Annual Report
September 30, 2023
Midland Exploration Inc.
1, Place Ville Marie, Suite 4000, Montreal (Quebec) H3B 4M4
Tel.: 450.420.5977 Fax : 450.420.5978
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Midland Exploration inc.
Table of contents
Message to Shareholders
Management’s discussion and Analysis
Nature of Activities ........................................................................................................................................ 6
Overall Performance ..................................................................................................................................... 6
Results of Operations .................................................................................................................................. 12
Exploration Activities ................................................................................................................................... 14
Cash and Investments Forecast ................................................................................................................. 45
Selected Annual Information ...................................................................................................................... 45
Summary of Results per Quarters .............................................................................................................. 46
Fourth Quarter ............................................................................................................................................. 47
Related Party Transactions ......................................................................................................................... 47
Events Subsequent to Year End ................................................................................................................. 48
Stock Option Plan ....................................................................................................................................... 48
Off-balance Sheet Arrangements ............................................................................................................... 48
Critical Accounting Estimates and Judgements .......................................................................................... 48
New Accounting Standards ......................................................................................................................... 48
Financial Instruments .................................................................................................................................. 48
Risk Factors ................................................................................................................................................ 48
Foward Looking Information........................................................................................................................ 52
Financial Statement
Independant Auditor’s Report ..................................................................................................................... 53
Consolidated Statements of Financial Position........................................................................................... 58
Consolidated Statements of Comprehensive Loss ..................................................................................... 59
Consolidated Statements of Changes in Equity.......................................................................................... 60
Consolidated Statements of Cash Flows .................................................................................................... 61
Notes to Consolidated Financial Statements .............................................................................................. 62
Corporate Information ................................................................................................................................. 87
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Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2023
Dear Shareholders,
I am very pleased to present the 2023 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 favourable
investment climate of Quebec to discover new world-class gold and critical metal deposits. Midland
continued to deploy its business model based on partnerships this year to conduct significant exploration
work. We are very proud to count on reputable partners such as BHP Canada Inc. (“BHP”),
Rio Tinto Exploration Canada Inc. ("RTEC"), Barrick Gold Corporation, Agnico Eagle Mines Limited,
Osisko Development Corp., Probe Metals Inc. (“Probe”), Wallbridge Mining Company Ltd (“Wallbridge”),
SOQUEM Inc., Brunswick Exploration Inc. (“Brunswick”), the Nunavik Mineral Exploration Fund,
Cosmos Exploration Limited, 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.
Midland continued to pursue its strategy of exploring in partnership across Quebec and achieved significant
progress once again in 2023, with the execution of a new partnership agreement with RTEC who optioned
an interest in several properties with strong lithium potential in the James Bay region of Quebec for up to
$65.5 million in work expenditures and other payments over a period of 10 years. Midland also concluded
a new partnership with Barrick; pursuant to the transaction, Barrick may acquire up to 75% interest in the
property in consideration of cash payments totalling $1,017,500 and exploration expenditures totalling
$16,575,000 over a period of eight years. Major exploration programs were launched in 2023 under these
two agreements and will continue in 2024.
One of the highlights of our exploration efforts in 2023 was certainly the joint discovery, under an option
agreement with RTEC, of significant lithium mineralization on our Galinee property. During the first phase
of the work program, spodumene-bearing pegmatite dykes were identified over a distance of nearly
600 metres at the Iceberg showing, with high grades reaching 7.2% Li2O in grab samples. Additional new
spodumene-bearing outcrops were also found 500 metres south and 900 metres southwest of the Iceberg
showing.
Prospecting work conducted in the summer of 2023 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. In 2022, 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. The summer 2023 program
resulted in the discovery of 6 new mineralized veins at surface and numerous erratic boulders containing
copper and gold mineralization spread over an area of 7 km2. Twenty-three samples, including 9 from
outcrops, yielded grades > 0.1% Cu and 6 samples yielded grades > 1% Cu, up to 20.4% Cu. Follow-up
work for 2024, pending approval, will include soil and rock sampling, stripping, channel sampling, and an
induced polarization geophysical survey.
Drilling in the Abitibi region, on our La Peltrie project in partnership with Probe, led to the discovery in 2022
of a large Cu-Au-Ag-Mo mineralized system with a drill interval of 345.5 metres grading 0.2% CuEq.,
which remains open along strike and at depth. Recent work on the La Peltrie property has successfully
demonstrated the tremendous potential for significant gold and copper mineralized systems. Follow-up
drilling (2,700 m) on this new discovery was completed in the late summer of 2023 and assay results are
pending. Discussions are currently underway to perform additional drilling in 2024 on this new discovery.
A drilling program with RTEC on our Tête Nord project located near the town of La Tuque resulted in the
discovery, in early 2023, of a new Ni-Cu zone (Santos). The Santos Ni-Cu zone was discovered after drill-
testing an electromagnetic VTEM anomaly. The discovery hole (MDLD0015) intersected, from 14 to
80 metres downhole depth, several layers with Ni-Cu mineralization within altered gabbro horizons. From
20.11 to 22.79 metres, the drill hole intersected 1.10% Ni and 0.71% Cu over 2.68 metres. Further down,
from 33.02 to 43.39 metres, a mineralized interval graded 0.45% Ni and 0.18% Cu over 10.37 metres.
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Midland Exploration Inc.
Message to Shareholders
For the fiscal year ended September 30, 2023
A second shallow hole was drilled in July 2023 on the Santos zone, approximately 50 metres west of the
discovery hole. After going through 11.66 metres of overburden, drill hole MDLD0018 intersected a
mineralized zone grading 0.33% Ni and 0.12% Cu over 39.73 metres, from 11.66 to 51.39 metres downhole
depth (see press release by Midland dated October 12, 2023). The interval exhibits impressive magmatic
breccias with a few decimetre-sale semi-massive sulphide zones, indicative of a dynamic magmatic system
at Santos. These two drill holes, MDLD0015 and MDLD0018, began directly in the mineralized zone; the
total thickness of the zone is still unknown and it remains open in all directions. Follow-up drilling is currently
underway to test the depth extensions of the Santos showing.
Finally, major exploration programs including geophysical and geochemical surveys and prospecting
campaigns were carried out in the summer of 2023 under our Strategic Alliance for Ni with BHP in Quebec’s
Far North (Kuujjuaq area). The 2023 exploration program, which began in July 2023, focused on a major
crustal-scale structure that was previously identified during regional magneto-telluric (“MT”) surveys
conducted in 2022. This structure, previously poorly defined, is potentially favourable for nickel-copper
mineralization. The 2023 program consisted of a lake sediment survey totalling 1,534 samples, an airborne
Z-Tipper axis (“ZTEM”) electromagnetic survey, and two phases of mapping and prospecting that took
place in July and August. Results are pending.
Here are the main highlights of our past year of activities:
• New lithium discoveries with Rio Tinto and Brunswick on our Galinee and Elrond projects;
• New option agreement with Rio Tinto on 10 lithium projects in the James Bay region ($65.5 million);
• New option agreement with Barrick on the Patris gold project ($17.5 million);
• Discovery of new high-grade Cu-Au showings with SOQUEM in the Labrador Trough;
• ZTEM survey completed with BHP under the Nunavik Ni-Cu Alliance; started phase 2 prospecting;
• Follow-up drilling (2,700 m) on La Peltrie with Probe (0.21% CuEq./345.5 m);
• Discovery of the new Ni-Cu Santos mineralized zone on Tête Nord with RTEC;
• One-year extension of the generative phase of our alliance with BHP with a $3.5 million budget;
• Drilling completed under the ADDP project (7,600 m) on the Patris-Laflamme-Heva-Adam
properties;
• Till survey completed on Nomans to the west (60 km) of the Kenorland/Newmont discovery;
• More than 15,000 metres of drilling completed during fiscal 2023.
Midland intends to continue aggressively exploring its various projects for gold and critical metals in 2024,
to discover world-class deposits. Another ambitious exploration program, similar to 2023, 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 2023, we also continued to increase visibility for Midland by taking part in numerous
promotional events throughout the year to attract significant new shareholders.
Midland also intends to continue assessing interesting business opportunities as they arise in 2024. Midland
has a very strong financial position, with more than $8 million in adjusted working capital as at
December 1, 2023, after completing its $2.7 million 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 2023. 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 2024 to make one or many significant discoveries in Quebec.
(s) Gino Roger
Gino Roger, P.Eng.
President and CEO
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
the Corporation’s
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
the year ended
that affected
September 30, 2023, 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, 2023 (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.
financial and operating performance
for
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 22
Q1-22
Q2-22
Q3-22
Q4-22
Fiscal 23
Q1-23
Q2-23
Q3-23
Q4-23
Fiscal 24
Period
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
October 1, 2023 to December 31, 2023
January 1, 2024 to March 31, 2024
April 30, 2024 to June 30, 2024
July 1, 2024 to September 30, 2024
October 1, 2023 to September 30, 2024
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
Fiscal 23 is an excellent year for Midland by the:
•
Important level of exploration work completed on its properties for $14.5M ($8.2M in
Fiscal 22).
• Closing and continuation of 14 partnerships in a variety of commodities (gold, copper, nickel
and lithium).
• Meters drilled: 15,139 metres in 86 holes (3,861 metres in 11 holes in Fiscal 22).
• Generation of $314,971 ($210,412 in Fiscal 22) project management fees.
• Payments in cash and listed shares for $950,000 (including the $500,000 payment from
Rio Tinto Exploration Canada Inc. (“RTEC”) cashed on October 3, 2023).
Interest revenues of $251,035 ($80,524 in Fiscal 22) at favorable rates.
•
• Financings covering more than the annual exploration budget with the support of its loyal
shareholders.
The parameters are in place to, we hope, realize Midland's motto which is to uncover the next major
discovery in Québec.
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
2.1 Highlights of exploration work in Fiscal 23
• New Cu-Au-Mo-Ag discovery (0.21% CuEq/345.5 metres) with Probe Gold Inc. (“Probe”) on
La Peltrie option and a second phase of drilling completed, assays pending.
• High-grade gold shears (18.9 g/t Au) and floats (28.7 g/t Au) discovered on Laflamme, and
two phases of drilling completed.
• New discovery of high-grade Cu-Au under the Labrador Trough Alliance with SOQUEM Inc.
(“SOQUEM”).
• New Ni-Cu discovery (Santos Zone) with RTEC on Tête Nord option and a second phase of
drilling commencing.
• New option agreement with RTEC for lithium including 10 properties in James Bay and
beginning of an imagery and LiDAR surveys.
• New discovery with up to 7.2% Li2O on Galinée with RTEC.
• New option agreement with Barrick Gold Corporation (“Barrick”) for the Patris gold project and
completion of a of a VTEM survey and upcoming drilling program.
• New option agreement with Brunswick Exploration Inc. (“Brunswick”) on Mythril and Elrond
for their lithium potential.
• New spodumene-bearing pegmatites discovery on Elrond with Brunswick.
• Major magnetotelluric (“MT”) survey completed with BHP Canada Inc. (“BHP”) and completion
of an important program of $3.5M for the Ni-Cu Alliance in Nunavik.
• Drilling programs Abitibi Discovery Drilling Program (“ADDP”) completed on Patris, Heva,
Adam and Laflamme.
Starting June 2023, major forest fires have raged in Quebec. During Summer 2023, several areas of
Abitibi, Côte-Nord and James Bay with Midland properties have been affected by ground access bans
and some access roads have also been closed. These fires have reduced the availability of
helicopters. They were requisitioned to fight the fires and evacuate affected residents, thus making
exploration work in remote areas, such as James Bay and Nunavik, impossible to complete. Field work
has gradually restarted, and access restrictions are now lifted.
More details can be found in section 4.
2.2 Working capital
Midland has an adjusted working capital1) of $4,613,449 as of September 30, 2023 ($5,935,098 as of
September 30, 2022), which will allow the Corporation to execute its exploration program and absorb
its general corporate expenses for at least the next two years.
The adjusted working capital1) is calculated as follows:
Current assets
Current liabilities
Working capital
Investments – non-current portion
Adjusted working capital1)
As at
September 30,
2023
$
5,678,842
(1,865,393)
3,813,449
800,000
4,613,449
As at
September 30,
2022
$
6,805,920
(870,822)
5,935,098
-
5,935,098
1) Midland has included a non-IFRS measure, “Adjusted working capital”, to supplement its financial statements, which are
presented in accordance with IFRS. Midland believes that this measure, together with measures determined in accordance with
IFRS, provide investors with an improved ability to evaluate the underlying performance of the Corporation. Non-IFRS measures
do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures
employed by other companies. The data is intended to provide additional information and should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with IFRS.
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
2.3 Private placements
2.3.1 Flow-through private placements
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. 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. 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.
On November 16 and 30, 2023,
the Corporation completed private placements of
2,761,228 flow-through shares at $0.65 per share for total gross proceeds of $1,794,798. Directors
and officers of the Corporation participated in the flow-through private placement for a total
In addition, on
consideration of $174,300 under
November 30, 2023, the Corporation completed, with an originator of flow-through donation financing,
a private placement of 666,667 flow-through shares at $0.90 per share for total gross proceeds of
$600,000.
terms as other
the same
investors.
2.3.2 Private placements
Through a private placement on January 14, 2022, BHP exercised its right to maintain its ownership
to 5.0% by acquiring 170,000 shares at a price of $0.55 per share for total gross proceeds of $93,500.
In similar circumstances on January 23, 2023, BHP acquired 356 000 shares at a price of $0.40 per
share for total gross proceeds of $142 400. This right had been granted to BHP on April 18, 2019
pursuant to an Investor Rights Agreement with the Corporation.
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.
On November 16, 2023, the Corporation completed a private placement of 666,666 shares at a price
of $0.45 per share for total gross proceeds of $300,000.
