LION COPPER & GOLD CORP.
For the period ended Jun 30, 2024. Filed Aug 16, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 16, 2024
LCU$4.20-4.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001062993-24-010308
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-16.
0001062993-24-015240
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 304 previous paragraphs and 149 current paragraphs.
64 unchanged; 38 reworded; 47 added; 199 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (47)
Current report
For the three and six months ended June 30, 2024
Current report
ABOUT LION CG
Current report
During the year ended December 31, 2022, the Company transitioned into the SEC reporting system because more than 50% of its outstanding voting common shares are held directly or indirectly by residents of the United States, and the majority of its directors are U.S. citizens. Consequently, the Company must adhere to the SEC's reporting and disclosure requirements, enhance financial and corporate governance and ensure greater transparency.
Current report
The Rio Agreement was amended in October 2023 with Stage 2 being modified to Stage 2a and Stage 2b. The Company completed Stage 1 on December 22, 2022, Stage 2a on January 12, 2024, and is currently progressing in State 2b.
Current report
As of June 30, 2024, the Company has received $23 million accumulative funding from Rio Tinto, incurred $16.742 million expenditures, including $12.755 million in exploration, $3.318 million in general operating and $0.669 million in capital items under the Rio Agreement.
Current report
Page 2 of 8
Current report
SELECTED FINANCIAL INFORMATION
Current report
SUMMARY OF QUARTERLY RESULTS
Current report
The Company's results have been driven by its general corporate and exploration activities. Other income and expenses fluctuate due to changes in the fair value of the Company's convertible notes and investment in associate.
Current report
The Company's results are also impacted, from time to time, by other non-recurring events arising from its ongoing activities, as discussed below, where applicable
Current report
Page 3 of 8
Current report
Preliminary Economic Assessment ("PEA")
Current report
Rio Agreement
Current report
PFS Work Programs
Current report
During the quarter ending June 30, 2024, PFS progressive work included exploration drilling, environmental and geotechnical studies, metallurgical testing and engineering.
Current report
Work to upgrade the mineral resource within the MacArthur mineral resource domain as represented in the PEA included contractor engagement to author the necessary sections of the PFS report as it refers to the MacArthur resource. The information from drilling, that includes 6,165 feet of drilling in 18 drill holes, was added to the MacArthur datasets and preparation for the resource model estimation was completed.
Current report
Two additional core drill holes were completed in the Yerington resource with a combined drill footage of 1,270 feet. One core hole reached 562 feet by March 31 and an additional 708 feet was drilled in April. A second core hole was completed to 634 feet and has been converted into a water level measuring station. The purpose of additional core drilling is to increase and upgrade the mineral resource along the margin of and beneath the Yerington pit. The mineral resource estimation will include adding recent drilling and newly discovered historical Anaconda drilling to the model, and by varying search distances to determine the influence on assigned mineral resource classes. The updated resource will be included in the PFS.
Current report
Yerington core drilling provided material for geomechanical testing, oriented core measurement and geotechnical logging to assess stability of pit slope design. A pit slope stability evaluation, including geotechnical pit bench mapping was initiated during Q2. Additional drill core samples were selected and delivered for metallurgical column leach test work and hydrodynamic leach characterization of Yerington sulfide material. Drill core samples were submitted for laboratory tests to characterize the geochemistry of planned mined materials.
Current report
Additional geotechnical and exploration drilling on the Yerington Site to support the PFS are in the planning stages. The timing and scope of additional drilling is dependent on receipt of permits from NDEP, as discussed in the next section.
Current report
Page 4 of 8
Current report
Permitting and Environmental
Current report
During the quarter ending June 30, 2024, the following material permit related activities occurred:
Current report
On May 21, 2024, SPS submitted to Nevada Division of Environmental Protection (NDEP) a revised application for a major modification to the Yerington Mine Exploration Reclamation Permit #0321. As of June 30, 2024, the revised permit had not been received by SPS.
Current report
On May 31, 2024, SPS submitted to NDEP an application for a Temporary Discharge Permit to allow exploration drilling into the bottom of the Yerington Pit Lake from a barge platform that would be constructed and floated on the surface of the pit lake. As of June 30, 2024, the permit had not been received by SPS.
Current report
On June 18, 2024, SPS received a Surface Air Disturbance Permit for the MacArthur Mine Exploration Project from NDEP.
Current report
On June 18, 2024, SPS received a Surface Air Disturbance Permit for the Yerington Mine Exploration Project from NDEP.
Current report
On June 21, 2024, SPS received a decision notice from the Bureau of Land Management (BLM) authorizing exploration drilling on public lands administered by the BLM at the Yerington Mine Project.
