 2021.
The Corporation recorded change in fair value – listed shares unfavorable of $15,059 (favorable of
$56,061 in Q4-20).
• An unfavorable change in fair value of $26,000 was recorded on the Niobay shares (favorable
of $50,000 in Q4-20);
• A favorable change in fair value of $10,941 was recorded on the share of Probe ($6,061 in
Q4- 20).
Those shares were received as part of option agreement on properties.
No recovery of deferred income taxes (non-cash item) was recognized to record the amortization
($49,623 in Q4-20), in proportion of the work completed, of the premium related to flow-through shares
following the November 2020 private placement (December 2019 in Fiscal 20). All exploration work
imposed by the November 2020 flow-through financing was completed before June 30, 2021. The
exploration work imposed by the December 2019 flow-through financings was completed in Q4-20.
The Corporation incurred $1,909,477 ($1,739,588 in Q4-20) in exploration expenses of which
$411,727 ($287,761 in Q4-20) was recharged to the partners. The exploration expenses incurred in
Q4-21 were incurred mainly on the BHP Alliance, Casault, Gauder and La Peltrie whereas in Q4-20
they were mostly executed on Samson, Mythril and as part of the BHP Alliance.
The Corporation acquired or maintained properties for $59,263 net ($26,915 net in Q4-20)
9. RELATED PARTY TRANSACTIONS
The following are the related party transactions that occurred in Fiscal 21, in the normal course of
operations:
● A firm in which René Branchaud (director and corporate secretary) is a partner charged legal
fees amounting to $88,839 ($146,834 in Fiscal 20) of which $77,439 ($121,446 in Fiscal 20)
was expensed and $11,400 ($25,388 in Fiscal 20) was recorded as share issue expenses;
● A company controlled by Ingrid Martin (chief financial officer) charged accounting fees totaling
$140,857 ($126,292 in Fiscal 20) of which $49,619 ($41,879 in Fiscal 20) relates to her staff.
See also section 4.6;
● As at September 30, 2021, the balance due to the related parties amounted to $12,772 ($9,448
as at September 30, 2020).
10. EVENTS SUBSEQUENT TO YEAR END
See section 2.5 on the option agreement signed with RTEC.
- 38 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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 exercised its the option to renew the
lease for an additional 3 year period under the same conditions. This lease is now capitalized as per
IFRS 16.
14. CRITICAL ACCOUNTING ESTIMATES
See note 4 of the Financial Statements.
15. NEW ACCOUNTING STANDARDS
See note 3 of the Financial Statements.
16. FINANCIAL INSTRUMENTS
See notes 2.6 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.
- 39 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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.
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.
- 40 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
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.
17.10 Option, Joint Venture and Strategic Alliance Agreements
The Corporation has and may continue to enter into option, joint ventures and strategic alliance
agreements as part of its business model. Any failure of any partner to meet its obligations or any
disputes with respect to each partners' respective rights and obligations, could have a negative impact
on the Corporation. The Corporation may be unable to exert direct influence over strategic decisions
made in respect of properties that are subject to the terms of these agreements, and the result may
be a materially adverse impact on the value of these properties.
17.11 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.
- 41 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
17.12 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.
17.13 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.
17.14 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.
17.15 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.
17.16 Cyber Security
The Corporation's operations depend upon information technology systems which may be subject to
disruption, damage, or failure from different sources, including, without limitation, installation of
malicious software, computer viruses, security breaches, cyber-attacks, and defects in design. Threats
to information technology systems associated with cyber security risks and cyber incidents or attacks
continue to grow, particularly as a result of remote work during the COVID-19 pandemic. The level of
sophistication of such attacks has also increased. It is possible that the business, financial and other
systems of the Corporation could be compromised, which could go unnoticed for some time. Risks
associated with these threats include, among other things, loss of intellectual property, disruption of
business operations and safety procedures, privacy and confidentiality breaches, and increased costs
to prevent, respond to or mitigate cyber security incidents. The significance of any cyber security
breach is difficult to quantify but may in certain circumstances be material and could have a material
adverse effect on the Corporation’s business, financial condition and results of operations.
- 42 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2021
18. FORWARD-LOOKING INFORMATION
Some statements contained in this MD&A, especially 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 2, 2021
(s) Gino Roger
Gino Roger
President and CEO
(s) Ingrid Martin
Ingrid Martin
CFO
- 43 -
Independent auditor’s report
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 (together, the Company) as at
September 30, 2021 and 2020, 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 Company’s consolidated financial statements comprise:
the consolidated statements of financial position as at September 30, 2021 and 2020;
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 the consolidated financial statements, which include significant accounting policies and
other explanatory information.
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 Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l.
1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1
T: +1 514 205 5000, F: +1 514 876 1502
“PwC” refers to PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., an Ontario limited liability partnership.
- 44 -
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis, which we obtained prior to the date of this auditor’s report and the information,
other than the consolidated financial statements and our auditor’s report thereon, included in the annual
report, which is expected to be made available to us after that date.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard. When we read the information, other
than the consolidated financial statements and our auditor’s report thereon, included in the annual report,
if we conclude that there is a material misstatement therein, we are required to communicate the matter to
those charged with governance.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
- 45 -
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
- 46-
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
The engagement partner on the audit resulting in this independent auditor’s report is Maxime Guilbault.
/s/PricewaterhouseCoopers LLP1
Montréal, Quebec
December 2, 2021
1 CPA auditor, CA, public accountancy permit No. A128042
- 47-
Midland Exploration Inc.
Consolidated Statements of Financial Position
As at September 30, 2021 and 2020
(in Canadian dollars)
Assets
Current assets
Cash
Investments (note 5)
Accounts receivable
Sales tax receivable
Tax credits and mining rights receivable
Prepaid expenses
Total current assets
Non-current assets
Listed shares
Right-of-use assets (note 6)
Exploration and evaluation assets (note 7)
Exploration properties
Exploration and evaluation expenses
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Advance received for exploration work
Lease liabilities – current portion (note 8)
Total current liabilities
Non-current liabilities
Lease liabilities (note 8)
Total liabilities
Equity
Capital stock
Warrants (note 9)
Contributed surplus
Deficit
Total equity
As at September 30
2020
2021
$
$
1,490,860
5,940,390
50,128
135,380
1,320,091
60,182
8,997,031
1,306,848
9,716,000
176,967
198,353
812,437
41,763
12,252,368
170,578
99,638
210,061
129,530
3,182,934
27,465,015
30,647,949
30,918,165
2,756,553
23,545,289
26,301,842
26,641,433
39,915,196
38,893,801
1,253,266
209,993
28,341
1,491,600
915,318
337,574
25,601
1,278,493
82,409
110,549
1,574,009
1,389,042
51,177,074
-
6,231,927
(19,067,814)
38,341,187
49,399,289
749,556
5,267,584
(17,911,670)
37,504,759
Total liabilities and equity
39,915,196
38,893,801
Subsequent events (note16)
The accompanying notes are an integral part of these consolidated financial statements.
On behalf of the Board of Directors
(s) Jean-Pierre Janson
Jean-Pierre Janson
Director
(s) Gino Roger
Gino Roger
President, Director
- 48 -
Midland Exploration Inc.
