THUNDER MOUNTAIN GOLD, INC. The following Management's Discussion and Analysis of Financial Condition and Results of Operation ("MD&A") is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes ("Notes") thereto. The following statements may be forward-looking in nature and actual results may differ materially.
COVID-19
In
The effects of the continued outbreak of COVID-19 and related government
responses could have disruptions to the Company`s Option Agreement with BeMetals
Corp. Under the terms of the BeMetals Option Agreement,
COVID-19 Additional Precautions
As of
Plan of Operation:
FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking
statements that involve a number of risks and uncertainties. Factors that could
cause actual results to differ materially include the following: inability to
locate property with mineralization, lack of financing for exploration efforts,
competition to acquire mining properties; risks inherent in the mining industry,
and risk factors that are listed in the Company's reports and registration
statements filed with the
On
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The Company's plan of operation through the end of the 2022 calendar year will be supporting BeMetals Corp. during their option period and aiding in the exploration and advancement of the project.
On
In addition to the PEM survey, property scale topography, geology and ground magnetics will be included to provide supporting data for the interpretation. The digital products include raw data, intermediate processed products, and final products in several data formats.
South Mountain is a polymetallic, carbonate replacement style deposit (CRD) in
the pre-development stage focused on high-grade zinc, silver, gold, copper and
lead. It is located approximately 70 miles southwest of
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Figure 2. Location of
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Under the BeMetals Corporation (TSX-V: BMET) Option Agreement, BeMetals and
With the help of
On
PROJECT HIGHLIGHTS - SOUTH MOUNTAIN PROJECT
In October of 2022, BeMetals Corp. completed a ground electromagnetic (EM) Loop
geophysical survey at the
In May of 2021, BeMetals Corp. completed an updated Mineral Resource Estimate
("MRE"), incorporating results from Phase 1 and 2 underground diamond drilling
programs at the
The updated Independent MRE, which has an effective date of
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After signing the Option Agreement Extension, BeMetals Corp. embarked on a phase
3 program at South Mountain with the objective to significantly expand the scale
of the current Mineral Resource Estimate ("MRE") at South Mountain (See Summary
of the MRE below), testing and establishing the down depth extent of
mineralization on the
Based on the last two phases of underground drilling and all the historical exploration data available, we believe there is the potential to expand the down-plunge extensions of the mineral resource with this new phase of surface drilling at the Property. The plan is to initially complete approximately 7,000 feet (2,100 meters) of surface core drilling in this phase of exploration. Assuming this exploration program is successful, the BMET will update the current MRE and continue the ongoing Preliminary Economic Assessment for the Project in 2022.
By December of 2021, 2 surface core holes had been drilled for a combined total of 3,600 feet, the results of which were added to the resource model.
Figure 1: 3D Perspective view inclined 200 looking north-north-east, with hole locations for SM20-028 thru SM20-050
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Figure 1: 3D Perspective View inclined at 20 degrees looking north-north-east, showing locations of rib-sampling, priority target zones, and the phase 1 drill holes and highlighted the recent SM19-016, SM19-017 and SM19-018
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Figure 2: Plan View of the Sonneman & Laxey Levels, South Mountain Deposit,
showing locations of rib-sampling, priority target zones, and drill holes
SM19-016, SM19-017 and SM19-018
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Figure 3: Plan View of Sonneman & Laxey Levels,
showing locations of previously reported rib sampling
QUALITY ASSURANCE AND QUALITY CONTROL PROCEDURES
The project employs a rigorous QC/QA program that includes blanks, duplicates
and appropriate certified standard reference material. All samples are
introduced into the sample stream prior to sample handling/crushing to monitor
analytical accuracy and precision. The insertion rate for the combined QA/QC
samples is 10 percent or more depending upon batch sizes. ALS Global completed
the analytical work with the core samples processed at their preparation
facility in Reno,
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Note to
Information concerning our mining properties has been prepared in accordance
with the requirements of subpart 1300 of Regulation SK, which first became
applicable to us for the fiscal year ended
Disclosure of the NI-43-101 has been prepared in accordance with the requirements of Canadian securities laws, including Canadian National Instrument 43-101 ("NI 43-101"). The Highlights of South Mountain NI-43-101 section refers to "mineral resources," "measured mineral resources," "indicated mineral resources," and "inferred mineral resources."
Qualified Person - The technical information in this Form 10K has been reviewed
and approved by
This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of the SEC`s Industry Guide 7. There are currently no permits required for conducting exploration in accordance with the Company`s current board approved exploration plan.
The Trout Creek project is a highly prospective gold exploration target located
along the western flank of the
During the year ended
The
Wright Geophysics also conducted a ground gravity survey and CSMAT over the pediment target area and this provided insight into the gravel-bedrock contact as well as defining the favorable structural setting within the buried bedrock. An untested drill target was identified under the gravel pediment along these structures, and the geophysics showed that the bedrock was within 500 feet of the surface, which is reasonable depth for exploration drilling and potential mining if a significant mineralization is encountered.
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The Company does not plan to conduct any work on the Trout Creek Property in
2022, but instead will focus all of their efforts on their
There are currently no environmental permits required for the planned
exploration work on the property. In the future, a notice of intent may be
required with the
Competition
We are an exploration stage company. We compete with other mineral resource
exploration and development companies for financing and for the acquisition of
new mineral properties. Many of the mineral resource exploration and development
companies with whom we compete have greater financial and technical resources
than us. Accordingly, these competitors may be able to spend greater amounts on
acquisitions of mineral properties of merit, on exploration of their mineral
properties and on development of their mineral properties. In addition, they may
be able to afford greater geological expertise in the targeting and exploration
of mineral properties. This competition could result in competitors having
mineral properties of greater quality and interest to prospective investors
Employees
The Company employs three full-time officers. As part of the BeMetals agreement,
the Company allowed these officers to work on the
Results of Operations:
For the nine months ended
Three-month period comparisons
Total revenue for the three-month periods ended
Nine-month period comparisons
Total revenues for the nine-month period
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The consolidated financial statements for the nine-months ended
Liquidity and Capital Resources:
The consolidated financial statements for the year ended
The liquidity of the Company was enhanced on
The Company has historically incurred losses, however, under the BeMetals Option Agreement, the Company now has a recurring source of revenue, and its ability to continue as a going concern is no longer dependent on equity capital raises and borrowings. However, the Company believes it has the ability to raise capital in order to fund its future exploration and working capital requirements if necessary.
Potential additional sources of cash, include additional external debt, the sale
of shares of our stock, or alternative methods such as mergers or sale of
8,000,000 BeMetals common stock shares held by the company. (
Our plans for the long-term continuation as a going concern include financing our future operations through sales of our common stock and/or debt and the potential exploitation of our mining properties. Our plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for equity in the property. In addition to the BeMetals Corp. Option Agreement, we believe that the Company will be able to meet its financial obligations because of the following:
º OnOctober 19, 2022 , we had$717,102 cash in our bank accounts. º We do not include in this consideration any option payments mentioned below. º Management is committed to manage expenses of all types to not exceed the on-hand cash resources of the Company at any point in time, now or in the future. º The Company will also consider other sources of funding, including potential mergers, the sale of all or part of the Company`s BeMetals Corp. (TSX-V: BMET) common shares beneficially held, and/or additional farm-out of its other exploration property.
For the nine-month period ended
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Our future liquidity and capital requirements will depend on many factors, including timing, cost and progress of our exploration efforts, our evaluation of, and decisions with respect to, our strategic alternatives, and costs associated with the regulatory approvals. If it turns out that we do not have enough cash to complete our exploration programs, we will attempt to raise additional funds from a public offering, a private placement, mergers, farm-outs or loans.
Additional financing may be required in the future to fund our planned operations. We do not know whether additional financing will be available when needed or on acceptable terms, if at all. If we are unable to raise additional financing, when necessary, we may have to delay our exploration efforts or any property acquisitions or be forced to cease operations. Collaborative arrangements may require us to relinquish our rights to certain of our mining claims.
Contractual Obligations
During 2008 and 2009, three lease arrangements were made with landowners that
own land parcels adjacent to the Company's South Mountain patented and
unpatented mining claims. The leases were for a seven-year period, with options
to renew, with annual payments (based on
Payments due by period
Contractual obligations Less than 2-3 4-5 More than
Total* 1 year years years 5 years
Acree Lease (yearly, June)(1) $ 3,390 $ 3,390 - - $ -
Lowry Lease (yearly,
October)(1)(2) $ 22,560 $ 11,280 $ 11,280 - $ -
OGT LLC(3) $ 25,000 $ 5,000 $ 10,000 $ 10,000 $ -
Total $ 50,950 $ 19,670 $ 21,280 $ 10,000 $ -
(1) Amounts shown are for the lease periods years 15 through 16, a total of 2
years that remains after 2021, the lease was extended an additional 10 years at
$30 /acre after 2014.
(2) The Lowry lease has an early buy-out provision for 50% of the remaining
amounts owed in the event the Company desires to drop the lease prior to the end
of the first seven-year period.
(3) OGT LLC , managed by the Company's wholly owned subsidiary SMMI, receives a
$5,000 per year payment for up to 10 years, or until a $5 million capped NPI
Royalty is paid.
Critical Accounting Policies
We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management's judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future. The critical accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:
a) Estimates. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition.
b) Stock-based Compensation. The Company records stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
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c) Income Taxes. We have current income tax assets recorded in our financial statements that are based on our estimates relating to federal and state income tax benefits. Our judgments regarding federal and state income tax rates, items that may or may not be deductible for income tax purposes and income tax regulations themselves are critical to the Company's financial statement income tax items.
d) Investments. In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture's management committee.
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