Annual Report
September 30, 2022
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 ........................................................................................................................................ 7
Overall Performance ..................................................................................................................................... 7
Results of Operations .................................................................................................................................. 11
Exploration Activities ................................................................................................................................... 13
Cash and Investments Forecast ................................................................................................................. 42
Selected Annual Information ...................................................................................................................... 43
Summary of Results per Quarters .............................................................................................................. 43
Fourth Quarter ............................................................................................................................................. 44
Related Party Transactions ......................................................................................................................... 45
Events Subsequent to Year End ................................................................................................................. 45
Stock Option Plan ....................................................................................................................................... 45
Off-balance Sheet Arrangements ............................................................................................................... 45
Commitment ................................................................................................................................................ 46
Critical Accounting Estimates and Judgements .......................................................................................... 46
New Accounting Standards ......................................................................................................................... 46
Financial Instruments .................................................................................................................................. 46
Risk Factors ................................................................................................................................................ 46
Foward Looking Information........................................................................................................................ 50
Financial Statement
Independant Auditor’s Report ..................................................................................................................... 51
Consolidated Statements of Financial Position........................................................................................... 55
Consolidated Statements of Comprehensive Loss ..................................................................................... 56
Consolidated Statements of Changes in Equity.......................................................................................... 57
Consolidated Statements of Cash Flows .................................................................................................... 58
Notes to Consolidated Financial Statements .............................................................................................. 59
Corporate Information ................................................................................................................................. 83
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Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2022
Dear Shareholders,
I am very pleased to present the 2022 Annual Report for Midland Exploration Inc. (“Midland” or the
“Corporation”).
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. Midland continued
to deploy its business model based on partnerships this year to conduct significant exploration work. We
are as always very proud to count on reputable partners such as BHP Canada Inc. (“BHP”), Rio Tinto
Exploration Canada Inc. ("RTEC"), Agnico Eagle Mines Limited, Osisko Development Corp., Probe Metals
(“SOQUEM”),
Inc.
Brunswick Exploration Inc. (“Brunswick”), the Nunavik Mineral Exploration Fund, and Abcourt Mines Inc.
We are currently in discussions with several potential new partners. Given the unprecedented interest for
nickel and lithium in Quebec, we are confident that we will quickly conclude new option agreements in the
coming months.
(“Probe”), Wallbridge Mining Company Ltd
(“Wallbridge”), SOQUEM
Inc.
Midland continued to pursue its strategy of exploring in partnership across Quebec and achieved significant
progress once again in 2022, with the execution of a new partnership agreement with Brunswick for lithium
in the James Bay region and the discovery of several new mineralized zones on various projects. This year
was particularly marked by several new gold and base metal discoveries. Major exploration work will begin
in the coming weeks on these new discoveries.
One of the highlights of our exploration efforts in 2022 was certainly the joint discovery, under an option
agreement with Probe, of significant Cu-Au-Ag-Mo occurrences on our La Peltrie project. Recent drilling
led to the discovery of a large-scale mineralized system with Cu-Au-Ag-Mo over an interval totalling
345.5 metres grading 0.2% CuEq., which remains open along strike and at depth. In addition, two
exploration drill holes testing regional targets intersected low-grade gold zones along the Lower Detour
Zone 58N shear splay. Recent work on this property has successfully demonstrated the tremendous
potential for large gold and copper mineralized systems. A drilling campaign to follow up on this new
discovery is set to begin in the coming weeks.
During a prospecting program conducted on our Laflamme project in late October 2022, a follow-up
investigation of an outcrop with anomalous gold identified by Midland in May 2022 led to the discovery of a
high-grade gold zone. Samples collected in a shear structure with strong silica and carbonate alteration,
injected with irregular quartz veining associated with 5% fine pyrite, yielded grades up to 18.9 g/t Au. A
second sample was collected in the same zone, 20 cm from the first. The latter graded 5.67 g/t Au and
shows intense silicification. This shear zone is located 500 metres northeast of gold-bearing boulders found
in May 2022 (28.7 g/t Au and 6.0 g/t Au) and may represent the source of these boulders. A significant
3,000-metre drilling program will begin shortly to test these new gold-bearing structures.
Prospecting work conducted in the summer of 2022 under our Strategic Alliance with SOQUEM in the
Labrador Trough led to the discovery of several new horizons with high-grade copper and gold
mineralization, observed at surface over an area of at least 115 metres strike length by 70 metres wide.
Due to the vegetative cover, the mineralization remains open in all directions and the full extent of this new
mineralized system has yet to be determined. Grab samples collected on this new mineralized system
graded up to 25.6% Cu, 4.9 g/t Au and 162 g/t Ag, as well as 7.14% Cu, 3.78 g/t Au and 33.5 g/t Ag. A
major exploration program will be launched in the summer of 2023, targeting Cu-Au-Ag mineralized
horizons and their extensions along the volcano-sedimentary Murdoch Formation. This area has seen very
little previous exploration. Recently approved follow-up work for 2023 will include soil and rock sampling,
stripping, channel sampling, and an induced polarization geophysical survey.
- 4 -
Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2021
Finally, major geophysical programs including magnetotelluric (“MT”) surveys and prospecting
campaigns were carried out under our Strategic Alliance with BHP in Quebec’s Far North (Kuujjuaq
area). These recent efforts will be followed by a phase of fieldwork in 2023, to test potential targets
identified during the MT survey. Midland was also pleased to announce, in 2022, a one-year
extension of the Generative Phase as well as an additional $1.4 million in funding under the
Strategic Alliance.
Here are the main highlights of our past year of activities:
New Cu-Au-Mo-Ag discovery (0.21% CuEq./345.5 m) with Probe on La Peltrie;
New high-grade gold structures (18.9 g/t Au) discovered on Laflamme;
New option agreement with Brunswick on Mythril and Elrond for their lithium potential;
New discovery of high-grade Cu-Au under the Labrador Alliance with SOQUEM;
One-year extension of the Generative Phase of our Strategic Alliance with BHP ($1.4 million) and
major MT survey recently conducted under the Ni Alliance;
New discovery of a high-grade gold boulder (28.7 g/t Au) on the Laflamme property;
Option payments completed with Wallbridge ($110,000) and Probe ($55,000);
5,000 metres of drilling completed in the Detour belt with partners;
Major VTEM survey conducted with RTEC on our Tête Nord Ni project;
New strategic acquisition of the Nickel Square Ni-Cu property in the Abitibi belt.
Midland intends to continue aggressively exploring its various projects for gold and base metals in 2023, to
discover world-class deposits. An ambitious exploration program, one of the most substantial since the
Corporation was founded, will be deployed on the Corporation’s best projects and recent new discoveries.
Midland will continue to generate several new projects and seek to quickly conclude additional partnership
agreements for properties acquired in recent years. In addition, we also continue to increase visibility for
Midland throughout 2023 by taking part in numerous promotional events to attract new and important
shareholders.
Midland also intends to continue assessing interesting business opportunities as they arise in 2023. Midland
has a very strong financial position, with more than $9M in adjusted working capital as at December 1,
2022, after completing its $3.5M private placement.
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 2022. 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 2023 to make one or many significant discoveries in Quebec.
(s) Gino Roger
Gino Roger, P. Eng.
President and CEO
- 5 -
- 6 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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, 2022, 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, 2022 (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 20
Q1-21
Q2-21
Q3-21
Q4-21
Fiscal 21
Q1-22
Q2-22
Q3-22
Q4-22
Fiscal 22
Q1-22
Q2-22
Q3-22
Q4-22
Fiscal 23
Period
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 December 31, 2021
January 1, 2022 to March 31, 2022
April 30, 2022 to June 30, 2022
July 1, 2022 to September 30, 2022
October 1, 2021 to September 30, 2022
October 1, 2022 to December 31, 2022
January 1, 2023 to March 31, 2023
April 30, 2023 to June 30, 2023
July 1, 2023 to September 30, 2023
October 1, 2022 to September 30, 2023
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 22
New option agreement with Rio Tinto Exploration Canada Inc. (“RTEC”) for Tête Nord Ni-Cu
project in the Grenville – VTEM surveys completed; several new exploration targets identified
and prospecting in progress. Maiden drilling program (3,750m) commencing in November
2022.
Magnetotelluric surveys (“MT”) completed with BHP Group PLC (“BHP”) in Nunavik for Ni-
Cu; 3D modeling of MT results in progress.
New Cu-Au-Ag discovery in Labrador trough with SOQUEM Inc.(“SOQUEM”), up to 25.6%
Cu, 4.9 g/t Au and 162 g/t Ag (grab).
New high-grade gold floats (28.7 g/t Au) discovered on Laflamme JV; follow-up works
(soils--IP-Mag) completed and drilling in Q2-23.
New Ni-Cu acquisition in Abitibi: Nickel Square property.
- 7 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
More details can be found in section 4.
2.2 Working capital
Midland has a working capital of $5,935,098 as of September 30, 2022 ($7,505,431 as of
September 30, 2021) which will allow the Corporation to execute its exploration program for at least
the following year.
2.3 Private placements
On December 7 and 21, 2021, the Corporation completed private placements of 2,458,875 flow-
through shares at $0.80 per share for total gross proceeds of $1,967,100. In addition, on
December 7, 2021, the Corporation completed, with an originator of flow-through donation financing,
a private placement of 760,870 flow-through shares at $0.92 per share for total gross proceeds of
$700,000. In connection with the private placements, the Corporation incurred $137,364 share issue
expense, of which $84,930 was paid as finder’s fees. Directors and officers of the Corporation
participated in the flow-through private placement for a total consideration of $189,000 under the
same terms as other investors.
On January 14, 2022, the Corporation completed a private placement of 170,000 shares at a price of
$0.55 per share for total gross proceeds of $93,500. BHP has exercised its right to maintain its
ownership to 5.0% by acquiring 170,000 shares. This right had been granted to BHP on April 18,
2019 pursuant to an Investor Rights Agreement with the Corporation.
On November 17 and December 1, 2022, the Corporation completed private placements of
4,034,000 flow-through shares at $0.50 per share for total gross proceeds of $2,017,000. In addition,
on November 17 and December 1, 2022, the Corporation completed, with an originator of flow-
through donation financing, a private placement of 1,268,400 flow-through shares at $0.70 per share
for total gross proceeds of $887,880. Finally, on December 1, 2022, the Corporation completed a
private placement of 1,450,000 shares at a price of $0.40 per share for total gross proceeds of
$580,000. Directors and officers of the Corporation participated in the flow-through private
placement for a total consideration of $203,000 under the same terms as other investors.
2.4 Outstanding share data:
Common shares
Options
2.5 Update on agreements with partners
2.5.1 RTEC – Tête Nord
As at
December 8, 2022
Number
82,420,197
5,570,000
87,990,197
As at
September 30, 2022
Number
75,667,797
5,570,000
81,237,797
On December 1, 2021, and as amended, the Corporation signed an option agreement with RTEC for
its Tete Nord property. Under this new agreement, RTEC may earn an initial 50% interest (First
Option) in the Tête 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 60 days of execution of the
agreement.
- 8 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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:
o An additional 1% interest (for a total of 51%) by funding an additional $250,000 of
exploration expenditures;
o An additional 1% interest for each additional $500,000 of exploration expenditures
(for a total of up to 69%);
o An additional 1% (for a total of 70%) by funding an additional $750,000 of
exploration expenditures.
RTEC retains the 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. RTEC chose to be the operator for
the first year of the option agreement.
2.5.2 BHP Alliance (Ni)
Under the initial agreement executed in August 2020, during the Generative Phase (Phase I), BHP
agreed to fund 100% of an annual amount of up to $1,400,000 for a minimum of two years until
August 21, 2022. On July 11, 2022, an amendment was signed which provides a one-year extension
of the Generative Phase (Phase I) which comes with an additional annual funding of up to
$1,400,000 and extends until August 21, 2023. The Corporation will continue to act as the project
operator, and the main objective of this phase is to generate, identify and secure, within the area of
interest, exploration projects to be advanced to a drill-ready stage through further exploration work.
BHP may, at its discretion, propose additional exploration work of up to $700,000 before advancing
a project to the second phase.