2.4 Outstanding share data:
Common shares
Options
As at
December 7, 2023
Number
86,870,758
6,000,000
92,870,758
As at
September 30, 2023
Number
82,776,197
6,000,000
88,776,197
2.5 New agreements with partners and updates
2.5.1 Option agreement with Brunswick on Mythril and Elrond
On November 22, 2022, the Corporation signed an option agreement with 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.
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Under this new agreement, Brunswick may acquire an initial 50% interest, the option 1, in the Mythril
property over a three-year period, at the following conditions:
Payments
Commitment
Exploration Work
in shares Completed Commitment Completed
$
$
Commitment
in cash
$
25,000
50,000
70,000
-
145,000
$
50,000
-
-
-
50,000
Upon signature (completed)
On or before November 22, 20232)
On or before November 22, 2024
On or before November 22, 2025
Total
1) 62,500 shares of Brunswick received
2) The $50,000 cash payment and the issuance of 48,544 Brunswick shares valued at $50,000 were completed before
-
300,000
300,000
900,000
1,500,000
-
272,511
-
-
272,511
25,0001)
50,000
70,000
210,000
355,000
November 22, 2023
In addition, Brunswick may earn an additional 35% undivided interest in the claims, 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 Brunswick's option; 2nd anniversary: $100,000
in cash or stock, at Brunswick's option.
• Requirement to spend an additional amount of $2,000,000 in exploration expenditures, in cash
or in shares, at Brunswick'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 $0.24 per
share.
If Brunswick exercise option 1 and 2, it 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).
2.5.2 Option agreement with Barrick on Patris
On May 11, 2023, the Corporation signed a definitive option agreement with a wholly owned indirect
subsidiary of Barrick whereby Barrick may acquire a 75% interest in the Patris property in
consideration for cash payments totaling $1,017,500 and exploration work totaling $16,575,000, over
an eight-year period, including a firm commitment of $3,000,000, over a four-year period. Barrick is
the operator. Commitment highlights are as follows to earn a 51% initial interest and form a joint
venture:
Upon signature - definitive agreement
On or before May 11, 2024
On or before May 11, 2025
On or before May 11, 2026
On or before May 11, 2027
Total
Cash payments
Exploration work
Commitment Completed Commitment Completed
$
50,000
60,000
77,500
95,000
110,000
392,500
$
50,000
-
-
-
-
50,000
$
-
500,000
-
-
3,500,000
4,000,000
$
-
369,974
-
-
-
369,974
In the following two years, Barrick may earn an additional 9% in the joint venture, for a 60% interest
in consideration for cash payments totalling $265,000 and exploration work expenditures of at least
$2,000,000.
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Finally, in the subsequent two years, Barrick may earn an additional 15% in the joint venture, for a
total 75% interest in consideration for cash payments totalling $360,000 and exploration work
expenditures of at least $10,575,000.
If Barrick does not exercise or complete the first joint venture funding or the second joint venture
funding option, the joint venture interests will be subject to any subsequent adjustments in ownership
made in accordance with the proportionate funding and dilution terms of the joint venture agreement.
Dilution below a 10% joint venture interest results in conversion of the joint venture interest to a
2% net smelter return (“NSR”) royalty with the right to repurchase 50% of the NSR royalty (1% NSR)
for a payment of $1,500,000.
2.5.3. Option agreement with RTEC for lithium in James Bay
On June 13, 2023, the Corporation signed an option agreement with RTEC for 10 lithium properties
in the James Bay region, including Corvette, Mythril-East, Chisaayuu, Galinée, Moria, Shire, Komo,
Warp, Sulu, and Picard (the “Lithium Properties”).
Under the option agreement, RTEC may acquire an initial 50% interest (the first option) in the Lithium
Properties over a period of 5 years, subject to the following conditions:
Initial payment
On or before August 24, 2024
On or before August 24, 2025
On or before August 24, 2026
On or before August 24, 2027
On or before August 24, 2028
Total
1) Received October 3, 2023
Cash payments
Exploration work
Commitment Completed Commitment Completed
$
500,000
100,000
100,000
100,000
100,000
100,000
1,000,000
$
500,0001)
-
-
-
-
-
500,000
$
-
-
-
-
-
14,500,000
14,500,000
$
-
-
-
-
-
817,383
817,383
Exploration expenditures totalling $14,500,000 include a firm commitment to spend not less than
$2,000,000 in the first 18 months.
After acquiring an initial 50% interest, RTEC will have the option to increase its interest in the Lithium
Properties to 70% (the second option) over a period of five years following the exercise of the first
option, subject to completing exploration expenditures totalling an additional $50,000,000 (for a total
of $64,500,000 under the option agreement).
If RTEC acquires an interest in the Lithium Properties, the parties will form a joint venture and
contribute on a pro-rata based on its interest. Dilution below a 10% interest results in conversion of
the interest to a 2% NSR royalty with the right to repurchase 50% of the NSR royalty for a payment of
$2,000,000.
RTEC is the project operator during the first and second option of the agreement.
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
2.5.4 Update on royalties held by Altius Resources Inc. and its affiliate Altius Royalties Corp.
(“Altius”)
On February 10, 2017, the Corporation signed a letter of intent creating a strategic alliance with Altius
(the “Altius Alliance”). On February 12, 2019, the parties jointly decided to terminate the Altius Alliance.
The designated projects as per the Altius Alliance (Elrond, Gondor, Helms Deep, Isengard, Minas
Tirith, Moria, Shire, Mythril and Fangorn) maintain their 1% NSR royalty in favor of Altius, on the claims
that were active at the time of their designation, as reiterated in the Royalty agreements signed on
June 12 and 19, 2023.
2.5.5 Update on the Mythril right of first offer (“ROFO”) held by BHP
Pursuant to the April 17, 2019, investment agreement with BHP, BHP has the right of first offer on the
Mythril project in the event the Corporation seeked to divest all or part of its interest. On May 8, 2023,
amendment to this investment agreement was signed whereby the claims that are part of the
RTEC option agreement on James Bay Lithium are no longer subject to the Mythril ROFO.
2.5.5 List of agreement with partners
As at September 30, 2023, the following properties are under agreements with partners:
• Casault
• Gaudet
• La Peltrie
• Laflamme
• Maritime Cadillac
• Patris
• Tête Nord
• BJ Lithium
• Eleonore JV
• LaSalle
• Mythril et Elrond
• BHP Alliance Ni
• Labrador Through
• Soissons
Wallbridge Mining Company Ltd (“Wallbridge”)
Probe
Probe
Abcourt Mines Inc. (“Abcourt”)
Agnico Eagle Mines Ltd (“Agnico Eagle”)
Barrick
RTEC
RTEC
Electric Elements Mining Corp. (“EEM”)
Cosmos Exploration Ltd
Brunswick
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. The Corporation filed all documentation
during T2-23 and is awaiting for it computerised audit.
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Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Health and safety at work:
During T3-23, an update of the Emergency Measure Plan has been done by Urgence industrielle Dan
Ouellet Inc. who continued his support mandate and did a training on the latest update of the guide
with the entire team. Following this training, monthly Health & Safety meetings were established with
a view to continuous improvement to reduce the risk of accidents. No major accidents with loss of time
or material damage were reported for Fiscal 23.
3. RESULTS OF OPERATIONS
As operator, Midland incurred exploration expenditures totalling $7,208,440 ($5,068,401 in Fiscal 22),
on its properties of which $3,304,317 was recharged to its partners ($2,244,701 in Fiscal 22).
The operating partners incurred $7,272,648 of exploration expenses ($3,114,180 in Fiscal 22). Also,
the Corporation invested $564,707 ($510,255 in Fiscal 22) to complete several property acquisitions
in Quebec or maintained them, of which $96,196 was recharged to its partners ($28,495 in Fiscal 22).
The Corporation reported a loss of $1,109,216 in Fiscal 23 compared to $1,900,085 for Fiscal 22.
Project management fees increased to $314,971 ($210,412 in Fiscal 22). The BHP alliance started in
August 2020 and generated most of the project management fees. Also, the Labrador Trough
SOQUEM alliance started in February 2021.
Operating expenses decreased at $2,839,391 for Fiscal 23 compared to $3,000,883 in Fiscal 22,
and following are the explanations for the main variances:
● Conference and investors relations $237,399 ($285,318 in Fiscal 22). 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, and did
not retain their services in Fiscal 23.
●
● Professional fees: $414,018 ($304,373 in Fiscal 22). The Corporation signed and implemented
several agreements with major partners requiring the contribution of its legal and accounting
professionals.
Impairment of exploration and evaluation assets: $976,731 ($1,208,289 in Fiscal 22). Write
offs were recorded on Gatineau for $343,302, Turgeon for $202,562, Jeremie for $135,855
and Guyberry for $76,181 (Pallas for $694,694 in Fiscal 22). In addition, the Corporation
dropped certain claims and partially impaired mainly the following properties: Jouvex for
$52,089, JV Eleonore for $49,848 and Laflamme for $35,053 (BJ Eleonore for $65,614, BJ Au
for $59,796, Mythril for $190,066 and Willbob for $110,837 in Fiscal 22). See section 4 for more
details.
The Corporation has received listed share as part of agreements on its exploration properties.
A change in fair value of listed shares was recorded as follows:
Brunswick
Probe
Niobay Metals inc.
Fiscal 23
$
30,730
3,181
(5,000)
28,911
Fiscal 22
$
-
(10,631)
(29,000)
(39,631)
The $30,730 change in fair value on Brunswick in Fiscal 23 is in fact a realized gain on the sale of the
62,500 shares received. The change in fair value of Probe includes a realized gain of $25,217 on the
sale of 35 423 shares in Fiscal 22.
- 12 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
A $1,140,043 ($856,355 in Fiscal 22) 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 and December 2022 private placement (December 2021
in Fiscal 22). All exploration work imposed by the November and December 2022 flow-through
financing was completed before September 30, 2023. 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 were completed before December 31, 2022.
- 13 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4. EXPLORATION ACTIVITIES
Deferred
exploration
expenses
Fiscal 23
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 Li RTEC
Elrond
Fangorn
Galinée1)
Helms
JV Eleonore Au
Balance
Sept. 30,
2022
Geology
Geo-
physics
Drilling
Geo-
chemistry
$
$
$
$
$
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
-
204,254
15,950
288,121
65,026
617, 865
-
174,330
8,450
7,641
(2,555)
-
6,545
-
17,980
19,323
7,521
139,726
41,460
2,323
12,407
14,670
70,269
8,958
-
101,322
20,106
-
-
23
9,612
3,565
-
11,820
9,956
-
44,757
-
-
-
-
-
-
32,557
-
-
-
48,280
-
66,590
-
-
-
61,390
34,300
127,895
-
-
-
60,925
-
-
-
-
-
-
116,025
-
-
-
-
66,520
-
297,424
17,424
-
145
-
47,917
-
-
1,119
-
644,754
-
-
-
-
-
-
-
620,085
727
-
-
754
-
-
-
-
-
-
-
-
-
-
21,266
-
-
-
-
7,351
-
-
-
-
165,358
1,838
-
-
-
33,176
-
-
109,869
5,421
-
-
-
-
-
-
-
-
-
-
-
-
Stock-
based
comp.
$
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
Balance
Sept. 30,
2023
$
$
$
$
$
$
-
2,759
-
786
3,199
-
-
-
1,747
-
-
15,051
1,855
-
1,333
2,024
823
943
-
12,022
678
-
-
-
-
-
589
-
720
-
-
-
-
-
-
(25,874)
-
-
-
-
-
-
(20,442)
-
-
-
-
-
-
-
-
-
(2,663)
-
-
-
-
(9,612)
-
-
(127,845)
-
-
-
-
(33,260)
-
-
-
(171)
(3,099)
-
-
-
(608)
-
(30,832)
(61,291)
(9,805)
-
(27,275)
-
(97,470)
-
-
-
(1,045)
-
-
-
-
-
-
-
(443)
-
(2,065)
-
-
-
-
(130,000)
-
-
-
-
-
-
(75,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(67,004)
-
(121,140)
-
-
-
-
-
-
-
-
-
-
-
-
-
(202,050)
-
(318,808)
-
-
-
-
-
-
-
-
-
-
495,779
(130,000)
8,256
30,247
(67,004)
61,813
(121,140)
67,399
(75,000)
43,279
903,598
35,348
2,323
47,855
50,994
134,693
9,901
-
840,635
86,812
(202,050)
-
7,383
941,825
1,924,569
63,079
744,877
-
433,266
-
800,695
970,108
117,206
4,249,507
616,872
502,241
470,091
55,331
242,847
193,714
571
1,520,055
2,079,669
-
32,949
(318,031)
-
3,565
-
97,535
907,099
589
-
10,233
-
42,692
-
33,260
1,859,464
-
214,487
15,950
330,813
65,026
651,125
Sub
total
$
-
493,020
25,874
7,641
30,147
-
61,813
-
66,260
20,442
74,111
949,838
43,298
2,323
73,797
48,970
231,340
8,958
-
831,276
87,179
-
-
777
9,612
3,565
-
127,845
9,956
-
44,757
-
66,520
- 14 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Deferred
exploration
expenses
Fiscal 23
Komo
Lasalle1)
McDuff
Moria
Mythril
Mythril BRW
Shire
Wookie
North
BHP Ni
Labrador Trough
Nachicapau
Soissons
Soissons Nmef
Willbob Au
Balance
Sept. 30,
2022
$
112,868
239,803
35,213
148,555
6,086,996
-
329,206
27,681
-
687,469
-
106,746
129,643
3,305,386
Geology
Geo-
physics
Drilling
Geo-
chemistry
Sub
total
$
28,785
81
-
6,100
65,329
2,292
20,959
-
$
-
-
-
-
154,549
-
-
-
$
-
-
-
-
9,408
-
-
-
$
-
-
-
-
989
-
-
-
$
28,785
81
-
6,100
230,275
2,292
20,959
-
923,778
202,311
634,968
3,524
-
30,731
1,330,077
3,000
-
-
-
-
-
-
-
-
-
34,200
412,053
25,987
-
-
-
-
2,665,908
231,298
634,968
3,524
-
64,931
Stock-
based
comp.
