Geomega Resources Inc.
Unaudited Condensed Interim Consolidated Financial Statements
For the Nine months ended February 29, 2024
The accompanying financial statements have been prepared by the management
of Geomega Resources Inc. and have not been reviewed by the auditors
Geomega Resources Inc.
Consolidated Statements of Financial Position
(unaudited, in Canadian Dollars)
As at | As at | ||
February 29, | May 31, | ||
Note | 2024 | 2023 | |
$ | $ | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | 4 | 2,900,637 | 3,799,111 |
Accounts receivable | 8 | 532,703 | 594,963 |
Tax credits and government grants receivable | 9 | 605,014 | 453,376 |
Investments | 5 | 22,000 | 522,000 |
Investment in a listed company | 6 | 180,757 | 67,574 |
Prepaid expenses and others | 10 | 355,675 | 56 051 |
Inventories | 20,555 | 18 561 | |
Current assets | 4,617,341 | 5,511,636 | |
Non-current assets | |||
Investment in an associate | 7 | 337,143 | 842,857 |
Deposits on acquisition of property and equipment, net of | |||
government grants | 307,817 | 283,559 | |
Property and equipment, net of government grants | 11 | 680,720 | 427,893 |
Right-of-use assets | 12 | 2,044,903 | 2,298,752 |
Non-current assets | 3,370,583 | 3,853,061 | |
Total assets | 7,987,924 | 9,364,697 | |
Liabilities | |||
Current liabilities | |||
Trade and other payables | 422,895 | 626,007 | |
Deferred grants | 13 | 904,624 | 680,650 |
Deferred revenues | 280,163 | 338,668 | |
Current portion of the lease liabilities | 14 | 14,023 | 74,646 |
Current portion of the long-term debt | 15 | - | 76,809 |
Current liabilities | 1,621,705 | 1,796,780 | |
Non-current liabilities | |||
Lease liabilities | 14 | 2,223,413 | 2,289,819 |
Non-current liabilities | 2,223,413 | 2,289,819 | |
Total liabilities | 3,845,118 | 4,086,599 | |
Equity | |||
Share capital | 38,778,372 | 38,515,697 | |
Reserves | 18 | 1,067,265 | 1,152,537 |
Contributed surplus | 4,587,730 | 4,524,149 | |
Deficit | (40,290,561) | (38,914,285) | |
Total equity | 4,142,806 | 5,278,098 | |
Total liabilities and equity | 7,987,924 | 9,364,697 |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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Geomega Resources Inc.
Notes to the Condensed Interim Consolidated Financial Statements
(unaudited, in Canadian Dollars)
Three months ended | Nine months ended | ||||
February 29, | February 28, | February 29, | February 28, | ||
Note | 2024 | 2023 | 2024 | 2023 | |
$ | $ | $ | $ | ||
Research fees | 57,479 | 184,078 | 401,323 | 381,314 | |
Revenues | 57,479 | 184,078 | 401,323 | 381,314 | |
Operating expenses | |||||
Salaries, employee benefits and | |||||
share-based compensation | 151,534 | 75,782 | 364,416 | 200,538 | |
Exploration and evaluation | |||||
expenses, net of tax credits | 19 | 755,000 | 383,143 | 1,856,890 | 977,587 |
Professional fees | 2,389 | 2,843 | 126,033 | 50,485 | |
Travel, conference and investor | |||||
relations | 19,172 | 38,910 | 91,614 | 198,295 | |
Administration | 26,294 | 25,345 | 61,557 | 53,203 | |
Filing fees | 9,075 | 13,071 | 57,199 | 47,570 | |
Rent | 9,117 | 25,492 | 62,826 | 72,963 | |
Depreciation of right-of-use assets | 35,530 | 20,073 | 142,835 | 60,219 | |
Insurance, taxes and permits | 22,772 | 6,150 | 47,919 | 17,588 | |