Consolidated Statements of Comprehensive Loss
For the years ended September 30, 2021 and 2020
(in Canadian dollars)
Revenues
Project management fees
Operating Expenses
Salaries
Stock-based compensation
Office expenses
Regulatory fees
Conferences and investors relations
Professional fees
Depreciation (note 6)
General exploration
Impairment of exploration and evaluation assets (note 7)
Operating expenses
Other gains (losses)
Interest income
Change in fair value - listed shares
Financing fees
Fiscal 21
$
Fiscal 20
$
202,218
23,754
734,745
174,639
196,018
50,145
131,190
408,506
29,892
-
201,717
1,926,852
798,892
168,868
234,219
45,470
318,054
340,509
29,892
8,033
194,603
2,138,540
98,837
7,765
(8,942)
97,660
253,080
90,061
(10,235)
332,906
Loss before income taxes
(1,626,974)
(1,781,880)
Recovery of deferred income taxes (note 12)
603,174
435,903
Loss and comprehensive loss
(1,023,800)
(1,345,977)
Basic and diluted loss per share (note 11)
(0.01)
(0.02)
The loss and comprehensive loss are solely attributable to Midland Exploration Inc. shareholders.
The accompanying notes are an integral part of these consolidated financial statements.
- 49 -
Midland Exploration Inc.
Consolidated Statements of Changes in Equity
For the years ended September 30, 2021 and 2020
(in Canadian dollars)
Number of
shares
outstanding
Balance at October 1, 2019
Loss and comprehensive loss
68,878,222
-
Capital
stock
$
48,230,237
-
Warrants
$
749,556
-
Contribut
ed
surplus
$
5,033,761
-
Deficit
$
(16,454,353)
(1,345,977)
Private placement
73,791
62,722
Flow-through private
placement
Less: premium
1,402,030
-
1,402,030
1,542,233
(435,903)
1,106,330
-
-
-
-
-
-
-
-
-
-
-
-
Total
equity
$
37,559,201
(1,345,977)
62,722
1,542,233
(435,903)
1,106,330
Stock-based compensation
Share issue expenses
-
-
-
-
-
-
233,823
-
-
(111,340)
233,823
(111,340)
Balance at Sept. 30, 2020
70,354,043
49,399,289
749,556
5,267,584
(17,911,670)
37,504,759
Number of
shares
outstanding
Balance at October 1, 2020
Loss and comprehensive loss
70,354,043
-
Capital
stock
$
49,399,289
-
Warrants
$
749,556
-
Contribut
ed
surplus
$
5,267,584
-
Deficit
$
(17,911,670)
(1,023,800)
Private placement
96,209
96,209
Flow-through private
placement
Less: premium
1,827,800
-
1,827,800
2,284,750
(603,174)
1,681,576
-
-
-
-
-
-
-
-
-
-
-
-
Total
equity
$
37,504,759
(1,023,800)
96,209
2,284,750
(603,174)
1,681,576
Warrants expired
Stock-based compensation
Share issue expenses
Balance as at Sept. 30, 2021
-
-
-
-
-
-
(749,556)
-
-
749,556
214,787
-
-
-
(132,344)
-
214,787
(132,344)
72,278,052
51,177,074
-
6,231,927
(19,067,814)
38,341,187
The accompanying notes are an integral part of these consolidated financial statements.
- 50 -
Midland Exploration Inc.
Consolidated Statements of Cash Flows
For the years ended September 30, 2021 and 2020
(in Canadian dollars)
Cash flow relating to:
Operating activities
Loss
Adjustment for:
Stock-based compensation
Depreciation (note 6)
Impairment of exploration and evaluation assets (note 7)
Change in fair value - listed shares
Recovery of deferred income taxes
Changes in non-cash working capital items
Accounts receivable
Sales tax receivable
Prepaid expenses
Accounts payable and accrued liabilities
Advance received for exploration work
Financing activities
Principal repayment – lease liabilities (note 8)
Private placement
Flow-through private placement
Share issue expenses
Investing activities
Additions to investments
Investments’ maturity
Proceeds from disposal of listed shares
Additions to exploration properties
Disposal of exploration properties
Additions to exploration and evaluation expenses
Tax credits and mining rights received
Net change in cash and cash equivalents
Cash and cash equivalents – beginning
Cash and cash equivalents – ending
For additional disclosure see note 14.
Fiscal 21
$
Fiscal 20
$
(1,023,800)
(1,345,977)
174,639
29,892
201,717
(7,765)
(603,174)
(1,228,491)
126,839
62,973
(18,419)
(19,615)
(127,581)
24,197
(1,204,294)
(25,400)
96,209
2,284,750
(132,344)
2,223,215
(5,940,390)
9,716,000
102,248
(638,049)
110,000
(4,997,155)
812,437
(834,909)
184,012
1,306,848
1,490,860
168,868
29,892
194,603
(90,061)
(435,903)
(1,478,578)
19,803
215,451
40,820
(363,178)
327,184
240,080
(1,238,498)
(23,272)
62,722
1,542,233
(111,340)
1,470,343
(9,716,000)
12,491,000
-
(481,485)
114,328
(3,222,736)
1,540,507
725,614
957,459
349,389
1,306,848
The accompanying notes are an integral part of these consolidated financial statements.
- 51 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
1. STATUTE OF INCORPORATION AND NATURE OF ACTIVITIES
Midland Exploration Inc. (“the Corporation”), incorporated in Canada on October 2, 1995 and operating
under the Business Corporations Act (Québec), is a company in the mining exploration business. The
Corporation’s operations include the acquisition and exploration of mining properties. Its head office is
located at 1, Place Ville Marie, suite 4000, Montreal, Quebec, H3B 4M4. The Corporation’s shares are
listed on the TSX Venture Exchange (the “Exchange”) under the MD ticker.
Until it is determined that properties contain mineral reserves or resources that can be economically
mined, they are classified as exploration properties. The recoverability of exploration and evaluation
assets is dependent upon: the discovery of economically recoverable reserves and resources; securing
and maintaining title and beneficial interest in the properties; the ability to obtain the necessary financing
to complete exploration and the profitable sale of the assets. The Corporation will periodically have to
raise additional funds to continue operations, and while it has been successful in doing so in the past,
there can be no assurance it will be able to do so in the future.
Although the Corporation has taken steps to verify title to mineral properties in which it has an interest,
in accordance with industry standards for the current stage of exploration of such properties, these
procedures do not guarantee the Corporation's title. Property title may be subject to unregistered prior
agreements and non-compliance with regulatory requirements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of presentation
The accompanying consolidated financial statements (“Financial Statements”) have been prepared in
accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”). The accounting policies, method of computation and presentation
applied to these financial statements are consistent with those of the previous financial year with the
exception of the reclassification of certain expenses as described in note 15. These financial statements
were approved and authorized for issue by the Board of Directors on December 2, 2021.
2.2 Basis of measurement
The Financial Statements have been prepared on a historical cost basis except for certain assets at fair
value.
2.3 Consolidation
The Financial Statements include the accounts of the Corporation and those of its wholly-owned
subsidiary, Midland Base Metals Inc. ("MBM"). The Corporation controls an entity when the Corporation
is exposed to or has rights to variable returns from its involvement with the entity and has the ability to
affect those returns, through its power over the entity. MBM is fully consolidated from the date on which
control is obtained by the Corporation and is deconsolidated from the date that control ceases. All
intercompany accounts and transactions are eliminated.
The subsidiary’s financial statements are prepared for the same financial information presentation period
as the Corporation and as per the same accounting policies.
- 52 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
2.4 Functional and presentation currency
The financial statements are presented in Canadian dollars, which is the Corporation and its subsidiary's
functional currency.
2.5 Jointly controlled assets and exploration activities
A jointly controlled asset involves joint control and offers joint ownership by the Corporation and other
venturers of assets contributed to or acquired for the purpose of the joint controlled operations, without
the formation of a corporation, partnership or other entity.