Current report
On June 27, 2024, SPS received a Stormwater Construction General permit for the Yerington Mine Exploration Project from NDEP.
Current report
On June 27, 2024, SPS received a Stormwater Construction General permit for the MacArthur Mine Exploration Project from NDEP.
Current report
All permits either applied for or received during the period are aligned to the Stage 2B and 3 work plan requirements. For those permits that SPS has applied for but not yet received, the Company continues to work cooperatively and proactively with NDEP to facilitate permit issuance in a timely manner.
Current report
The US firms representing SPS completed the briefing on the Amended Petition for Judicial Review and filed the opening brief on the Complaint for Equitable Relief. The hearing on both matters will occur in early January 2025. The firms interviewed the likely witnesses in the matter and developed the Declarations in Support of the Equitable Relief briefing. The firms await the response brief from the State of Nevada which is due on or before September 6, 2024. Thereafter the firms will determine whether expert or other witness testimony is necessary to the pursuit of the matters.
Current report
Page 5 of 8
Current report
The US firms representing SPS completed the briefing on the Amended Petition for Judicial Review and filed the opening brief on the Complaint for Equitable Relief. The hearing on both matters will occur in early January 2025. The firms interviewed the likely witnesses in the matter and developed the Declarations in Support of the Equitable Relief briefing. The firms await the response brief from the State of Nevada which is due on or before September 6, 2024. Thereafter the firms will determine whether expert or other witness testimony is necessary to the pursuit of the matters.
Current report
The Groundhog prospect lies on the Alaskan peninsula on state lands, within an established copper porphyry belt 200 miles southwest Anchorage.
Current report
Operating and Other Expenses
Current report
During the six months ended June 30, 2024, the Company recognized a $1.75 million loss on debenture conversion and repayment. The Company also recorded $0.66 million share-based payments expense versus a $0.136 million recovery in the same prior period resulting from the RSU cancellation.
Current report
Page 6 of 8
Current report
TRANSACTIONS WITH RELATED PARTIES
Current report
(1) Charles Travis Naugle, Former CEO, Director - $104 (2023 - $125); Stephen Goodman, Former CFO, Director - $83 (2023 - $105); Steven Dischler, CEO - $17 (2023 - $-); Lei Wang, CFO $8 (2023 - $-).
Current report
These transactions have occurred in the normal course of the business and are measured at the equivalent amount of the services rendered.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Removed paragraphs (199)
Previous report
For the three months ended March 31, 2024
Previous report
General
Previous report
Under U.S. federal securities laws, issuers must assess their foreign private issuer status as of the last business day of their second fiscal quarter. It was announced that more than 50% of the Company's common shares are held by U.S. shareholders, and the Company no longer meets the definition of a foreign private issuer under the United States securities laws. As a result, commencing in 2023, the Company is required to use forms and rules prescribed for U.S. domestic companies, including the requirement that financial statements be presented in accordance with U.S. GAAP instead of International Financial Reporting Standards ("IFRS"). The Company's common shares will continue to be listed on the TSX Venture Exchange and quoted on the OTCQB.
Previous report
Company Profile
Previous report
The Company prepares its condensed interim consolidated financial statements on a going concern basis, which contemplates that the Company will be able to meet its commitments, continue operations and realize its assets and discharge its liabilities in the normal course of business for at least twelve months from the date of this report. The Company has incurred ongoing losses and expects to incur further losses in the advancement of its business activities. For the three months ended March 31, 2024, the Company incurred a net loss of $2,453,000 (2023 – $2,116,000). As at March 31, 2024, the Company had cash of $10,899,000 (December 31, 2023 - $2,310,000), working capital deficit of $712,000 (December 31, 2023 – $2,854,000) and an accumulated deficit of $128,920,000 (December 31, 2023 - $126,663,000).
Previous report
The Company continues to incur losses, has limited financial resources, and has no current source of revenue or cash flow generated from operating activities. To address its financing requirements, the Company plans to seek financing through, but not limited to, debt financing, equity financing and strategic alliances. However, there is no assurance that such financing will be available. If adequate financing is not available or cannot be obtained on a timely basis, the Company may be required to delay, reduce the scope of or eliminate one or more of its exploration programs or relinquish some or all of its rights under the existing option and acquisition agreements. The above factors give rise to material uncertainties that cast substantial doubt on the Company's ability to continue as a going concern.
Previous report
If the going concern assumptions were not appropriate for these condensed interim consolidated financial statements, then adjustments would be necessary to the carrying values of assets, liabilities, the reported expenses, and the condensed interim consolidated balance sheet classifications used. Such adjustments could be material.