$
-
-
-
-
3,037
-
-
-
-
11,485
-
-
-
-
Recharge
Tax
credits
Option
Payment
Write-off
Net
change
$
-
-
-
-
-
(2,292)
-
-
(2,665,908)
(109,091)
(307,330)
-
-
-
$
(799)
-
-
(92)
51,983
-
(667)
-
-
-
(70,255)
-
-
(243)
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
27,986
81
-
6,008
285,295
-
20,292
-
-
133,692
257,383
3,524
-
64,688
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
Sept. 30,
2023
$
140,854
239,884
35,213
154,563
6,372,291
-
349,498
27,681
-
821,161
257,383
110,270
129,643
3,370,074
TOTAL
29,321,874
2,649,067
2,102,108
1,673,957
783,308
7,208,440
59,051
(3,304,317)
(254,177)
(205,000)
(709,002)
2,794,995 32,116,869
1) Before Fiscal 23, the Galinée and Lasalle properties were grouped in the BJ Gold property.
- 15 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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
-
-
-
- 16 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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
- 17 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Exploration and evaluation
expenses
Properties
Actual Fiscal 22
Actual Fiscal 23
Budget Fiscal 231)
Budget Fiscal 24
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
100 % Midland
Abitibi Gold
Adam
Fleuribleu
Guyberry
Heva Au
Jeremie
Jouvex
Lac Esther
Lewis
Mistaouac
Molion
Nickel Square
Nomans
Noyelles
Olga
Patris
Samson
Valmond
Vezza
Gatineau Zn
Palatin
Tête Nord
Weedon Cu-Zn-Au
BJ Éléonore Au
BJ Gold
Elrond
Fangorn
Galinée
Helms
Komo
Lasalle
McDuff
Minas Tirith
Moria
Mythril
Shire
Tilly
Wookie
Nachicapau
Pallas EGP
Soissons
Willbob
Project generation
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
-
-
-
-
-
-
-
-
-
-
-
-
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
-
493,020
7,641
-
61,813
-
66,260
74,111
43,298
73,797
-
48,970
231,340
8,958
-
828,613
87,179
-
-
777
-
-
3,565
-
-
9,956
-
44,757
-
28,785
81
-
-
6,100
230,275
20,959
-
-
-
600
3,524
64,931
14,876
2,454,186
5,000
455,000
5,000
-
70,000
4,000
65,000
95,000
50,000
75,000
-
100,000
250,000
15,000
-
840,000
100,000
5,000
-
5,000
5,000
-
10,000
20,000
-
5,000
5,000
30,000
5,000
-
-
5,000
-
5,000
145,000
-
-
-
-
-
10,000
30,000
40,000
2,454,000
-
-
493,020
-
7,641
-
-
-
61,813
-
-
-
66,260
-
74,111
-
43,298
-
73,797
-
-
-
48,970
-
231,340
-
8,958
-
-
-
828,613
-
87,179
-
-
-
-
-
777
-
-
-
-
-
3,565
-
-
-
-
-
9,956
-
-
-
44,757
-
-
-
28,785
-
81
-
-
-
-
-
6,100
-
230,275
-
20,959
-
-
-
-
-
-
-
600
-
3,524
-
64,931
-
-
14,876
- 2,454,186
- 18 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000
455,000
5,000
-
70,000
4,000
65,000
95,000
50,000
75,000
-
100,000
250,000
15,000
-
840,000
100,000
5,000
-
5,000
5,000
-
10,000
20,000
-
5,000
5,000
30,000
5,000
-
-
5,000
-
5,000
145,000
-
-
-
-
-
10,000
30,000
40,000
2,454,000
-
5,000
-
-
7,000
-
30,000
7,000
500,000
25,000
50,000
300,000
150,000
55,000
-
-
-
4,000
9,000
-
-
-
115,000
60,000
-
60,000
-
-
-
-
-
-
-
-
120,000
-
60,000
50,000
-
-
-
80,000
159,000
1,846,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000
-
-
7,000
-
30,000
7,000
500,000
25,000
50,000
300,000
150,000
55,000
-
-
-
4,000
9,000
-
-
-
115,000
60,000
-
60,000
-
-
-
-
-
-
-
-
120,000
-
60,000
50,000
-
-
-
80,000
159,000
1,846,000
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Exploration and evaluation
expenses
Properties
Option
BJ Lithium RTEC
Casault - Wallbridge
La Peltrie – Probe
Lasalle – Cosmos
Mythril-Elrond – Brunswick
Patris – Barrick
Tête Nord – Rio Tinto
Joint venture
BHP Ni Alliance
Lab.Trought – SOQUEM 0%
Gatineau JV 50%
Gaudet-Fenelon – Probe
JV Eleonore Osisko 50%
Laflamme Au– Abcourt
Maritime-Cadillac AEM 51%
Soissons NMEF 50%
Grand total
Actual Fiscal 22
Actual Fiscal 23
Budget Fiscal 231)
Budget Fiscal 24
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
Midland
$
Partners
$
Total
$
-
-
-
-
-
-
-
-
-
721,850
-
721,850
1,291,562 1,291,562
-
-
-
843,605
2,857,017 2,857,017
-
-
-
843,605
-
-
-
-
-
-
-
-
804,598
804,598
1,093,616 1,093,616
1,298,992 1,298,992
288,374
274,803
372,637
3,260,548 3,260,548
7,393,568 7,393,568
288,374
274,803
372,637
-
-
-
-
-
-
-
-
-
1,200,000
1,000,000
500,000
300,000
-
3,200,000
6,200,000
-
1,200,000
1,000,000
500,000
300,000
-
3,200,000
6,200,000
-
-
-
-
-
-
-
-
1,500,000
1,000,000
1,100,000
250,000
300,000
1,500,000
1,200,000
6,850,000
-
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
2,665,908 2,665,908
-
899,692
449,845
-
-
64,529
30,147
66,520
33,260
949,838
949,838
2,323
2,323
-
-
1,465,413
3,183,397 4,648,810
3,919,599 10,576,965 14,496,564
449,847
-
34,382
33,260
-
-
-
3,800,000
3,800,000
-
1,300,000
650,000
650,000
-
-
-
120,000
60,000
60,000
80,000
40,000
40,000
925,000
-
925,000
5,000
-
5,000
100,000
50,000
50,000
1,730,000
6,330,000
4,600,000
4,184,000 10,800,000 14,984,000
-
490,000
-
5,000
195,000
295,000
-
45,000
1,030,000
2,876,000
400,000
490,000
-
5,000
195,000
-
-
45,000
1,135,000
7,985,000
1,500,000
1,000,000
1,100,000
250,000
300,000
1,500,000
1,200,000
6,850,000
400,000
980,000
-
10,000
390,000
295,000
-
90,000
2,165,000
10,861,000
1) Updated on July 18, 2023
- 19 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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 technical disclosure included in this MD&A.
ABITIBI
4.1 Abitibi Gold (Au)
Property Description
As at September 30, 2023, 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, 2023, it consists of 130 claims covering a surface area of about
7,229 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.
Some claims were dropped therefore the Corporation impaired partially for $13,032 the property cost
in Q3-23.
Exploration work on the property
One drill hole was completed at a depth of 295.0 metres during Q2-23 with the objective to test below
an historical value in drill hole. Several cherty horizons mineralized with pyrite and pyrrhotite were cut.
No significant result was obtained.
During Q3-23, two additional holes totalling 438.0 metres were completed. These holes were designed
to test VTEM conductors for their Cu-Au potential. The best result was obtained in hole ADM-23-02
which returned a weak gold anomaly (50-60 ppb Au) between 176.8 and 180.0 metres. This zone
corresponds to an interval of semi-massive pyrite within a mudrocks unit.
- 20 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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, 2023, 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, and on September 29, 2023, whereby Wallbridge may earn a 50% interest in the
Casault property in consideration of the following:
Upon signature
On or before June 30, 2021
On or before June 30, 2022
On or before June 30, 2023
On or before December 31, 2023
On or before June 30, 2024
On or before June 30, 2025
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
130,000
-
-
-
450,000
Exploration work
Commitment
$
Completed
$
-
750,000
1,000,000
-
1,250,000
-
2,000,000
5,000,000
-
750,000
1,000,000
-
1,250,000
-
35,663
3,035,663
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
In Q3-23, Wallbridge completed a till sampling program (Sonic survey) covering the eastern portion of
the property. Final results have been received and an interpretation of the results is in progress. The
preliminary interpretation of these results shows the presence of a new gold-in-till anomaly near the
Sunday Lake deformation zone. Additional interpretation is ongoing to better define the significance
of this anomaly.
4.4 Fleuribleu (Au)
Property Description
The Fleuribleu property consists in one claim block totalling 196 claims (10,880 hectares) as at
September 30, 2023. 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.
- 21 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Exploration work on the property
For Q3-23, Midland had planned 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. That survey was not completed during Q3-23 and was cancelled because of the
forest fires and also considering the one-year extension granted by the government for the claims
expiry dates.
4.5 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, 2023. 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
An induced polarisation (“IP”) survey was completed during Q2-23. This grid covered an area where
biogeochem anomalies were identified in the SE portion of the partnership. A few weak to moderate
IP anomalies were identified in the southern portion of the grid, including an interesting one situated
at the intersection of the Lower Detour and Sunday Lake faults.
4.6 Guyberry (Au)
Property Description
The Guyberry property consists of one claim block totaling 51 claims (1,957 hectares) as at
September 30, 2023. Since no exploration work are planned in the near future, the property was
impaired and written off for $76 181 during Fiscal 23,
4.7 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, half
of which can be bought back for a payment of $1,000,000.
Exploration work on the property
An IP grid (15 km) with lines at 100 metres spacing started during Q2-23 in the southern portion of the
project and the remainder of the grid has been postponed to a later date. At least two anomalies of
interest have been detected in areas showing a structural complexity.
- 22 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
During February 2023, one drill hole was completed to test an IP anomaly identified in the southern
portion of the property, closer to the Cadillac Break. This IP anomaly is interpreted at the contact
between the Timiskaming conglomerates and the wackes which contain a gold-bearing quartz veins
network. Sampling of some of those quartz veins had returned up to 0.23 g/t Au and 0.18 g/t Au in
grab samples.
Drill hole HEV-23-06 was completed at a final depth of 223.0 metres. The best results returned 6 gold
anomalous values ranging between 0.1 and 0.3 g/t Au over metric widths.
4.8 Jeremie (Au)
Property Description
The Jeremie block totals 42 claims (2,173 hectares) as at September 30, 2023 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).
Since no exploration work are planned in the near future, the property was written off for $135,855 in
Fiscal 23.
Exploration work on the property
A second bark survey was planned for Q2-23. This survey was not completed and has been cancelled
because of the forest fires and the one year extension (claims expiry dates) by the government.
4.9 Jouvex (Au)
Property Description
The Jouvex property is located about 50 kilometres to the southwest of Matagami and as at
September 30, 2023 is composed of 253 claims covering an area of approximately 14,117 hectares.
Some claims of the Casault property are subject to a 1% NSR royalty that can be bought back by
making a cash payment of $1,000,000 per tranche of 0.5% NSR. Other claims of the property are
subject to a 1% NSR royalty that can be bought back by making a cash payment of $1,000,000 per
tranche of 0.5% royalty.
Some claims were dropped therefore the Corporation impaired partially for $52,089 the property cost
in Q2-23.
Exploration work on the property
In Fiscal 23, Midland is planning a follow-up on a new bark anomaly as well as other local surveys to
cover other areas of interest on the property. This survey was not completed and has been cancelled
because of the forest fires during the summer of 2023.
A high-resolution magnetic survey was completed, covering the southern half of the property. This
survey identified a few weak and isolated magnetic anomalies that could be caused by syenite
intrusions.
- 23 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.10 La Peltrie (Au), option agreement with Probe, operated by Probe
Property Description
As at September 2023, the La Peltrie property comprises 483 claims covering a surface area of about
26,112 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)
100,000 4)
-
275,000
Exploration work
Commitment
$
Completed
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
-
500,000
700,000
1,200,000
867,911
3,267,911
1)
2)
3)
4)
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.
In July 2023, the Corporation received 61,087 shares of Probe based on a 5 days VWAP calculation to total $100,000.
Probe is the operator.
After exercising this first option to earn a 50% interest, Probe may increase its interest to 65%
(the second option) over a period of 2 years in consideration of exploration expenditures or cash
payment totalling $5,000,000.
Some claims of the La Peltrie property are subject to a 1% Gross Metal royalty. Another claim is subject
to a 1.5% NSR royalty that can be bought back by making a cash payment of $750,000 per tranche of
0.75% royalty.
The Wawagosic property (57 claims as of September 30, 2023, covering 3,162 hectares) is included
in the Probe option agreement.
Exploration work on the property
A drilling program was completed by Probe 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 metres.
In December 2022, the discovery of a large copper-gold-silver-molybdenum (“Cu-Au-Ag-Mo”)
mineralized system was announced. The mineralization intersected in hole LAP-22-012 was present
throughout the drill hole, defining a wider Cu-Au-Ag-Mo intercept grading 0.21% CuEq over
345.5 metres from surface, with potential to continue laterally and at depth. Midland and Probe are
currently planning the next phase of work including an IP survey, a spring prospecting program, and a
summer 2,500 metres drilling program with a focus on testing new IP anomalies strategically positioned
to the north and west of discovery hole LAP-22-012.
A drilling program consisting in eight (8) holes totalling 2,700 metres was completed during
September 2023. Final and complete results are pending and are expected for Q1-24.
4.11 Lac Esther (Au)
- 24 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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, 2023 comprises 287 claims (16,094 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.
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 therefore the Corporation impaired partially for $3,759 ($2,335 in Fiscal 22)
the exploration property cost.
Exploration work on the property
A small grid and an IP survey totalling 15 km were completed in the western portion of the Lac Esther
property. The IP final report has been received and some IP anomalies were identified near surface
with a thin overburden cover, namely on lines 4+00N and 5+00N. A short field program could take
place in Summer 2024.
4.12 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, 2023, the Laflamme property consists of a total of 456 claims covering an area
of approximately 24,500 hectares and Midland holds 82.3% 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 therefore the Corporation impaired partially for $35,053 the property cost
in Fiscal 23.
Exploration work on the property
A major drilling program, totalling 10,000 metres, was launched in December 2022 in the Abitibi region
on five projects targeted under the ADDP program. A total of 40 new exploration targets will be tested
on the Laflamme, Patris, Heva, Adam and Lewis projects. This drilling program will also test the best
targets located near high-grade gold floats discovered on the Laflamme project that returned up to
28.7 g/t Au and 6.0 g/t Au in grab samples. Recently, new gold-bearing shear zones grading up to
18.9 g/t Au and 5.7 g/t Au (grab samples) were discovered north of these gold-bearing floats
(see Midland’s press release dated November 29, 2022). This program will also test Ni-Cu-Pt-Pd
targets identified using the 3D model proximal to the Copernick zone which returned 0.45% Ni,
0.33% Cu, 0.15 g/t Pt and 0.24 g/t Pd over 42.6 metres in drill hole LAF-16-38. A minimum of
4,000 metres is planned on the Laflamme property.
During Q3-23, a first phase (phase 1) of drilling including 10 holes totalling 1,904 metres was
completed in follow-up on the high-grade floats and shear zones discovery area.
The best results of phase 1 returned:
• 2.44 g/t Au over 1.0 m (LAF-23-60 ; 158.0 to 159.0 m);
• 0.61 g/t Au over 2.0 m (LAF-23-62 ; 50.6 to 52.6 m);
- 25 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
• 0.52 g/t Au over 1.5 m (LAF-23-60 ; 191.0 to 192.0 m);
• 0.29 g/t Au over 2.3 m (LAF-23-56 ; 40.0 to 42.3 m).
•
Furthermore, during this phase 1, one drill hole was completed, and one was abandoned on the
Copernick Ni-Cu zone, for a total of 387.0 metres. A mineralized zone was intersected and returned
0.36% Ni, 0.25% Cu over 4.0 metres between 270.0 and 274.0 metres.
During Q3-23, a second phase of drilling (phase 2) was completed to follow-up on the phase 1 results
in the floats and shear zones discovery area. A total of five new drill holes and three holes extensions
totalling 1,217.0 metres were completed during that second phase.
The best result of phase 2 was obtained in hole LAF-23-67 drilled about 50 metres north of the Shear
Zone East that had returned 18.9 g/t Au in a grab sample. An interval returned 2.8 g/t Au over 0.8 metre
between 34.40 and 35.20 metres. In addition, the first 10 metres of this hole is anomalous in gold with
an average of 25 ppb Au.
Moreover, a re-analysis of a value of 1.6 g/t Au over 1.0 metre in hole LAF-23-69 between 80 m and
81 m was confirmed by ALS. Photos of that zone show an alteration in biotite with 1% pyrite in a Qtz-Cb
shear zone.
Hole LAF-23-61EXT returned two anomalous values of 0.44 g/t Au over 1.0 m (298.0 à 299.0 m) and
0.89 g/t Au over 1.4 m (300.0 to 301.4 m). These two values could correspond to gold values that were
obtained higher on this section and that had returned 2.44 g/t Au over 1.0 m and 0.52 g/t Au over
1.5 m.
4.13 Lewis (Au)
Property Description
As of September 30, 2023, the Lewis property consists of 154 claims (8,589 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%).
Exploration work on the property
A drilling program of 1,500 metres is currently in preparation under the ADDP drilling program. This
program will test the two known showings (Golden Nest and Red Giant) as well as other IP targets
and soil anomalies. This program was scheduled to begin during Q2-23. Drilling on Lewis is contingent
on results and priorities on other projects. This program is now planned for the winter of 2024 in order
to access the swamps.
Few days of prospecting were completed during Q4-23, however, no significant gold results were
obtained.
- 26 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.14 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 of which half 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.
4.15 Mistaouac (Au)
Property Description
The Mistaouac property is located about 75 kilometres to the south-west of Matagami in Abitibi,
Quebec and consists of 125 claims (6,972 hectares) as at September 30, 2023. 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 $12,404 in Fiscal 2023.
Exploration work on the property
Midland completed a high-resolution magnetic survey in order to renew the eastern half of the project
where new structural targets were identified. Final results and interpretation of this survey have been
received and new structural targets have been identified in proximity with an important E-W oriented
structure.
4.16 Molion (Li)
Property Description
The Molion property is located about 60 kilometres northwest of Val-d’Or in Abitibi, Quebec and
consists of 144 claims (7,739 hectares) as at September 30, 2023.
Exploration work on the property
No exploration work conducted on Molion during Fiscal 23. Midland is currently looking for a new
partner for this property.
- 27 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.17 Nickel Square (Ni-Cu)
Property Description
The Nickel Square property 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, 2023,
the property consists of 450 claims covering 25 061 hectares.
Exploration work on the property
A compilation of historical magnetic and electromagnetic surveys was completed, and several isolated
EM targets were identified and associated with ultramafic rocks. During Q2-24, some 4-5 grids will be
completed with ground EM geophysics in order to cover and validate these conductors. A field
follow-up on electromagnetic (“EM”) targets was planned in 2023 but could not be carried out because
of the forest fires and the bad condition of the access roads.
4.18 Nomans (Au)
Property Description
As at September 30, 2023, 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 Ltd. (“Kenorland”) 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.
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, 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.
A second review and evaluation of the till results over the entire survey is being carried out by a
consultant geologist, including the potential for lithium.
Following this evaluation and interpretation, a new nickel in till anomaly has been identified in the
western portion of the claims block. A high-resolution magnetic survey was carried out during Q3-23
in order to cover the most promising areas based on till results.
- 28 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Following the announcement by Kenorland of a new gold discovery associated with a syenite, a high-
resolution magnetic survey was completed during Q3-23 in the eastern portion of the property. This
area will also be covered by a till survey (1 kg) during Q4-23 aiming to identify new exploration targets.
Results of this till survey were received and led to the identification of five (5) new gold-in-till anomalies.
A prospecting follow-up will be done during Fiscal 24.
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 153 claims (8,553 hectares) as at September 30, 2023. 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.
Some claims were dropped therefore the Corporation impaired partially for $3,250 the property cost in
Q2-23.
Exploration work on the property
Results from the bark sampling program were received in Q1-23. In the west part of the project, a trend
can be seen with regional anomalies in Sb and Te. Following this survey, an area was selected to the
west of a small intrusion (pressure shadow) and will be covered with a geophysics IP survey during
Fiscal 24.
4.20 Patris (Au)
Property Description
The wholly owned Patris property comprises 299 claims (11,742 hectares) as at September 30, 2023,
covering a surface area of about 117 square kilometres, located less than 10 kilometres northwest of
the prolific Doyon/Westwood-Bousquet-La Ronde gold mining camp. The Patris property offers
excellent gold potential as it covers the Manneville Fault over more than 8 kilometres and the La Pause
Fault over more than 10 kilometres, both recognized as subsidiary faults to the well-known Destor-
Porcupine Fault Zone. 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.
See section 2.5 for details on the option agreement with Barrick.
Exploration work on the property
The ADDP drilling program on Patris was planning 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.
During Q3-23, 11 holes were completed for a total of 2,281 metres. These holes completed in the
southeastern portion of the property intersected highly deformed mafic and ultramafic rocks of the
Malartic Group cut by numerous altered (Hem-Sil) felsic dykes carrying various amounts of pyrite
(up-to 1-2%). In the northern part, strongly altered and sheared ultramafic rocks and syenite dykes
were intersected.
The best results came from a 20 metres interval in hole PAT-23-26 where gold anomalous values
were intersected between 569 and 595 metres. The best results in that interval returned 0.42 g/t Au
over 1.07 m and 0.41 g/t Au over 1.43 m.
- 29 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
A heliborne electromagnetic VTEM survey was completed in order to cover the whole Patris property.
The resistivity component will be used to map the overburden in preparation for a Sonic till sampling
program to take place during the winter of 2024.
4.21 Samson (Au)
Property Description
As at September 30, 2023, the Samson property consists of 275 claims covering a surface area of
about 15,263 hectares about 50 kilometres west of the town of Matagami, in Abitibi.
Some claims were dropped therefore the Corporation impaired partially for $12,500 the property cost
in Fiscal 22.
Exploration work on the property
During Q3-23, a geophysical IP survey was completed immediately south of the IP Grid that was
completed on the Gaudet-Fenelon JV with Probe. A few weak to moderate IP anomalies were
identified in the southern portion of the grid, including an interesting one situated at the intersection of
the Lower Detour and Sunday Lake faults.
4.22 Turgeon (Au)
Property Description
All the Turgeon property claims expired and therefore the property was written off for $202,562 in
Fiscal 23 ($512 property cost and $202,050 exploration expenses). Some claims were dropped in
Fiscal 22 and the Corporation had impaired partially for $4,346 the property cost.
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, 2023, this property consists in 43 claims covering an area of
approximately 2,394 hectares.
Exploration work on the property
No exploration work on the ground was conducted on Valmond during Fiscal 23. 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, 2023, 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 23. Midland is currently looking for a new
partner for this property.
GRENVILLE-APPALACHES
- 30 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.25 Gatineau (Zn)
Property Description
The Gatineau property is a land position for zinc, including as at September 30, 2023, 256 claims
(15,104 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.
Since no exploration work are planned in the near future, the property was written off for $343,302 in
Fiscal 23 ($24,494 of property cost and $318,808 of exploration expenses) in Fiscal 23. Some claims
were dropped in Fiscal 22 and the Corporation had impaired partially for $3,382 the property cost.
4.26 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. Some claims are subject to 2% NSR royalties
that can be bought back in tranches for an aggregate of $6,000,000. In addition, as part of a prospector
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.
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.
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.
- 31 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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
-
100,000
100,0001)
100,000
100,000
500,000
$
100,000
-
100,000
-
-
-
200,000
Exploration work
Commitment
$
Completed
$
-
500,000
-
-
-
3,500,000
4,000,000
-
500,000
-
-
-
3,500,000
4,000,000
1) $100,000 received before December 1, 2023.
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.
As of September 30, 2023, the Tête Nord Property consists of 1,385 claims (79,637 hectares) under
option with RTEC. In addition, 160 claims in the area were assessed without interest by RTEC and the
Corporation and excluded from the agreement; the Corporation impaired the $9,940 property cost of
those claims in Fiscal 2023.
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.
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, 2023
During this initial drilling program, 16 drill holes totalling 3,450 metres were completed to test a series
of VTEM targets identified during the 2022 survey.
Drill hole MDLD0015, which was designed to test a VTEM anomaly, and an off-hole anomaly detected
in drill hole MDLD0009, intersected, from 14 metres to 80 metres downhole depth, several layers with
Ni-Cu mineralization within altered gabbro horizons. From 20.11 to 22.79 metres, the drill hole
intersected 1.10% Ni and 0.71% Cu over 2.68 metres. A little further down, from 33.02 to 43.39 metres,
a mineralized interval graded 0.45% Ni and 0.18% Cu over 10.37 metres. These mineralized gabbro
zones generally exhibit net-textured and disseminated sulphides and alternate with metre-scale barren
gabbro layers.
This new Ni-Cu mineralized Santos zone is regionally well located along a North-South structure 8 km
North of the former Lac Edward Ni-Cu mine.
The results of electromagnetic surveys conducted on surface and in drill hole indicate the presence of
an unexplained conductor plunging to the southeast. The Santos zone thus remains entirely open in
that direction. A geophysical gravity survey was completed and has identified new targets in this area.
Three (3) additional drillholes at Santos were completed in July for a total of 895.0 metres.
Hole MDLD0018 was drilled in July 2023 on the Santos zone, approximately 50 metres west of the
discovery hole. After going through 11.66 metres of overburden, drill hole MDLD0018 intersected a
mineralized zone grading 0.33% Ni and 0.12% Cu over 39.73 metres, from 11.66 to 51.39 metres
downhole depth (see press release by Midland dated October 12, 2023). The interval exhibits
impressive magmatic breccias with decimetre-scale semi-massive sulphide zones, indicative of a
dynamic magmatic system at Santos. The two drill holes, MDLD0015 and MDLD0018, began directly
in the mineralized zone; the total thickness of this zone has yet to be determined and the zone remains
open in all directions.
A new drilling program targeting the Santos zone consists of four (4) drill holes totalling 1,150 metres
and is mainly designed to test new conductors identified at depth on the Santos zone following
downhole and ground-based electromagnetic surveys.
A very similar target as Santos, occurs 770m to the south. The Santos South target consists of a subtle
airborne EM located in a very similar fold structure as the Santos occurrence. One drill hole totaling
300m will be drilled to test this target.
Additional targets were also selected for another phase of drill testing (5-7 drill holes) in early 2024, in
the Bonhomme and Cutaway-East areas.
Ni-Cu intercepts on Savane
In the vicinity of the Savane showing, drill hole MDLD0001 intersected an interval grading 1.07% Ni
and 0.13% Cu over 0.78 metre, from 101.87 to 102.65 metres, associated with a mineralized
pyroxenite horizon. Several other metre-scale intervals also yielded anomalous Ni-Cu values in drill
holes MDLD0001 and MDLD0002.
Following geochemical treatment, the majority of Savane pyroxenites show geochemical affinity with
mafic-ultramafic cumulate rocks based on Cr, Ni and Ti values, a strong indication of a dynamic conduit
system and promising for Ni-Cu mineralisation.
- 33 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.27 Weedon (Cu-Zn-Au)
Property Description
This property is located in the Eastern Townships, about 120 km south of Quebec City and as at
September 30, 2023 is comprised of 60 claims covering an approximate area of 4,189 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 $7,994 in Fiscal 2023 and
for $6,484 in Fiscal 2022 of the exploration property cost.