Where the Corporation’s activities are conducted through jointly controlled assets and exploration
activities, the financial statements include the Corporation’s share in the assets and the liabilities from
the joint operations as well as when applicable, the Corporation’s share in the income and the expenses.
2.6 Financial instruments
Financial assets and financial liabilities are recognized when the Corporation becomes a party to the
contractual provisions of the financial instrument.
a) Financial assets
Financial assets are derecognized when the contractual rights to receive the cash flows from the financial
asset have expired, or when the financial asset and all substantial risks and rewards have been
transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it
expires.
Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted
for at fair value through profit or loss, then the initial measurement includes transaction costs that are
directly attributable to the asset’s acquisition or origination. On initial recognition, the Corporation
classifies its financial instruments in the following categories depending on the purpose for which the
instruments were acquired.
Fair value through profit and loss listed shares:
Listed shares at fair value through profit and loss are equity investments recognized initially at fair value
and subsequently measured at fair value. Gains or losses arising from changes in fair value are recorded
in the consolidated statement of loss and comprehensive loss. Dividend income on those investments
are recognized in the consolidated statement of loss and comprehensive loss.
Amortized cost:
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable
payments constituted solely of payments of principal and interest that are held within a “held to collect”
business model. Financial assets at amortized cost are initially recognized at the amount expected to be
received, less, when material, a discount to reduce the financial assets to fair value. Subsequently,
financial assets at amortized cost are measured using the effective interest method less a provision for
expected losses. The Corporation’s cash and cash equivalents, investments and accounts receivable
are classified within this category.
b) Financial liabilities
Financial liabilities measured at amortized cost
Accounts payable, accrued liabilities and advances received for exploration work are initially measured
at the amount required to be paid, less, when material, a discount to reduce the payables to fair value.
Subsequently, financial liabilities are measured at amortized cost using the effective interest method.
- 53 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
c) Impairment of financial assets
Amortized cost:
The expected loss is the difference between the amortized cost of the financial asset and the present
value of the expected future cash flows, discounted using the instrument’s original effective interest rate.
The carrying amount of the asset is reduced by this amount either directly or indirectly through the use
of an allowance account. Provisions for expected losses are adjusted upwards or downwards in
subsequent periods if the amount of the expected loss increases or decreases. For trade receivables,
the Corporation applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognized from initial recognition of the receivables.
2.7 Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, bank balances and short-term liquid investments
with original maturities of three months or less or cashable at any time without penalties.
2.8 Tax credits and mining rights receivable
The Corporation is entitled to a refundable tax credit on qualified exploration expenditures incurred and
a refundable credit on duties for losses under the Mining Tax Act. These tax credits are recognized as a
reduction of the exploration and evaluation expenses incurred. As management intends to realize the
carrying value of its assets and settle the carrying value of its liabilities through the sale of its exploration
and evaluation assets, the related deferred tax has been calculated accordingly.
2.9 Exploration and evaluation assets
Exploration and evaluation (“E&E”) assets are comprised of acquisition costs of mining rights for each
exploration properties and E&E expenses. All costs incurred prior to obtaining the mining rights to
undertake E&E activities on an area of interest are expensed as incurred.
E&E assets include mining rights in exploration properties, paid or acquired through a business
combination or an acquisition of assets, and costs related to the initial search for mineral deposits with
economic potential or to obtain more information about existing mineral deposits. Individual mining rights
are regrouped in area of interest and are disclosed as an exploration property.
Mining rights are recorded at acquisition cost less accumulated impairment losses for each area of
interest.
E&E expenses for each separate area of interest are capitalized (net from E&E expenses recovered
from partners) and include costs associated with prospecting, sampling, trenching, drilling and other
work involved in searching for ore like topographical, geological, geochemical and geophysical studies.
They also reflect costs related to establishing the technical and commercial viability of extracting a
mineral resource identified through exploration or acquired through a business combination or asset
acquisition.
E&E expenses include the cost of:
● establishing the volume and grade of deposits through drilling of core samples, trenching and
sampling activities in an ore body;
● determining the optimal methods of extraction and metallurgical and treatment processes;
● studies related to surveying, transportation and infrastructure requirements;
● permitting activities; and
● economic evaluations to determine whether development of the mineralized material is
commercially justified, including scoping, prefeasibility and final feasibility studies.
E&E expenses include overhead expenses directly attributable to the related activities.
Cash flows attributable to costs capitalized to E&E assets are classified as investing activities in the
consolidated statement of cash flows.
- 54 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
From time to time, the Corporation may acquire or dispose of a property pursuant to the terms of an
option agreement. Due to the fact that options are exercisable entirely at the discretion of the option
holder, the amounts payable or receivable are not recorded.
Option payments are recorded when they are made or received. Proceeds on the sale of exploration
properties are applied in reduction of the acquisition costs of the related mining rights, then in reduction
of the E&E expenses for the related area of interest and any residual is recorded in the consolidated
statement of comprehensive loss unless there is contractual work required by the Corporation in which
case the residual gain is deferred and will be applied against the contractual disbursements when done.
Funds received from partners on certain properties where the Corporation is the operator in order to
perform exploration work as per agreements, are accounted for in the consolidated statement of financial
position as advances received for upcoming exploration work. These advances are reduced gradually
when the exploration work is performed. The project management fees received when the Corporation
is the operator are recorded in the consolidated statement of comprehensive loss when the E&E
expenses are charged back to the partner. When the partner is the operator, the management fees are
recorded in the consolidated statement of financial position as E&E expenses. Costs related to E&E
assets are transferred to Property, plant and equipment when they reach the development phase and
will be subject to depreciation when these properties are put into commercial production.
2.10 Lease agreements
At the commencement date of a lease, a liability is recognized 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) is also recognized. The interest expense on the lease liability is recognized separately
from the depreciation expense on the right-of-use asset.
The lease liability is remeasured 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). This remeasurement is generally recognized as an adjustment to the right-of-use asset.
Leases of “low-value” assets and short-term leases (12 months or less) will continue to be recorded as
operating lease.
2.11 Impairment of non-financial assets
The carrying amounts of mining rights and E&E expenses are assessed for impairment, by area of
interest, only when indicators of impairment exist, typically when one of the following circumstances
apply: exploration rights have expired or will expire in the near future; no future substantive exploration
expenditures are budgeted or planned; no commercially viable quantities or minerals have been
discovered and exploration and evaluation activities will be discontinued; exploration and evaluation
assets are unlikely to be fully recovered from successful development or by sale; or a significant drop in
metal prices. If any such indication exists, then the asset’s recoverable amount is estimated. When
some mining rights within an area of interest are abandoned during the period, the acquisition costs of
those mining rights are impaired on a pro rata basis.
Mining rights and E&E expenses are systematically assessed for impairment upon the transfer of
exploration and evaluation assets to development assets.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be
tested individually are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or groups of assets
(the “cash-generating unit” or “CGU”). The level identified by the Company for the purposes of testing
exploration and evaluation assets and mining properties for impairment corresponds to each property.
- 55 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized
in respect of CGUs are allocated to the assets in the unit (“group of units”) on a pro rata basis.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortization, if no impairment loss had been recognized.
The carrying amounts of exploration and evaluation assets and property and equipment are reviewed at
each reporting date to determine whether there is any indication of impairment.
2.12 Income taxes
Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income
tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity,
in which case it is recognized in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to
previous years. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Temporary differences are not provided for if they arise from the initial recognition of goodwill or the initial
recognition of an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss. The amount of deferred tax provided
is based on the expected manner of realization or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the financial position reporting date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilized.