Previous report
Mineral Properties
Previous report
The following table summarizes the balance of exploration and evaluation assets as at March 31, 2024, and December 31, 2023, and the changes in exploration and evaluation assets for the years then ended (in thousands of $).
Previous report
On June 1, 2023, Lion CG and Houston Minerals Ltd. terminated the option agreement surrounding the Chaco Bear and Ashton properties. As at December 31, 2023, Lion CG impaired the full balance of property and recognized $602,000 in impairment expense.
Previous report
Total exploration expenditures recorded on the condensed interim consolidated statement of operations are listed in the tables below (in thousands of $):
Previous report
Exploration expenditures incurred for the three months ended March 31, 2024
Previous report
Exploration expenditures incurred for the three months ended March 31, 2023
Previous report
On April 27, 2022, the Company TSX Venture Exchange approved the Rio Tinto Agreement.
Previous report
The status of the Rio Tinto Agreement is set out below.
Previous report
Stage 1** **
Previous report
Rio Tinto paid four million U.S. dollars ($4,000,000) for the agreed-upon Program of Work on the Mining Assets. Stage 1 was deemed completed on December 22, 2022.
Previous report
Stage 2** **
Previous report
Within forty-five (45) days of the completion of Stage 1, Rio Tinto was to provide notice to the Company whether Rio Tinto elected to proceed with Stage 2 (notice was provided), upon which Rio Tinto was to pay up to $5,000,000 for agreed-upon Mason Valley study and evaluation works to be completed by the Company within 12 months from the date that the parties agree upon the scope of Stage 2 work ($7,500,000 paid January 13, 2023, representing $5,000,000 for Stage 2 and $2,500,000 for Stage 3 in which some of the work has started for Stage 3 and a portion of the deposit has been used).
Previous report
On October 5, 2023, an amendment was signed for the modification of the Stage 2 Program of Work. The significant updates are related to the following:
Previous report
The term of Stage 2 of the Option Agreement has an end date of January 12, 2024. The Parties extend that end date by 9 months, to September 12, 2024 to continue study work, including testing and evaluation of the Nuton Technologies.
Previous report
Subject to internal approvals, Nuton LLC (“Nuton”), on behalf of Rio Tinto, will advance $10,000,000 of the Stage 3 Earn-In Not to Exceed Amount to Lion CG for the Stage 2b Program of Work within 30 days of completion of Stage 2a (Stage 2a is defined as the Stage 2 Program of Work activities performed up until January 12, 2024).
Previous report
Should the Parties agree that Stage 2c is necessary, the Parties will memorialize the scope of work in a letter agreement. Subject to internal approvals, Nuton will advance another $5,000,000 of the Stage 3 Earn-In Not to Exceed Amount to Lion CG within 30 days of the execution of the Stage 2c Program of Work Agreement.
Previous report
The Parties agree that Lion CG may allocate $50,000 per month for its corporate G&A expenses from the funds paid under the payments above (if any) and such allocation will be detailed in the relevant Program of Work Agreement(s).
Previous report
Stage 3 - Feasibility Study
Previous report
Within sixty (60) days of the completion of Stage 2, Rio Tinto shall provide notice to the Company whether Rio Tinto will exercise its Option and fund a Feasibility Study based on the results of the Stage 1 and Stage 2 Programs of Work. Rio Tinto will fully-fund the Feasibility Study and ancillary work completed by the Company in an amount composed of the aggregate of Stage 1 through 3 not to exceed $50,000,000.
Previous report
Investment Decision
Previous report
Upon completion of the Feasibility Study, Rio Tinto and the Company will decide whether to create an investment vehicle into which the Mining Assets will be transferred, with Rio Tinto holding not less than a 65% interest in the investment vehicle.
Previous report
• If Rio Tinto elects to not to create the investment vehicle, then the Company shall grant to Rio Tinto a 1.5% NSR on the Mining Assets.
Previous report
• If Rio Tinto elects to create the investment vehicle but the Company elects not to create the investment vehicle, then, at Rio Tinto's option, Lion CG shall create the investment vehicle and Rio Tinto will purchase the Company's interest in the investment vehicle for fair market value.
Previous report
Project Financing
Previous report
• Following the formation of the investment vehicle, any project financing costs incurred will be funded by Rio Tinto and the Company in proportion to their respective ownership interest in the investment vehicle.
Previous report
• Rio Tinto may elect to fund up to $60,000,000 of the Company's project financing costs in exchange for a 10% increase in Rio Tinto's ownership percentage. In addition, upon mutual agreement of Rio Tinto and the Company, Rio Tinto may fund an additional $40,000,000 of the Company's project financing costs in exchange for an additional 5% increase in Rio Tinto's ownership percentage.