Exploration work on the property
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 was completed during Q4-23, but no base metals anomaly was identified in
bedrock.
An airborne geophysics survey (gravity) is being planned for Q1-24 and will cover the whole property.
JAMES BAY
4.28 Royalties held by Altius Resources Inc. and its affiliate Altius Royalties Corp. (“Altius”)
On February 10, 2017, the Corporation signed a letter of intent creating a strategic alliance with Altius
(the “Altius Alliance”). On February 12, 2019, the parties jointly decided to terminate the Altius Alliance.
The designated projects as per the Altius Alliance (Elrond, Gondor, Helms Deep, Isengard, Minas
Tirith, Moria, Shire, Mythril and Fangorn) maintain their 1% NSR royalty in favor of Altius, on the claims
that were active at the time of their designation, as reiterated in the Royalty agreements signed on
June 12 and 19, 2023.
4.29 Mythril right of first offer (“ROFO”) held by BHP
Pursuant to the April 17, 2019, investment agreement with BHP, BHP has the right of first offer on the
Mythril project in the event the Corporation seeked to divest all or part of its interest. On May 8, 2023,
amendment to this investment agreement was signed whereby the claims that are part of the RTEC
option agreement on James Bay Lithium are no longer subject to the Mythril ROFO.
4.30 BJ Gold (Au)
Property Description
The BJ Gold property was split in 3 distinct projects, Galinée, Lasalle and Rogue. Some claims were
dropped therefore the Corporation impaired partially for $90,126 in Fiscal 22 the property cost.
4.31 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 184 claims covering an area of approximately 9,644 hectares as at
September 30, 2023.
- 34 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Some claims were dropped therefore the Corporation impaired partially for $65,614 the property cost
in Fiscal 22.
Exploration work on the property
No exploration work conducted on BJ Eleonore during Fiscal 23. A $60,000 prospecting campaign is
scheduled in Fiscal 24.
4.32 BJ Lithium, option agreement with RTEC, operated by RTEC.
Property Descriptions
See section 2.5 for details on the RTEC option agreement.
Galinée
The Galinée project is located approximately 4 kilometres east of the promising Adina lithium showing
held by Winsome Resources Limited (“Winsome”), who recently announced drill intercepts reaching
1.34% Li2O over 107.6 metres (see press release by Winsome dated January 6, 2023). Recent drilling
results (DDH AD-22-043) by Winsome reported that spodumene bearing pegmatite were intersected
about 1.6 kilometres north-east of the discovery showing and about 1.0 kilometres north-east of
previous reported intersections. Drillhole AD-22-043 intersected 17.1 metres of spodumene bearing
pegmatite (see press release by Winsome dated January 25, 2023).
This Adina showing is located at the contact between amphibolites of the Trieste Formation to the
south and felsic intrusives to the north. This contact is marked by a major structure that most likely
controlled the emplacement of pegmatites on the Adina showing. This same highly favourable contact
is present on Midland’s Galinée property over more than 7 kilometres and has never been explored
for lithium in the past. This strongly suggests that the Galinée project shows excellent potential for
lithium exploration.
The Galinée project consists of 54 claims covering a total of 28 square kilometres. Historically, this
project was worked for its gold potential and has never been explored for its excellent lithium potential.
Komo
The Komo project is located about 20 kilometres west of the James Bay lithium deposit (Allkem). It is
located at the contact between the La Grande and Nemiscau geological subprovinces, the same major
geological structure that hosts the James Bay lithium deposit and is likely critical for its genesis.
Prospecting for gold in 2022 uncovered a Li-Ta-Be pegmatite outcrop that returned 0.04% Li2O,
159 ppm Ta, 396 ppm Be in a grab sample. These strongly anomalous Li-Ta-Be values and the very
favourable geological setting highlight the strong lithium potential of the Komo project.
Mythril East
The Mythril East claim block is located 7 kilometres northeast and directly on strike with the Corvette
pegmatite field (held by Patriot). On other claim blocks, compilation of historical work by Midland
revealed strong evidence of Li-Be-Ta pegmatite potential. While exploring for copper in 2022, a
pegmatite outcrop returned two strongly anomalous lithium values in grab samples: 0.12% Li2O and
0.04% Li2O. Grab samples of pegmatitic boulders in other claim blocks in the area also returned highly
anomalous Li-Ta-Sn values: 0.03% Li2O, 23 ppm Ta, 50 ppm Sn; 0.02% Li2O, 72 ppm Ta. None of
these anomalies have been followed up. These also suggest a favourable exploration potential for
lithium on the Mythril East project, which has never been explored for lithium.
- 35 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Shire
The Shire project is located within amphibolites of the Lac des Montagnes geological Group, which
hosts the Whabouchi lithium deposit about 60 kilometres west of Shire. The Whabouchi lithium deposit
is characterized by a pegmatite intrusion assigned to the Senay granitic Suite that also intrudes
amphibolites of the Lac des Montagnes Group. In 2021, the Quebec government mapped at least
6 granitic intrusions of the same highly favourable Senay granitic Suite on the Shire project. None of
the favourable pegmatitic intrusions have been assayed for lithium.
The Shire project is also located at the boundary between the La Grande and Opatica geological
subprovinces, a major structure that could be critical for the emplacement of lithium-bearing
pegmatites in the area. Historical exploration work by Midland for base metals reported a tourmaline-
garnet-bearing pegmatite outcrop that returned a strong anomaly of 399 ppm Be (grab sample), not
assayed for Li, Ta, Cs or Rb. These very favourable geological characteristics and strong hints of
metal-bearing pegmatites on the project suggest an important lithium exploration potential.
Other information on the Lithium Properties
Lithium Properties
Chisaayuu
Corvette
Galinée
Komo
Moria
Mythril-Est
Picard
Shire
Sulu
Warp
Total
Claims
Number
303
319
54
674
166
108
65
105
175
112
2 081
Area
(hectares)
15,201
16,425
2,782
34,470
8,775
5,518
3,448
5,583
9,440
5,984
107,626
• Moria; some claims are subject to a 1% NSR royalty.
• Shire: 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
An imagery and LiDAR surveys were completed during Q4-24 and are covering some properties of
the agreement with RTEC, including the Komo, Galinée, Corvette, Mythril East and Chisaayuu
properties. These surveys were delayed because of the wildfires access restrictions in James Bay
during the summer of 2023.
Prospecting was conducted during Q4-23 led to the discovery of new spodumene-bearing pegmatites
on the Galinée property, about 8 kilometres east of the Adina lithium deposit held by Winsome
Resources.
Assay results have been received for the 26 samples collected at the Iceberg lithium discovery. High-
grade grab samples returned up to 7.2 % Li2O, including 6 samples grading between 5.0 % Li2O and
7.2 % Li2O, 6 samples grading between 3.0 % Li2O and 5.0 % Li2O, and 3 other samples grading
between 1 % Li2O and 3 % Li2O. The other samples returned anomalous lithium values below 1% Li2O.
- 36 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
The Iceberg discovery was identified on several outcrops by field crews after a few days of prospecting.
A combination of ultraviolet (UV) lamp and a LIBS (Laser-Induced Breakdown Spectroscopy) analyzer
were used to confidently identify spodumene, including some crystals reaching up to 60 centimetres
in length (see press release by Midland dated September 19, 2023). The Iceberg discovery consists
of a series of spodumene exposures outcrop, now over a 600m east-west strike intermixed with
amphibolite and granodiorite. Testing subtle local relief features in areas covered with vegetation and
soil resulted in locating two new coarse spodumene-bearing pegmatite outcrops, located 500 and
900 metres south and southwest from the Iceberg showing. Assays are pending.
The Galinée project is located approximately 4 kilometres due east of the Adina showing held by
Winsome. This showing is located at the contact between amphibolites of the Trieste Formation to the
south and felsic intrusives to the north. This contact is marked by a major structure that likely controlled
the emplacement of pegmatites at the Adina showing. This new discovery, on Galinée, of spodumene-
bearing pegmatite dykes was made along the same highly favourable contact zone, which is present
on the property over more than 7 kilometres and which has never been explored for lithium in the past.
This first exploration program included prospecting, geological mapping as well as a high-resolution
LiDAR survey. Following the discovery, a high-resolution airborne magnetic and radiometric survey
was completed. The LiDAR, imagery, magnetic and radiometric data will hopefully guide future work
to expand the footprint of spodumene outcrops on Galinée. A maiden drilling campaign is currently
being planned on Galinée.
Initial exploration work on Chisaayuu, Corvette and Mythril East blocks was successful in identifying
several pegmatites. No lithium phases were observed so far, but geochemistry of these pegmatites is
underway to determine their full potential and for further vectoring.
Additional results are pending for the prospecting works completed during Q4-24 on the Komo
property.
4.33 Elrond (Au)
Property Description
The Elrond property consists as at September 30, 2023 of 61 claims (3,162 hectares) explored by
Midland and 136 claims (7,014 hectares) under option with Brunswick (see section 2.5). Some claims
are subject to a 1% NSR royalty.
See section 2.3 for details on the Brunswick transaction.
Exploration work on the property
No exploration work conducted on Elrond (West part – Not optioned to Brunswick) during Fiscal 23.
4.34 Fangorn (Au)
Property Description
The Fangorn property consists as at September 30, 2023 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 23. Midland is currently looking for a new
partner for this property.
- 37 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.35 Helm’s Deep (Au)
Property Description
The Helm’s Deep property consists as at September 30, 2023 of 70 contiguous claims covering a total
surface area of 3,699 hectares. Some claims are subject to a 1% NSR royalty.
Exploration work on the property
No exploration work conducted on Helm’s Deep during Fiscal 23. Midland is currently looking for a
new partner for this property.
4.36 JV Eleonore (Au), in partnership with EEM, operated by EEM
Property Description
On June 13, 2016, a joint-venture agreement (50%-50%) was signed and is now held by EEM whereby
EEM 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. EEM 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, 2023, the property regroups several properties for a total of 463 claims covering a
surface area of about 24,248 hectares. The Corporation impaired partially the property for the claims
that were dropped for $49,848 in Fiscal 23.
Exploration work on the property
The proposed airborne magnetic survey to keep 46 claims in good standing was completed in Q2-23.
The survey report was completed and filed with the MERN.
4.37 Lasalle, option agreement with 9481-6337 Québec inc., a wholly owned subsidiary of Cosmos
Exploration Ltd (“Cosmos”) operated by Cosmos.
Property Description
The Lasalle project is located in the James Bay territory and consists of 39 claims (1,997 hectares).
On January 12, 2023, and as amended October 26, 2023, the Corporation signed an option agreement
with Cosmos whereby it may earn a 50% interest in the Lasalle project, the option 1, by completing
the following commitments:
Upon signature - completed
On or before December 15, 2023
On or before September 15, 2024
Total
Cash payments
Exploration work
Commitment Completed Commitment Completed
$
20,000
70,000
-
90,000
$
20,000
-
-
20,000
$
-
-
500,000
500,000
$
-
-
288,374
288,374
From commencement of the option 1, Cosmos is the operator.
Upon exercising the option 1, Cosmos will have a second option, option 2, to increase its ownership
interest by an additional 1% during a six-month period after the exercise of option 1 by incurring an
additional work commitment of $100,000 (or equivalent in cash payable to the Corporation).
- 38 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Upon exercising the option 2, Cosmos will have a third option, option 3, to increase its ownership
interest by an additional 24% during a two-year period after the exercise of option 2 by incurring an
additional work commitment of $2,000,000 (or equivalent in cash payable to the Corporation).
If Cosmos acquires a 75% interest, it shall have a pre-emptive right to purchase the remaining 25%
held by the Corporation.
On October 26, 2023, an amendment was signed to include in the option agreement 32 contiguous
claims staked by Cosmos.
Exploration Work on the property
A high-resolution magnetic survey as well as an analysis of the imagery, LiDAR and hyper spectral
data were completed during Q3-23 and led to the identification of three target areas to be followed-up
on the field during the summer of 2023. Following this field program, assay results did not return any
lithium anomaly, however a grab sample taken in the western part of the property returned 42 g/t Au.
4.38 McDuff (Cu-Au-Mo-Ag)
Property Description
The McDuff property consists as at September 30, 2023 of 159 (8,394 hectares).
Exploration work on the property
No exploration work conducted on McDuff during Fiscal 23. Midland is currently looking for a new
partner for this project.
4.39 Mythril and Mythril Regional
Property Description
As at September 30, 2022, the Mythril and Mythril Regional project consisted of 1,534 claims
(77,910 hectares). In September 30, 2023, this project was split into 3 groups:
• Mythril property (378 claims covering 19 085 hectares) under option with Brunswick
• Three properties were optioned to RTEC and grouped under the BJ Lithium project: Corvette
(319 claims covering 16,425 hectares), Chisaayuu (303 claims covering 15,200 hectares) and
Mythril East (108 claims covering 5,518 hectares).
• Two properties remain in the Mythril Regional project and are explored by Midland: Mythril
East (119 claims covering 6,078 hectares) and Tilly (307 claims covering 15,603 hectares). In
addition, 2 claims were staked in Fiscal 23 in the Mythril Regional property.
The Corporation had partially impaired the Mythril and Mythril Regional property cost for $190,066 in
Fiscal 22. Some claims are subject to a 1% NSR royalty.
4.40 Mythril and Elrond (Li), option agreement with Brunswick, operated by Brunswick
See section 2.5 for details on the Brunswick transaction.
- 39 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Exploration work on the property
The Mythril project consists of a total of 378 map designated claims covering up to 194 square
kilometres and is located to the north of the pegmatite field of Patriot Battery Metals Inc. (“Patriot”). A
total of 47 map designated claims were added recently to the Mythril project main block, which are
partially neighbour to Patriot’s current claims. This project, which originally targeted Cu-Mo-Au-Ag
mineralization, is currently being also evaluated for lithium-bearing pegmatite mineralization which
could potentially add value to their current metallogeny.
During Q4-23, a new spodumene-bearing pegmatite was discovered on Elrond. This spodumene-
bearing pegmatite outcrop, named the Arwen showing, is exposed over an area of approximately
250 metres by 100 metres and is shallowly dipping to the north. This spodumene-bearing pegmatite
remains open in all directions.
The Arwen showing exhibits strong mineralization, with spodumene crystals observed throughout the
entire outcrop, including a higher-grade zone measuring approximately 75 metres by 15 metres and
containing up to 30% spodumene. The spodumene crystals are well formed and reach up to
30 centimetres in length.
This new discovery lies within a larger area where other differentiated barren pegmatites are found.
Laboratory assay results are pending. Brunswick is planning to drill-test these new showings in 2024.
Few days of prospecting on Mythril did not return any significant lithium anomaly.
4.41 Mythril Regional (Au-Cu-Mo-Ag)
The Mythril Regional project is composed of: Mythril East (119 claims covering 6,078 hectares) and
Tilly (307 claims covering 15,603 hectares). In addition, 2 claims were staked in Fiscal 23 in the Mythril
Regional property.
Exploration work on the property
No exploration work conducted on Mythril Regional during Fiscal 23. A $60,000 prospecting campaign
is scheduled in Fiscal 24.
4.42 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).
Exploration work on the property
No exploration work conducted on Wookie during Fiscal 23. A $50,000 prospecting campaign is
scheduled in Fiscal 24.
NORTHERN QUEBEC
4.43 BHP Alliance (NI)
Alliance Description
A total of 1,194 claims (52 485 hectares) were map staked within the area of interest of the strategic
alliance with BHP.
- 40 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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.
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.
- 41 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
On July 11, 2022, and April 19, 2023, amendments were signed which provide for an extension of the
Generative Phase (Phase I) which comes with an additional annual funding of $1,400,000 and a further
$3,400,000 and extends until March 31, 2024. 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
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.
A prospecting program (two phases) was completed in early September 2022. 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 – 0.22% 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
The 2023 exploration program including airborne MT surveys, lake sediments sampling and
prospecting was presented to BHP in January and has been approved in early March with a budget of
$3.4M.
The 2023 exploration program started in July 2023 and is focusing on a major crustal-scale structure
that has been identified in the regional MT surveys performed in 2022. This structure, previously poorly
recognised is deemed favorable for nickel-copper mineralization. The 2023 program consisted of a
1,534 samples lake sediment survey, an airborne Z-Tipper axis electromagnetic survey (“ZTEM”) as
well as two phases of mapping and prospecting that started in July and continued in September. Only
few nickel and copper weak anomalies were obtained. The ZTEM inversions are in progress and will
be competed during Q2-24.
4.44 Labrador Trough alliance - SOQUEM
Alliance Description
On February 18, 2021, the Corporation signed a strategic alliance with SOQUEM to jointly explore the
Labrador Trough, for an amount of up to $5,000,000 over 4 years. A joint annual budget of $1,000,000
over a period of 4 years (firm commitment totalling $2,000,000 for the first 2 years), for a total of up to
$4,000,000, will be provided under the alliance for the targeting and field reconnaissance phase.
Midland will be the project operator in charge of exploration work during the targeting and field
reconnaissance phase. An additional, firmly committed, joint budget of $1,000,000 for the second year
is provided under the agreement to explore the designated projects. The joint budgets for exploration
work in the third and fourth years on the designated projects shall be approved by the project’s
management committee. SOQUEM will become project operator on all designated projects.
A total of 762 claims (35,739 hectares) were map staked by Midland and SOQUEM (50%-50%) within
the AOI of the strategic alliance with SOQUEM.
- 42 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
On January 16, 2023, SOQUEM and Midland signed a joint venture agreement on the designated
project Nachicapau comprised of 378 claims.
Exploration work in the area of interest
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).
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 8 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 was completed in the summer of 2023, focusing on the immediate vicinity of
the volcano-sedimentary
the Cu-Au-Ag mineralized horizons and
Murdoch Formation. This area has been the focus of very little previous exploration.
their extensions along
Works completed in 2023 consisted in a soil sampling program (B-Horizon) as well as prospecting.
Final assay results are pending.
4.45 Pallas (PGE)
Property Description
As at September 30, 2023, the property totals 306 claims covering approximately 13,880 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.
Exploration work on the property
No exploration work conducted on Pallas during Fiscal 23.
- 43 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
4.46 Soissons (Ni-Cu-Co)
Property description
As at September 30, 2023, 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
No exploration work conducted on Soissons during Fiscal 23.
4.47 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.
On October 4, 2022, the Corporation signed an amendment whereby NMEF agrees to transfer its 50%
in 46 mining claims (the “Kasik” property) 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.
As at September 30, 2023, this project consists of a total of 31 claims (1,432 hectares).
Exploration work on the property
No exploration work conducted on Soissons-NMEF during Fiscal 23. A $100,000 prospecting
campaign is scheduled in Fiscal 24.
4.48 Willbob (Au)
Property Description
The Willbob property in the Labrador Trough consists of 630 claims (28,863 hectares) as of September
30, 2023, 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.
In Fiscal 23, the Corporation impaired partially the property for the claims that were dropped for
$18,481 ($110,837 in Fiscal 22).
Exploration work on the property
Midland completed the work required to maintain the property in good standing.
- 44 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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 24 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.
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 generated
Cash and investments ending
Fiscal 24
forecast
$
5 700 000
(2 876 000)
(257 000)
149 000
1 155 000
2 600 000
300 000
(145 000)
(1 482 000)
367 000
241 000
52 000
5 752 000
6. SELECTED ANNUAL INFORMATION
Project management fees
Loss
Loss per share, basic and diluted
Fiscal 23
$
314 971
(1,109,216)
(0.01)
Fiscal 22
$
210,412
(1,900,085)
(0.03)
Fiscal 21
$
202,218
(1,023,800)
(0.01)
- 45 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
Total assets
41,663,069
39,216,081
39,915,196
2023
$
As at September 30,
2022
$
2021
$
7. SUMMARY OF RESULTS PER QUARTERS
For the eight most recent quarters:
Q4-23
$
Q3-23
$
Q2-23
$
Q1-23
$
177,302
(858,637)
(0.01)
41,663,069
111,100
(15,919)
-
42,056,008
9,128
(178,057)
-
41,853,899
17,441
(56,603)
-
41,920,451
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
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Project management
fees
Net earnings (loss)
Loss per share
Total assets
Quarterly highlights:
• Q4-23
o New discovery with up to 7.2% Li2O on Galinee with RTEC.
o New spodumene-bearing pegmatites discovery on Elrond with Brunswick.
o The Gatineau, Guyberry,Jeremie and Turgeon properties were depreciated and
written off for $757,900 since the claims expired or no exploration work are planned
in the near future.
• Q3-23
o Option agreement with RTEC for lithium including 10 properties in James Bay and
beginning of an imagery and LiDAR survey.
• Q2-23
o $142,400 hard cash financing with BHP.
o New Ni-Cu discovery (Santos Zone) with RTEC on Tête Nord Option.
o New option agreement with Barrick Gold Corporation (“Barrick”) for the Patris gold
project;
o Drilling programs ADDP completed on Patris, Heva and Laflamme (Phase 1);
• Q1-23
o $2,904,880 flow-through financing as well as an hard cash financing of $580,000.
o New Cu-Au-Mo-Ag discovery (0.21% CuEq/345.5 m) with Probe on La Peltrie.
o High-grade gold shears (18.9 g/t Au) and floats (28.7 g/t Au) discovered on Laflamme.
o Major MT survey recently completed on the Nickel Strategic Alliance with BHP.
o New option agreement with Brunswick on Mythril and Elrond for their lithium potential.
• Q4-22
o BHP extends the alliance for one 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).
o The Pallas property was written off for $694,694 since no exploration work are
planned in the near future.
• Q3-22
- 46 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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.
8. FOURTH QUARTER
The Corporation incurred $2,563,949 ($2,078,377 in Q4-22) in exploration expenses of which
$1,891,749 ($1,459,676 in Q4-22) was recharged to the partners. The exploration expenses incurred
by Midland in Q4-23 were mainly on BHP Alliance, in the Labrador Through with SOQUEM and on
Nomans, whereas in Q4-22 the expenses were incurred mainly on the BHP Alliance, Laflamme and
Labrador Trough with SOQUEM.
The Corporation acquired or maintained properties for $32,842 net ($94,279 net in Q4-22).
The Corporation reported a loss of $858,637 for Q4-23 compared to a loss of $1,087,021 for Q4-22.
Project management fees increased to $177,302 ($140,537 in Q4-22) mainly due to increased activity
level in Q4-23 on BHP Alliance versus Q4-22.
Operating expenses decreased to $1,241,118 in Q4-23 compared to $1,440,694 in Q4-22:
●
Impairment of exploration and evaluation assets: $801,991 ($1,004,981 in Q4-22). During
Q3-23, the main impairment arises from the write offs of Gatineau for $343,302, Turgeon for
$202,562, Jeremie for $135,855 and Guyberry for $76,181. During Q4-22, the main
impairment arises from the Pallas property write off for $694,694 in Q4-22; in addition, the
Corporation dropped certain claims and partially impaired mainly Mythril for $190,066.
9. RELATED PARTY TRANSACTIONS
The following are the related party transactions that occurred in Fiscal 23, in the normal course of
operations:
● A firm in which René Branchaud (director and corporate secretary) is a partner charged legal
fees amounting to $205,067 ($121,171 in Fiscal 22) of which $155,098 ($91,265 in Fiscal 22)
was expensed and $45,969 ($29,906 in Fiscal 22) was recorded as share issue expenses.
● A company controlled by Ingrid Martin (chief financial officer) charged accounting fees totaling
$182,700 ($144,151 in Fiscal 22) of which $62,902 ($53,676 in Fiscal 22) relates to her staff.
● As at September 30, 2023, the balance due to the related parties amounted to $12,850 ($13,735
as at September 30, 2022).
- 47 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
10. EVENTS SUBSEQUENT TO YEAR END
See section 2.3 on the private placements closed in November 2023 and section 2.5.3 for the $500,000
payment received from RTEC for the Lithium Properties option agreement.
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.
is determined by
The number of common shares granted
the Board of Directors. On
December 8, 2022, the Corporation amended its stock option plan (the "Plan") to increase from
5,790,000 to 8,200,000 the number of shares issuable under the Plan, to provide for the requirement
to obtain disinterested shareholders’ approval to extend the term of options granted to insiders,
eliminate the cashless exercise feature and provide that any adjustment to security-based
compensation awarded or issued under the Plan, other than in connection with a stock consolidation
or a stock split, is subject to the prior consent of the Exchange. The exercise price of any option granted
under the plan shall be fixed by the Board of Directors at the time of grant and shall not be lower than
the closing price on the day preceding the grant. The term of the option will not exceed ten years from
the date of grant. The options normally vest 1/6 per 3 months from the grant date, or otherwise as
determined by the Board of Directors.
12. OFF-BALANCE SHEET ARRANGEMENTS
The Corporation does not have any off-balance sheet arrangements.
13. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
See note 3 of the Financial Statements.
14. NEW ACCOUNTING STANDARDS
No new accounting standards to discuss for Fiscal 23.
15. FINANCIAL INSTRUMENTS
See notes 2.6 and 10 of the Financial Statements.
16. 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.
- 48 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
16.1 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.
16.2 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. In
addition, a government could delimit a territory and create a protected aera or a park to preserve its
biological diversity and its related natural and cultural resources.
16.3 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.
16.4 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.
16.5 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.
- 49 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
16.6 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.
16.7 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.
16.8 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.
16.9 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 prevent or delay work, or increase exploration costs. The effect of these factors
cannot be accurately determined.
16.10 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.
16.11 Uninsured Hazard
- 50 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
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.
16.12 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.
16.13 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.
16.14 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.
16.15 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.
- 51 -
Midland Exploration Inc.
Management Discussion & Analysis
For the year ended September 30, 2023
16.16 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.
16.17 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.
17. 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 7, 2023
(s) Gino Roger
Gino Roger
President and CEO
(s) Ingrid Martin
Ingrid Martin
CFO
- 52 -
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 Corporation) as at
September 30, 2023 and 2022, and its financial performance and its cash flows for the years then ended
in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS).
What we have audited
The Corporation’s consolidated financial statements comprise:
the consolidated statements of financial position as at September 30, 2023 and 2022;
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 Corporation in accordance with the ethical requirements that are relevant
to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
PricewaterhouseCoopers LLP
1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1
T: +1 514 205 5000, F: +1 514 876 1502, ca_montreal_main_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended September 30, 2023. These matters
were addressed in the context of our audit of the consolidated financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Assessment of indicators of impairment of
exploration and evaluation assets
Our approach to addressing the matter included the
following procedures, among others:
Assessed the judgment by management
in determining indicators of impairment related
to E&E assets, which included the following:
Obtained for all claims, by reference to
government registries, evidence to support
(i) the right to explore in the specific area
and (ii) the claims’ expiration dates.
Read Board minutes and obtained the
approved budget to (i) evidence continued
and planned substantive E&E
expenditures, and to (ii) assess whether
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
management as a result has decided
to discontinue such activities in the
specific area.
Refer to note 2 – Summary of significant accounting
policies, note 3 – Critical accounting estimates and
judgments and note 5 – Exploration and evaluation
assets to the consolidated financial statements
The net book value of exploration and evaluation
assets amounted to $35,000,242 as at
September 30, 2023.
The carrying amount of each exploration and
evaluation (E&E) asset is assessed for impairment
by management when indicators of impairment
exist. Determining whether to test for impairment
of E&E assets requires management’s judgment,
among others, regarding the following: (i) whether
the period for which the Corporation 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; (ii) whether substantive
expenditure on further E&E of mineral resources
in a specific area is neither budgeted nor planned;
and (iii) whether 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 management has decided
to discontinue such activities in the specific area.