Deferred income tax assets and liabilities are presented as noncurrent and are offset when there is a
legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
2.13 Equity
Capital stock represents the amount received on the issue of shares. Warrants represent the allocation
of the amount received for units issued as well as the charge recorded for the broker warrants relating
to financing. Contributed surplus includes charges related to stock options until they are exercised and
the warrants that are expired and not exercised. Deficit includes all current and prior period retained
profits or losses and share issue expenses.
Proceeds from unit placements are allocated between shares and warrants issued on a pro-rata basis
of their value within the unit using the Black-Scholes pricing model.
- 56 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
2.14 Flow-through shares
The Corporation finances some E&E expenses through the issuance of flow-through shares. The
resource expenditure deductions for income tax purposes are renounced to investors in accordance with
the appropriate income tax legislation. The difference between the amount recorded as common shares
and the amount paid by the investors for the shares (the “premium”), measured with the residual value
method, is accounted for as a flow-through share premium, which is reversed to income as recovery of
deferred income taxes when the eligible expenses are incurred. The Corporation recognizes a deferred
tax liability for flow-through shares and a deferred tax expense, at the moment the eligible expenditures
are incurred.
2.15 Share and warrant issue expenses
Share and warrant issue expenses are accounted for in the year in which they are incurred and are
recorded as a deduction to equity in the deficit in the year in which the shares are issued.
2.16 Stock-based compensation
The Corporation operates an equity-settled share-based remuneration plan (share options plan) for its
eligible directors, officers, employees and consultants. The Corporation's plan does not feature any
options for a cash settlement.
An individual is classified as an employee when the individual is an employee for legal or tax purposes
(direct employee) or provides services similar to those performed by a direct employee, including
directors of the Corporation. The expense is recorded over the vesting period for employees and over
the period covered by the contract for non-employees.
All goods and services received in exchange for the grant of any share-based payment are measured at
their fair values, unless that fair value cannot be estimated reliably. If the Corporation cannot estimate
reliably the fair value of the goods or service received, the Corporation shall measure their value
indirectly by reference to the fair value of the equity instruments granted. Where employees are rewarded
using share-based payments, the fair values of employees' services are determined indirectly by
reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date
using the Black & Scholes option pricing model and excludes the impact of non-market vesting
conditions.
All equity-settled share-based payments (except warrants to brokers) are ultimately recognized as an
expense in the consolidated statement of comprehensive loss or capitalized as E&E expenses on the
consolidated statement of financial position, depending on the nature of the payment with a
corresponding credit to contributed surplus, in equity. Warrants to brokers, in respect of an equity
financing are recognized as share issue expense reducing the equity in the deficit with a corresponding
credit to warrants.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Non-market
vesting conditions are included in assumptions about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is any indication that the number of share
options expected to vest differs from previous estimates.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs
are recorded as capital stock. The accumulated charges related to the share options recorded in
contributed surplus are then also transferred to capital stock.
- 57 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
2.17 Loss per share
Loss per share is calculated using the weighted average number of shares outstanding during the year.
Diluted loss per share is calculated using the weighted average number of shares outstanding during
the year for the calculation of the dilutive effect of warrants and stock options unless they have an anti-
dilutive effect.
2.18 Revenue recognition
The project management fees received when the Corporation is the operator are recorded in the
consolidated statement of comprehensive loss when the exploration work recharged to the partners are
incurred.
2.19 Segment disclosures
The Corporation currently operates in a single segment – the acquisition, exploration and evaluation of
exploration properties. All of the Corporation’s activities are conducted in Canada.
3. NEW ACCOUNTING STANDARDS
The most relevant standards, amendments and interpretations issued up to the date of the issuance of
these financial statements are listed below.
Amendments to IAS 1 Presentation of Financial Statements
The IASB has made amendments to IAS 1 Presentation of Financial Statements that use a consistent
definition of materiality throughout IFRS and the Conceptual Framework for Financial Reporting, to clarify
when information is material and incorporate some of the guidance in IAS 1 about immaterial information.
In particular, the amendments clarify that information is material if omitting, misstating, or obscuring it
could reasonably be expected to influence decisions that the primary users of general-purpose financial
statements make based on those financial statements, which provide financial information about a
specific reporting entity. Materiality depends on the nature or magnitude of information, or both. An entity
assesses whether information, either individually or in combination with other information, is material in
the context of its financial statements taken as a whole. The Corporation adopted IAS 1 on October 1,
2020, which did not have a significant impact on the consolidated financial statements disclosures.
4. CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS AND ASSUMPTIONS
When preparing the financial statements, management undertakes a number of judgments, estimates
and assumptions about recognition and measurement of assets, liabilities, income and expenses. The
actual results could differ from the judgments, estimates and assumptions made by management, and
will seldom equal the estimated results. Information about the significant judgments that have the most
significant effect on the recognition and measurement of assets, liabilities, income and expenses are
discussed below.
JUDGMENTS
4.1 Impairment of E&E assets
Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment
losses is a subjective process involving judgment and a number of estimates and interpretations in many
cases.
- 58 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
Determining whether to test for impairment of E&E assets requires management’s judgment, among
others, regarding the following: the period for which the entity has the right to explore in the specific area
has expired during the period or will expire in the near future, and is not expected to be renewed;
substantive expenditure on further E&E of mineral resources in a specific area is neither budgeted nor
planned; exploration for and evaluation of mineral resources in a specific area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided to
discontinue such activities in the specific area; or sufficient data exists to indicate that, although a
development in a specific area is likely to proceed, the carrying amount of the E&E asset is unlikely to
be recovered in full from successful development or by sale.
When an indication of impairment loss or a reversal of an impairment loss exists, the recoverable amount
of the individual asset must be estimated. If it is not possible to estimate the recoverable amount of the
individual asset, the recoverable amount of the cash-generating unit to which the asset belongs must be
determined. Identifying the cash-generating units requires considerable management judgment. In
testing an individual asset or cash-generating unit for impairment and identifying a reversal of impairment
losses, management estimates the recoverable amount of the asset or the cash-generating unit. This
requires management to make several assumptions as to future events or circumstances. These
assumptions and estimates are subject to change if new information becomes available. Actual results
with respect to impairment losses or reversals of impairment losses could differ in such a situation and
significant adjustments to the Corporation’s assets and earnings may occur during the next period.
The total impairment loss of the E&E assets recognized is $201,717 for the year ended September 30,
2021 (“Fiscal 21”) ($194,603 for the year ended September 30, 2020 (“Fiscal 20”)). No reversal of
impairment losses has been recognized for the reporting periods.
4.2 Deferred taxes
The assessment of availability of future taxable profits involves judgment. A deferred tax asset is
recognized to the extent that it is probable that taxable profits will be available against which deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized.
Judgment is also involved in the determination of the expected manner of realisation or settlement of the
carrying amount of the Corporation's assets and liabilities which is expected to be through the sale of
the Corporation's assets.
4.3 Valuation of credit on duties refundable for loss and the refundable tax credit for resources.
Refundable credit on mining duties and refundable tax credit related to resources for the current and
prior periods are measured at the amount expected to be recovered from the taxation authorities using
the tax rates and tax laws that have been enacted or substantively enacted at the consolidated statement
of financial position date.
The calculation of the Corporation’s credit on mining duties and tax credit related to resources
necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment
cannot be finally determined until notice of assessments and payments have been received from the
relevant taxation authority.
Differences arising between the actual results following final resolution of some of these items and the
assumptions made, or future changes to such assumptions, could necessitate adjustments to credit on
mining duties and tax credit related to resources, exploration and evaluation assets and expenses, and
income tax expense in future periods. The amounts recognized in the financial statements are derived
from the Corporation’s best estimation and judgment as described above. However, the inherent
uncertainty regarding the outcome of these items means that eventual resolution could differ from the
accounting estimates and therefore impact the Corporation’s financial position and its financial
performance and cash flows.