Previous report
• If the Company's ownership percentage in the investment vehicle is diluted to 10% or less, then the Company's ownership interest will be converted into a 1% uncapped NSR.
Previous report
On March 20, 2023, the Company and Rio Tinto formally agreed to proceed with the Stage 2 Program of Work and an advance on the Stage 3 Program of Work.
Previous report
On January 4, 2024, $11,500,000 was received from Rio Tinto relating to the Stage2b and the Stage 3 Programs of Work. The Company completed the Stage 2a program of work on January 12, 2024.
Previous report
The funds incurred in connection with these Programs of Work were offset against additions to mineral properties and general expenditures as follows:
Previous report
Yerington Copper Project, Nevada
Previous report
The Yerington Copper Project ("Project") is located near the geographic center of Lyon County, Nevada, U.S.A., along the eastern flank of the Singatse Range. The Project is approximately 70 miles by road from Reno Nevada, 50 miles south of Tahoe-Reno Industrial Center, and 10 miles from the nearest rail spur of Wabuska.
Previous report
The Project includes both the historical Yerington Property and the historic MacArthur Deposit located approximately 4.5 miles to the northwest. The Project is bordered on the east by the town of Yerington, Nevada which provides access via a network of paved and gravel roads that were used during previous mining operations. The Project consists of 5 fee simple parcels and 82 patented mining claims totaling 2,768 acres, and 1,113 unpatented lode and placer claims totaling 22,996 acres. The unpatented claims are located on lands administered by the U.S. Department of Interior, Bureau of Land Management (BLM).
Showing the first 40 of 199 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
This Management's Discussion and Analysis ("MD&A") of Lion Copper and Gold Corp. and its wholly owned subsidiaries (collectively, "Lion CG" or the "Company"), dated May 14, 2024, should be read in conjunction with the condensed interim consolidated financial statements for the three months ended March 31, 2024 and audited consolidated financial statements year ended December 31, 2023, and related notes thereto which have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). All dollar amounts in this MD&A are United States dollars unless otherwise noted.
Current wording
This Management's Discussion and Analysis ("MD&A") of Lion Copper and Gold Corp. and its wholly owned subsidiaries (collectively, "Lion CG" or the "Company"), dated August 14, 2024, should be read in conjunction with the condensed interim consolidated financial statements for the three and six months ended June 30, 2024 and audited consolidated financial statements for the year ended December 31, 2023, and related notes thereto which have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). All dollar amounts in this MD&A are United States dollars unless otherwise noted.
Previous wording
Additional information about the Company, including the Company's press releases, quarterly and annual reports, and Form 10-K, is available through the Company's filings with the securities regulatory authorities in Canada atwww.sedarplus.com or the United States Securities Exchange Commission atwww.sec.gov/edgar. Information about mineral resources, as well as risks associated with investing in the Company's securities is contained in the Company's most recently filed 10-K.
Current wording
Additional information about Lion CG, including the Company's press releases, quarterly and annual reports is available through the Company's filings with the securities regulatory authorities in Canada atwww.sedarplus.com or the United States Securities Exchange Commission ("SEC") atwww.sec.gov/edgar. Information about mineral resources, as well as risks associated with investing in the Company's securities is contained in the Company's most recently filed 10-K.
Previous wording
Charles Travis Naugle, CEO of the Company, is a Qualified Person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), and has approved the scientific and technical information in this MD&A.
Current wording
Steve Dischler, CEO of the Company, is a Qualified Person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), and has approved the scientific and technical information in this MD&A.
Previous wording
Lion Copper and Gold Corp. is a Canadian-based Company advancing its 100% owned flagship copper projects at Yerington, Nevada through an option to earn-in agreement with Nuton LLC, a Rio Tinto Venture.
Current wording
Lion Copper and Gold Corp., formerly Quaterra Resources Inc., is a Canadian-based Company advancing its 100% owned flagship copper projects at Yerington, Nevada through an option to earn-in agreement with Nuton LLC, a Rio Tinto Venture. The Company also looks for opportunities to acquire projects on reasonable terms that have the potential to host large mineral deposits attractive to major mining companies.
Previous wording
The Company also looks for opportunities to acquire projects on reasonable terms that have the potential to host large mineral deposits attractive to major mining companies. The Company is incorporated in British Columbia, Canada. Its registered and records offices are located at 1200 - 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T8.
Current wording
The Company is incorporated in British Columbia, Canada. Its registered and records offices are located at 1200 - 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T8.
Previous wording
On November 22, 2021, the Company changed its name from Quaterra Resources Inc. to Lion Copper and Gold Corp. The shares of the Company commenced trading under the new name at the open of trading on November 23, 2021. The Company's common shares are listed on the TSX Venture Exchange ("TSXV") under the symbol "LEO" and traded on the OTCQB Market under the symbol "LCGMF".