- 54 -
Key audit matter
How our audit addressed the key audit matter
The total impairment loss of the E&E assets
recognized is $976,731 for the year ended
September 30, 2023. No reversal of impairment
losses has been recognized for the
reporting periods.
We considered this a key audit matter due to
(i) the significance of the E&E assets and
(ii) the judgments made by management in its
assessment of indicators of impairment related
to E&E assets, which resulted in a high degree
of subjectivity in performing procedures related
to these judgments applied by management.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis and the information, other than the consolidated financial statements and our
auditor’s report thereon, included in the annual report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
and will 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, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
- 55 -
In preparing the consolidated financial statements, management is responsible for assessing the
Corporation’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 Corporation or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Corporation’s financial
reporting process.
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 Corporation’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 Corporation’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
Corporation to cease to continue as a going concern.
- 56 -
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 Corporation 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.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Maxime Guilbault.
/s/PricewaterhouseCoopers LLP1
Montréal, Quebec
December 7, 2023
1 CPA auditor, public accountancy permit No. A128042
- 57 -
Midland Exploration Inc.
Consolidated Statements of Financial Position
As at September 30, 2023 and 2022
(in Canadian dollars)
Assets
Current assets
Cash and cash equivalents (note 4)
Investments (note 4)
Accounts receivable
Sales tax receivable
Tax credits and mining rights receivable
Listed shares
Prepaid expenses
Total current assets
Non-current assets
Investments – non-current portion (note 4)
Listed shares
Right-of-use assets
Advance paid for exploration work
Exploration and evaluation assets (note 5)
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
Total current liabilities
Non-current liabilities
Lease liabilities
Total liabilities
Equity
Capital stock
Contributed surplus
Deficit
Total equity
Total liabilities and equity
As at September 30
2022
2023
$
$
2,453,793
2,500,000
224,947
112,309
278,640
7,000
102,153
5,678,842
800,000
144,131
39,854
-
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
2,883,373
32,116,869
35,000,242
35,984,227
2,927,591
29,321,874
32,249,465
32,410,161
41,663,069
39,216,081
1,110,901
719,996
-
34,496
1,865,393
291,906
434,135
113,480
31,301
870,822
16,612
51,108
1,882,005
921,930
55,568,556
6,633,446
(22,420,938)
39,781,064
52,967,839
6,431,575
(21,105,263)
38,294,151
41,663,069
39,216,081
Subsequent events (note12)
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
- 58 -
Midland Exploration Inc.
Consolidated Statements of Comprehensive Loss
For the years ended September 30, 2023, and 2022
(in Canadian dollars)
Revenues
Project management fees
Operating Expenses
Salaries (note 7)
Stock-based compensation (note 7)
Office expenses
Regulatory fees
Conferences and investors relations
Professional fees
Depreciation
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
Loss before income taxes
Fiscal 23
$
Fiscal 22
$
314,971
210,412
767,405
142,820
198,158
43,693
237,399
414,018
29,892
29,275
976,731
2,839,391
773,865
159,515
190,221
46,991
285,318
304,373
29,892
2,419
1,208,289
3,000,883
251,035
28,911
(4,785)
275,161
80,524
(39,631)
(6,862)
34,031
(2,249,259)
(2,756,440)
Recovery of deferred income taxes (note 9)
1,140,043
856,355
Loss and comprehensive loss
(1,109,216)
(1,900,085)
Basic and diluted loss per share (note 8)
(0.01)
(0.03)
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.
- 59 -
Midland Exploration Inc.
Consolidated Statements of Changes in Equity
For the years ended September 30, 2023, and 2022
(in Canadian dollars)
Number of
shares
outstanding
Capital
stock
$
Contributed
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
Number of
shares
outstanding
Capital
stock
$
Contributed
surplus
$
Deficit
$
Total
equity
$
Balance at October 1, 2022
Loss and comprehensive loss
75,667,797
-
52,967,839
-
6,431,575
-
(21,105,263)
(1,109,216)
38,294,151
(1,109,216)
Private placement
1,806,000
722,400
Flow-through private placement
Less: premium
5,302,400
-
5,302,400
2,904,880
(1,026,563)
1,878,317
-
-
-
-
-
-
-
-
722,400
2,904,880
(1,026,563)
1,878,317
Stock-based compensation
Share issue expenses
-
-
-
-
201,871
-
-
(206,459)
201,871
(206,459)
Balance as at Sept. 30, 2023
82,776,197
55,568,556
6,633,446
(22,420,938)
39,781,064
The accompanying notes are an integral part of these consolidated financial statements.
- 60 -
Midland Exploration Inc.
Consolidated Statements of Cash Flows
For the years ended September 30, 2023 and 2022
(in Canadian dollars)
Cash flow relating to:
Operating activities
Loss
Adjustment for:
Stock-based compensation (note 7)
Depreciation
Impairment of exploration and evaluation assets (note 3)
Change in fair value - listed shares
Recovery of deferred income taxes (note 9)
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
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
Option payments received on 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 and cash equivalents – ending
For additional disclosure see note 11.
Fiscal 23
$
Fiscal 22
$
(1,109,216)
(1,900,085)
142,820
29,892
976 731
(28,911)
(1,140,043)
(1,128,727)
(165,019)
(27,761)
(47,292)
618,221
285,861
664,010
(464,717)
(31,301)
722,400
2,904,880
(206,459)
3,389,520
(3,300,000)
4,504,000
55,730
(470,819)
325,000
50,000
(3,701,041)
170,415
(2,366,715)
558,088
1,895,705
2,453,793
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
The accompanying notes are an integral part of these consolidated financial statements.
- 61 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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 7, 2023.
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.
- 62 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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, 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.
- 63 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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.
- 64 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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.
- 65 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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.
- 66 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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.
- 67 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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.
- 68 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
The total impairment loss of the E&E assets recognized is $976,731 for the year ended
September 30, 2023 (“Fiscal 23”) ($1,208,289 for the year ended September 30, 2022 (“Fiscal 22”)). 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. CASH AND CASH EQUIVALENTS AND INVESTMENTS
As at September 30, 2022, investments are composed of guaranteed investment certificates (“GIC)”, 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.
As at September 30, 2023, cash and cash equivalents includes a GIC cashable with interest payable
annually, earning 5.15%, maturing July 25, 2024, with a maturity value of $536,265. Investments are
composed of GICs, not cashable before the expiry date with interest payable annually. Current
investments are earning between 5.00% and 5.41% interest, maturing between November 17, 2023,
and December 8, 2023, with a maturity value of $2,628,120. Non-current investments are earning
between 5.05% and 5.30% interest, maturing between November 28, 2024, and December 2, 2024, with
a maturity value of $841,400.
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; all
exploration work was completed before December 31, 2022. All exploration work imposed by the
November and December 2022 flow-through financings was completed before September 30, 2023.
- 69 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
5. EXPLORATION AND EVALUATION ASSETS
The following table disclose the acquisition costs of exploration properties by region:
Acquisition
costs
Abitibi
Grenville
James Bay
Northern Quebec
Acquisition
costs
Abitibi
Grenville
James Bay
Northern Quebec
Project generation
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
Net
Addition
s
$
158,915
47,198
193,968
68,430
468,511
Net
Addition
s
$
137,537
48,019
151,674
142,964
1,566
481,760
Option
payments
$
(75,000)
(100,000)
(70,000)
-
(245,000)
Option
payments
$
(8,781)
(100,000)
-
-
-
(108,781)
Impairment
$
(156,491)
(42,909)
(49,848)
(18,481)
(267,729)
Impairment
$
(6,681)
(9,866)
(339,252)
(262,882)
(9,641)
(628,322)
As at
Sept. 30,
2023
$
1,062,927
33,689
1,336,277
450,480
2,883,373
As at
Sept. 30,
2022
$
1,135,503
129,400
1,262,157
400,531
-
2,927,591
In Fiscal 23, the Corporation impaired partially some properties for claims that were dropped for
$226,806 and wrote off the properties (or some projects included in these properties) for $40,923 since
no exploration program was planned for the near future and/or all claims were dropped.
In Fiscal 22, the Corporation impaired partially some properties for 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.
The following table disclose details of exploration and evaluation expenses by region:
Exploration
and evaluation
expenses
Abitibi
Grenville
James Bay
Northern Quebec
As at
Sept.
30,
2022
$
13,743,117
1,319,100
10,030,413
4,229,244
29,321,874
Net
Addition
s
$
3,050,528
4,342
378,519
529,785
3,963,174
Option
payment
s
$
(205,000)
-
-
-
(205,000)
Tax
credits
$
Impairm
ent
$
As at
Sept. 30,
2023
$
(231,596)
-
47,917
(70,498)
(254,177)
(390,194) 15,966,855
1,004,634
(318,808)
10,456,849
-
4,688,531
-
(709,002) 32,116,869
- 70 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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
Net
Addition
s
$
1,570,278
77,498
622,583
593,474
-
2,863,833
Option
payment
s
$
(171,219)
-
-
-
-
(171,219)
Tax
credits
$
(114,335)
(15,987)
(68,885)
(56,581)
-
(255,788)
Impairm
ent
$
-
-
-
(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
In Fiscal 23, the Corporation impaired the properties for $709,002 including write offs for Gatineau for
$318,808, Turgeon for $202,050, Jeremie for $121,140 and Guyberry for $67,004 since no exploration
program was planned for the near future and/or all claims were dropped.
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.
ABITIBI
5.1 Casault
On June 16, 2020, the Corporation signed an option agreement with Wallbridge Mining Company Limited
(“Wallbridge”), as amended on November 4, 2022, and on September 29, 2023, 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 June 30, 2023 – completed
On or before December 31, 2023
On or before June 30, 2024
On or before June 30, 2025
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.
Some claims of the Casault property are 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.
5.2 Gaudet
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.
Some claims of the Gaudet property are subject to a 1% NSR royalty.
- 71 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
5.3 Heva
The Corporation owns the Heva property and some claims are subject to a 2% NSR royalty, half of which
can be bought back for a payment of $1,000,000.
5.4 Jouvex
Some claims of the Jouvex property are subject to a 1% NSR royalty that can be bought back by making
a cash payment of $1,000,000 per tranche of 0.5% NSR. Other claims of the property are subject to a
1% NSR royalty that can be bought back by making a cash payment of $1,000,000 per tranche of 0.5%
royalty.
5.5 La Peltrie
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 completed
On or before July 31, 2024
Total
Payments
$
50,000 1)
55,000 2)
70,000 3)
100,000 4)
125,000
400,000
Exploration
work
$
-
500,000
700,000
1,200,000
1,100,000
3,500,000
1)
2)
3)
4)
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.
In July 2023, the Corporation received 61,087 shares of Probe based on a 5 days VWAP calculation to total $100,000.
After exercising this first option to earn a 50% interest, Probe may increase its interest to 65% (the
second option) over a period of 2 years in consideration of exploration expenditures or cash payment
totalling $5,000,000. Probe is the operator.
Some claims of the La Peltrie property are subject to a 1% Gross Metal royalty. Another claim is subject
to a 1.5% NSR royalty that can be bought back by making a cash payment of $750,000 per tranche of
0.75% royalty.
5.6 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.
5.7 Laflamme Au-Cu
The Corporation holds 82.3% of the Laflamme property.
5.8 Maritime-Cadillac
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. The property is subject to a 2% NSR royalty of which
half can be bought back for a payment of $1,000,000.
- 72 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
5.9 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.
On May 11, 2023, the Corporation signed a definitive option agreement with a wholly owned indirect
subsidiary of Barrick Gold Corporation (“Barrick”) whereby Barrick may acquire a 75% interest in the
Patris property in consideration for cash payments totaling $1,017,500 and exploration work totaling
$16,575,000, over an eight-year period, including a firm commitment of $3,000,000, over a four-year
period. Barrick is the operator. Commitment highlights are as follows to earn a 51% initial interest and
form a joint venture:
Upon signature - definitive agreement - completed
On or before May 11, 2024
On or before May 11, 2025
On or before May 11, 2026
On or before May 11, 2027
Total
Cash
payments
$
50,000
60,000
77,500
95,000
110,000
392,500
Exploration
work
$
-
500,000
-
-
3,500,000
4,000,000
In the following two years, Barrick may earn an additional 9% in the joint venture, for a 60% interest in
consideration for cash payments totalling $265,000 and exploration work expenditures of at least
$2,000,000. Finally, in the subsequent two years, Barrick may earn an additional 15% in the joint venture,
for a total 75% interest in consideration for cash payments totalling $360,000 and exploration work
expenditures of at least $10,575,000.
If Barrick does not exercise or complete the first joint venture funding or the second joint venture funding
option, the joint venture interests will be subject to any subsequent adjustments in ownership made in
accordance with the proportionate funding and dilution terms of the joint venture agreement. Dilution
below a 10% joint venture interest results in conversion of the joint venture interest to a 2% NSR royalty
with the right to repurchase 50% of the NSR royalty (1% NSR) for a payment of $1,500,000.
GRENVILLE
5.10 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.
5.11 Tête Nord
The Corporation assembled the Tête Nord property through map staking and acquisition. Some claims
are subject to 2% NSR royalties that can be bought back in tranches for an aggregate of $9,000,000.
- 73 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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. Under this 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:
Upon signature (completed)
On or before November 1, 2022 (completed)
On or before December 1, 2022 (completed)
On or before December 1, 2023 1)
On or before December 1, 2024
On or before December 1, 2025 (completed)
On or before December 1, 2025
Total
1) $100,000 received before December 1, 2023.
Cash
payments
$
100,000
-
100,000
100,000
100,000
-
100,000
500,000
Exploration
work
$
-
500,000
-
-
-
3,500,000
-
4,000,000
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.
5.12 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
5.13 BJ Lithium
On June 13, 2023, the Corporation signed an option agreement with RTEC for 10 lithium properties in
the James Bay region, including Corvette, Mythril-East, Chisaayuu, Galinée, Moria, Shire, Komo, Warp,
Sulu, and Picard (the “Lithium Properties”).
- 74 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
Under the option agreement, RTEC may acquire an initial 50% interest (the first option) in the Lithium
Properties over a period of 5 years, subject to the following conditions:
Initial payment (completed on October 3, 2023)
On or before August 24, 2024
On or before August 24, 2025
On or before August 24, 2026
On or before August 24, 2027
On or before August 24, 2028
Total
Cash
payments
$
500,000
100,000
100,000
100,000
100,000
100,000
1,000,000
Exploration
work
$
-
-
-
-
-
14,500,000
14,500,000
Exploration expenditures totalling $14,500,000 include a firm commitment to spend not less than
$2,000,000 in the first 18 months.
After acquiring an initial 50% interest, RTEC will have the option to increase its interest in the Lithium
Properties to 70% (the second option) over a period of five years following the exercise of the first option,
subject to completing exploration expenditures totalling an additional $50,000,000 (for a total of
$64,500,000 under the option agreement).
If RTEC acquires an interest in the Lithium Properties, the parties will form a joint venture and contribute
on a pro-rata based on its interest. Dilution below a 10% interest results in conversion of the interest to
a 2% NSR royalty with the right to repurchase 50% of the NSR royalty for a payment of $2,000,000.
RTEC is the project operator during the first and second option of the agreement.
5.14 JV Eleonore (Au)
On June 13, 2016, a joint-venture agreement (50%-50%) was signed and is now held by Electric
Elements Mining Corp. (“EEM”) whereby EEM 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. EEM is the operator. Each partner obtained a 0.5% NSR royalty as a mutual
consideration for the constitution of the joint-venture.
5.15 Lasalle
On January 12, 2023, and as amended October 26, 2023, the Corporation signed an option agreement
with 9481-6337 Québec Inc., a wholly owned subsidiary of Cosmos Exploration Ltd (“Cosmos”) whereby
it may earn a 50% interest in the Lasalle project, the option 1, by completing the following commitments:
Upon signature - completed
On or before December 15, 2023
On or before September 15, 2024
Total
Cash
payments
$
20,000
70,000
-
90,000
Exploration
work
$
-
-
500,000
500,000
- 75 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
From commencement of the option 1, Cosmos is the operator.
Upon exercising the option 1, Cosmos will have a second option, the option 2, to increase its ownership
interest by an additional 1% during a six-month period after the exercise of option 1 by incurring an
additional work commitment of $100,000 (or equivalent in cash payable to the Corporation). Upon
exercising the option 2, Cosmos will have a third option, the option 3, to increase its ownership interest
by an additional 24% during a two-year period after the exercise of option 2 by incurring an additional
work commitment of $2,000,000 (or equivalent in cash payable to the Corporation). If Cosmos acquires
a 75% interest, it shall have a pre-emptive right to purchase the remaining 25% held by the Corporation.
5.16 Mythril and Elrond
On November 22, 2022, the Corporation signed an option agreement with Brunswick Exploration Inc.
(“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 agreement, Brunswick may acquire an initial 50% interest, option 1, in
the Mythril property over a three-year period, at the following conditions:
Payments in
shares
$
Exploration
work
$
Payment in
cash
$
25,000
50,000
70,000
-
145,000
Upon signature (completed)
On or before November 22, 20232)
On or before November 22, 2024
On or before November 22, 2025
Total
1) 62,500 shares of Brunswick received
2) The $50,000 cash payment and the issuance of 48,544 Brunswick shares valued at $50,000 were completed before
-
300,000
300,000
900,000
1,500,000
25,0001)
50,000
70,000
210,000
355,000
November 22, 2023
In addition, Brunswick may earn an additional 35% undivided interest in the claims, 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 Brunswick's option; 2nd anniversary: $100,000 in
cash or stock, at Brunswick's option;
• Requirement to spend an additional amount of $2,000,000 in exploration expenditures, in cash
or in shares, at Brunswick'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 $0.24 per
share. If Brunswick exercise option 1 and 2, it 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).
5.17 Royalties held by Altius Resources Inc. and its affiliate Altius Royalties Corp. (“Altius”)
On February 10, 2017, the Corporation signed a letter of intent creating a strategic alliance with Altius
(the “Altius Alliance”). On February 12, 2019, the parties jointly decided to terminate the Altius Alliance.
The designated projects as per the Altius Alliance (Elrond, Gondor, Helms Deep, Isengard, Minas Tirith,
Moria, Shire, Mythril and Fangorn) maintain their 1% NSR royalty in favor of Altius, on the claims that
were active at the time of their designation, as reiterate in the Royalty agreements signed on June 12
and 19, 2023.
- 76 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
5.18 Mythril right of first offer (“ROFO”) held by BHP
Pursuant to the April 17, 2019, investment agreement with BHP, BHP has the right of first offer on the
Mythril project in the event the Corporation seeked to divest all or part of its interest. On May 8, 2023,
amendment to this investment agreement was signed whereby the claims that are part of the RTEC
option agreement on James Bay Lithium are no longer subject to the Mythril ROFO.
NORTHERN QUEBEC
5.19 BHP Alliance
On August 20, 2020, the Corporation signed an agreement with and Rio Algom Limited, a wholly owned
subsidiary of BHP Group plc (“BHP”), for a new strategic alliance (“Alliance”) for the initial funding by
BHP of a generative exploration phase and opportunities for joint contributions to advance nickel
exploration within the Nunavik territory, Quebec.
Generative Phase (I)
During the first phase of the Alliance, BHP will fund at 100% up to $1,400,000 on an annual basis for a
minimum of two years. The Corporation is acting as operator and the main objective is to generate,
identify and secure exploration projects to be advanced to a drill-ready stage through further exploration
work. BHP may propose additional exploration work for up to $700,000 before advancing an identified
project to the second phase.
Following the first phase, one or more specific exploration targets may be advanced to a second phase
to be further developed as a separate designated project.
Testing Phase (II)
During this second phase, each designated project will have its own work program and budget with the
objective, mainly through drilling, to test and further develop the identified targets. The Corporation will
act as operator during the testing phase subject to BHP’s right to become the operator of any designated
project.
For each designated project, the testing phase will last up to four years, with a total budget of up to
$4,000,000 with a minimum of $700,000 to be spent during the first year. During this phase, BHP and
the Corporation will fund 75% and 25%, respectively, for approved work programs.
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.
- 77 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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 and April 19, 2023, amendments were signed which provide for an extension of the
Generative Phase (Phase I) which comes with an additional annual funding of $1,400,000 and a further
$3,400,000 and extends until March 31, 2024. The Corporation will continue to act as the project
operator. BHP may, at its discretion, propose additional exploration work of up to $700,000 before
advancing a project to the second phase.
5.20 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.
5.21 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.
On October 4, 2022, the Corporation signed an amendment whereby NMEF agrees to transfer to the
Corporation its 50% in 46 mining claims (the “Kasik” property) 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.
5.22 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.
6. EQUITY
6.1 Capital stock authorized
Unlimited number of common shares without par value, voting and participating.
- 78 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
6.2 Private placements
a) 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.
b) November 2022, December 2022 and January 2023
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. On those
dates, the Corporation’s share closed at $0.355 and $0.35 respectively on the Exchange, therefore the
residual values attributed to the benefit related to flow-through shares renunciation are $0.145 and $0.15
for a total value of $585,480, assigned to the liability related to the premium on flow-through shares.
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. On those dates, the residual value attributed to the benefit
related to flow-through shares renunciation are $0.345 and $0.35 respectively for a total value of
$441,083 assigned to the liability related to the premium on flow-through shares. Also, on December 1,
2022, the Corporation completed private placements of 1,450,000 shares at $0.40 per share for total
gross proceeds of $580,000.
Finally, on January 23, 2023, the Corporation completed a private placement of 356,000 shares at a
price of $0.40 per share for total gross proceeds of $142,400. BHP has exercised its right to maintain its
ownership to 5.0% by acquiring 356,000 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 $206,459 share issue expenses, of
which $83,910 was paid as finder’s fees. 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.
- 79 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
6.3 Policies and processes for managing capital
The capital of the Corporation consists of the items included in equity of $39,781,064 as of
September 30, 2023 ($38,294,151 as of September 30, 2022). 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
7. EMPLOYEE REMUNERATION
7.1 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 23
$
1,405,507
113,000
123,517
1,642,024
(874,619)
Fiscal 22
$
1,306,389
129,666
98,576
1,534,631
(760,766)
767,405
773,865
- 80 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
7.2 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 23
$
201,871
(59,051)
Fiscal 22
$
199,648
(40,133)
142,820
159,515
The Corporation has a stock option plan (the “Plan”). The number of common shares granted is
determined by the Board of Directors. On December 8, 2022, the Corporation amended its stock option
plan (the "Plan") to increase from 5,790,000 to 8,200,000 the number of shares issuable under the Plan,
to provide for the requirement to obtain disinterested shareholders’ approval to extend the term of options
granted to insiders, eliminate the cashless exercise feature and provide that any adjustment to security-
based compensation awarded or issued under the Plan, other than in connection with a stock
consolidation or a stock split, is subject to the prior consent of the Exchange. The exercise price of any
option granted under the plan shall be fixed by the Board of Directors at the time of grant and shall not
be lower than the closing price on the day preceding the grant. The term of the option will not exceed
ten years from the date of grant. The options normally vest 1/6 per 3 months from the grant date, or
otherwise as determined by the Board of Directors.
On February 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.
On February 9, 2023, the Corporation granted to its directors, officers and employees 760,000 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 $0.28 per option amounts to a total stock-based compensation cost of
$212,000. The fair value of the options granted was estimated using the Black-Scholes model with no
expected dividend yield, 51.1% expected volatility, 2.96% risk-free interest rate and 6 years options
expected life.
This expected life was estimated by benchmarking comparable situations for companies that are similar
to the Corporation. The expected volatility was determined by calculating the historical volatility of the
Corporation’s share price back from the date of grant and for a period corresponding to the expected life
of the options.
A summary of changes in the Corporation’s common share purchase options is presented below:
Fiscal 23
Fiscal 22
Balance – Beginning of year
Granted
Forfeited
Expired
Balance – End of year
Balance – End of year exercisable
Weighted
average
exercise
price
$
0.87
0.54
-
1.25
0.81
0.83
Number of
options
5,245,000
730,000
(30,000)
(375,000)
5,570,000
5,073,333
Weighted
average
exercise
price
$
0.96
0.54
0.59
1.47
0.87
0.91
Number of
options
5,570,000
760,000
-
(330,000)
6,000,000
5,493,332
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
The following table summarizes information about common share purchase options outstanding and
exercisable as at September 30, 2023:
Number of options
outstanding
Number of options
exercisable
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
760,000
6 000 000
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
253,332
5 493 332
Exercise
price
$
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
0.54
Expiry date
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
February 9, 2033
7.3 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
$
735,906
107,966
11,832
49,940
Fiscal
$
745,346
82,150
8,325
30,284
128,479
1,034,123
151,655
1,017,760
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 $1,220,211.
7.4 Related party transactions
In addition to the amounts listed above in the compensation to key management (note 7.3 and elsewhere
in the Financial Statements) following are the related party transactions.
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
In the normal course of operations:
A firm in which an officer is a partner charged professional fees amounting to $205,067 ($121,171 in
Fiscal 22) of which $155,098 ($91,265 in Fiscal 22) was expensed and $49,969 ($29,906 in
Fiscal 22) was recorded as share issue expenses;
A company controlled by an officer charged professional fees of $62,902 ($53,676 in Fiscal 22) for
her staff; and
As at September 30, 2023, the balance due to the related parties amounted to $12,850 ($13,735 in
September 30, 2022).
8. 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 23
$
(1,109,216)
81,689,477
(0.01)
Fiscal 22
$
(1,900,085)
75,009,762
(0.03)
9.
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 23
$
-
(1,140,043)
(1,140,043)
Fiscal 22
$
-
(856,355)
(856,355)
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
2022)
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 23
$
(2,249,259)
Fiscal 22
$
(2,756,440)
(596,100)
37,800
851,600
(1,140,043)
(265,636)
(27,764)
(1,140,043)
(730,500)
42,300
625,000
(856,355)
71,260
(8,060)
(856,355)
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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 nil ($226,000 as of September
30, 2022).
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,
2023
$
As of
September 30,
2022
$
5,400,000
19,000
86,000
14,000
5,519,000
5,510,000
(2,000)
11,000
5,519,000
4,901,000
19,000
85,000
22,000
5,027,000
4,785,000
(2,000)
18,000
4,801,000
Deferred income tax assets not recognized
-
226,000
As of September 30, 2023, 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
2,262,000
1,813,000
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
2,508,000
1,990,000
2026
2027
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
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Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
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 November and December 2022 flow-through financings was completed before September 30, 2023.
10. 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:
10.1 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, 2023 would
result in an estimated effect on the net income (loss) of $30,226.
10.2 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 2023, 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.
10.3 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, 2023, the Corporation has working capital of $3,813,449
including cash and cash equivalents of $2,453,793. 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.
- 85 -
Midland Exploration Inc.
Notes to Consolidated Financial Statements
For the years ended September 30, 2023, and 2022
10.4 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.
11. 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 23
$
59,051
309,948
254,177
125,000
150,005
Fiscal 22
$
40,133
104,558
194,878
-
73,168
12. SUBSEQUENT EVENTS
12.1 Private Placement
On November 16 and 30, 2023, the Corporation completed private placements of 2,761,228 flow-through
shares at $0.65 per share for total gross proceeds of $1,794,798. In addition, the Corporation completed
on November 30, 2023, with an originator of flow-through donation financing, a private placement of
666,667 flow-through shares at $0.90 per share for total gross proceeds of $600,000. Finally, on
November 16, 2022, the Corporation completed a private placement of 666,666 shares at a price of
$0.45 per share for total gross proceeds of $300,000. Directors and officers of the Corporation
participated in the flow-through private placement for a total consideration of $174,850 under the same
terms as other investors.
- 86 -
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
- 87 -