- 59 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
4.4 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.
In keeping with the health and safety guidelines, the Corporation, 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.
The impact of current uncertainty on judgments, estimates and assumptions extends, but is not limited
to, the Company's valuation of its non-current assets, including the assessment for impairment and
impairment reversal. Actual results may differ materially from these estimates.
5.
INVESTMENTS
As at September 30, 2020, investments are composed of guaranteed investment certificates, not
cashable before the expiry date, earning between 0.9% and 2.3% interest payable annually, maturing
between October 20, 2020 and September 29, 2021. The investments’ maturity value is $9,880,989.
As at September 30, 2021, investments are composed of guaranteed investment certificates, not
cashable before the expiry date, earning between 0.75% and 1.00% interest payable annually, maturing
between October 21, 2021 and March 31, 2022. The investments’ maturity value is $5,989,968.
6. RIGHT-OF-USE ASSETS
Cost
As at October 1, 2019 and as at September 30, 2021
Accumulated depreciation
As at October 1, 2019
Depreciation for the year
As at September 30, 2020
Depreciation for the year
As at September 30, 2021
Net book value
As at September 30, 2020
As at September 30, 2021
- 60 -
Buildings
$
159,422
-
29,892
29,892
29,892
59,784
129,530
99,638
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
7. EXPLORATION AND EVALUATION ASSETS
The following table disclose the acquisition costs of exploration properties by region:
Acquisition costs
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
Acquisition costs
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
As at
Sept. 30,
2020
$
930,677
67,597
1,251,348
502,171
4,760
2,756,553
As at
Sept. 30,
2019
$
875,404
45,889
1,190,487
444,783
4,649
2,561,212
Net
Additions
$
Option
payments
$
196,977
155,238
232,292
35,641
3,315
623,463
(55,810)
-
-
-
-
(55,810)
Impairment
$
(58,416)
(31,588)
(33,905)
(17,363)
-
(141,272)
Net
Additions
$
Option
payments
$
183,395
21,708
211,551
63,448
111
480,213
(105,840)
-
-
-
-
(105,840)
Impairment
$
(22,282)
-
(150,690)
(6,060)
-
(179,032)
As at
Sept. 30,
2021
$
1,013,428
191,247
1,449,735
520,449
8,075
3,182,934
As at
Sept. 30,
2020
$
930,677
67,597
1,251,348
502,171
4,760
2,756,553
In Fiscal 21, the Corporation impaired partially the following properties for some claims that were dropped
for $120 971 (BJ Gold for $6,960, Komo for $9,369, Laflamme for $12,865, Lewis for $1,505, Mistaouac
for $5,673, Pallas for $8,099, Turgeon for $35,256, Weedon for $31,588 and Wookie for $9,656) and
wrote off the properties (or some projects included in these properties) for $20,301 (Coigny for $3,117,
Minas Tirith for $3,530, a project included in Mythril for $4,390 and Nachicapau for $9,264) since no
exploration program was planned for the near future and/or all claims were dropped. In Fiscal 20, the
Corporation impaired partially the properties for the claims that were dropped for $178,249 (Laflamme
for $15,978, Mythril for $150,690 and Pallas for $6,060 $ and Samson for $5,521) and wrote off the
properties (or some projects included in these properties) for $783 (Abitibi Gold) since no exploration
program was planned for the near future and/or all claims were dropped.
The following table disclose details of exploration and evaluation expenses by region:
Exploration
and evaluation
expenses
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
As at
Sept. 30,
2020
$
10,067,943
836,108
8,673,408
3,930,512
37,318
23,545,289
Net
Additions
$
3,155,418
426,012
1,390,461
437,561
-
5,409,452
Option
payments
$
Tax
credits
$
(654,712)
(4,531)
(543,553)
(117,295)
-
(109,190) (1,320,091)
(109,190)
-
-
-
-
- 61 -
As at
Sept. 30,
2021
$
Impairment
$
(1,066) 12,458,393
1,257,589
9,476,715
4,235,000
37,318
(60,445) 27,465,015
-
(43,601)
(15,778)
-
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
Exploration
and evaluation
expenses
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
As at
Sept. 30,
2019
$
8,639,183
719,988
7,765,158
3,763,005
23,232
20,910,566
Net
Additions
$
1,978,308
124,185
1,185,613
214,571
18,542
3,521,219
Option
payments
$
(58,488)
-
-
-
-
(58,488)
Tax
credits
$
(475,489)
(8,065)
(277,363)
(47,064)
(4,456)
(812,437)
Impairment
$
As at
Sept. 30,
2020
$
(15,571) 10,067,943
836,108
8,673,408
3,930,512
37,318
(15,571) 23,545,289
-
-
-
-
In Fiscal 21, the Corporation wrote off the properties (or some projects included in these properties) for
$60,445 (Coigny for $1,066, Minas Tirith for $41,895, a project included in Mythril for $1,706 and
Nachicapau for $15,778) since no exploration program was planned for the near future and/or all claims
were dropped.
In Fiscal 20, the Corporation wrote off the properties (or some projects included in these properties) for
$15,571 (Abitibi Gold) since no exploration program was planned for the near future and/or all claims
were dropped.
ABITIBI
7.1 Casault
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
the following:
Upon signature – completed
On or before June 30, 2021 - completed
On or before June 30, 2022
On or before June 30, 2023
On or before June 30, 2024
Total
Cash
payments
$
100,000
110,000
110,000
130,000
150,000
600,000
Exploration
work
$
-
750,000
1,000,000
1,250,000
2,000,000
5,000,000
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. Wallbridge is the operator.
The Casault property is subject to a 1% net smelter return (“NSR”) royalty; the Corporation 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 (see note 7.10) .
7.2 Gaudet
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.
- 62 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
On July 29, 2020, the Corporation signed a joint venture agreement with Probe Metals Inc. (“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.
7.3 Heva
The Corporation owns the Heva property and some claims are subject to a 2% NSR royalty to the original
holders, half of the royalty can be bought back for a payment of $1,000,000.
7.4 Jouvex
The Casault property is subject to a 1% net smelter return (“NSR”) royalty; the Corporation 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 (see note 7.10).
On April 7, 2021, the Corporation signed the acquisition from SOQUEM of two blocs of claims contiguous
to the Jouvex property by paying $60,000 and by issuing a 1% NSR royalty; the Corporation 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%
royalty.
7.5 La Peltrie
The Corporation owns the La Peltrie property and some claims are subject to a 1% Gross Metal royalty.
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 - completed 1)
On or before July 31, 2021 completed 2)
On or before July 31, 2022
On or before July 31, 2023
On or before July 31, 2024
Total
Payments
$
50,000
55,000
70,000
100,000
125,000
400,000
Exploration
work
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
1)
2)
In July 2020, the Corporation received 37,879 shares of Probe based on a 5 days VWAP calculation to total $50,000.
In July 2021, the Corporation received 32,544 shares of Probe based on a 5 days VWAP calculation to total $55,000.
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. Probe is the operator.
7.6 Lac Esther
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.
- 63 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
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.
7.7 Laflamme Au-Cu
The Corporation holds 77.9% of the Laflamme property.
7.8 Maritime-Cadillac
The Corporation holds 49% of the Maritime-Cadillac property. The property is subject to a 2% 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 is shared 51% Agnico Eagle
- 49% the Corporation.