Current wording
On November 22, 2021, the Company changed its name and began trading on the TSX Venture Exchange ("TSXV") under the symbol "LEO" and on the OTCQB Market under the symbol "LCGMF".
Previous wording
On March 18, 2022, the Company entered into an Option to Earn-in Agreement with Rio Tinto to advance studies and exploration at Lion CG's copper assets in Mason Valley, Nevada (the "Rio Tinto Agreement"). Under the agreement, Rio Tinto has the exclusive option to earn a 65% interest in the assets comprising Yerington, MacArthur, Wassuk, Bear and associated water rights (the "Mining Assets").
Current wording
Effective April 27, 2022, the Company entered an option to earn-in agreement (the "Rio Agreement") with Rio Tinto America Inc. ("Rio Tinto"), to advance studies and exploration at the Company's copper projects in Mason Valley, Nevada. Under the Rio Agreement, Rio Tinto has the exclusive option to earn a 65% interest in the projects comprising Yerington, MacArthur, Wassuk, Bear and associated water rights (the "Mining Assets") for $50 million over three stages.
Previous wording
In addition, Rio Tinto will evaluate the potential commercial deployment of its Nuton™ technologies at the site. Nuton™ offers copper heap leaching technologies developed by Rio Tinto to deliver greater copper recovery from mined ore and access new sources of copper such as low-grade sulfide resources and reprocessing of stockpiles and mineralized waste. The technologies have the potential to deliver leading environmental performance through more efficient water usage, lower carbon emission, and the ability to reclaim mine sites by reprocessing waste.
Current wording
In addition, Rio Tinto evaluates the potential commercial deployment of its Nuton™ technologies at the site. Nuton™ offers copper heap leaching technologies developed by Rio Tinto to deliver greater copper recovery from mined ore and access new sources of copper, such as low-grade sulfide resources and reprocessing of stockpiles and mineralized waste. These technologies have the potential to deliver leading environmental performance through more efficient water usage, lower carbon emission, and the ability to reclaim mine sites by reprocessing waste.
Previous wording
On January 30, 2024, the Company announced the results of a Preliminary Economic Assessment (“PEA”) on its Yerington Copper Project. The PEA envisions an open pit mining strategy followed by a heap leach operation, enhanced by the application of Rio Tinto’s Nuton technologies to process primary sulfide copper materials. Highlights of the PEA results include (full details and disclaimers on the PEA results are provided in the January 30, 2024 news release):
Current wording
On January 30, 2024, the Company announced the results of a PEA on its Yerington Copper Project. The PEA envisions an open pit mining strategy followed by a heap leach operation, enhanced by the application of Rio Tinto's Nuton technologies to process primary sulfide copper materials. Highlights of the PEA results include:
Previous wording
On March 12, 2024 the Company announced the commencement of the Stage 2b and Stage 3 Advance Programs of Work to advance the flagship Yerington Copper Project through completion of a Pre-Feasibility Study (“PFS”) and progress permitting and exploration initiatives on the Bear Deposit.
Current wording
On March 12, 2024, the Company announced the commencement of the Stage 2b and Stage 3 Programs of Work to advance the flagship Yerington Copper Project through completion of a Pre-Feasibility Study ("PFS") and progress permitting and exploration initiatives on the Bear Deposit.
Previous wording
On July 23, 2021, the Company received a notice from the State of Nevada that three water rights permits had been forfeited. Further, the application for an extension of time to prevent forfeiture of a fourth certificate was denied. On August 20, 2021, the Company filed a Petition for Judicial Review of the Forfeiture Notice and has retained legal counsel to undertake the appeal process. SPS subsequently filed and was granted a Stay of the Forfeiture Notice on September 15, 2021. SPS filed its Opening Brief on March 28, 2022. The State Engineer filed its Answering Brief on July 8, 2022. SPS filed its Reply Brief on August 25, 2022. A hearing regarding the status of the forfeiture appeal was held in the Third Judicial Court District in Lyon County on November 4, 2022. On December 6, 2022, the Judge remanded the case back to the State for further written findings based on issues raised at the hearing.
Current wording
On July 23, 2021, the Company received notice from the State of Nevada that three water rights permits had been forfeited. Further, the application for an extension of time to prevent forfeiture of a fourth certificate was denied. On August 20, 2021, the Company filed a Petition for Judicial Review of the Forfeiture Notice and has retained legal counsel to undertake the appeal process. SPS subsequently filed and was granted a Stay of the Forfeiture Notice on September 15, 2021. SPS filed its Opening Brief on March 28, 2022. The State Engineer filed its Answering Brief on July 8, 2022. SPS filed its Reply Brief on August 25, 2022. A hearing regarding the status of the forfeiture appeal was held in the Third Judicial Court District in Lyon County on November 4, 2022. On December 6, 2022, the Judge remanded the case back to the State for further written findings based on issues raised at the hearing.