Government grants on operating | |||||
expenses | (580,169) | (114,696) | (1,284,106) | (480,395) | |
Operating loss | (375,001) | (292,035) | (1,125,860) | (816,739) | |
Other income (expenses) | |||||
Investment income | 25,381 | 36,658 | 92,476 | 73,874 | |
Gain (loss) on foreign exchange | (3,518) | (910) | (12,636) | 17,204 | |
Finance costs | (70,515) | (12,471) | (223,865) | (38,249) | |
Gain on disposal of exploration | |||||
and evaluation assets | 195,826 | 136,833 | 239,687 | 136,833 | |
Net gain on settlement of a lease | |||||
agreement | - | - | 171,242 | - | |
Unrealized gain (loss) in fair value | |||||
of investments in a listed | |||||
company | 49,738 | 26,179 | (12,027) | 26,179 | |
Share of loss of associate | (49,232) | (77,627) | (41,222) | (171,348) | |
Net loss on dilution of investment | |||||
in an associate | - | (19,203) | - | (19,041) | |
Reversal of (impairment) of an | |||||
investment in an associate | 133,547 | 349,688 | (464,493) | (170,229) | |
281,198 | 439,147 | (250,416) | (144,777) | ||
Net and comprehensive (loss) | |||||
profit | (93,803) | 147,112 | (1,376,276) | (961,516) | |
Basic income (loss) per share | (0.001) | 0.001 | (0.009) | (0.007) | |
Diluted income (loss) per share | (0.001) | 0.001 | (0.009) | (0.007) | |
Weighted average number of basic | |||||
shares outstanding | 143,048,224 | 141,769,521 | 142,372,050 | 141,585,638 | |
Weighted average number of diluted | |||||
shares outstanding | 143,048,224 | 147,657,021 | 142,372,050 | 141,585,638 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
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Geomega Resources Inc.
Consolidated Statements of Change in Equity
(Unaudited, in Canadian dollars)
Number of | ||||||||||
shares | Contributed | |||||||||
Note | outstanding | Share Capital | Reserves | Surplus | Deficit | Total Equity | ||||
$ | $ | $ | $ | $ | ||||||
Balance at May 31, 2023 | 141,826,521 | 38,515,697 | 1,152,537 | 4,524,149 | (38,914,285) | 5,278,098 | ||||
Net and comprehensive loss | - | - | - | - | (1,376,276) | (1,376,276) | ||||
Exercised stock options | 1,575,000 | 262,675 | (99,301) | - | - | 163,374 | ||||
Expired options | - | - | (63,581) | 63,581 | - | - | ||||
Share-based compensation | - | - | 77,610 | - | - | 77,610 | ||||
Balance at February 29, 2024 | 143,401,521 | 38,778,372 | 1,067,265 | 4,587,730 | (40,290,561) | 4,142,806 | ||||
Number of | ||||||||||
shares | Broker | Contributed | ||||||||
Note | outstanding | Share Capital | warrants | Reserves | Surplus | Deficit | Total Equity | |||
$ | $ | $ | $ | $ | $ | |||||
Balance at May 31, 2022 | 141,369,521 | 38,435,625 | 27,477 | 1,069,608 | 4,424,649 | (37,513,413) | 6,443,946 | |||
Net and comprehensive loss | - | - | - | - | - | (961,516) | (961,516) | |||
Exercised stock options | 400,000 | 66,177 | - | (25,301) | - | - | 40,876 | |||
Expired options | - | - | - | (72,023) | 72,023 | - | - | |||
Expired broker options | - | - | (27,477) | - | 27,477 | - | - | |||
Share-based compensation | - | - | - | 152,764 | - | - | 152,764 | |||
Balance at February 28, 2023 | 141,769,521 | 38,501,802 | - | 1,125,048 | 4,524,149 | (38,474,929) | 5,676,070 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Geomega Resources Inc.
Consolidated Statements of Cash Flow
(Unaudited, in Canadian dollars)
Nine months ended | |||
February 29, | February 28, | ||
Note | 2024 | 2023 | |
$ | $ | ||
Operating activities | |||
Net and comprehensive loss | (1,376,276) | (961,516) | |
Adjustments for: | |||
Share-based compensation | 77,610 | 152,764 | |
Unrealized loss on foreign exchange rate | 1,230 | 844 | |
Depreciation of property and equipment | 87,264 | 23,699 | |
Depreciation of right-of-use assets | 142,835 | 60,219 | |
Finance costs for the accretion of long-term debt | 3,191 | 3,850 | |
Share of loss of an associate | 41,221 | 171,348 | |
Net loss on dilution of investment in an associate | - | 19,041 | |
Impairment of an investment in an associate | 7 | 464,493 | 170,229 |
Unrealized loss (gain) on variation of value of an investment in a | |||
listed company | 12,027 | (26,179) | |
Gain on disposal of exploration and evaluation assets - | |||
non-cash portion | (126,440) | (69,567) | |
Net gain on settlement of a lease agreement | (171,242) | - | |
Changes in non-cash working capital items | 20 | (325,643) | 46,865 |
Cash flows from operating activities | (1,169,730) | (408,403) | |
Investing activities | |||
Variation of deposits on property and equipment | (6,052) | (647,826) | |
Disposal of investments | 500,000 | (522,000) | |
Additions of property and equipment | (102,142) | (3,644) | |
Settlement of a lease agreement | 175,000 | - | |
Variation of deferred grants for the purchase of property and | |||
equipment | 13 | (359,151) | 107,715 |
Cash flows from investing activities | 207,655 | (1,065,755) | |
Financing activities | |||
Exercise of stock options | 163,374 | 40,876 | |
Repayments of lease liability | (19,773) | (49,341) | |
Repayment of long-term debt | (80,000) | - | |
Cash flows from financing activities | 63,601 | (8,465) | |
Net change in cash | (898,474) | (960,623) | |
Cash and cash equivalents - beginning | 3,799,111 | 5,084,902 | |
Cash and cash equivalents - ending | 2,900,637 | 4,124,279 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Geomega Resources Inc.
Notes to the Condensed Interim Consolidated Financial Statements
(unaudited, in Canadian Dollars)
-
NATURE OF OPERATIONS AND GOING CONCERN
Geomega Resources Inc. (the "Corporation") is incorporated under the Canada Business Corporations Act and is engaged in the acquisition, exploration and evaluation of mining properties in Canada. Through its private and wholly owned subsidiary Innord, the Corporation is developing innovative technologies for extraction and separation of rare earth elements and other critical and strategic metals from its mining properties and other mining and industrial waste, in an environmentally sustainable way. The Corporation's shares are listed on the TSX Venture Exchange (the "Exchange") under symbol GMA. The address of the Corporation's registered office and principal place of business is 75, de Mortagne Boulevard, Boucherville, Quebec, Canada, J4B 6Y4. These unaudited condensed consolidated financial statements (the "Financial Statements") were approved by the Corporation's
Board of Directors on April 24, 2024.
The Financial Statements have been prepared in accordance with valid accounting principles in a context of going concern which provides that the Company will be able to realize its assets and pay its debts in the normal course of its activities. In assessing the validity of the going concern principle, management considers all available data regarding the future, which represents at least, but is not limited to, the twelve months following the end of the reporting period. For the nine months ended February 29, 2024, the Corporation recorded a net loss of $1,376,276 and accumulated a deficit of $40,290,561 as of that date. As of February 29, 2024, the Company had a working capital of $2,995,636.
Any funding shortfall may be met in the future in a number of ways including but not limited to, the issuance of new equity or debt financing. While management has been successful in securing financing in the past, there can be no assurance that it will be able to do so in the future or that these sources of funding or initiatives will be available to the Corporation or that they will be available on terms which are acceptable to the Corporation. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-
Declaration of conformity
The Financial Statements have been prepared in accordance with International Financial Reporting
Standards ("International Financial Reporting Standards" or "IFRS") as published by the International Accounting Standards ("IAS") and which are applicable for the preparation of interim consolidated financial statements, in particular International Accounting Standard 34 ("International Accounting Standard 34" or "IAS 34") - Interim financial information. The Financial Statements therefore do not include all the information and notes required under IFRS for the purposes of annual financial statements. - Basis of Presentation
The Financial Statements should be read in conjunction with the audited annual financial statements for the year ended May 31, 2023, which have been prepared in accordance with IFRS. The accounting conventions and the calculation and presentation methods used in the preparation of the Financial Statements comply with the conventions and methods used for the previous financial year ended May 31, 2023, except as follows:
Equity-settledshare-based compensation
The Corporation offers an equity settled share-based compensation plan for its eligible directors, officers, employees and consultants. Each award is considered a separate award with its own vesting periods and fair value. Fair value is measured at the date of grant using the Black-Scholes option pricing model or the share market price where applicable. - 6 -
Geomega Resources Inc.
Notes to the Condensed Interim Consolidated Financial Statements
(unaudited, in Canadian Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
All equity settled share-based compensation (except broker warrants) are ultimately recognized as an expense in the statement of (loss) income with a corresponding credit to reserves (within shareholders' equity on the consolidated statement of financial position). Equity settled share-based compensation to broker, in respect of an equity financing are recognized as issuance cost of the equity instruments with a corresponding credit to broker warrants in equity.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting year, based on the best available estimate of the number of equity instruments expected to vest. Non-market vesting conditions are included in assumptions about the instruments that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of instruments expected to vest differs from previous estimates. Any cumulative restatement prior to vesting is recognized in the current period.
Any consideration paid on exercise of share options is credited to share capital. The accumulated expenses resulting from stock options are transferred to share capital when the options are exercised.
Expenses recognized for forfeited awards are reversed. Where the terms of an equity settled award are modified, as a minimum, an expense is recognized as if the terms had not been modified over the original vesting period. In addition, an expense is recognized for any modification which increases the total fair value of the share-based payment arrangement as measured at the date of the modification, over the remainder of the vesting period.
3. CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS AND ERRORS
The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions that affect the amounts reported as assets and liabilities, the presentation of assets and at the date of the Financial Statements as well as the amounts presented as income and expenses during the reporting period. The Company also makes estimates and assumptions for the future. The determination of estimates requires the exercise of judgment based on various assumptions as well as other factors such as historical experience and current and expected economic conditions. Actual results could differ from these estimates.
Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations about future events, which are believed to be reasonable under the circumstances.
In preparing the Financial Statements, the main judgments made by management in applying the Company's accounting policies and the main sources of estimation uncertainty were the same as those that applied to the annual financial statements for the fiscal year ended May 31, 2023.
4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include available cash, bank balances and short-term liquid investments with an original maturity of up to 3 months or redeemable at any time without penalty.
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Geomega Resources Inc.
Notes to the Condensed Interim Consolidated Financial Statements
(unaudited, in Canadian Dollars)
-
CASH AND CASH EQUIVALENTS (CONT'D)
The short-term investments held as of February 29, 2024 and classified as cash equivalents include the following investments: - Guaranteed investments certificates totaling $2,440,610 with rates from 4.50% to 5.15% and maturity dates ranging from May 6, 2024 to February 13, 2025. The short-term investments classified as cash equivalents are either cashable at anytime without penalty or invested for a period of 3 months or less.
- Investment of US $163,642 (CAD $222,305) in a high interest exchange trading fund. Investment is cashable at any time without penalty.
- INVESTMENTS
The investments as at February 29, 2024 consist of guaranteed investment certificates totalling $22,000 that are non-cashable prior to maturity. The certificates bear interest at 3.00% and expires on October 3, 2024.
6. INVESTMENT IN A LISTED COMPANY
The Corporation holds marketable securities. The shares are listed on the Exchange. The total amount of the investment is as follows:
As at | As at | ||
February 29, | May 31, | ||
204 | 2023 | ||
$ | $ | ||
Classified as current asset | |||
MTM Critical Metals Ltd. - 2,327,273 common shares (666,667 | |||
as at May 31, 2023) - $0.088 AUD ($0.115 AUD as at May | 180,757 | 67,574 | |
31, 2023) | |||
Investment in a listed company | 180,757 | 67,574 | |
7. INVESTMENT IN AN ASSOCIATE |
Kintavar Exploration Inc. ("Kintavar") is the Corporation's only associate. Kintavar's share capital consists solely of ordinary shares, which are held directly by the Corporation. Kintavar is incorporated in Canada where its exploration and evaluation activities on bearing properties are carried out. The proportion of ownership interest is the same as the proportion of voting rights held. The investment in Kintavar is accounted for under the equity method. Its fair value as at February 29, 2024 is $337,143 (16,857,143 shares at $0.02, closing price on the Exchange). Considering that the fair value of the investment is lower than its carrying value as at February 29, 2024, an impairment loss of $780,856 has been recorded to reduce the investment to its estimated recoverable value, in this case its fair market value. Its fair value was of $842,857 as at May 31, 2023. The Corporation categorized the fair value measurement as Level 1, as it is derived from quoted prices in active markets. No shares were issued in the first nine months of fiscal 2024, thus the Corporation's interest in Kintavar was not diluted and remains at 13.11%.
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Geomega Resources Inc.
Notes to the Condensed Interim Consolidated Financial Statements
(unaudited, in Canadian Dollars)
7. INVESTMENT IN AN ASSOCIATE (CONT'D)
Determination of significant influence
Management determines its ability to exercise significant influence over an investment in shares of other companies by looking at its percentage interest and other qualitative factors including but not limited to its voting rights, representation on the board of directors, participation in policy-making processes, material transactions between the Corporation and the associate, interchange of managerial personnel, provision of essential technical information and operating involvement. Considering these factors, Geomega is considered to have significant influence over Kintavar.
Nine months | ||||||
ended | Year ended | |||||
February 29, 2024 May 31, 2023 | ||||||
$ | $ | |||||
Balance at beginning of period | 842,857 | 1,372,048 | ||||
Share of net and comprehensive loss | (41,221) | (193,787) | ||||
Net gain from dilution of the interest | - | (19,041) | ||||
Impairment to fair market value | (464,493) | (316,363) | ||||
Balance at end of period | 337,143 | 842,857 | ||||
8. ACCOUNTS RECEIVABLE | ||||||
As at | As at | |||||
February 29, 2024 | May 31, 2023 | |||||
$ | $ | |||||
Trade receivables | 52,311 | 343,010 | ||||
Sales taxes receivable | 252,313 | 110,293 | ||||
Interest receivables | 12,232 | 43,258 | ||||
Other accounts receivables | 215,847 | 98,402 | ||||
Accounts receivable | 532,703 | 594,963 | ||||
9. TAX CREDITS AND GOVERNMENT GRANTS RECEIVABLE | ||||||
As at | As at | |||||
February 29, 2024 | May 31, 2023 | |||||
$ | $ | |||||
Refundable tax credits | 4,193 | 2,173 | ||||
Government grants receivable | 600,821 | 451,203 | ||||
Tax credits and government grants | ||||||
receivable | 605,014 | 453,376 |
Refundable tax credits are related to eligible mining exploration expenses incurred in the province of Quebec and the refundable portion of the research and development tax credits.
The government grants are related to expenditures on research and development incurred by the corporation and its subsidiary.
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Geomega Resources Inc.
Notes to the Condensed Interim Consolidated Financial Statements
(unaudited, in Canadian Dollars)
10. PREPAID EXPENSES AND OTHERS
As at | As at | |||||||
February 29, 2024 | May 31, 2023 | |||||||
$ | $ | |||||||
Prepaid on operation expenses | 168,648 | 56,051 | ||||||
Advance payment on inventories | 187,027 | - | ||||||
Prepaid expenses and others | 355,675 | 56,051 | ||||||
11. PROPERTY AND EQUIPMENT | ||||||||
Office | E&E | Total | ||||||
equipment | Equipment | |||||||
$ | $ | $ | ||||||
Nine months ended February 29, 2024 | ||||||||
Opening net book value | - | 427,893 | 427,893 | |||||
Additions | - | 794,886 | 794,886 | |||||
Government grants | - | (454,795) | (454,795) | |||||
Depreciation | - | (87,264) | (87,264) | |||||
Closing net book value | - | 680,720 | 680,720 | |||||
As at February 29, 2024 | ||||||||
Cost | 14,984 | 1,050,336 | 1,065,320 | |||||
Accumulated depreciation | (14,984) | (369,616) | (384,600) | |||||
Closing net book value | - | 680,720 | 680,720 | |||||
Office | E&E | Total | ||||||
equipment | Equipment | |||||||
$ | $ | $ | ||||||
Fiscal 2023 | ||||||||
Opening net book value | - | 100,532 | 100,532 | |||||
Additions | - | 764,100 | 764,100 | |||||
Government grants | - | (402,628) | (402,628) | |||||
Depreciation | - | (34,111) | (34,111) | |||||
Closing net book value | - | 427,893 | 427,893 | |||||
As at May 31, 2023 | ||||||||
Cost | 14,984 | 710,244 | 725,228 | |||||
Accumulated depreciation | (14,984) | (282,351) | (297,335) | |||||
Closing net book value | - | 427,893 | 427,893 |
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GeoMegA Resources Inc. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 22:28:20 UTC.