7.9 Patris
The Corporation holds the Patris property and some claims are subject to the following NSR royalties
varying from 1% to 2% that can be bought back in tranches for an aggregate of $7,000,000.
GRENVILLE
7.10 Gatineau
On February 20, 2020, the Corporation signed an agreement 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; the Corporation 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.
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.
7.11 Tête Nord
The Corporation assembled the Tête Nord property through map staking and acquisition.
On November 13, 2020, the Corporation signed an agreement with Les Ressources Tectonic inc.
whereby it acquired the Tête Nord property for a $100,000 cash payment ($30,000 upon signature
(completed), $35,000 on the first anniversary and $35,000 on the second anniversary) and a 2% net
smelter return (“NSR”) royalty that can be bought back for a cash payment of $1,500,000 for each 1%
for a total amount of $3,000,000.
- 64 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
In March 2021, the Corporation signed four agreements with different prospectors whereby it acquired
blocs of claim for cash payments totalling $41,050. The Corporation issued three 2% NSR royalties to
the prospectors. The Corporation may, at any time, buy back each royalty, in all or in part, by making a
cash payment of $2,000,000 per royalty, $1,000,000 per tranche of 1% royalty. For the fourth agreement,
the Corporation agreed to make a $25,000 payment if a resources estimate is completed on the bloc
acquired or on the 40 contiguous claims owned by the Corporation.
7.12 Weedon
The Corporation holds the Weedon property and some claims are subject to NSR royalties varying from
0.5% to 1.5% that can be bought back in tranches for an aggregate of $3,000,000.
JAMES BAY
7.13 JV Eleonore (Au)
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 Goldcorp’s Eleonore deposit. Osisko
is the operator. Each partner obtained a 0.5% NSR royalty as a mutual consideration for the constitution
of the joint-venture.
NORTHERN QUEBEC
7.14 BHP Alliance
On August 20, 2020, the Corporation signed an agreement with and 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.
- 65 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
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.
7.15 Labrador Trough - alliance
On February 18, 2021, the Corporation signed a strategic alliance with SOQUEM to jointly explore the
Labrador Trough, for an amount of up to $5,000,000 over 4 years. A joint annual budget of $1,000,000
over a period of 4 years (firm commitment totalling $2,000,000 for the first 2 years), for a total of up to
$4,000,000, will be provided under the alliance for the targeting and field reconnaissance phase. The
Corporation will be the project operator in charge of exploration work during the targeting and field
reconnaissance phase. An additional, firmly committed, joint budget of $1,000,000 for the second year
is provided under the agreement to explore the designated projects. The joint budgets for exploration
work for the third and fourth years on the designated projects shall be approved by the project’s
management committee. SOQUEM will become project operator on all designated projects.
7.16 Soissons-NMEF property
On July 27, 2018, the Corporation signed a partnership agreement (50%-50%) with the Nunavik Mineral
Exploration fund (“NMEF”), to explore an area of the Soissons property. The NMEF is the operator of the
partnership.
7.17 Willbob
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.
- 66 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
8. LEASE LIABILITIES
Opening balance
Principal repayment
Lease liabilities
Less : current lease liabilities
Non-current lease liabilities
9. EQUITY
9.1 Capital stock authorized
As at
September 30
2021
$
136,150
(25,400)
110,750
(28,341)
82,409
As at
September 30
2020
$
159,422
(23,272)
136,150
(25,601)
110,549
Unlimited number of common shares without par value, voting and participating.
9.2 Private placements
a) December 2019
On December 4 and 13, 2019, the Corporation completed private placements of 1,402,030 flow-through
shares at $1.10 per share for total gross proceeds of $1,542,233. On those dates, the Corporation’s
share closed at $0.79 and $0.77 respectively on the Exchange, therefore the residual values attributed
to the benefit related to flow-through shares renunciation are $0.31 and $0.33 for a total value of
$435,903, credited to the liability related to the premium on flow-through shares which was subsequently
reduced to nil as the required expenditures were incurred before September 30, 2020.
In connection with the private placements, the Corporation incurred $111,340 share issue expense, 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 has exercised its right to maintain its ownership
to 5.0% by acquiring these 73,791 shares. This right had been granted to BHP on April 18, 2019 pursuant
to an Investor Rights Agreement with the Corporation.
All the exploration work imposed by the November 2020 flow-through financings was completed.
b) November 2020
On November 5, 2020, the Corporation completed a private placement of 1,827,800 flow-through shares
at $1.25 per share for total gross proceeds of $2,284,750. On that date, the Corporation’s share closed
at $0.92 on the Exchange, therefore the residual value attributed to the benefit related to flow-through
shares renunciation are $0.33 for a total value of $603,174 credited to the liability related to the premium
on flow-through shares.
In connection with the private placements, the Corporation incurred $132,344 share issue expenses of
which $100,065 was paid as 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.
- 67 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
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.
All the exploration work imposed by the November 2020 flow-through financings was completed.
9.3 Warrants
Changes in the Corporation’s number of outstanding warrants were as follows:
Balance – Beginning of period
Issued following private placement
Expired
Balance – End of period
9.4 Policies and processes for managing capital
Fiscal 21
Fiscal 20
Number
4,110,667
-
(4,110,667)
-
Amount
$
749,556
-
(749,556)
-
Number
4,110,667
-
-
4,110,667
Amount
$
749,556
-
-
749,556
The capital of the Corporation consists of the items included in equity of $38,341,187 as of
September 30, 2021 ($37,504,759 as of September 30, 2020). The Corporation’s objectives when
managing capital are to maximise shareholders value, maintain an optimal share capital structure to
reduce capital cost, safeguard its ability to continue its operations as well as its acquisition and
exploration programs. As needed, the Corporation raises funds in the capital markets. The Corporation
does not use long term debt since it does not generate operating revenues. There is no dividend policy.
The Corporation does not have any externally imposed capital requirements neither regulatory nor
contractual requirements to which it is subject unless:
• The Corporation closes a flow-through private placement in which case the funds are reserved
in use for exploration expenses (and the Corporation was in compliance during the year);
• The terms of the 2019 investment agreement with BHP are triggered. Thus, BHP will be granted
certain rights as long as BHP holds common shares equal to at least 5% of the issued and
outstanding common shares (on a partially diluted basis), including:
o
the right to participate in future equity financings by the Corporation to allow BHP to
maintain its then current pro rata non-diluted ownership interest in the Corporation or to
increase its ownership interest in the Corporation to a maximum of 19.99%, on a fully-
diluted basis;
o
o certain top-up rights to subscribe for additional common shares following certain dilutive
transactions to allow BHP to maintain its then current pro rata non-diluted ownership
interest in the Corporation;
the right of first offer for any non-equity financings, including any tolling arrangements,
streaming arrangements, forward agreements, off-take agreements or royalty sales
relating to any present or future copper exploration projects of the Corporation in
Quebec; and
the right of first offer on the Mythril project in the event the Corporation seeks to divest
all or part of its interest.
If BHP holds common shares equal to at least 15% of the issued and outstanding
common shares (on a non-diluted basis), BHP will also have the right to designate one
director for appointment to the Corporation board of directors.
o
o
- 68 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
10. EMPLOYEE REMUNERATION
10.1 Salaries
Salaries and bonuses
Director fees
Benefits
Less: salaries and benefits capitalized in E&E assets
Salaries disclosed on the consolidated statement of
comprehensive loss
10.2 Stock-based compensation
Stock-based compensation
Less: stock-based compensation capitalized in the E&E assets
Stock-based compensation disclosed on the consolidated
statement of comprehensive loss
Fiscal 21
$
1 278 374
124 278
94 624
1 497 276
(762 531)
734 745
Fiscal 20
$
1,362,278
113,625
113,030
1,588,933
(790,041)
798,892
Fiscal 21
$
214,787
(40,148)
Fiscal 20
$
233,823
(64,955)
174,639
168,868
The Corporation has a stock option plan (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.
On February 13, 2020, the Corporation granted to its directors, officers, employees and consultants
620,000 options exercisable at $0.72, valid for 10 years. Those options were granted at an exercise
price equal to the closing market value of the shares the previous day of the grant. Total stock-based
compensation costs amount to $210,800 for an estimated fair value of $0.34 per option. The fair value
of the options granted was estimated using the Black-Scholes model with no expected dividend yield,
48.0% expected volatility, 1.39% risk-free interest rate and 6 years options expected life.
On February 11, 2021, the Corporation granted to its directors, officers and employees 525,000 options
exercisable at $0.82, valid for 10 years. Those options were granted at an exercise price equal to the
closing market price of the Corporation’s shares on the business day prior to the date of the issuance.
Total stock-based compensation costs amount to $183,750 for an estimated fair value of $0.35 per
option. The fair value of the options granted was estimated using the Black-Scholes model with no
expected dividend yield, 46.3% expected volatility, 0.6% risk-free interest rate and 6 years options
expected life.
On March 18, 2021, the Corporation granted to a director 80,000 options exercisable at $0.88, valid for
10 years. Those options were granted at an exercise price equal to the closing market price of the
Corporation’s shares on the business day prior to the date of the issuance. Total stock-based
compensation costs amount to $32,800 for an estimated fair value of $0.41 per option. The fair value of
the options granted was estimated using the Black-Scholes model with no expected dividend yield,
48.2% expected volatility, 1.17% risk-free interest rate and 6 years options expected life.
- 69 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
On September 8, 2021, the Corporation granted to a director 80,000 options exercisable at $0.75, valid
for 10 years. Those options were granted at an exercise price higher than the closing market price of
the Corporation’s shares on the business day prior to the date of the issuance. Total stock-based
compensation costs amount to $22,400 for an estimated fair value of $0.28 per option. The fair value of
the options granted was estimated using the Black-Scholes model with no expected dividend yield,
47.5% expected volatility, 0.92% risk-free interest rate and 6 years options expected life.
This expected life was estimated by benchmarking comparable situations for companies that are similar
to the Corporation. The expected volatility was determined by calculating the historical volatility of the
Corporation’s share price back from the date of grant and for a period corresponding to the expected life
of the options.
A summary of changes in the Corporation’s common share purchase options is presented below:
Fiscal 21
Fiscal 20
Weighte
d
average
exercise
price
$
1.05
0.82
1.51
0.96
0.97
Number of
options
4,320,000
620,000
-
4,940,000
4,526,668
Weighted
average
exercise
price
$
1.07
0.72
-
1.02
1.05
Number of
options
4,940,000
685,000
(380,000)
5,245,000
4,761,668
Balance – Beginning of year
Granted
Expired
Balance – End of year
Balance – End of year exercisable
The following table summarizes information about common share purchase options outstanding and
exercisable as at September 30, 2021:
Number of options
outstanding
Number of options
exercisable
315,000
20,000
330,000
580,000
420,000
485,000
50,000
530,000
100,000
550,000
560,000
620,000
525,000
80,000
80,000
5,245,000
315,000
20,000
330,000
580,000
420,000
485,000
50,000
530,000
100,000
550,000
560,000
620,000
175,000
26,668
-
4,761,668
Exercise
price
$
1.54
1.61
1.25
0.85
0.60
1.10
1.13
1.14
1.04
0.89
1.03
0.72
0.82
0.88
0.75
- 70 -
Expiry date
February 16, 2022
February 27, 2022
February 19, 2023
February 20, 2024
August 13, 2025
August 11, 2026
November 23, 2026
February 21, 2027
May 10, 2027
February 15, 2028
February 18, 2029
February 13, 2030
February 11, 2031
March 18, 2031
September 8, 2031
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
10.3 Compensation to key management
The Corporation’s key management personnel includes the president, the vice-president exploration and
the chief financial officer as well as members of the board of directors. Key management remuneration
is as follows:
Short-term benefits
Salaries including bonuses and benefits
Professional fees
Professional fees recorded in share issue expenses
Salaries including bonuses and benefits capitalized in E&E
expenses
Long-term benefits
Stock-based compensation
Total compensation
Fiscal
21
$
702,445
84,338
6,900
43,879
Fiscal
20
$
694,259
78,938
5,475
7,973
165,553
1,003,115
160,910
947,555
The Corporation has employment and consulting agreements with members of senior management
which, among other things, provided that in the event of a termination without cause or of a change of
control, a compensation equivalent to between 18 to 24 months of salary or consulting fees will be paid
for a total of $1,083,786.
10.4 Related party transactions
In addition to the amounts listed above in the compensation to key management (note 10.3 and
elsewhere in the Financial Statements) following are the related party transactions.
In the normal course of operations:
● A firm in which an officer is a partner charged professional fees amounting to $88,839 ($146,834
in Fiscal 20) of which $77,439 ($121,446 in Fiscal 20) was expensed and $11,400 ($25,388 in
Fiscal 20) was recorded as share issue expenses;
● A company controlled by an officer charged professional fees of $49,619 ($41,879 in Fiscal 20)
for her staff; and
● As at September 30, 2021, the balance due to the related parties amounted to $12,772 ($9,448
in September 30, 2020).
11. LOSS PER SHARE
The calculation of basic loss per share is based on the loss for the year divided by the weighted average
number of shares in circulation during the year. In calculating the diluted loss per share, potential
common shares such as share options and warrants have not been included as they would have the
effect of decreasing the loss per share. Decreasing the loss per share would be antidilutive. Details of
share options and warrants issued that could potentially dilute earnings per share in the future are given
in notes 9 and 10.
Loss
Weighted average number of basic and diluted outstanding shares
Basic and diluted net loss per share
Fiscal 21
$
(1,023,800)
72,087,232
(0.01)
Fiscal 20
$
(1,345,977)
70,088,564
(0.02)
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
12.
INCOME TAXES
The income tax expense is made up of the following component:
Deferred income taxes
Premium on flow-through share issuance
Recovery of deferred income taxes
Fiscal 21
$
Fiscal 20
$
-
(603,174)
(603,174)
-
(435,903)
(435,903)
The provision for income taxes presented in the financial statements is different from what would have
resulted from applying the combined Canadian Statutory tax rate as a result of the following:
Loss before income taxes
Combined federal and provincial income tax at 26.50% (26.50% in
2020)
Non-deductible expenses
Tax effect of renounced flow-through share expenditures
Amortization of flow-through share premiums
Unrecognized temporary differences
Other elements
Recovery of deferred income taxes
Fiscal 21
$
(1,626,974)
Fiscal 20
$
(1,781,880)
(431,100)
46,300
605,400
(603,174)
(219,721)
(879)
(603,174)
(474,000)
44,900
408,700
(435,903)
42,500
(22,100)
(435,903)
The ability to realize the tax benefits is dependent upon a number of factors, including the sale of
properties. Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable
profits will be available to allow the asset to be recognized. Accordingly, some deferred tax assets have
not been recognized; these deferred tax assets not recognized amount to $127,000 ($348,000 as of
September 30, 2020).
Significant components of the Corporation’s deferred income tax assets and liabilities are as follows:
Deferred income tax assets
Non-capital losses
Donations
Share and warrant issue expenses
Lease liabilities
Total deferred income tax assets
Deferred income tax liabilities
E&E assets
Unrealized gain on listed shares
Right-of-use assets
Total deferred income tax liabilities
As of
September
30, 2021
$
As of
September
30, 2020
$
4,300,000
19,000
96,000
29,000
4,444,000
4,284,000
7,000
26,000
4,317,000
3,433,000
23,000
109,000
36,000
3,601,000
3,202,000
17,000
34,000
3,253,000
Deferred income tax assets not recognized
127,000
348,000
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
As of September 30, 2021, expiration dates of losses available to reduce future years’ income tax are:
Federal
$
84,000
126,000
177,000
540,000
645,000
726,000
677,000
748,000
906,000
760,000
820,000
1,062,000
1,360,000
1,275,000
1,501,000
1,644,000
2,417,000
Provincial
$
69,000
112,000
183,000
514,000
631,000
713,000
663,000
736,000
891,000
749,000
811,000
1,048,000
1,343,000
1,261,000
1,481,000
1,627,000
2,777,000
2026
2027
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
All the exploration work imposed by the December 2019 flow-through financings was completed before
September 30, 2020. Also, all the exploration work imposed by the December 2020 flow-through
financings was completed before September 30, 2021.
13. FINANCIAL INSTRUMENTS AND RISKS
The Corporation is exposed to various financial risks resulting from both its operations and its investment
activities. The Corporation’s management manages financial risks. The Corporation does not enter into
financial instrument agreements including derivative financial instruments for speculative purposes. The
Corporation’s main financial risk exposure and its financial risk management policies are as follows:
13.1 Market Risk
Interest rate fair value risk
Since the guaranteed investment certificates are at fixed rates, the Corporation is not exposed to interest
rate risk on the instruments themselves. The Corporation’s other financial assets and liabilities do not
comprise any interest rate risk since they do not bear interest.
Listed shares risk
Listed shares risk is the risk that the fair value of a financial instrument varies due to the changes in the
Canadian mining sector and equity market. For the Corporation’s listed shares at fair value through profit
and loss, a variation of plus or minus 20% of the quoted market prices as at September 30, 2021 would
result in an estimated effect on the net income (loss) of $34,116.
13.2 Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause
the other party to incur a financial loss. The Corporation is subject to concentrations of credit risk through
cash and cash equivalents, investments and accounts receivable. The Corporation reduces its credit risk
by maintaining part of its cash and cash equivalents and its investments in financial instruments held
with a Canadian chartered bank, with a broker which is a subsidiary of a Canadian chartered bank or
with an independent investment dealer member of the Canadian Investor Protection Fund.
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
In Fiscal 2021, the investments are composed of guaranteed investment certificates issued by Canadian
banks or guaranteed by the Canadian Investor Protection Fund. The Corporation aims at signing
partnership agreements with established companies and follows their cash position closely to reduce its
credit risk on accounts receivable. The carrying amount of cash and cash equivalents and investments
represents the Corporation maximum credit exposure. Nevertheless, the management considers the
credit risk to be minimal and further disclosure are not significant.
13.3 Liquidity risk
Liquidity risk is the risk that the Corporation will not be able to meet the obligations associated with its
financial liabilities. As at September 30, 2021, the Corporation has working capital of $7,505,431
including cash and cash equivalents of $1,490,860. Management of the Corporation believes it has
sufficient funds to pay its ongoing general and administrative expenses, to pursue its budgeted
exploration and evaluation expenditures, and to meet its liabilities, obligations and existing commitments
for the ensuing twelve months as they fall due.
The Corporation will periodically have to raise additional funds to continue operations, and while it has
been successful in doing so in the past, there can be no assurance it will be able to do so in the future.
13.4 Fair value
The carrying value of cash, accounts receivable, investments and accounts payable and accrued
liabilities, advance received for upcoming exploration work and lease liabilities are considered to be a
reasonable approximation of their fair value because of the short-term maturity and contractual terms of
these instruments.
Fair value estimates are made at the consolidated statement of financial position date, based on relevant
market information and other information about financial instruments.
The fair value of the listed shares at fair value through profit and loss is established using the closing
price on the most beneficial active market for this instrument that is readily available to the Corporation
and as such are classified as Level 1 in the fair value hierarchy.
14. ADDITIONAL INFORMATION ON CASH FLOWS
Stock-based compensation included in E&E expenses
Additions of exploration properties and E&E expenses included in
accounts payable and accrued liabilities
Tax credits receivable applied against E&E expenses
Listed shares received for option payment
Interest received
Fiscal 21
$
40,148
938,745
1,320,091
55,000
157,209
Fiscal 20
$
64,955
522,010
812,437
50,000
352,255
15. RECLASSIFICATIONS
For presentation purposes, the following expenses included in the consolidated statement of
comprehensive loss were reclassified to provide more relevant information:
● Travel and rent and insurance were grouped with office expenses.
● Conferences and mining industry involvement as well as press releases and investors relations
were grouped under conferences and investors relations.
The comparative figures for Fiscal 20 were reclassified accordingly.
- 74 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2021 and 2020
16. SUBSEQUENT EVENT
On December 1, 2021, the Corporation signed an option agreement with Rio Tinto Exploration Canada
Inc. ("RTEC") for its Tete Nord property. Under this new agreement, RTEC may earn an initial 50%
interest (First Option) in the Tete Nord property over a period of four years, by fulfilling the following
conditions:
● Exploration expenditures totalling $4,000,000, including a minimum of $500,000 in the first year.
● Cash payments totalling $500,000, including $100,000 within 30 days of execution of the
agreement
After earning an initial 50% interest, RTEC may elect to increase its interest to 70% (Second Option)
over a period of four years by fulfilling the following conditions:
● Exploration expenditures totalling up to $10,000,000 and cash payments totalling $500,000,
gaining interest on the following schedule:
● An additional 1% interest (for a total of 51%) by funding an additional $250,000 of exploration
expenditures;
● An additional 1% interest for each additional $500,000 of exploration expenditures (for a total of
up to 69%);
● An additional 1% (for a total of 70%) by funding an additional $750,000 of exploration
expenditures.
RTEC retains right to act as operator for the First and the Second Option; or at its discretion elects to
have the Corporation act as operator on RTEC’s behalf.
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Midland Exploration Inc.
Corporate Information
Directors
Paul Archer 2) 3)
René Branchaud 2)
Jean des Rivières 3)
Annie Dutil 1)
Germain Carrière 1) 2)
Jean-Pierre Janson, Chairman of the board 1) 2)
Gino Roger 3)
Robert I. Valliant 1) 3)
Notes:
1) Member of the Audit committee
2) Member of the Human Resources and Governance Committee
3) Member of the Technical Committee
Officers
Gino Roger, President and Chief Executive Officer
Mario Masson, Vice-president Exploration
Ingrid Martin, Chief Financial Officer
René Branchaud, Secretary
Head Office
1 Place Ville Marie, Suite 4000
Montreal, Quebec, H3B 4M4
Exploration Office
132 Labelle Blvd, Suite 220
Rosemere, Quebec, J7A 2H1
Tel. : (450) 420-5977
Fax : (450) 420-5978
Email : info@midlandexploration.com
Website : www.midlandexploration.com
Auditors
PricewaterhouseCoopers, LLP
1250 René-Lévesque Boulevard West, Suite 2500
Montreal, Quebec, H3B 4Y1
Legal counsel
Lavery, de Billy, L.L.P.
1 Place Ville Marie, Suite 4000
Montreal, Quebec, H3B 4M4
Transfer Agent
Computershare Investor Services Inc.
1500 University, Suite 700
Montreal, Quebec, H3A 3S8
Tel.: (514) 982-7888
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