Previous wording
Just as SPS did with the initial forfeiture decision that was remanded by the Court, SPS will diligently defend against the wrongful forfeiture of its water rights with clear evidence of the need for those water rights in mine remediation, production and reclamation.
Current wording
Just as SPS did with the initial forfeiture decision that was remanded by the Court, SPS continues to diligently defend against the wrongful forfeiture of its water rights with clear evidence of the need for those water rights in mine remediation, production and reclamation.
Previous wording
A Butte-style copper-gold system in Powell County and Lewis & Clark County in Montana, located 45 miles north of the world famous Butte, Montana copper mines. District-scale consolidation sitting on top of a prolific placer gold system with extensive copper showings.
Current wording
The Blue Copper project is a Butte-style copper-gold system in Powell County and Lewis & Clark County in Montana, located 45 miles north of the world famous Butte, Montana copper mines. District-scale land consolidation almost completely encompasses a prolific placer gold system with extensive copper showings.
Previous wording
The Schell Creek Project is composed of the Cabin and Muncy Properties in White Pine County, Nevada, which represent two copper immediately adjacent targets composed of approximately 15,000 acres of mineral claims.
Current wording
The Schell Creek Project is composed of the Cabin and Muncy Properties in White Pine County, Nevada, which represent two immediately adjacent copper targets composed of approximately 15,000 acres of mineral claims.
Previous wording
pay an additional payment commitment of $51,000 by July 1, 2024;
Current wording
pay an additional payment commitment of $51,000 by July 1, 2024 (Paid as a subsequent event);
Previous wording
An approximate 1,300 acre covered target area prospective for high grade primary or enriched porphyry copper mineralization located within Arizona's prolific Copper Triangle - within 10 miles of the Resolution & Ray mines.
Current wording
Pioneer is an approximate 1,300 acre covered target area prospective for high grade primary or enriched porphyry copper mineralization located within Arizona’s prolific Copper Triangle - within 10 miles of the Resolution & Ray mines.
Previous wording
FCC incurred evaluation expenditures on reconnaissance in Nevada, Montana and Arizona properties in order to determine whether they warranted further pursuit.
Current wording
FCC incurred reconnaissance evaluation expenditures on targets in Nevada, Arizona and Montana in order to determine whether they warranted further pursuit.
Previous wording
For the three months ended March 31, 2024, the Company incurred operating expenses of $1,263,000 compared to operating expenses of $805,000 in the prior period. The increase in operating expenses of $458,000 is primarily due to the following:
Current wording
For the six months ended June 30, 2024, the Company incurred operating expenses of $1.908 million compared to $1.437 million in the prior period. The increase of $0.471 million is primarily due to professional fees in the current period related to convertible debenture and water rights dispute.
Previous wording
The Company is an exploration stage company that has not earned any production revenue. Its operations have been dependent mainly on the Rio-Tinto agreement and private placements in the last few years without diluting shareholders' value. The Company may have capital requirements in excess of its currently available resources. In the event the Company's plans change, its assumptions change or prove inaccurate, or its capital resources in addition to projected cash flow, if any, prove to be insufficient to fund operations, the Company may be required to seek additional financing. There can be no assurance that the Company will have sufficient financing to meet its future capital requirements or that additional financing will be available on terms acceptable to the Company in the future.
Current wording
The Company is an exploration stage company that has not earned any production revenue. Its operations have been dependent mainly on the Rio-Tinto agreement and private placements in the last few years without diluting shareholders' value. The Company may have capital requirements in excess of its currently available resources and may be required to seek additional financing. There can be no assurance that the Company will have sufficient financing to meet its future capital requirements or that additional financing will be available on terms acceptable to the Company in the future.
Previous wording
The following table summarizes the Company's cash flows for the three months ended March 31, 2024, and 2023:
Current wording
The following table summarizes the Company's cash flows for the six months ended June 30, 2024, and 2023:
Previous wording
As at March 31, 2024, the Company had cash of $10,899,000 (December 31, 2023 - $ 2,310,000) and working capital deficit of $712,000 (December 31, 2023 – $2,854,000). The decrease in working capital of $2,142,000 is primarily due to the increase in cash of $8,589,000 which was offset by an increase in the Rio Tinto deposit of $8,161,000.