2.5.3 Option agreement with Brunswick Exploration Inc. (“Brunswick”) on Mythril and Elrond
On November 22, 2022, the Corporation signed an option agreement Brunswick whereby Brunswick
has the option to acquire exploration rights for critical minerals including lithium (excluding copper,
nickel, zinc, lead, gold, silver, platinum and palladium) on the Mythril and Elrond properties. Under
this new agreement, Brunswick may acquire an initial 50% interest (“Option 1”) in the Mythril
property over a three-year period, at the following conditions:
Upon signature
On or before November 22, 2023
On or before November 22, 2024
On or before November 22, 2025
Total
Payment in
cash
$
25,000
50,000
70,000
-
145,000
Payments in
shares
$
25,000
50,000
70,000
210,000
355,000
Exploration
work
$
-
300,000
300,000
900,000
1,500,000
Option to earn an additional 35% undivided interest in the claims (the “Option 2”) in the properties
over an additional two-year period, at the following conditions:
Aggregate consideration of $200,000 payable according to the following schedule:
1st Anniversary: $100,000 in cash or stock, at BRW's option; 2nd anniversary: $100,000 in
cash or stock, at BRW's option;
Requirement to spend an additional amount of $2,000,000 in exploration expenditures, in
cash or in shares, at BRW's option, according to the following schedule: 1st anniversary
after exercising Option 1: amount of $1,000,000; and 2nd anniversary after exercising
Option 1: additional amount of $1,000,000.
Any Brunswick share issuance during Option 1 and Option 2 is subject to a minimum price of $0.254
per share.
- 9 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Brunswick would hold a right of first refusal on the 15% remaining interest held by the Corporation
and the Corporation would not be required to participate in exploration and development
expenditures until a mine is constructed to extract all metals or minerals except precious metals
(gold, platinum, palladium and silver) and base metals (copper, zinc, nickel and lead).
2.5.4 SOQUEM - Gatineau
On April 6, 2022, the Corporation received from SOQUEM a notice to terminate the Alliance contract
signed on April 13, 2021, on the Gatineau property.
2.5.5 List of agreement with partners
As at September 30, 2022, the following properties are under agreements with partners:
Casault
Gaudet
La Peltrie
Laflamme
Maritime Cadillac
Tête Nord
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”)
RTEC
Osisko Development Corp. (“Osisko”)
BHP
SOQUEM
Nunavik Mineral Exploration Funds (“NMEF”)
2.6 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 ECOLOGO® 2723 Certification
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
involved in the review and improvement of exploration practices. Throughout 2022, employees
integrated the new normative requirements in preparation for the audit.
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, in
January 2022, continued its mandate in order to update all documentation and to do the June 2021
accident feedback with all employees as well as with the services providers involved, with a view to
continuous improvement. No accidents have been reported for Fiscal 22.
- 10 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
3. RESULTS OF OPERATIONS
As operator, Midland incurred exploration expenditures totalling $5,068,401 ($7,207,380 in Fiscal
21), on its properties of which $2,244,701 was recharged to its partners ($1,838,076 in Fiscal 21).
The operating partners incurred $3,114,180 of exploration expenses ($2,784,334 in Fiscal 21). Also,
the Corporation invested $510,255 ($793,440 in Fiscal 21) to complete several property acquisitions
in Quebec or maintained them, of which $28,495 was recharged to its partners ($169,977 in
Fiscal 21).
The Corporation reported a loss of $1,900,085 in Fiscal 22 compared to $1,023,800 for Fiscal 21.
Project management fees increased to $210,412 ($202,218 in Fiscal 21). 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 increased at $3,000,883 for Fiscal 22 compared to $1,926,852 in Fiscal 21, and
following are the explanations for the main variances:
● Conference and investors relations $285,318 ($131,190 in Fiscal 21). Midland also retained
Independent Trading Group (“ITG”) to provide market making services in accordance with the
Exchange policies. ITG will trade the securities of Midland on the Exchange for the purposes
of maintaining an orderly market. In consideration of the services provided by ITG, Midland
started paying a monthly cash fee of $5,000 on February 1, 2021. Also, Midland retained
Renmark Financial Communications Inc. (“Renmark”) to provide investor relations services
for a monthly cash consideration of $6,000 from March 1, 2022 to September 30, 2022.
Finally, the Midland team started to travel again to participate at conferences.
● Professional fees: $304,373 ($408,506 in Fiscal 21). During Fiscal 21, fees of $81,276 (none
in Fiscal 22) were incurred relating to the mandate given to an external firm to develop rules
and procedures related to health and safety. During Fiscal 21, fees of $21,544 were incurred
(none during Fiscal 22) relating to the analysis of management and directors’ compensation,
its comparison to market and recommendations from Perrault Consulting, the Corporation’s
external advisor. Finally, professional fees were incurred in Fiscal 21 to set up the BHP
alliance.
Impairment of exploration and evaluation assets: $1,208,289 ($201,717 in Fiscal 21). The
main impairment arises from the Pallas property write off for $694,694. In addition, the
Corporation dropped certain claims and partially impaired mainly the following properties: BJ
Eleonor for $65,614, BJ Au for $59,796, Mythril for $190,066 and Willbob for $110,837.
During Fiscal 21, the impairments were spread across several properties. See section 4 for
more details.
●
The Corporation recorded an unfavorable change in fair value – listed shares of $39,631 (favorable
of $7,765 in Fiscal 21).
● An unfavorable change of $29,000 ($10,752 in Fiscal 21) was recorded on the Niobay Metals
Inc. (“Niobay”) shares composed of an unfavorable change in fair value of $29,000. In Fiscal
23, the change in fair value was unfavorable for $98,000, compensated by a realized gain for
$87,248 following the sale of 100,000 shares of Niobay;
● An unfavorable change in fair value of $10,631 ($18,517 favorable in Fiscal 21) was recorded
on the share of Probe composed of an unfavorable change in fair value of $35,848 ($18,517
favorable in Fiscal 21) and a realized gain of $25,217 (none in Fiscal 21) following the sale of
35,423 share of Probe.
Those shares were received as part of option agreement on properties.
- 11 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
A $856,355 ($603,174 in Fiscal 21) 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. The balance on flow-through financing not spent according to the restrictions
imposed by the December 2021 financings represents $308,636 as at September 30, 2022; the
Corporation has to dedicate these funds to Canadian mining properties exploration.
- 12 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
4. EXPLORATION ACTIVITIES
Deferred
exploration
expenses
Fiscal 22
Abitibi
Abitibi Au
Adam
Casault Au
Fleuribleu
Gaudet
Guyberry
Heva Au
Jeremie
Jouvex Au
La Peltrie Au
Lac Esther
Laflamme Au
Lewis
Mar.Cadillac Au
Mistaouac
Nickel Square
Nomans
Noyelles
Olga
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
Balance
Sept. 30,
2021
Geology
Geo-
physics
Drilling
Geo-
chemistry
$
$
$
$
$
-
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
274,914
81,274
901,401
1,793,168
496,698
140,885
15,950
65,026
617,865
7,474
20,040
4,865
3,588
45,784
-
601
-
41,455
6,950
-
85,244
106,449
-
6,064
4,337
125,329
69,691
571
68,710
18,178
-
-
54,215
13,979
3,107
66,833
31,214
60,256
-
-
-
-
-
-
46,119
42,372
2,750
92,034
-
-
-
-
94,420
109,485
-
712
-
-
101,857
-
226,305
24,211
-
-
-
-
-
-
-
-
-
-
-
-
-
11,501
-
4,947
-
300
-
-
1,049
-
18,019
1,511
-
-
-
-
-
-
5,366
827
-
-
711
-
-
-
-
-
-
-
-
-
10,010
-
-
5,101
-
739
-
10,692
-
-
28,996
63,558
-
313
-
19,499
12,149
-
17,264
5,140
-
-
-
5,188
-
2,069
7,511
3,178
-
-
-
Stock-
based
comp.
$
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
Balance
Sept. 30,
2022
$
$
$
$
$
$
-
499
-
1,854
3,213
-
-
-
-
-
-
1,452
4,947
-
499
-
1,947
2,225
-
2,336
4,833
-
-
-
-
499
1,390
-
2,027
-
-
-
-
0
(16,366)
-
(1,738)
-
-
-
-
(7,999)
-
-
-
-
-
-
-
-
-
-
-
-
-
(201)
-
-
-
-
-
-
-
-
(91)
(191)
-
(653)
(16 793)
(928)
(729)
-
(3 871)
-
(182)
(942)
(10 728)
-
-
-
(49 833)
(5 949)
-
(3 386)
(20 059)
-
-
(11 608)
(2 906)
(1 473)
(4 585)
(7 499)
(2 092)
-
-
-
-
-
(109,656)
-
-
-
-
-
-
(61,563)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,383
30,358
(109,656)
50,908
82,886
1,822
92,945
-
48,276
(61,563)
(182)
227,189
275,222
-
7,588
4,337
96,942
179,973
571
316,595
33,130
-
-
43,117
16,261
2,133
65,707
31,226
63,369
-
-
-
7,383
446,046
2,054,569
54,823
714,630
67,004
371,453
121,140
733,296
1,045,108
73,927
3,345,909
581,524
499,918
422,236
4,337
108,154
183,813
571
679,420
1,992,857
202,050
32,949
318,031
97,535
903,534
1,858,875
527,924
204,254
15,950
65,026
617, 865
Sub
total
$
7,474
30,050
16,366
49,707
98,204
2,750
93,674
-
52,147
7,999
-
226,679
281,003
-
7,089
4,337
144,828
183,697
571
317,645
48,356
-
-
54,926
19,167
3,107
68,902
38,725
63,434
-
-
-
- 13 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Deferred
exploration
Expenses
Fiscal 22
Komo
McDuff
Moria
Mythril
Shire
Wookie
North
BHP Ni
Labrador Trough
Pallas PGE
Soissons
Soissons Nmef
Willbob Au
Generation
Balance
Sept. 30,
2021
$
64,243
35,213
134,573
5,842,099
243,885
27,110
-
243,476
542,649
106,746
101,998
3,240,131
37,318
Geology
Geo-
physics
Drilling
Geo-
chemistry
Sub
total
$
49,087
-
13,982
276,571
85,321
571
745,357
709,362
-
-
30,090
35,012
-
$
-
-
-
-
-
-
1,063,375
66,878
-
-
-
-
-
$
-
-
-
9,203
-
-
-
-
-
-
-
33,500
-
$
-
-
-
7,355
-
-
$
49,087
-
13,982
293,129
85,321
571
28,965
87,520
-
-
-
5,415
-
1,837,697
863,760
-
-
30,090
73,927
-
Stock-
based
comp.
$
-
-
-
6,015
-
-
-
6,397
-
-
-
-
-
Recharge
Tax
credits
Option
Payment
Write-
off
Net
change
$
-
-
-
-
-
-
(1,837,697)
(380,352)
-
-
(348)
-
-
$
(462)
-
-
(54 247)
-
-
-
(45 812)
-
-
(2 097)
(8 672)
-
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(542,649)
-
-
-
(37,318)
$
48,625
-
13,982
244,897
85,321
571
-
443,993
(542,649)
-
27,645
65,255
(37,318)
Balance
Sept. 30,
2022
$
112,868
35,213
148,555
6,086,996
329,206
27,681
-
687,469
-
106,746
129,643
3,305,386
-
TOTAL
27,465,015
2,790,287
1,870,518
86,934
320,662
5,068,401
40,133
(2,244,701)
(255 788)
(171,219)
(579,967)
1,856,859 29,321,874
- 14 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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-
chemistry
$
$
$
$
$
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
-
-
Stock-
based
comp.