Current wording
As of June 30, 2024, the Company had cash and cash equivalents of $8.318 million (December 31, 2023 - $ 2.31 million) and working capital deficit of $0.589 million (December 31, 2023 - $2.854 million). The decrease in the working capital deficit of $2.265 million is primarily due to the increase in cash and cash equivalents of $6.008 million which was offset by an increase in the Rio Tinto deposit of $4.901 million.
Previous wording
As of March 31, 2024, the Company had convertible debentures with a face value of $964,642 and a carrying value of $855,000.
Current wording
As of June 30, 2024, the Company had convertible debentures with a face value of $1.011 million and a carrying value of $0.932 million.
Previous wording
On February 16, 2024, the Company issued new convertible debentures totaling $941,000 to replace the Existing Debentures. The new debentures will have, a maturity date of 12 months; bear interest at a rate of 20% per annum, non-compounding, and accrued interest on may be converted into common shares of the Company at a conversion price equal to $0.06 (C$0.08) per share, or at the holder's option into common shares the Company owns of Falcon Butte at $0.25 (C$0.32) per share; and one Warrant will be issued for every $0.06 of principal new debentures issued ("New Debentures"). New Debentures holders also received 15,696,883 share purchase warrants, exercisable at $0.06 (C$0.08) per share which expire on February 16, 2025.
Current wording
On February 16, 2024, the Company issued new convertible debentures totaling $0.941 million to replace the existing debentures. The new debentures will have, a maturity date of 12 months; bear interest at a rate of 20% per annum, non-compounding, and accrued interest or may be converted into common shares of the Company at a conversion price equal to $0.06 (C$0.08) per share, or at the holder's option into common shares the Company owns of Falcon Butte at $0.25 (C$0.32) per share; and one Warrant will be issued for every $0.06 of principal new debentures issued. New debentures holders also received 15,696,883 share purchase warrants, exercisable at $0.06 (C$0.08) per share which expire on February 16, 2025.
Previous wording
On March 8, 2024, the Company issued 4,107,998 units and 41,707,215 common shares to settle $1,924,000 of Existing Debenture debt. The Existing Debenture holders converted their principal and interest into units of the Company at $0.045 (C$0.06) per Unit. Each Unit will be comprised of one common share and one share purchase warrant. Each warrant is exercisable into one additional common share at a price of $0.06 (C$0.08) per share for a period of 5 years from the date of issuance.
Current wording
On March 8, 2024, the Company issued 4,107,998 units and 41,707,215 common shares to settle $1.924 million of existing debenture debt. The existing debenture holders converted their principal and interest into units of the Company at $0.045 (C$0.06) per Unit. Each Unit is comprised of one common share and one share purchase warrant. Each warrant is exercisable into one additional common share at a price of $0.06 (C$0.08) per share for a period of 5 years from the date of issuance.
Previous wording
Certain directors and individuals did not receive warrants with their convertible debenture settlement and will receive these warrants upon the Company’s listing on the CSE (“Contingent Warrants”). The Company expects to list in the near future, therefore management concluded that the issuance of the 41,707,215 Contingent Warrants is probable. As such, the fair value of the warrants as at March 8, 2024, of $648,000 was recognized as a derivative liability at issuance
Current wording
Certain directors and individuals did not receive warrants with their convertible debenture settlement and will receive these warrants upon the Company's listing on the CSE ("Contingent Warrants"). The Company expects to list in the near future, therefore management concluded that the issuance of the 41,707,215 Contingent Warrants is probable. As such, the fair value of the warrants as of March 8, 2024, of $0.648 million was recognized as a derivative liability at issuance
Previous wording
Additionally, on March 8, 2024, the Company repaid convertible debentures of a total of $831,000 in cash.
Current wording
Additionally, on March 8, 2024, the Company repaid convertible debentures of a total of $0.831 million in cash.
Previous wording
(2) Thomas Pressello, Former Director - $Nil (2023 - $21).
Current wording
(2) Thomas Pressello, Former Director - $Nil (2023 - $ 21).
Previous wording
(3) Charles Travis Naugle, CEO - $Nil (2023 - $35); Stephen Goodman, President, CFO and Corporate Secretary - $66 (2023 - $34); Tony Alford, Director - $215 (2023 - $Nil).
Current wording
(3) Charles Travis Naugle, Former CEO, Director - $Nil (2023 - ($81)); Stephen Goodman, Former CFO Director - $66 (2023 - ($81)); Tony Alford, Director - $215 (2023 - $Nil).