$
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
Balance
Sept. 30,
2021
$
$
$
$
$
$
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
-
Sub
total
$
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
-
- 15 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Deferred
exploration
Expenses
Fiscal 21
Moria
Mythril
Shire
Wookie
North
BHP Ni (2021 amended)
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
310,497
404,050
-
525
-
56,517
33,529
-
$
-
142,871
-
-
1,249,042
138,881
-
-
-
-
-
-
$
-
658,390
-
-
$
-
101,786
-
1,616
-
-
-
-
-
-
34,708
-
21,145
4,383
-
-
-
2,288
51
-
$
1,087
1,181,647
-
6,116
1,580,684
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
-
-
-
-
-
-
-
-
(1,580,684)
(237,371)
-
-
-
-
-
-
-
(66,467)
-
-
-
(25,987)
(24,841)
-
TOTAL
23,545,289
2,083,111
2,407,806
1,920,659
795,804
7,207,380
40,148
(1,838,076)
(1,320,091)
(109,190)
(60,445)
3,919,726 27,465,015
- 16 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Exploration and evaluation
expenses
Properties
Actual Fiscal 21
Actual Fiscal 22
Budget Fiscal 22
Budget Fiscal 23
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
100 % Midland
Abitibi Gold
Adam
Fleuribleu
Guyberry
Heva Au
Jeremie
Jouvex
La Peltrie
Lac Esther
Lewis
Mistaouac
Nickel Square
Nomans
Noyelles
Olga
Palatin
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
-
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
1,320,611
-
-
-
-
82,434
144,169
22,311
41,706
103,700
-
-
15,330
1,575
-
1,087
1,181,647
-
6,116
-
525
-
68,288
-
3,998,130
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
- 1,320,611
-
-
-
-
-
-
-
-
82,434
-
144,169
-
22,311
-
41,706
-
103,700
-
-
-
-
-
15,330
-
1,575
-
-
1,087
-
- 1,181,647
-
-
6,116
-
-
-
525
-
-
-
68,288
-
-
-
- 3,998,130
8,130
30,050
49,707
2,750
93,674
-
52,147
-
-
281,003
7,089
4,337
144,828
183,697
571
-
317,645
48,356
-
-
309
-
19,167
3,107
68,902
38,725
63,434
-
-
49,087
-
675
13,982
293,129
85,321
571
400
-
-
73,927
-
1,934,720
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
28,000
53,000
6,000
118,000
8,000
55,000
-
8,000
340,000
9,000
15,000
150,000
173,000
-
-
335,000
54,000
-
4,000
-
5,000
10,000
30,000
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
2,233,000
20,000
205,000
50,000
-
200,000
14,000
130,000
-
25,000
255,000
100,000
150,000
45,000
5,000
-
35,000
700,000
80,000
-
5,000
5,000
-
-
10,000
20,000
90,000
5,000
-
5,000
-
5,000
-
5,000
145,000
-
-
-
-
5,000
30,000
20,000
2,364,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
205,000
50,000
-
200,000
14,000
130,000
-
25,000
255,000
100,000
150,000
45,000
5,000
-
35,000
700,000
80,000
-
5,000
5,000
-
-
10,000
20,000
90,000
5,000
-
5,000
-
5,000
-
5,000
145,000
-
-
-
-
5,000
30,000
20,000
2,364,000
-
-
-
-
-
-
-
-
-
-
-
-
8,130
30,050
49,707
2,750
93,674
-
52,147
-
-
281,003
7,089
4,337
144,828
183,697
-
571
-
-
-
317,645
-
48,356
-
-
-
-
-
309
-
-
-
19,167
-
3,107
-
68,902
-
38,725
-
63,434
-
-
-
-
-
49,087
-
-
-
675
-
13,982
-
293,129
-
85,321
-
571
-
400
-
-
-
-
-
73,927
-
-
-
- 1,934,720
20,000
28,000
53,000
6,000
118,000
8,000
55,000
-
8,000
340,000
9,000
15,000
150,000
173,000
-
-
335,000
54,000
-
4,000
-
5,000
10,000
30,000
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
2,233,000
- 17 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Exploration and evaluation
expenses
Properties
Option
Casault - Wallbridge
La Peltrie – Probe
Mythril-Elrond – Brunswick
Tête Nord – Rio Tinto
Joint venture
BHP Ni Alliance (2021amended)
Lab.Trought – SOQUEM 0%
Gatineau JV 50%
Gaudet-Fenelon – Probe 50%
JV Eleonore Osisko 50%
Laflamme Au– Abcourt 21%
Maritime-Cadillac AEM 51$
Soissons NMEF 50%
Grand total
Actual Fiscal 21
Actual Fiscal 22
Budget Fiscal 22
Budget Fiscal 23
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
-
-
-
-
-
1,230,338 1,230,338
447,245
-
-
1,677,583 1,677,583
447,245
-
-
-
-
-
-
-
721,850
721,850
1,291,562 1,291,562
-
843,605
2,857,017 2,857,017
-
843,605
-
-
-
-
-
500,000
700,000
-
900,000
2,100,000
500,000
700,000
-
900,000
2,100,000
-
-
-
-
-
1,200,000
-
300,000
3,200,000
4,700,000
1,200,000
-
300,000
3,200,000
4,700,000
-
309,943
198,070
776,821
-
9,946
17,589
58,805
1,371,174
5,369,304
1,580,684 1,580,684
619,886
309,943
198,070
396,140
779,019 1,555,840
-
9,946
35,895
117,610
2,944,827 4,316,001
4,622,410 9,991,714
-
-
18,306
58,805
-
483,408
54,416
96,466
-
226,679
-
29,742
890,711
2,825,431
483,409
54,416
96,599
-
-
-
29,743
1,837,697 1,837,697
966,817
108,832
193,065
-
226,679
-
59,485
2,501,864 3,392,575
5,358,881 8,184,312
-
500,000
50,000
85,000
-
285,000
9,000
30,000
959,000
3,192,000
2,000,000 2,000,000
500,000 1,000,000
100,000
170,000
-
285,000
19,000
60,000
3,634,000
7,967,000
50,000
85,000
-
-
10,000
30,000
2,675,000
4,775,000
-
650 000
-
135 000
40 000
790 000
5 000
50 000
1 670 000
4 034 000
500,000
650,000
-
135,000
-
-
-
50,000
1,335,000
6,035,000
500,000
1,300,000
-
270,000
40,000
790,000
5,000
100,000
3,005,000
10,069,000
- 18 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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
As at September 30, 2022, the property consists of 15 claims covering a surface area of about
846 hectares included in five properties located in Lac Nicobi area and also in 31N14, 32C03, 32G03,
32G05 NTS sheets in Abitibi.
Exploration work on the property
Compilation works were completed in Lac Nicobi area.
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, 2022, it consists of 188 claims covering a surface area of about
10,457 hectares in the Abitibi region of Quebec.
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.
A 1,000 metres drilling program is in preparation and will be conducted during the winter of 2023. This
program will be aiming to test the best VTEM targets located along the eastern extension of the
B26 base metal and gold deposit.
- 19 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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, 2022, this property consists in 327 claims
covering an area of approximately 18,002 hectares. Some claims are subject to 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.
On June 16, 2020, the Corporation signed an option agreement with Wallbridge, amended November
4, 2022, 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 December 31, 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
110,000
-
-
320,000
Exploration work
Commitment
$
Completed
$
-
750,000
1,000,000
1,250,000
2,000,000
5,000,000
-
750,000
1,000,000
215,702
-
1,965,702
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
Between July and September 2021, Wallbridge completed a drill program totaling 13 drill holes, testing
a variety of grassroots exploration targets at Casault. Drilling has focused on the unexplored northern
part of the property, within 1 to 2 kilometres north of the Sunday Lake Deformation Zone. The first drill
hole (CAS-21-123) has intersected new gold mineralization with a visible gold-bearing interval
returning 6.85 g/t Au over 2.00 metres from 254.50 to 256.50 metres. This intersection is considered
significant, as it is located in the northern, largely untested part of the Casault property, where no gold
zone has been known so far, approximately 2 kilometres from the nearest anomalous gold
intersections both on the Casault and Martiniere properties. Two (2) other drillholes (128 and 130)
completed about 2 kilometres to the SE of hole CAS-21-123 intersected:
CAS-21-128
2.40 g/t Au over 0.60 m (197.40 to 198.00 m)
2.30 g/t Au over 0.60 m (298.90 to 299.50 m)
CAS-21-130
4.34 g/t Au over 1.00 m (242.00 to 243.00 m)
1.85 g/t Au over 0.65 m (380.25 to 380.90 m)
Three holes totalling 1,098 metres were completed during Q3-22. This program targeted below hole
CAS-21-123 which had returned 6.85 g/t Au over 2.0 metres (CAS-22-136 and 137). A third hole,
CAS-22-138 tested the same structure at about 700 metres to the east.
- 20 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
The best results obtained are:
CAS-22-136
70.4–70.9 m
0.36 g/t Au
CAS-22-137
192.0-193.5 m
197.5-198.5 m
198.5-199.5 m
199.5-201.0 m
0.10 g/t Au
0.23 g/t Au
0.20 g/t Au
0.10 g/t Au
CAS-22-138
121.3-122.3 m
122.3-123.3 m
0.25 g/t Au
0.19 g/t Au
During Q4-22, Wallbridge completed a drone magnetic survey as well as a till sampling program over
the eastern block of the Casault property. The magnetic data shows interesting geological and
structural features close to a sedimentary basin. The results of the till samples are pending. For 2023,
Wallbridge is planning a larger till sampling program over the entire property as well as diamond
drilling.
4.4 Coigny (Au)
Property Description
The new Coigny property (100% Midland) consists of 40 claims (2,225 hectares) as at
September 30, 2022 and 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.
4.5 Fleuribleu (Au)
Property Description
The Fleuribleu property consists in one claim block totalling 196 claims (10,880 hectares) as at
September 30, 2022. 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 high-resolution magnetic survey was completed during Q2-22 in the southern portion of the property.
The final report was received and submitted to the Ministère de l’Énergie et des Ressources naturelles
(“MERN”) for statutory works.
For Q2-23, Midland is planning a bark sampling program to cover the southern portion of the property
where the new magnetic data shows interesting features possibly associated with the Sunday Lake
deformation zone.
- 21 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
4.6 Gaudet (Au), in partnership avec Probe, operated by Probe
Property Description
The Gaudet-Fenelon property consists of one claim block totalling 226 claims (12,530 hectares ) as at
September 30, 2022. 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.
Some claims are subject to a 1% NSR royalty.
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
Over the course of August and September 2021, fourteen drill holes totalling 4,483 metres were
completed to test induced polarization anomalies coinciding with biogeochemical anomalies and
structures interpreted from the magnetic survey. No significant results were received but a new
anomalous gold-bearing zone was intersected in two drillholes on the Gaudet block of the JV.
An induced polarisation (“IP”) survey has been approved and is planned to begin during the winter of
2023. This grid will cover an area where biogeochem anomalies have been identified in the SE portion
of the JV. This IP geophysical survey will begin during Q1-23, as soon as the access is frozen.
4.7 Guyberry (Au)
Property Description
The new Guyberry property consists of one claim block totaling 51 claims (1,957 hectares) as at
September 30, 2022.
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.
- 22 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Exploration work on the property
An IP grid with lines at 100 metres spacing started during Q3-22 in the southern portion of the project.
This survey will have to be completed later in 2022 when the ground is frozen. Up to now, about
15 km has been completed on a total of 27 km. At least two anomalies of interest have been detected
in areas showing a structural complexity.
A drilling program is planned for Q2-23 to test a minimum of three (3) IP targets identified last summer.
This program will consist of 3-4 holes for a meterage of approximately 1,200 metres.
4.9 Jeremie (Au)
Property Description
The Jeremie block totals 42 claims (2,173 hectares) as at September 30, 2022 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.
A second bark survey is planned for Q2-23. This one will cover the southern portion of the claims block
closer to the Wallbridge Fenelon Gold project.
4.10 Jouvex (Au)
Property Description
The Jouvex property is located about 50 kilometres to the southwest of Matagami and as at
September 30, 2022 is composed of 374 claims covering an area of approximately 20,871 hectares.
Some claims are subject to 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.
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
A biogeochem (black spruce barks) sampling survey was completed during Q2-22 in the southern
portion of the property to the northwest of the Douay deposit. This survey identified a gold anomalous
area closely associated with an interpreted NE structure. This sector is also located in an area
interpreted as being south of the Douay-type altered felsic rocks.
In Fiscal 23, Midland is planning a follow-up on this new bark anomaly as well as other local surveys
to cover other areas of interest on the property.
- 23 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
4.11 La Peltrie (Au), option agreement with Probe, operated by Probe
Property Description
As at September 2022, 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)
70,000 3)
-
-
175,000
Exploration work
Commitment
$
Completed
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
-
500,000
700,000
753,269
-
1,953,269
1)
2)
3)
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.
In July 2022, the Corporation received $70,000 in cash.
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.
The Wawagosic property (57 claims as of September 30, 2022 covering 3,162 hectares) is included in
the Probe option agreement.
Exploration work on the property
A biogeochem (black spruce barks) sampling program was completed and covered the southeast
portion of the property. Five IP grids were completed to cover historical VTEM targets.
A drilling program was completed by Probe Metals in September 2022 to test the best IP anomalies
combined with biogeochem anomalies. There was a total of 7 drill holes completed, totalling 2,388 m.
Apart for some isolated gold values ranging from 0.1 g/t Au to 1.0 g/t Au, no significant gold intercepts
were obtained during this program. Base metals analysis are still pending.
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, 2022 comprises 264 claims (14,802 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.
- 24 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Some claims of the Lac Esther property are subject to two 2% NSR royalty of which 1% can be bought
back in tranches for an aggregate of $2,000,000.
Some claims were dropped in Fiscal 2022, therefore the Corporation impaired partially for $2,335 the
exploration property cost.
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, 2022, the Laflamme property consists of a total of 494 claims covering an area
of approximately 26,638 hectares and Midland holds 79% 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
During a prospecting program a high-grade gold boulder was discovered approximately 700 metres
southeast of the historical Notting Hill gold showing. This boulder graded 28.7 g/t Au and is
characterized by an intense stockwork of quartz-ankerite veins containing up to 15% pyrite
mineralization. Another sample collected from a similar boulder located 1 metre apart yielded a grade
of 6.0 g/t Au in a country rock completely altered to ankerite and containing 5% pyrite mineralization,
which represents the stockwork host rock.
Given the angular shape of this boulder and known glacial flow directions in this part of the Abitibi, the
potential source of these erratic boulders is interpreted as being at a short distance to the NNE.
The target area has never been drill-tested and corresponds to a magnetic low that remains untested
over a distance of more than 1.5 kilometres.
Prospecting also yielded several anomalous gold values on outcrops with grades between 0.1 and
1.0 g/t Au, in grab samples associated with new shear zones with strong carbonate alteration,
supporting the gold potential in the vicinity of the discovery boulder.
In the summer 2022, geophysical and geological work were undertaken in an effort to locate the source
of the gold-bearing boulders, directly north of the latter. This work included a very detailed high-
resolution drone-supported magnetic survey with flight lines spaced every 25 metres. This survey was
followed, by a dipole-dipole IP survey along lines at a 100-metre spacing. In addition to these
geophysical surveys, a prospecting and soil/till sampling program was also conducted. Several new
IP anomalies, as well as new soil anomalies (Au-Bi-W) were identified north of the high-grade gold
floats and represent high priority drilling targets.
- 25 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
A drilling program is planned for Q2-23 on Laflamme. This program (3,000 m) will test the best targets
in the vicinity of the high-grade gold floats as well as some untested BHEM conductors close to the
Copernick Ni-Cu showing. A 3D-Model of the Copernick showing is currently ongoing.
4.14 Lewis (Au)
Property Description
As of September 30, 2022, the Lewis property consists of 173 claims (9,649 hectares) and covers a
strategic position characterized by a regional flexure proximal to the Guercheville-Opawica
deformation zone. The Lewis property 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
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 2021. The best results from the channel sampling completed on Golden
Nest returned 0.46 g/t Au over 8.0 metres including 0.98 g/t Au over 3.0 metres and 0.65 g/t Au over
6.0 metres including 1.06 g/t Au over 2.0 metres.
A high-resolution magnetic survey was completed over the most part of the property. This high-quality
survey was successful in identifying a new structural pattern around the 2020 and 2021 new showings.
This mag survey will help position the next phases of exploration works.
A soil geochem sampling program was completed in the extension of the Red Giant and Golden Nest
gold showings. A total of 455 samples were collected and several Au-As anomalies were identified
and prospected during Q4-22.
A drilling program (1,500 m) is currently in preparation. This program will test the two known showings
(Golden Nest and Red Giant) as well as other IP targets and soil anomalies. This program is scheduled
to begin during Q2-23.
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% 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 and the Corporation are in a joint venture and future work are shared 51% Agnico Eagle
- 49% the Corporation.
Exploration work on the property
Midland is reviewing the 3D-Model in order to propose a drilling program aiming to test the best
remaining openings found in the vicinity of the best gold intersections.
- 26 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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 170 claims (9,482 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.
Midland is currently planning some small geophysical IP surveys to cover the best bark gold anomalies
identified in the southern portion of the claim block.
4.17 Nickel Square (Ni-Cu)
Property Description
This new property, dubbed Nickel Square, extends over a total surface area of approximately
300 square kilometres with strong yet underexplored potential for Ni-Cu-Co-PGE. It covers the
Maizerest Intrusions, a series of ultramafic intrusions that are locally associated with untested
historical electromagnetic (INPUT) conductors. In the north part of the Nickel Square property,
a historical grab sample collected by the MERN in ultramafic rocks of the Maizerest with minor
sulphide mineralization yielded anomalous values of 0.20% Ni, 450 ppm Cu, 110 ppm Co, 117 ppb Pd
and 68 ppb Pt. As of September 30, 2022, the property consists of 448 claims covering
25 031 hectares.
Exploration work on the property
During Q3-22, a compilation of historical works was completed over the whole property. Few historical
drilling was done on this property which hosts a large volume of ultramafic rocks that has never been
worked for its nickel-copper potential.
This property will be covered with a high-resolution magnetic survey during Q3-23. Field follow-up
consisting in prospecting and soil sampling will be undertaken during Q4-23.
4.18 Nomans (Au)
Property Description
As at September 30, 2022, the Nomans property 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 gold project consolidates a 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.
- 27 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Exploration work on the property
The survey completed on Nomans consisted of a total of 187 till samples (1 kg each) collected
approximately every 300 to 500 metres along grid lines spaced 2 km apart and oriented NW-SE,
i.e., perpendicular to the glacial flow direction.
Based on analytical results of the fine fraction (<63 microns), four significant gold signals were
identified, ranging from 11 ppb to 31 ppb Au. In plan view, these anomalies form a narrow corridor
about 20 kilometres long that is parallel to the dominant SSW ice flow direction. This alignment of gold
anomalies is interpreted as a ribbon-shaped dispersal train with the highest value, at 31 ppb Au,
located at the northern end of the glacial flow. This gold value is also associated with an anomalous
sulfur value, suggesting the possibility of a local source.
Another sample from this survey showed a multi-element anomaly with elevated Li-Cs-Ba-K-Rb values
indicating the presence of complex pegmatite in the north part of the property.
Midland is currently planning a follow-up campaign on these new (Au, Li) anomalies for the fall of 2022
that will include prospecting work and till sampling along a tighter grid, around the 31 ppb Au anomaly
and the sample indicating lithium potential.
4.19 Noyelles (Au)
Property Description
The Noyelles property is located approximately 20 kilometres south of the town of Matagami, in Abitibi,
Quebec and consists of 188 claims (10,510 hectares) as at September 30, 2022. 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
Compilation of historical works and high-resolution magnetic survey were completed during Q2-22.
Results from the bark sampling program have been received. In the west part of the project, a trend
can be seen with regional anomalies in Sb and Te. More interpretation must be done with these results.
4.20 Patris (Au)
Property Description
The Patris property is located about 30 kilometres to the north-east of Rouyn-Noranda and as at
September 30, 2022 consists of 298 claims (11,717 hectares). Some claims are subject to NSR
royalties varying from 1% to 2% that can be bought back in tranches for an aggregate of $7,000,000.
Exploration work on the property
A bark survey was completed in the southeastern portion of the Patris property. This survey covered
a new Camflo-Type target area along the La Pause Fault. The results show a possible gold anomaly
located near the La Pause fault and in the vicinity of the “Z” fold seen on the mag.
Two IP grids totalling about 57 km with line-spacing at 100 metres, were completed during Q3-22.
Several new chargeability anomalies were detected but they are often associated with high resistivity
anomalies, which could be explained by the presence of shallow bedrock. A more detailed
interpretation of these results was completed, and a drilling campaign has been approved.
- 28 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
The Q1-23 and Q2-23 drilling program will consist of 15 drillholes totalling approximately 3,000 metres.
Most of the targets consists in new IP targets located along the favorable gold-bearing structure that
hosts the Gadoury, Patris and Lac Bellot West showings. Target also includes the wide alteration zone
(100m) identified in the eastern extension of the Fayolle deposit.
4.21 Samson (Au)
Property Description
As at September 30, 2022, 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.
- 29 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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.
During Q2-23, a geophysic IP survey will be conducted immediately south of the IP Grid that will be
completed on our Gaudet-Fenelon JV with Probe.
4.22 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, 2022, it consists of 8 claims (448 hectares) in the Abitibi region of
Quebec.
Some claims were dropped therefore the Corporation impaired partially for $35,256 in Fiscal 2021 and
for $4,346 in Fiscal 2022.
Exploration work on the property
No exploration work on the ground was conducted on Turgeon during Fiscal 22. Midland is currently
looking for a new partner for this property.
4.23 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, 2022, this property consists in 44 claims covering an area of
approximately 2,449 hectares.
Exploration work on the property
No exploration work on the ground was conducted on Valmond during Fiscal 22. Midland is currently
looking for a new partner for this property.
4.24 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, 2022, 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 22. Midland is currently looking for a new
partner for this property.
- 30 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
GRENVILLE-APPALACHES
4.25 Gatineau (Zn)
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.
On April 6, 2022, the Corporation received from SOQUEM a notice to terminate the Alliance contract
signed on April 13, 2021, on the Gatineau property.
Some claims were dropped therefore the Corporation impaired partially for $3,382 in Fiscal 2022.
Exploration work on the property
The final interpretation of the results (soils) and a final report for the 2021 exploration program were
completed by SOQUEM during Q2-22. The results do not show any significant results from this soil
sampling program.
4.26 Ski
Property Description
The Ski property staked, consists of 5 claims as of September 30, 2022, and is located in the
31J02 NTS sheet in the Vallee de la Gatineau.
Exploration work on the property
No exploration work conducted on Vezza during Fiscal 22. Midland is currently looking for a new
partner for this property.
4.27 Tête Nord (Ni-Cu), option agreement with Rio Tinto, operated by Rio Tinto
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.
56 claims were acquired by purchase on November 13th, 2020 from Les Ressources Tectonic Inc. for
$100,000 of which $30,000 is payable upon signature, $35,000 on the first anniversary and $35,000
on the second anniversary; these payments were completed before November 13, 2022. These
56 claims 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.
- 31 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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 a description on the option agreement signed with Rio Tinto for its Tête Nord
property located in the Grenville geological Province, near the town of La Tuque in Haute-Mauricie.
Rio Tinto may earn an initial 50% interest (First Option) in the Tête Nord property over a period of
four years, by fulfilling the following conditions:
Upon signature
On or before November 1, 2022
On or before December 1, 2022
On or before December 1, 2023
On or before December 1, 2024
On or before December 1, 2025
Total
Cash payments
Commitment Completed
$
100,000
-
100,0001)
100,000
100,000
100,000
500,000
$
100,000
-
-
-
-
-
100,000
Exploration work
Commitment
$
Completed
$
-
500,000
-
-
-
3,500,000
4,000,000
-
500,000
343,605
-
-
-
843,605
1) $100,000 received before December 1, 2022.
Exploration work on the property
The VTEM survey totalled 6,635-line kilometres and covered the majority of the optioned claim blocks,
with flight lines spaced 100 metres apart and locally 50 metres apart on more detailed grids. Following
the review of the preliminary results, a new block of 39 claims (Bonhomme block) was map-designated
approximately 12 kilometres north of the former Lac Edouard (Ni-Cu) mine. This claim block will be
included in the partnership between Rio Tinto and Midland.
Preliminary results from the VTEM survey led to the identification of several new conductors,
strategically positioned proximal to or along the extensions of known Ni-Cu occurrences such as the
Rochette, Savane, Lac Matte and Ghyslaine showings, as well as on the new Bonhomme claim block.
Following the helicopter-borne VTEM-type electromagnetic survey totalling 6,635 line kilometres that
was completed in 2022, a drilling campaign totalling 3,750 metres is set to begin in early December
2022 to test 10 new targets, mainly consisting of new VTEM conductors. These conductors are
strategically positioned along the extensions, or proximal to historical Ni-Cu occurrences such as
Savane and Rochette, or in new areas of interest including the Bonhomme area located north of the
former Lac Edouard Ni-Cu mine, as well as the Cabouron and Tête Sud areas.
RTEC geology crews were very active in the field during the summer of 2022, prospecting and mapping
prospective areas where new VTEM conductors were identified. The Rochette showing returned
0.86% Ni and 0.16% Cu (Tenor of 4.26% Ni calculated at 100% sulfides) in a grab sample. The
Lac Matte showing returned a grab sample grading 0.36% Ni and 0.18% Cu (Tenor of 6.96% Ni
calculated at 100% sulfides).
Prospecting in the Bonhomme area north of Lac Edouard former mine led to the identification of several
anomalous values in Ni-Cu in ultramafic intrusions. This area is also characterized by the presence of
several untested VTEM conductors that will be tested during this drilling program.
- 32 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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, 2022 is comprised of 87 claims covering an approximate area of 5,589 hectares. 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.
Some claims were dropped therefore the Corporation impaired partially for $31,588 in Fiscal 2021 and
for $6,484 in Fiscal 2022 of 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.
A till survey was completed on a small grid to cover a possible volcanic enclave with the Aylmer Pluton.
This survey highlighted a base metal (Zn-Cu-Pb) anomalous area directly over an untested VTEM axis.
Additional prospecting is in progress in this area to try to explain the soil anomalies.
JAMES BAY
4.29 BJ Gold (Au)
Property Description
Midland owns a 100% interest on 118 claims as at September 30, 2022 covering 6,069 hectares in
the James Bay Area. Some claims were dropped therefore the Corporation impaired partially for
$6,960 Fiscal 21 and $90,126 in Fiscal 22 the property cost.
Exploration work on the property
A prospecting program was conducted during Q3-22. No significant result was obtained.
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, 2022.
- 33 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Some claims were dropped therefore the Corporation impaired partially for $65,614 the property cost
in Fiscal 22.
Exploration work on the property
A soil survey was completed on the property during Q4-21 and the results have been recently received.
Polymetallic signatures (Cu-Zn) were obtained in the southern portion associated with a felsic
intrusion.
4.31 Elrond (Au)
Property Description
The Elrond property consists as at September 30, 2022 of 197 contiguous claims covering a total
surface area of 10,175 hectares. Some claims are subject to a 1% NSR royalty.
See section 2.5 for details on the Brunswick transaction.
Exploration work on the property
The end results of the 80 till samples collected over the summer 2021, southwest of
Harfang Exploration Inc.’s Serpent gold project, have been recently received but the final interpretation
is ongoing. The samples sent to ODM have completed the last stage of treatment and went through
the heavy fluid separation phase. The heavy concentrates were sent to Actlabs for analysis.
Meanwhile, the final ODM report on gold grains count was received. The gold grains count (and size)
gives us more detail on the till anomalies. Up to 52 gold grains count were obtained, a strong anomaly
in itself for a till sample, followed by 24 gold grains. Several anomalous till samples are present in the
western section of the project. The maximum pristine+modified grains obtained are 6 and are
associated with the 52 total grains count sample.
Few days of prospecting were completed during Q3-22 and no significant results were received.
4.32 Fangorn (Au)
Property Description
The Fangorn property consists as at September 30, 2022 of 16 contiguous claims covering a total
surface area of 816 hectares. Some claims are subject to a 1% NSR royalty.
Exploration work on the property
No exploration work conducted on Fangorn during Fiscal 22. Midland is currently looking for a new
partner for this property.
4.33 Helm’s Deep (Au)
Property Description
The Helm’s Deep property consists as at September 30, 2022 of 70 contiguous claims covering a total
surface area of 3,699 hectares. Some claims are subject to a 1% NSR royalty.
- 34 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Exploration work on the property
No exploration work conducted on Helm’s Deep during Fiscal 22. Midland is currently looking for a
new partner for this property.
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 and is now held by 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. As at
September 30, 2022, the property regroups several properties for a total of 592 claims covering a
surface area of about 31,011 hectares.
Exploration work on the property
No exploration work conducted on JV Eleonore during Fiscal 22.
4.35 Komo (Au)
Property Description
As at September 30, 2022, the Komo property consists of 393 claims (20,743 hectares), located near
the 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.
Exploration work on the property
A prospecting program was conducted during Q3-22. No significant results were obtained.
- 35 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
4.36 McDuff (Cu-Au-Mo-Ag)
Property Description
The McDuff property consists as at September 30, 2022 of 159 (8,394 hectares).
Exploration work on the property
No exploration work conducted on McDuff during Fiscal 22. Midland is currently looking for a new
partner for this project.
4.37 Minas Tirith
The Minas Tirith property was dropped in Fiscal 22 and was entirely written off in Fiscal 21 for $45,425.
4.38 Moria (Ni-Cu)
Property Description
The Moria property consists as at September 30, 2022 of 140 claims (7,400 hectares). Some claims
are subject to a 1% NSR royalty.
Exploration work on the property
No exploration work conducted on Moria during Fiscal 22. Midland is currently looking for a new
partner for this project.
4.39 Mythril and Mythril Regional (Au-Cu-Mo), option agreement with Brunswick, operated by Brunswick
Property Description
The Mythril property consists as at September 30, 2022 of 1,534 claims (77,910 hectares).
The Corporation wrote off a project included in the Mythril property for $6,096 in Fiscal 21 and partial
impaired property cost for $190,066 in Fiscal 22. Some claims are subject to a 1% NSR royalty.
See section 2.5 for details on the Brunswick transaction.
Exploration work on the property
An update of the 3D-Model of Mythril mineralized zone was completed. The new drilling results were
incorporated into the model and modelled, including the grade envelopes and interpolation between
them. This model will help in prioritizing specific areas for a possible geophysics follow-up in 2022.
Midland is currently evaluating the possibility of conducting a deep geophysical survey to try to map
the conglomerates that erode the tonalite and the mineralized zones.
At a regional scale, during prospecting work on the Chisaayuu claim block of the Mythril Regional
project, two new high-grade gold-bearing boulders were discovered, yielding values in grab samples
of 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.
A prospecting program was conducted during Q3-22 following up on the high-grade gold floats
discovered in 2021. A grab sample returned 2.2 g/t Au on Chisaayuu west of the gold-bearing boulder
field discovered in 2021. Few others anomalous values between 0.1 g/t Au and 0.8 g/t Au were
received.
- 36 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
4.40 Shire (Zn-Cu)
Property Description
The Shire property consists as at September 30, 2022 of 105 contiguous claims covering a total
surface area of 4,582 hectares. Some claims are subject to a 1% NSR royalty. The Corporation
impaired partially the property for the claims that were dropped for $23,774 in Fiscal 22.
Exploration work on the property
A prospecting program was conducted during Q3-22 in order to follow-up VTEM conductors having a
potential for Ni-Cu mineralization. This type of mineralization could be present since MERN identified
ultramafic rocks in 2021 on the property. No significant results were received.
4.41 Wookie (Au)
Property Description
The Corporation holds the Wookie project totalling 188 claims (9,843 hectares), located near the recent
Patwon gold discovery made by 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 in Fiscal 21.
Exploration work on the property
No significant result was received for the Wookie prospecting program conducted during Q4-20.
NORTHERN QUEBEC
4.42 BHP Alliance (NI)
Alliance Description
During Fiscal 21 and 22, a total of 1,196 claims (52 587 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, 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.
- 37 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Testing Phase (II)
During this second phase, each designated project will have its own work program and budget with
the objective, mainly through drilling, to test and further develop the identified targets. The Corporation
will act as operator during the testing phase subject to BHP’s right to become the operator of any
designated project.
For each designated project, the testing phase will last up to four years, with a total budget of up to
$4,000,000 with a minimum of $700,000 to be spent during the first year. During this phase, BHP and
the Corporation will fund 75% and 25%, respectively, for approved work programs.
In addition, for each designated project, BHP will pay to the Corporation a designated project fee,
structured as follows: $250,000 on or before the first anniversary, $250,000 on or before the second
anniversary and $500,000 on or before the third anniversary, of the testing phase, for a maximum of
$1,000,000 per designated project.
BHP has the right to cease contributing its share of the funding of a designated project in which case
the Corporation would have the right to retain a 100% interest of the designated project and BHP would
receive a 1% NSR royalty. The Corporation would have a right to buy-back such royalty for a one-time
cash payment of $1,500,000. Total royalty payments would be capped at $3,000,000 per designated
project.
BHP may decide to advance any designated project to the third phase as a joint venture project
(“JV Project”).
Joint Venture Phase (III)
For this third phase, a formal joint venture would be formed with initial participating interests being
70% BHP and 30% the Corporation. Both parties would contribute to the expenses pro-rata to their
participating interests. BHP would be the operator for all JV Projects.
For each JV Project, BHP will pay to the Corporation a joint venture success fee of $200,000 after the
formation of the joint venture including transfer of tenements, data ownership and any other assets
related to the JV Project to, or for the benefit of, the joint venture.
If a party’s participating interest in the joint venture is diluted below 10%, such interest would be
converted into a 1.5% NSR royalty on the JV Project. The non-diluted party would have a right to buy-
back such royalty for a one-time cash payment of $2,500,000. Total royalty payments would be capped
at $5,000,000 per JV Project.
On July 11, 2022, an amendment was signed which provides a one-year extension of the Generative
Phase (Phase I) which comes with an additional annual funding of up to $1,400,000 and extends until
August 21, 2023. The Corporation will continue to act as the project operator, and the main objective
of this phase is to generate, identify and secure, within the area of interest, exploration projects to be
advanced to a drill-ready stage through further exploration work. BHP may, at its discretion, propose
additional exploration work of up to $700,000 before advancing a project to the second phase.
Exploration work in the area of interest
A three-week prospecting program was completed in September and October 2021 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. Final assay results for the 2021
prospecting program were received. Thirteen grab samples returned anomalous values ranging
between 0.10% and 0.25% Ni along with associated Cu values in the ratio close to 1:1.
Regional MT surveys covering 232 stations in three blocks, were conducted during Q3-22. This work
was designed to map and provide a preliminary assessment of the regional geological architecture.
Results are being integrated in a 3D model.
- 38 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
A prospecting program (two phases) was completed in early September. These field programs
targeted new anomalies identified during the MT survey, as well as additional geological targets that
were generated during the initial targeting phase but that were not ground-checked during the 2021
program.
Assay results from the first phase were received during this month. New results, including new
showings from the 2022 target list, include :
Target 2022-22 : 0.81% Ni – 0.21% Cu ( New 2022 results)
Area 2022-22 Ultramafic boulder : 0.16% Ni (New 2022 results)
Mantas Intrusion (North) : 0.15 % Ni – 0.11% Ni
Bonne Une Intrusion : 0.22 % Ni – 0.23 % Cu
A17-1: 0.20 % Ni – 0.20 % Cu
Final interpretation and 3D inversions of the MT data is still in progress. Planning for the 2023 program
is currently ongoing with BHP and will be finalized during Q2-23.
4.43 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 Fiscal 21 and 22, a total of 490 claims (22,883 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
For the summer of 2022, Midland and SOQUEM conducted a second prospecting campaign in two
phases of three weeks each, under the Labrador Trough Alliance. Several new targets were
prospected, including some follow-up work on an erratic boulder discovered in the late summer of
2021, which graded 40.8 g/t Au in grab sample.
During a prospecting campaign carried out in the summer of 2022, the Midland-SOQUEM team
discovered, on surface, several new mineralized horizons with high-grade copper and gold that were
observed over an area of at least 160 metres by 170 metres. Given the vegetative cover, the
mineralization remains open in all directions and the dimensions of this new mineralized system have
yet to be determined.
Discovery of a high-grade Cu-Au mineralized system, interpreted over an area of at least
160 metres by 170 metres, open in all directions
Grab samples grading up to 25.6 % Cu, 4.9 g/t Au, 162 g/t Ag (29.97 % CuEq*) ;
Channel #1: 1.49% Cu, 0.54 g/t Au and 11.4 g/t Ag (1.93% CuEq*) over 4.0 metres ;
Channel #2: 0.90% Cu, 0.45 g/t Au and 6.5 g/t Ag (1.25% CuEq*) over 3.0 metres.
New land position following the acquisition of 187 claims (90 sq. km)
- 39 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
The mineralized system was discovered during prospecting work conducted in the area south of
Nachicapau Lake. This work followed up on the discovery made by Midland in 2018 of a calcite vein
with bornite and malachite mineralization that graded 3.16% Cu, 5.27 g/t Au and 40.7 g/t Ag. The new
discovery is located 100 metres from this showing and the surrounding area has seen very little
exploration.
Geologically, the mineralized system is hosted in mafic pyroclastic rocks and chlorite-actinolite schists
of the Murdoch Formation. It is defined by the presence of disseminated malachite and bornite
mineralization in horizons ranging from cm-scale to several metres wide and as cm-scale pods in
calcite veins. Gold mineralization is also associated with these veins. At least eight decimetric to pluri-
metric mineralized horizons have been identified to date.
Additional assays results have confirmed the potential in this area with 8 new samples of interest
grading up to 10.05% Cu, 0.19 g/t Au, and 62.90 g/t Ag, and 1.26% Cu, 5.80 g/t Au, and 10.90 g/t Ag
in grab samples. These samples with high-grade Cu-Au-Ag values are located along the extensions
of horizons and veins with malachite and bornite mineralization. A new area of interest located
350 metres south of these mineralized horizons also exhibits carbonate veining with chalcopyrite and
bornite mineralization, which graded 0.11% Cu, 0.03 g/t Au, and 0.20 g/t Ag.
An exploration program will be undertaken in the summer of 2023, focusing on the immediate vicinity
of the Cu-Au-Ag mineralized horizons and their extensions along the volcano-sedimentary
Murdoch Formation. This area has been the focus of very little previous exploration. Upcoming work
may include soil and rock sampling, stripping, channel sampling, and induced polarization surveys.
4.44 Pallas (PGE)
Property Description
As at September 30, 2022, the property totals 322 claims covering approximately 14,601 hectares in
the Labrador Trough (” Trough”) some 80 kilometres west of Kuujjuak, Québec. Since no exploration
work are planned in the near future, the property was written off for $694,694 in Fiscal 22. Some claims
were dropped in Fiscal 21 and the Corporation impaired partially for $8,099 the property cost.
Exploration work on the property
Midland is currently looking for a new partner for this project.
4.45 Soissons (Ni-Cu-Co)
Property description
As at September 30, 2022, 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.
- 40 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
4.46 Soissons-NMEF (Ni-Cu-Co)
Property Description
On July 27, 2018, the Corporation signed a partnership agreement (50%-50%) with the 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,
2022, this project consists of a total of 77 claims (3,571 hectares).
On October 4, 2022, the Corporation signed an amendment to the July 27, 2018 agreement with NMEF
whereby NMEF agrees to transfer its 50% in 46 mining claims for a 2 NSR royalty that can be bought
back for a cash payment of $1,500,000 for each 1% for a total amount or $3,000,000.
Exploration work on the property
Prospecting works were carried out during Q4-21 and assay results and the final report from NMEF
were received. The most interesting results came from the Northern Block 3.
A total of 43 out of 136 samples were collected on Northern Block 3. Approximately 16.8 km (excluding
the soil sampling and detailed sampling area) have been walked in the vicinity of MERN’s Soissons
Suite intrusions.
Fifteen samples returned Ni values over the significant threshold (150 parts per million (“ppm”) Ni)
including one anomalous value at 2150 ppm in sample M825391. Twenty samples returned Cu values
over the significant threshold (125 ppm Cu) including eleven anomalous samples with the highest value
of 2450 ppm in sample M825391. Three samples returned Co values over the significant threshold
(100 ppm Co) and they are associated with the three best results of Ni-Cu. These three samples:
M825323 (Ni 1460 ppm, Cu: 1540 ppm & Co: 126 ppm), M825343 (Ni: 1270 ppm, Cu: 1420 ppm &
Co: 103 ppm) and M825391 (Ni: 2150 ppm, Cu: 2450 ppm & Co: 135 ppm) are the three best samples
of the 2020-2021 exploration campaign. All significant Ni-Cu-Co results are within gabbroic Soissons
intrusions except samples M825277 (Cu: 605 ppm) and M825334 (Cu: 187 ppm) with significant
copper in gneiss rock.
Two small channels were cut. The first two meters channel had samples M825343 (Ni: 1270 ppm,
Cu 1420 ppm & Co: 103 ppm) and M825344 (Ni: 818 ppm, Cu: 638 ppm & Co: 89 ppm). The second
channel is 3.6 meters to the southeast in line with the first channel and is two meters long with samples
M825345 (Ni: 371 ppm, Cu: 353 ppm & Co: 59 ppm) and M825346 (Ni: 256 ppm, Cu: 189 ppm &
Co 56 ppm). The three best Ni results were all collected within 10 meters north of the channel
(M825323: 1460 ppm Ni, M825391: 2150 ppm Ni and M825392: 1290 ppm Ni).
A soil survey was completed but did not return any significant value with the best Ni value of 44.4 ppm
in sample M825423 and the best Cu value of 17 ppm in sample M825426. Although the values are
not significant, the highest values line up with the local Soissons intrusion in a North-Northwest trend.
4.47 Willbob (Au)
Property Description
The Willbob property in the Labrador Trough consists of 687 claims (31,483 hectares) as of September
30, 2022, 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.
- 41 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
In Fiscal 22, the Corporation impaired partially the property for the claims that were dropped for
$110,837.
Exploration work on the property
No exploration work conducted on Willbob during Fiscal 22. Midland is currently looking for a new
partner for this project.
During Q3-21, Simon Hébert had completed two days on the field visiting the most important gold
showings of the Willbob project for his M.Sc. thesis. M. Hébert has also spent a few days reviewing
the core from the drilled showings at Kuujjuaq. During his field trip for his master’s degree about gold
in the Labrador Trough, M. Hébert found free gold in a trench of the Wayne showing. Results were
received during Q1-22 and one sample with visible gold returned 87,5g / t Au (gravity).
PROJECTS GENERATION
Midland continued some geological compilation programs in Quebec for the acquisition of new
strategic gold and base metal properties.
Some claims were dropped therefore the Corporation impaired partially the property cost for $16,630
in Fiscal 22.
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. CASH AND INVESTMENTS FORECAST
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 next 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.
- 42 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Cash and investments opening
Exploration budget paid by Midland
Property maintenance
Project management fees
Payments received – option agreements and alliances
Flow-through private placement
Private placement
Share issue expenses
Operating expenses, excluding non-cash items
Interest income
Mining credits of preceding years
Cash used
Cash and investments ending
Fiscal 23
forecast
$
6,400,000
(4,034,000)
(394,000)
89,000
355,000
2,905,000
726,000
(180,000)
(1,577,000)
245,000
194,000
(1,671,000)
4,729,000
6. SELECTED ANNUAL INFORMATION
Project management fees
Loss
Loss per share, basic and diluted
Fiscal 22
$
210,412
(1,900,085)
(0.03)
Fiscal 21
$
202,218
(1,023,800)
(0.01)
Fiscal 20
$
23,754
(1,345,977)
(0.02)
2022
$
As at September 30,
2021
$
2020
$
Total assets
39,216,081
39,915,196
38,893,801
7. SUMMARY OF RESULTS PER QUARTERS
For the eight most recent quarters:
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Q4-22
$
Q3-22
$
Q2-22
$
Q1-22
$
140,537
(1,087,021)
(0.01)
39,216,081
30,997
(180,374)
-
41,431,312
13,205
(369,947)
(0.01)
41,821,173
25,673
(262,743)
-
40,914,031
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
- 43 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
Quarterly highlights:
Q4-22
o BHP extends the alliance for year and increase the budget for $1,400,000.
o New Cu-Au-Ag discovery in Labrador trough with SOQUEM, up to 25.6% Cu, 4.9 g/t
Au and 162 g/t Ag (grab).
Q3-22
o New high-grade gold floats (28.7 g/t Au) discovered on Laflamme.
o Prospecting in James Bay.
o New Ni-Cu acquisition in Abitibi: Nickel Square property.
Q2-22
o $93,500 hard cash financing with BHP.
o Commencement of regional magnetotelluric surveys and prospecting in the Nunavik
with BHP.
o 2,388 metres drilling on La Peltrie with Probe.
Q1-22
o $2,667,100 flow-through financing.
o Option agreement with RTEC on the Tête Nord property.
o New gold discovery on Casault with Wallbridge: 6.85 g/t Au over 2.0 metres.
o New high-grade gold float (40.8 g/t Au) discovered on the Labrador Trough Alliance
with SOQUEM.
o Several high-resolution magnetic surveys commencing in Abitbi.
Q4-21
o 5,295 metres drilling on Casault with Wallbridge.
o 4,483 metres drilling on Gaudet with Probe.
Q3-21
o 2,405 metres drilling on Samson.
o 1 647 metres drilling on Mythril.
Q2-21
o SOQUEM alliance agreement signed 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 incurred $2,078,377 ($1,781,852 in Q4-21) in exploration expenses of which
$1,459,676 ($284,102 in Q4-21) was recharged to the partners. The exploration expenses incurred in
Q4-22 were incurred mainly on the BHP Alliance, Laflamme and Labrador Trough with SOQUEM,
whereas in Q4-21 they were mostly incurred on the BHP Alliance, Casault, Gauder and La Peltrie.
The Corporation acquired or maintained properties for $94,279 net ($59,263 net in Q4-21)
The Corporation reported a loss of $1,087,021 for Q4-22 compared to a loss of $342,253 for Q4-21.
Project management fees increased to $140,537 ($29,086 in Q4-21) mainly due to increased activity
level in Q4-22 on BHP Alliance versus Q4-21.
Operating expenses increased to $1,440,694 in Q4-22 compared to $369,354 in Q4-21:
● Conference and investors relations $70,546 ($27,828 in Q4-21). Midland retained Renmark
to provide investor relations services for a monthly cash consideration of $6,000 from
- 44 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
●
March 1, 2022 to September 30, 2022. Also, the Midland team started to travel again to
participate at conferences.
Impairment of exploration and evaluation assets: $1,004,981 ($10,623 credit in Q4-21). The
main impairment arises from the Pallas property write off for $694,694. In addition, the
Corporation dropped certain claims and partially impaired mainly Mythril for $190,066.
A $206,416 (none in Q4-21) 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.
The balance on flow-through financing not spent according to the restrictions imposed by the
December 2021 financings represents $308,636 as at September 30, 2022.
9. RELATED PARTY TRANSACTIONS
The following are the related party transactions that occurred in Fiscal 22, in the normal course of
operations:
● A firm in which René Branchaud (director and corporate secretary) is a partner charged legal
fees amounting to $121,171 ($88,839 in Fiscal 21) of which $91,265 ($77,439 in Fiscal 21) was
expensed and $29,906 ($11,400 in Fiscal 21) was recorded as share issue expenses;
● A company controlled by Ingrid Martin (chief financial officer) charged accounting fees totaling
$144,151 ($140,857 in Fiscal 21) of which $53,676 ($49,619 in Fiscal 21) relates to her staff;
● As at September 30, 2022, the balance due to the related parties amounted to $13,735 ($12,772
as at September 30, 2021).
10. EVENTS SUBSEQUENT TO YEAR END
See section 2.5 on the option agreement signed with Brunswick on the Mythril and Elrond properties,
and also section 4.46 for an amendment signed with NMEF on the Soissons NMEF property. Finally
see section 2.3 on the private placements closed in November and December 2022.
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.
- 45 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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 AND JUDGEMENTS
See note 3 of the Financial Statements.
15. NEW ACCOUNTING STANDARDS
No new accounting standards to discuss for Fiscal 22.
16. FINANCIAL INSTRUMENTS
See notes 2.6 and 12 of the Financial Statements.
17. RISK FACTORS
The following discussions review a number of important risks which management believes could
impact the Corporation’s business. There are other risks, not identified below, which currently, or may
in the future exist in the Corporation’s operating environment.
17.1 Exploration and Mining Risks
The business of exploration for minerals and mining involves a high degree of risk. Few properties
that are explored are ultimately developed into producing mines.
Currently, there are no known bodies of commercial ore on the mineral properties of which the
Corporation intends to acquire an interest and the proposed exploration program is an exploratory
search for ore. Unusual or unexpected formations, formation pressures, fires, power outages, labor
disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery,
equipment or labor are other risks involved in the conduct of exploration programs. The Corporation,
from time to time, increases its internal exploration and operating expertise with due advice from
consultants and others as required.
The economics of developing gold and other mineral properties is affected by many factors including
the cost of operations, variation of the grade of ore mined and fluctuations in the price of any minerals
produced. There are no underground or surface plants or equipment on the Corporation’s mineral
properties.
17.2 Titles to Property
While the Corporation has diligently investigated title to the various properties in which it has interest,
and to the best of its knowledge, title to those properties are in good standing, this should not be
construed as a guarantee of title. The properties may be subject to prior unregistered agreements or
transfer, or native or government land claims, and title may be affected by undetected defects.
- 46 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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.
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.
- 47 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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.
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 Fluctuation in market value of Midland’s shares
The market price of Midland shares is affected by many variables not directly related to the corporate
performance of the Corporation, including the strength of the economy generally, the availability and
attractiveness of alternative investments, and the breadth of the public market for the stock. The effect
of these and other factors on the market price of Midland’s shares in the future cannot be predicted
and may cause more dilution or difficulties in closing future financings.
- 48 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
17.14 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.
17.15 Taxation
Taxation laws are complicated and may be subject to change. The Corporation may also be subject
to review, audit and assessment in the ordinary course. Any such situations could result in higher taxes
being payable or require payment of taxes due from previous years, which could adversely affect the
Corporation’s liquidities.
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.
17.16 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.
17.17 Relationship with local communities and First Nations.
Relationship with local communities and First Nations is critical to ensure the success of exploration
activities of the Corporation and their future development.
- 49 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2022
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 8, 2022
(s) Gino Roger
Gino Roger
President and CEO
(s) Ingrid Martin
Ingrid Martin
CFO
- 50 -
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, 2022 and 2021, 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, 2022 and 2021;
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.
- 51 -
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.
- 52 -
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.
- 53 -
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, actions
taken to eliminate threats or safeguards applied.
The engagement partner on the audit resulting in this independent auditor’s report is Maxime Guilbault.
/s/PricewaterhouseCoopers LLP1
Montréal, Quebec
December 8, 2022
1 CPA auditor, public accountancy permit No. A128042
- 54 -
Midland Exploration Inc.
Consolidated Statements of Financial Position
As at September 30, 2022 and 2021
(in Canadian dollars)
Assets
Current assets
Cash
Investments (note 4)
Accounts receivable
Sales tax receivable
Tax credits and mining rights receivable
Listed shares
Prepaid expenses
Total current assets
Non-current assets
Listed shares
Right-of-use assets (note 5)
Advance paid for exploration work
Exploration and evaluation assets (note 6)
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
Liability related to the premium on flow-through share
Lease liabilities – current portion (note 7)
Total current liabilities
Non-current liabilities
Lease liabilities (note 7)
Total liabilities
Equity
Capital stock
Contributed surplus
Deficit
Total equity
Total liabilities and equity
As at September 30
2021
2022
$
$
1,895,705
4,504,000
59,928
84,548
194,878
12,000
54,861
6,805,920
40,950
69,746
50,000
1,490,860
5,940,390
50,128
135,380
1,320,091
-
60,182
8,997,031
170,578
99,638
-
2,927,591
29,321,874
32,249,465
32,410,161
3,182,934
27,465,015
30,647,949
30,918,165
39,216,081
39,915,196
291,906
434,135
113,480
31,301
870,822
1,253,266
209,993
-
28,341
1,491,600
51,108
82,409
921,930
1,574,009
52,967,839
6,431,575
(21,105,263)
38,294,151
51,177,074
6,231,927
(19,067,814)
38,341,187
39,216,081
39,915,196
Subsequent events (note14)
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
- 55 -
Midland Exploration Inc.
Consolidated Statements of Comprehensive Loss
For the years ended September 30, 2022 and 2021
(in Canadian dollars)
Revenues
Project management fees
Operating Expenses
Salaries (note 9)
Stock-based compensation (note 9)
Office expenses
Regulatory fees
Conferences and investors relations
Professional fees
Depreciation (note 5)
General exploration
Impairment of exploration and evaluation assets (note 3)
Operating expenses
Other revenues (expenses)
Interest income
Change in fair value - listed shares
Financing fees
Fiscal 22
$
Fiscal 21
$
210,412
202,218
773,865
159,515
190,221
46,991
285,318
304,373
29,892
2,419
1,208,289
3,000,883
734,745
174,639
196,018
50,145
131,190
408,506
29,892
-
201,717
1,926,852
80,524
(39,631)
(6,862)
34,031
98,837
7,765
(8,942)
97,660
Loss before income taxes
(2,756,440)
(1,626,974)
Recovery of deferred income taxes (note 11)
856,355
603,174
Loss and comprehensive loss
(1,900,085)
(1,023,800)
Basic and diluted loss per share (note 10)
(0.03)
(0.01)
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.
- 56 -
Midland Exploration Inc.
Consolidated Statements of Changes in Equity
For the years ended September 30, 2022 and 2021
(in Canadian dollars)
Number of
shares
outstanding
Capital
stock
$
Warrants
$
Contribut
ed
surplus
$
Deficit
$
Total
equity
$
Balance at October 1, 2020
Loss and comprehensive loss
70,354,043
-
49,399,289
-
749,556
-
5,267,584
-
(17,911,670)
(1,023,800)
37,504,759
(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
-
-
-
-
-
-
-
-
-
-
-
-
96,209
2,284,750
(603,174)
1,681,576
Warrants expired
Stock-based compensation
Share issue expenses
-
-
-
-
-
-
(749,556)
-
-
749,556
214,787
-
-
-
(132,344)
-
214,787
(132,344)
Balance as at Sept. 30, 2021
72,278,052
51,177,074
-
6,231,927
(19,067,814)
38,341,187
Number of
shares
outstanding
Capital
stock
$
Contribut
ed
surplus
$
Deficit
$
Total
equity
$
Balance at October 1, 2021
Loss and comprehensive loss
72,278,052
-
51,177,074
-
6,231,927
-
(19,067,814)
(1,900,085)
38,341,187
(1,900,085)
Private placement
170,000
93,500
Flow-through private placement
Less: premium
3,219,745
-
3,219,745
2,667,100
(969,835)
1,697,265
-
-
-
-
-
-
-
-
93,500
2,667,100
(969,835)
1,697,265
Stock-based compensation
Share issue expenses
-
-
-
-
199,648
-
-
(137,364)
199,648
(137,364)
Balance as at Sept. 30, 2022
75,667,797
52,967,839
6,431,575
(21,105,263)
38,294,151
The accompanying notes are an integral part of these consolidated financial statements.
- 57 -
Midland Exploration Inc.
Consolidated Statements of Cash Flows
For the years ended September 30, 2022 and 2021
(in Canadian dollars)
Cash flow relating to:
Operating activities
Loss
Adjustment for:
Stock-based compensation (note 9)
Depreciation (note 5)
Impairment of exploration and evaluation assets (note 3)
Change in fair value - listed shares
Recovery of deferred income taxes (note 11)
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 7)
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
Advance paid for exploration expenses
Additions to exploration and evaluation expenses
Tax credits and mining rights received
Net change in cash
Cash – beginning
Cash – ending
Fiscal 22
$
Fiscal 21
$
(1,900,085)
(1,023,800)
159,515
29,892
1,208,289
39,631
(856,355)
(1,319,113)
(9,800)
50,832
5,321
(145,787)
224,142
124,708
(1,194,405)
(28,341)
93,500
2,667,100
(137,364)
2,594,895
(4,504,000)
5,940,390
77,997
(472,453)
280,000
(50,000)
(3,648,580)
1,381,001
(995,645)
404,845
1,490,860
1,895,705
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
For additional disclosure see note 13.
The accompanying notes are an integral part of these consolidated financial statements.
- 58 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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. These
Financial Statements were approved and authorized for issue by the Board of Directors on December 8,
2022.
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.
- 59 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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. 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.
- 60 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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.
- 61 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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.
- 62 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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.
- 63 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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.
- 64 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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 the Corporation’s activities are conducted in Canada.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
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.
3.1 Impairment of E&E assets
Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment
losses is a subjective process involving judgment and a number of estimates and interpretations in many
cases.
Determining whether to test for impairment of E&E assets requires management’s judgment, among
others, regarding the following: the period for which the entity has the right to explore in the specific area
has expired during the period or will expire in the near future, and is not expected to be renewed;
substantive expenditure on further E&E of mineral resources in a specific area is neither budgeted nor
planned; exploration for and evaluation of mineral resources in a specific area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided to
discontinue such activities in the specific area; or sufficient data exists to indicate that, although a
development in a specific area is likely to proceed, the carrying amount of the E&E asset is unlikely to
be recovered in full from successful development or by sale.
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.
- 65 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
The total impairment loss of the E&E assets recognized is $1,208,289 for the year ended
September 30, 2022 (“Fiscal 22”) ($201,717 for the year ended September 30, 2021 (“Fiscal 21”)). No
reversal of impairment losses has been recognized for the reporting periods.
3.2 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.
3.3 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.
4.
INVESTMENTS
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.
As at September 30, 2022, investments are composed of guaranteed investment certificates, not
cashable before the expiry date, earning between 0.92% and 2.25% interest payable annually, maturing
between November 17, 2022 and March 21, 2023. The investments’ maturity value is $4,568,406.
The balance on flow-through financing not spent according to the restrictions imposed by the December
2021 financings represents $308,636 as at September 30, 2022 and is included in investments. The
Corporation has to dedicate these funds to Canadian mining properties exploration.
- 66 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
5. RIGHT-OF-USE ASSETS
Cost
As at September 30, 2021 and 2022
Accumulated depreciation
As at October 1, 2020
Depreciation for the year
As at September 30, 2021
Depreciation for the year
As at September 30, 2022
Net book value
As at September 30, 2021
As at September 30, 2022
Buildings
$
159,422
29,892
29,892
59,784
29,892
89,676
99,638
69,746
6. 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,
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
Net
Additions
$
137,537
48,019
151,674
142,964
1,566
481,760
Option
payments
$
(8,781)
(100,000)
-
-
-
(108,781)
Impairment
$
(6,681)
(9,866)
(339,252)
(262,882)
(9,641)
(628,322)
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)
As at
Sept. 30,
2022
$
1,135,503
129,400
1,262,157
400,531
-
2,927,591
As at
Sept. 30,
2021
$
1,013,428
191,247
1,449,735
520,449
8,075
3,182,934
In Fiscal 22, the Corporation impaired partially the following properties for some claims that were dropped
for $466,636 and wrote off the properties (or some projects included in these properties) for $161,686
since no exploration program was planned for the near future and/or all claims were dropped.
In Fiscal 21, the Corporation impaired partially the following properties for some claims that were dropped
for $120 971 and wrote off the properties (or some projects included in these properties) for $20,301
since no exploration program was planned for the near future and/or all claims were dropped.
- 67 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
The following table disclose details of exploration and evaluation expenses by region:
Exploration
and evaluation
expenses
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
Exploration
and evaluation
expenses
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
As at
Sept. 30,
2021
$
12,458,393
1,257,589
9,476,715
4,235,000
37,318
27,465,015
As at
Sept. 30,
2020
$
10,067,943
836,108
8,673,408
3,930,512
37,318
23,545,289
Net
Additions
$
Option
payments
$
1,570,278
77,498
622,583
593,474
-
2,863,833
(171,219)
-
-
-
-
(171,219)
Tax
credits
$
(114,335)
(15,987)
(68,885)
(56,581)
-
(255,788)
Impairment
$
-
-
-
(542,649)
(37,318)
(579,967)
As at
Sept. 30,
2022
$
13,743,117
1,319,100
10,030,413
4,229,244
-
29,321,874
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)
-
-
-
-
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)
-
In Fiscal 22, the Corporation wrote off the properties (or some projects included in these properties) for
$579,967 including Pallas for $542,649, since no exploration program was planned for the near future
and/or all claims were dropped.
In Fiscal 21, the Corporation wrote off the properties (or some projects included in these properties) for
$60,445 since no exploration program was planned for the near future and/or all claims were dropped.
ABITIBI
6.1 Casault
On June 16, 2020, the Corporation signed an option agreement with Wallbridge Mining Company Limited
(“Wallbridge”), and amended on November 4, 2022, 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 - completed
On or before December 31, 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.
- 68 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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.
6.2 Gaudet
Some claims of the Gaudet property are subject to a 1% NSR royalty.
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.
6.3 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.
6.4 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.
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.
6.5 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
On or before July 31, 2021 completed
On or before July 31, 2022 completed
On or before July 31, 2023
On or before July 31, 2024
Total
Payments
$
50,000 1)
55,000 2)
70,000 3)
100,000
125,000
400,000
Exploration
work
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
1)
2)
3)
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.
In July 2022, the Corporation received $70,000 in cash.
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.
- 69 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
6.6 Lac Esther
Some claims of the Lac Esther property are subject to two 2% NSR royalty of which 1% can be bought
back in tranches for an aggregate of $2,000,000.
6.7 Laflamme Au-Cu
The Corporation holds 79% of the Laflamme property.
6.8 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.
6.9 Patris
The Corporation holds the Patris property and some claims are subject to NSR royalties varying from
1% to 2% that can be bought back in tranches for an aggregate of $7,000,000.
GRENVILLE
6.10 Gatineau
On February 20, 2020, the Corporation signed an alliance contract 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.
On April 6, 2022, the Corporation received from SOQUEM a notice to terminate the alliance on the
Gatineau property.
6.11 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 (completed)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.
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.
- 70 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
On December 1, 2021, and as amended, the Corporation signed an option agreement with
Rio Tinto Exploration Canada Inc. ("RTEC") for its Tête Nord property (Grenville). 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 60 days of execution of the
agreement (completed).
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:
o An additional 1% interest (for a total of 51%) by funding an additional $250,000 of
exploration expenditures;
o An additional 1% interest for each additional $500,000 of exploration expenditures (for
a total of up to 69%); and
o An additional 1% (for a total of 70%) by funding an additional $750,000 of exploration
expenditures.
RTEC retains the 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. RTEC chose to be the operator for the first
year of the option agreement.
6.12 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
6.13 JV Eleonore (Au)
On June 13, 2016, a joint-venture agreement (50%-50%) was signed with Osisko Development Corp.
(“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
6.14 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.
- 71 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
Following the first phase, one or more specific exploration targets may be advanced to a second phase
to be further developed as a separate designated project.
Testing Phase (II)
During this second phase, each designated project will have its own work program and budget with the
objective, mainly through drilling, to test and further develop the identified targets. The Corporation will
act as operator during the testing phase subject to BHP’s right to become the operator of any designated
project.
For each designated project, the testing phase will last up to four years, with a total budget of up to
$4,000,000 with a minimum of $700,000 to be spent during the first year. During this phase, BHP and
the Corporation will fund 75% and 25%, respectively, for approved work programs.
In addition, for each designated project, BHP will pay to the Corporation a designated project fee,
structured as follows: $250,000 on or before the first anniversary, $250,000 on or before the second
anniversary and $500,000 on or before the third anniversary, of the testing phase, for a maximum of
$1,000,000 per designated project.
BHP has the right to cease contributing its share of the funding of a designated project in which case the
Corporation would have the right to retain a 100% interest of the designated project and BHP would
receive a 1% NSR royalty. The Corporation would have a right to buy-back such royalty for a one-time
cash payment of $1,500,000. Total royalty payments would be capped at $3,000,000 per designated
project.
BHP may decide to advance any designated project to the third phase as a joint venture project (“JV
Project”).
Joint Venture Phase (III)
For this third phase, a formal joint venture would be formed with initial participating interests being 70%
BHP and 30% the Corporation. Both parties would contribute to the expenses pro-rata to their
participating interests. BHP would be the operator for all JV Projects.
For each JV Project, BHP will pay to the Corporation a joint venture success fee of $200,000 after the
formation of the joint venture including transfer of tenements, data ownership and any other assets
related to the JV Project to, or for the benefit of, the joint venture.
If a party’s participating interest in the joint venture is diluted below 10%, such interest would be converted
into a 1.5% NSR royalty on the JV Project. The non-diluted party would have a right to buy-back such
royalty for a one-time cash payment of $2,500,000. Total royalty payments would be capped at
$5,000,000 per JV Project.
On July 11, 2022, an amendment was signed which provides a one-year extension of the Generative
Phase (Phase I) which comes with an additional annual funding of up to $1,400,000 and extends until
August 21, 2023. The Corporation will continue to act as the project operator, and the main objective of
this phase is to generate, identify and secure, within the area of interest, exploration projects to be
advanced to a drill-ready stage through further exploration work. BHP may, at its discretion, propose
additional exploration work of up to $700,000 before advancing a project to the second phase.
- 72 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
6.15 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.
6.16 Soissons-NMEF
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.
6.17 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.
7. LEASE LIABILITIES
Opening balance
Principal repayment
Lease liabilities
Less : current lease liabilities
Non-current lease liabilities
8. EQUITY
8.1 Capital stock authorized
As at
September 30
2022
$
110,750
(28,341)
82,409
(31,301)
51,108
As at
September 30
2021
$
136,150
(25,400)
110,750
(28,341)
82,409
Unlimited number of common shares without par value, voting and participating.
8.2 Private placements
a) 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.
- 73 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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.
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.
b) December 2021 and January 2022
On December 7 and 21, 2021, the Corporation completed private placements of 2,458,875 flow-through
shares at $0.80 per share for total gross proceeds of $1,967,100. On those dates, the Corporation’s
share closed at $0.53 and $0.49 respectively on the Exchange, therefore the residual values attributed
to the benefit related to flow-through shares renunciation are $0.27 and $0.31 for a total value of
$673,096, credited to the liability related to the premium on flow-through shares.
In addition, on December 7, 2021, the Corporation completed, with an originator of flow-through donation
financing, a private placement of 760,870 flow-through shares at $0.92 per share for total gross proceeds
of $700,000. On that date, the Corporation’s share closed at $0.53 on the Exchange, therefore the
residual value attributed to the benefit related to flow-through shares renunciation is $0.39 for a total
value of $296,739 credited to the liability related to the premium on flow-through shares.
On January 14, 2022, the Corporation completed a private placement of 170,000 shares at a price of
$0.55 per share for total gross proceeds of $93,500. BHP has exercised its right to maintain its ownership
to 5.0% by acquiring 170,000 shares. This right had been granted to BHP on April 18, 2019 pursuant to
an Investor Rights Agreement with the Corporation.
In connection with the private placements, the Corporation incurred $137,364 share issue expense, of
which $84,930 was paid as finder’s fees. Directors and officers of the Corporation participated in the
flow-through private placement for a total consideration of $189,000 under the same terms as other
investors.
8.3 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
Fiscal 21
Number
4,110,667
-
(4,110,667)
-
Amount
$
749,556
-
(749,556)
-
- 74 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
8.4 Policies and processes for managing capital
The capital of the Corporation consists of the items included in equity of $38,294,151 as of
September 30, 2022 ($38,341,187 as of September 30, 2021). 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
9. EMPLOYEE REMUNERATION
9.1 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
Fiscal 22
$
1,306,389
129,666
98,576
1,534,631
(760,766)
Fiscal 21
$
1,278,374
124,278
94,624
1,497,276
(762,531)
773,865
734,745
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
9.2 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 22
$
199,648
(40,133)
Fiscal 21
$
214,787
(40,148)
159,515
174,639
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 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.
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.
On February 24, 2022, the Corporation granted to its directors, officers and employees 730,000 options
exercisable at $0.54, 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.
The estimated fair value of $0.24 per option amounts to a total stock-based compensation cost of
$172,000 considering a forfeiture factor representing the expected employee departures. The fair value
of the options granted was estimated using the Black-Scholes model with no expected dividend yield,
45.4% expected volatility, 1.75% 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.
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
A summary of changes in the Corporation’s common share purchase options is presented below:
Fiscal 22
Fiscal 21
Weighted
average
exercise
price
$
0.96
0.54
0.59
1.47
0.87
0.91
Number of
options
4,940,000
685,000
-
(380,000)
5,245,000
4,761,668
Weighted
average
exercise
price
$
1.05
0.82
-
1.51
0.96
0.97
Number of
options
5,245,000
730,000
(30,000)
(375,000)
5,570,000
5,073,333
Balance – Beginning of year
Granted
Forfeited
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, 2022:
Number of options
outstanding
Number of options
exercisable
330,000
580,000
420,000
485,000
50,000
530,000
100,000
550,000
545,000
605,000
510,000
80,000
80,000
705,000
5,570,000
330,000
580,000
420,000
485,000
50,000
530,000
100,000
550,000
545,000
605,000
510,000
80,000
53,333
235,000
5,073,333
Exercise
price
$
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
0.54
Expiry date
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
February 24, 2032
9.3 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
Long-term benefits
Stock-based compensation
Total compensation
Fiscal 22
$
Fiscal 21
$
745,346
82,150
8,325
702,445
84,338
6,900
151,655
1,017,760
165,553
1,003,115
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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 $1,128,727.
9.4 Related party transactions
In addition to the amounts listed above in the compensation to key management (note 9.3 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 $121,171 ($88,839
in Fiscal 21) of which $91,265 ($77,439 in Fiscal 21) was expensed and $29,906 ($11,400 in
Fiscal 21) was recorded as share issue expenses;
● A company controlled by an officer charged professional fees of $53,676 ($49,619 in Fiscal 21)
for her staff; and
● As at September 30, 2022, the balance due to the related parties amounted to $13,735 ($12,772
in September 30, 2021).
10. LOSS PER SHARE
The calculation of basic loss per share is based on the loss for the year divided by the weighted average
number of shares in circulation during the year. In calculating the diluted loss per share, potential
common shares such as share options and warrants have not been included as they would have the
effect of decreasing the loss per share. Decreasing the loss per share would be antidilutive.
Loss
Weighted average number of basic and diluted outstanding shares
Basic and diluted net loss per share
Fiscal 22
$
(1,900,085)
75,009,762
(0.03)
Fiscal 21
$
(1,023,800)
72,087,232
(0.01)
11.
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 22
$
Fiscal 21
$
-
(856,355)
(856,355)
-
(603,174)
(603,174)
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
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 22
$
(2,756,440)
Fiscal 21
$
(1,626,974)
(730,500)
42,300
625,000
(856,355)
71,260
(8,060)
(856,355)
(431,100)
46,300
605,400
(603,174)
(219,721)
(879)
(603,174)
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 $226,000 ($127,000 as of
September 30, 2021).
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 (loss) on listed shares
Right-of-use assets
Total deferred income tax liabilities
As of
September
30, 2022
$
As of
September
30, 2021
$
4,901,000
19,000
85,000
22,000
5,027,000
4,300,000
19,000
96,000
29,000
4,444,000
4,785,000
(2,000)
18,000
4,801,000
4,284,000
7,000
26,000
4,317,000
Deferred income tax assets not recognized
226,000
127,000
- 79 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
As of September 30, 2022, 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
2,861,000
2,304,000
2,264,000
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
1,646,000
2,678,000
2,516,000
2026
2027
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
The balance on flow-through financing not spent according to the restrictions imposed by the December
2021 financings represents $308,636 as at September 30, 2022. All the exploration work imposed by
the December 2020 flow-through financings was completed before September 30, 2021.
12. 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:
12.1 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, 2022 would
result in an estimated effect on the net income (loss) of $10,590.
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
12.2 Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause
the other party to incur a financial loss. The Corporation is subject to concentrations of credit risk through
cash and cash equivalents, investments and accounts receivable. The Corporation reduces its credit risk
by maintaining part of its cash and cash equivalents and its investments in financial instruments held
with a Canadian chartered bank, with a broker which is a subsidiary of a Canadian chartered bank or
with an independent investment dealer member of the Canadian Investor Protection Fund.
In Fiscal 2022, 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.
12.3 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, 2022, the Corporation has working capital of $5,935,098
including cash and cash equivalents of $1,895,705. 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.
12.4 Fair value
The carrying value of cash, investments, accounts receivable 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.
13. 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 22
$
40,133
104,558
194,878
-
73,168
Fiscal 21
$
40,148
938,745
1,320,091
55,000
157,209
- 81 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2022 and 2021
14. SUBSEQUENT EVENTS
14.1 Soisson-NMEF property
On October 4, 2022, the Corporation signed an amendment to the July 27, 2018 agreement with NMEF
whereby NMEF agrees to transfer its 50% in 46 mining claims for a 2 NSR royalty that can be bought
back for a cash payment of $1,500,000 for each 1% for a total amount or $3,000,000.
14.2 Option agreement with Brunswick Exploration Inc. (“Brunswick”)
On November 22, 2022, the Corporation signed an option agreement Brunswick whereby Brunswick has
the option to acquire exploration rights for critical minerals including lithium (excluding copper, nickel,
zinc, lead, gold, silver, platinum and palladium) on the Mythril and Elrond properties. Under this new
agreement, Brunswick may acquire an initial 50% interest ("Option 1") in the Mythril property over a
three-year period, at the following conditions:
Upon signature
On or before November 22, 2023
On or before November 22, 2024
On or before November 22, 2025
Total
Payment in
cash
$
25,000
50,000
70,000
-
145,000
Payments in
shares
$
25,000
50,000
70,000
210,000
355,000
Exploration
work
$
-
300,000
300,000
900,000
1,500,000
Option to earn an additional 35% undivided interest in the claims (the "Option 2") in the properties over
an additional two-year period, at the following conditions:
Aggregate consideration of $200,000 payable according to the following schedule: 1st
Anniversary: $100,000 in cash or stock, at BRW's option; 2nd anniversary: $100,000 in cash or
stock, at BRW's option;
Requirement to spend an additional amount of $2,000,000 in exploration expenditures, in cash
or in shares, at BRW's option, according to the following schedule: 1st anniversary after
exercising Option 1: amount of $1,000,000; and 2nd anniversary after exercising Option 1:
additional amount of $1,000,000.
Any Brunswick share issuance during Option 1 and Option 2 is subject to a minimum price of $0.254 per
share.
Brunswick would hold a right of first refusal on the 15% remaining interest held by the Corporation and
the Corporation would not be required to participate in exploration and development expenditures until
a mine is constructed to extract all metals or minerals except precious metals (gold, platinum, palladium
and silver) and base metals (copper, zinc, nickel and lead).
14.1 Private Placement
On November 17 and December 1, 2022, the Corporation completed private placements of 4,034,000
flow-through shares at $0.50 per share for total gross proceeds of $2,017,000. In addition, on November
17 and December 1, 2022, the Corporation completed, with an originator of flow-through donation
financing, a private placement of 1,268,400 flow-through shares at $0.70 per share for total gross
proceeds of $887,880. Finally, on December 1, 2022, the Corporation completed a private placement
of 1,450,000 shares at a price of $0.40 per share for total gross proceeds of $580,000. Directors and
officers of the Corporation participated in the flow-through private placement for a total consideration of
$203,000 under the same terms as other investors.
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Midland Exploration Inc.
Corporate Information
Directors
Paul Archer 2) 3)
René Branchaud 2)
Jean des Rivières 1) 3)
Annie Dutil 1)
Jean-Pierre Janson, Chairman of the board 1) 2)
Gino Roger 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, Corporate Secretary
Head Office
1 Place Ville Marie, Suite 4000
Montréal, Québec, H3B 4M4
Exploration Office
132 Labelle Blvd, Suite 220
Rosemère, Québec, 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
Montréal, Québec, H3B 4Y1
Legal counsel
Lavery, de Billy, L.L.P.
1 Place Ville Marie, Suite 4000
Montréal, Québec, H3B 4M4
Transfer Agent
Trust TSX
100, Adelaide Street West, Suite 301,
Toronto, On. M5H 4H1
Tel. : (866) 600-5869
tsxtis@tmx.com
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