Previous wording
(4) Charles Travis Naugle, CEO - $24 (2023 - $6); Tony Alford, Director - $77 (2023 - $30); Ekaterina Naugle, spouse of the CEO - $3 (2023 - $1); Stephen Goodman, President, CFO and Corporate Secretary $2 (2023 - $1); Thomas Pressello, Director - $Nil (2023 - $1)
Current wording
(4) Charles Travis Naugle, Former CEO, Director - $40 (2023 - $16); Tony Alford, Director - $79 (2023 - $84); Ekaterina Naugle, spouse of a director - $5 (2023 - $2); Stephen Goodman, Former CFO, Director $2 (2023 - $1); Thomas Pressello, Director - $Nil (2023 - $1)
Previous wording
Other transactions for the three months ended March 31, 2024:
Current wording
Other transactions for the six months ended June 30, 2024
Previous wording
a) On February 16, 2024, Charles Travis Naugle (CEO), Stephen Goodman (CFO), Ekaterina Naugle (CEO's spouse) and Tony Alford (director) of the Company restructured $407,000 of their existing convertible debentures into the New Debentures. The debentures bear interest at a rate of 20% per annum and mature on November 16, 2025, and are convertible into shares of the Company at $0.06 (C$0.08) per share. Additionally, certain directors converted $259,000 of their existing convertible into 3,500,000 common shares at a price of $0.074.
Current wording
a) On February 16, 2024, the former CEO, former CFO and directors of the company restructured $407,000 of their existing convertible debentures into the New Debentures. The debentures bear interest at a rate of 20% per annum and mature on November 16, 2025, and are convertible into shares of the Company at $0.06 (C$0.08) per share. Additionally, certain directors converted $259 of their existing convertible into 3,500,000 common shares at a price of $0.074.
Previous wording
b) On March 8, 2024, Stephen Goodman (CFO), and Tony Alford (director) converted $1,541,000 of their outstanding convertible debentures into 36,675,478 common shares at a price of US$0.042.
Current wording
b) On March 8, 2024, the former CFO and directors converted $1,541,000 of their outstanding convertible debentures into 36,675,478 common shares at a price of US$0.042.
Previous wording
c) On March 8, 2024, the Company recognized 36,267,383 Contingent Warrants for Stephen Goodman (CFO), and Tony Alford (director), and other related parties who converted their existing debentures into units. The value of the contingent warrants upon recognition was $564,000. The related parties will receive these warrants upon the Company'slisting on the CSE.
Current wording
c) On March 8, 2024, the Company recognized 36,675,478 Contingent Warrants for former CEO, former CFO, directors, and other related parties who converted their existing debentures into units. The value of the contingent warrants upon recognition was $570,000. The related parties will receive these warrants upon the Company's listing on the CSE.
Previous wording
d) On March 8, 2024, certain directors subscribed for 12,202,380 common shares for total proceeds of $513,000 in relation of a private placement. Additionally, Stephen Goodman (CFO), and Tony Alford (director), received 12,202,380 warrants with a value of $177,000.
Current wording
d) On March 8, 2024, the former CFO and directors subscribed for 12,202,380 common shares for a total proceeds of $513,000 in relation of a private placement. Additionally, the directors received 12,202,380 warrants with a value of $177,000.
Previous wording
e) As at March 31, 2024, the Company had $10,000 (December 31, 2023 - $290,000) in interest accrued relating to outstanding convertible debentures with Charles Travis Naugle (CEO), Stephen Goodman (CFO), Ekaterina Naugle (CEO's spouse) and Tony Alford (director).
Current wording
e) As at June 30, 2024, the Company had $30,000 (December 31, 2023 - $290,000) in interest accrued relating to outstanding convertible debentures with directors and officers of the Company.
Previous wording
f) As at March 31, 2024, there was $11,000 (December 31, 2023 - $11,000) in prepaid expenses to the Charles Travis Naugle (CEO) of the Company relating to wages paid during the period for services subsequent to period end.
Current wording
f) As at June 30, 2024, there was $Nil (December 31, 2023 - $11,000) in prepaid expenses to the former CEO of the Company relating to wages paid during the year for services subsequent to period end.
Previous wording
On May 15, 2022, Rio Tinto approved the Stage 1 Program of Work and provided $4,000,000 to the Company for the development of the Mason Valley projects, which has been completed as of December 31, 2022. The remaining funds of the $4,000,000 will be spent per agreement with Rio Tinto in 2023 for Stage 2.
Current wording
As of August 14, 2024, the Company has:
Previous wording
The Company has not entered any off-balance sheet arrangements.
Current wording
The Company does not have any off-balance sheet arrangements.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Option to Earn-in Agreement with Rio Tinto
Previous report — wording carried elsewhere
Stage 2b and Stage 3 Programs of Work
Previous report — wording carried elsewhere
Other transactions for the three months ended March 31, 2023: