Avrupa Minerals Ltd 6-K, filed Jul 24, 2023
Avrupa Minerals Ltd. (AVPMF)
About this 6-K
Avrupa Minerals Ltd filed this 6-K on July 24, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of June 2023
File No. 000-55193
Avrupa Minerals Ltd.
(Name of Registrant)
410 – 325 Howe Street Vancouver, British Columbia, Canada V6C 1Z7
(Address of principal executive offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F x Form 40-F ¨
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Avrupa Minerals Ltd.
(Registrant)
Dated: June 28, 2023 | By: /s/ “Winnie Wong” Winnie Wong, Chief Financial Officer |
Exhibits:
99.1Interim Financial Statements for the period ended March 31, 2023
99.2Management Discussion and Analysis
AVRUPA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2023 AND 2022
(Unaudited)
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AVRUPA MINERALS LTD.
Contents |
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Notice of no Auditor Review of Interim Financial Statements | 3 |
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Condensed Consolidated Interim Statements of Financial Position | 4 |
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Condensed Consolidated Interim Statements of Comprehensive Loss | 5 |
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Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (Deficiency) | 6 |
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Condensed Consolidated Interim Statements of Cash Flows | 7 |
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Notes to the Condensed Consolidated Interim Financial Statements | 8 – 27 |
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NOTICE OF NO AUDITOR REVIEW OF
INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.
The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Presented in Canadian Dollars)
| Note | March 31, 2023 |
| December 31, 2022 | ||
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| (Unaudited) |
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| (Audited) | |
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Assets |
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Current assets |
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Cash |
| $ | 248,261 |
| $ | 307,531 |
Prepaid expenses and advances |
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| 339 |
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| 9,376 |
Due from optionee | 5 |
| 31,096 |
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| 12,811 |
Advance to related party | 9 |
| 26,139 |
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| 22,323 |
Sales tax receivables |
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| 3,812 |
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| 3,627 |
Other receivables |
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| 12,746 |
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| 10,713 |
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| 322,393 |
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| 366,381 |
Non-current assets |
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Property deposits | 6 |
| 1,471 |
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| 1,446 |
Tax deposits | 6 |
| 41,201 |
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| 41,201 |
Exploration and evaluation assets | 5 |
| 167,920 |
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| 167,920 |
Equipment | 4 |
| 2,130 |
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| 2,602 |
Investment in PorMining | 5 |
| 765 |
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| 765 |
Advance to Akkerman Finland OY | 7 |
| 282,400 |
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| 282,400 |
Investment in Akkerman Finland OY | 7 |
| 247,067 |
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| 258,532 |
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| 742,954 |
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| 754,866 |
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Total assets |
| $ | 1,065,347 |
| $ | 1,121,247 |
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Liabilities |
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Current liabilities |
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Accounts payable and accrued liabilities |
| $ | 99,430 |
| $ | 130,019 |
Due to related parties | 9 |
| 55,160 |
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| 108,006 |
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| 154,590 |
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| 208,936 |
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Shareholders' equity |
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Share capital | 8 |
| 10,990,255 |
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| 10,990,255 |
Reserves | 8 |
| 7,646,382 |
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| 7,641,733 |
Deficit |
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| (17,725,880) |
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| (17,719,677) |
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| 910,757 |
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| 912,311 |
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Total shareholders' equity and liabilities |
| $ | 1,065,347 |
| $ | 1,121,247 |
These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on May 26, 2023. They are signed on the Company's behalf by:
/s/Paul W. Kuhn |
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/s/Mark T. Brown |
Director |
| Director |
See notes to the condensed consolidated interim financial statements
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AVRUPA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, Presented in Canadian Dollars)
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| Three months ended March 31 | |||
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| Note | 2023 | 2022 | ||
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Mineral exploration expenses |
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Mineral exploration expenses | 5 | $ | 15,548 | $ | 7,442 |
Reimbursements from optionee | 5 |
| (136,114) |
| (84,538) |
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| 120,566 |
| 77,096 |
General administrative expenses |
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Bank charges |
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| 321 |
| 234 |
Consulting fees, wages and benefits | 9 |
| 47,991 |
| 41,758 |
Depreciation | 4 |
| 509 |
| 291 |
Investor relations |
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| 25,897 |
| 7,508 |
Listing and filing fees |
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| 7,425 |
| 12,608 |
Office and administrative fees |
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| 2,955 |
| 2,341 |
Professional fees | 9 |
| 24,262 |
| 80.155 |
Rent | 9 |
| 2,550 |
| 2,550 |
Share-based payment | 9 |
| - |
| 98,123 |
Transfer agent fees |
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| 1,153 |
| 3,832 |
Travel |
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| 2,731 |
| 700 |
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| (115,794) |
| (250,100) |
Other items |
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Foreign exchange gain |
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| - |
| 108 |
Interest income and other income |
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| 490 |
| 2,907 |
Loss on investment in Akkerman Finland OY | 7 |
| (11,465) |
| (3,998) |
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| (10,975) |
| (983) |
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Net loss for the period |
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| (6,203) |
| (173,987) |
Exchange difference arising on the translation of foreign subsidiaries |
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4,649 |
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(4,063) |
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Comprehensive loss for the period |
| $ | (1,554) | $ | (178,050) |
Basic and diluted loss per share | 10 | $ | (0.00) | $ | (0.00) |
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See notes to the condensed consolidated interim financial statements
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIENCY)
(Presented in Canadian Dollars)
| Share capital |
| Reserves |
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| Number of shares | Amount |
| Warrants | Finder’s options | Equity-settled employee benefits | Exchange | Subtotal | Deficit | Total shareholders' (deficiency) / equity |
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Balance as at December 31, 2021 (Audited) | 32,738,087 | $ 9,994,487 |
| $ 5,405,052 | $ 277,893 | $ 1,298,472 | $ (853) | $ 6,980,564 | $ (17,389,888) | $ (414,837) |
Share issues: |
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Shares issued for private placement | 16,666,667 | 695,475 |
| 554,525 | - | - | - | 554,525 | - | 1,250,000 |
Share issue costs | - | (76,979) |
| - | 19,841 | - | - | 19,841 | - | (57,138) |
Shares issued for debt settlement | 3,800,000 | 285,000 |
| - | - | - | - | - | - | 285,000 |
Shares issued for investment in Akkerman Finland OY | 1,470,000 | 95,550 |
| - | - | - | - | - | - | 95,550 |
Share-based payment | - | - |
| - | - | 98,123 | - | 98,123 | - | 98,123 |
Comprehensive loss | - | - |
| - | - | - | (4,063) | (4,063) | (173,987) | (178,050) |
Balance as at March 31, 2022 (Unaudited) | 54,674,754 | 10,993,533 |
| 5,959,577 | 297,734 | 1,396,595 | (4,916) | 7,648,990 | (17,563,875) | 1,078,648 |
Share issues: |
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Share issue costs | - | (3,278) |
| - | - | - | - | - | - | (3,278) |
Comprehensive loss | - | - |
| - | - | - | (7,257) | (7,257) | (155,802) | (163,059) |
Balance as at December 31, 2022 (Audited) | 54,674,754 | 10,990,255 |
| 5,959,577 | 297,734 | 1,396,595 | (12,173) | 7,641,733 | (17,719,677) | 912,311 |
Comprehensive loss | - | - |
| - | - | - | 4,649 | 4,649 | (6,203) | (1,554) |
Balance as at March 31, 2023 (Unaudited) | 54,674,754 | $ 10,990,255 |
| $ 5,959,577 | $ 297,734 | $ 1,396,595 | $ (7,524) | $ 7,646,382 | $ (17,725,880) | $ 910,757 |
See notes to the condensed consolidated interim financial statements
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, Presented in Canadian Dollars)
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| Three months ended March 31 | |||
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| 2023 | 2022 | ||
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Cash flows from operating activities |
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Net loss for the period |
| $ | (6,203) | $ | (173,987) |
Items not involving cash: |
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Depreciation |
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| 509 |
| 291 |
Loss on investment in Akkerman Finland OY |
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| 11,465 |
| 3,998 |
Share-based payment |
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| - |
| 98,123 |
Changes in non-cash working capital items: |
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Sales tax receivables |
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| (185) |
| (3,304) |
Due from optionee |
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| - |
| (15,983) |
Advance to related party |
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| (3,816) |
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Prepaid expenses and advances |
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| 9,037 |
| (12,704) |
Other receivables |
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| (2,033) |
| 3,351 |
Accounts payable and accrued liabilities |
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| (1,500) |
| (18,219) |
Due from/to related parties |
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| (52,846) |
| (231,654) |
Exchange difference arising on the translation of foreign subsidiaries |
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| (13,698) |
| (4,032) |
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Net cash used in operating activities |
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| (59,270) |
| (354,120) |
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Cash flows from investing activities |
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Investment in Akkerman Finland OY |
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| - |
| (211,800) |
Advance to Akkerman Finland OY |
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| - |
| (285,518) |
Purchase of equipment |
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| - |
| (1,818) |
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Net cash used in investing activities |
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| - |
| (499,136) |
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Cash flows from financing activities |
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Proceeds from issuance of common shares |
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| - |
| 1,250,000 |
Share issue costs |
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| - |
| (47,138) |
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Net cash provided by financing activities |
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| - |
| 1,202,862 |
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Change in cash for the period |
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| (59,270) |
| 349,606 |
Cash, beginning of the period |
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| 307,531 |
| 139,164 |
Cash, end of the period |
| $ | 248,261 | $ | 488,770 |
Supplemental disclosure with respect to cash flows (Note 12)
See notes to the condensed consolidated interim financial statements
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NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
1.NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS
Avrupa Minerals Ltd. (the “Company”) was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia and its registered office is 10th floor, 595 Howe Street, Vancouver, BC, Canada, V6C 2T5. The Company changed its name on July 7, 2010 and began trading under the symbol “AVU” on the TSX Venture Exchange (the “Exchange”) on July 14, 2010. On September 20, 2012, the Company listed in Europe on the Frankfurt Stock Exchange under the trading symbol “8AM”. The Company is primarily engaged in the acquisition and exploration of mineral properties in Europe.
These condensed consolidated interim financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes 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 the foreseeable future. There are material uncertainties that cast significant doubt about the appropriateness of the going concern assumption.
If the Company is to advance or develop its mineral properties further, it will be necessary to obtain additional financing and while it has been successful in the past, there can be no assurance that it will be able to do so in the future. Failure to raise sufficient funds would result in the Company’s inability to make future required property payments, which would result in the loss of those property options.
These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption inappropriate, and these adjustments could be material.
2.BASIS OF PREPARATION
a)Statement of compliance
These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) using accounting policies consistent with IFRS issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
b)Basis of preparation
These condensed consolidated interim financial statements have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
The preparation of these condensed consolidated interim financial statements in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements.
These condensed consolidated interim financial statements, including comparatives, have been prepared on the basis of IFRS standards that are published at the time of preparation.
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NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
3.SIGNIFICANT ACCOUNTING POLICIES
These unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS as issued by the IASB on a basis consistent with those followed in the Company’s most recent annual financial statements for the year ended December 31, 2022.
These unaudited condensed consolidated interim financial statements do not include all note disclosures required by IFRS for annual financial statements, and therefore should be read in conjunction with the annual financial statements for the year ended December 31, 2022. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the three-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the current fiscal year ending December 31, 2023.
4. EQUIPMENT
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| Furniture and other equipment | Vehicles | Other assets | Total |
Cost |
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As at January 1, 2022 |
| $ 114,795 | $ 38,712 | $ 21,479 | $ 174,986 |
Additions during the year |
| 2,531 | - | - | 2,531 |
Exchange adjustment |
| 535 | 180 | 100 | 815 |
As at December 31, 2022 |
| 117,861 | 38,892 | 21,579 | 178,332 |
Exchange adjustment |
| 2,037 | 673 | 373 | 3,083 |
As at March 31, 2023 |
| $ 119,898 | $ 39,565 | $ 21,952 | $ 181,415 |
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Accumulated depreciation |
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As at January 1, 2022 |
| $ 112,705 | $ 38,712 | $ 21,479 | $ 172,896 |
Depreciation for the year |
| 1,923 | - | - | 1,923 |
Exchange adjustment |
| 631 | 180 | 100 | 911 |
As at December 31, 2022 |
| 115,259 | 38,892 | 21,579 | 175,730 |
Depreciation for the period |
| 509 | - | - | 509 |
Exchange adjustment |
| 2,000 | 673 | 373 | 3,046 |
As at March 31, 2023 |
| $ 117,768 | $ 39,565 | $ 21,952 | $ 179,285 |
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Net book value |
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As at January 1, 2022 |
| $ 2,090 | $ - | $ - | $ 2,090 |
As at December 31, 2022 |
| $ 2,602 | $ - | $ - | $ 2,602 |
As at March 31, 2023 |
| $ 2,130 | $ - | $ - | $ 2,130 |
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NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5. EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES
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| Portugal |
| Kosovo |
| Others |
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| Alvalade | Others |
| Slivova | Others |
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| Total |
Exploration and evaluation assets |
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Acquisition costs |
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As of January 1, 2023 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
As of March 31, 2023 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
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Mineral exploration expenses for the period ended March 31, 2023 |
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Geological salaries and consulting |
| $ 4,890 | $ - |
| $ 6,044 | $ - |
| $ - |
| $ 10,934 |
Insurance |
| 148 | - |
| - | - |
| - |
| 148 |
Office and administrative fees |
| - | - |
| 174 | - |
| - |
| 174 |
Rent |
| - | - |
| 2,613 | - |
| - |
| 2,613 |
Site costs |
| 157 | - |
| 952 | - |
| - |
| 1,109 |
Travel |
| 570 | - |
| - | - |
| - |
| 570 |
Reimbursements from optionee |
| (85,312) | - |
| (50,802) | - |
| - |
| (136,114) |
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| $ (79,547) | $ - |
| $ (41,019) | $ - |
| $ - |
| $ (120,566) |
Cumulative mineral exploration expenses since acquisition |
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Assaying |
| $ - | $ - |
| $ 297,975 | $ 65,936 |
| $ 10,846 |
| $ 374,757 |
Concession fees and taxes |
| 361,864 | 693,608 |
| 20,505 | 206,975 |
| 4 |
| 1,282,956 |
Depreciation |
| 17,178 | 98,722 |
| - | - |
| - |
| 115,900 |
Drilling |
| 610,197 | 472,513 |
| 1,180,217 | - |
| - |
| 2,262,927 |
Geological salaries and consulting |
| 6,565,771 | 6,317,147 |
| 150,393 | 720,879 |
| 12,359 |
| 13,766,549 |
Geology work |
| - | 32,377 |
| 891,582 | 402,515 |
| 364,525 |
| 1,690,999 |
Insurance |
| 25,468 | 52,112 |
| 14,604 | 15,007 |
| - |
| 107,191 |
Legal and accounting |
| 1,020 | 1,244 |
| 58,158 | 13,958 |
| - |
| 74,380 |
Office and administrative fees |
| 254,058 | 279,739 |
| 81,402 | 101,624 |
| 68,446 |
| 785,269 |
Rent |
| 606,084 | 596,896 |
| 38,703 | 88,221 |
| 20,560 |
| 1,350,464 |
Report |
| - | - |
| 24,232 | - |
| - |
| 24,232 |
Site costs |
| 194,362 | 244,377 |
| 188,202 | 194,582 |
| 8,865 |
| 830,388 |
Travel |
| 242,014 | 247,277 |
| 63,047 | 22,478 |
| 15,326 |
| 590,142 |
Trenching and road work |
| - | - |
| 34,339 | - |
| - |
| 34,339 |
Reimbursements from optionee |
| (9,046,361) | (4,890,826) |
| (2,939,854) | (45,158) |
| - |
| (16,922,199) |
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| $ (168,345) | $ 4,145,186 |
| $ 103,505 | $ 1,787,017 |
| $ 500,931 |
| $ 6,368,294 |
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NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5. EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES
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| Portugal |
| Kosovo |
| Others |
| Total | ||
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| Alvalade | Others |
| Slivovo | Others |
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Exploration and evaluation assets |
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Acquisition costs |
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As of January 1, 2022 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
As of December 31, 2022 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
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Mineral exploration expenses for the year ended December 31, 2022 |
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Concession fees and taxes |
| $ - | $ - |
| $ 8,666 | $ - |
| $ - |
| $ 8,666 |
Geological salaries and consulting |
| 23,066 | - |
| 24,548 | - |
| - |
| 47,614 |
Insurance |
| 698 | - |
| - | - |
| - |
| 698 |
Office and administrative fees |
| 108 | - |
| 1,005 | - |
| - |
| 1,113 |
Rent |
| - | - |
| 7,396 | - |
| - |
| 7,396 |
Site costs |
| 2 | - |
| 2,123 | - |
| - |
| 2,125 |
Travel |
| 1,777 | - |
| 2,940 | - |
| - |
| 4,717 |
Reimbursements from optionee |
| (348,277) | - |
| (56,066) | - |
| - |
| (402,343) |
|
| $ (322,626) | $ - |
| $ (7,388) | $ - |
| $ - |
| $ (330,014) |
Cumulative mineral exploration expenses since acquisition |
|
|
|
|
|
|
|
|
|
|
Assaying |
| $ - | $ - |
| $ 297,975 | $ 65,936 |
| $ 10,846 |
| $ 374,757 |
Concession fees and taxes |
| 361,864 | 693,608 |
| 20,505 | 206,975 |
| 4 |
| 1,282,956 |
Depreciation |
| 17,178 | 98,722 |
| - | - |
| - |
| 115,900 |
Drilling |
| 610,197 | 472,513 |
| 1,180,217 | - |
| - |
| 2,262,927 |
Geological salaries and consulting |
| 6,560,881 | 6,317,147 |
| 144,349 | 720,879 |
| 12,359 |
| 13,755,615 |
Geology work |
| - | 32,377 |
| 891,582 | 402,515 |
| 364,525 |
| 1,690,999 |
Insurance |
| 25,320 | 52,112 |
| 14,604 | 15,007 |
| - |
| 107,043 |
Legal and accounting |
| 1,020 | 1,244 |
| 58,158 | 13,958 |
| - |
| 74,380 |
Office and administrative fees |
| 254,058 | 279,739 |
| 81,228 | 101,624 |
| 68,446 |
| 785,095 |
Rent |
| 606,084 | 596,896 |
| 36,090 | 88,221 |
| 20,560 |
| 1,347,851 |
Report |
| - | - |
| 24,232 | - |
| - |
| 24,232 |
Site costs |
| 194,205 | 244,377 |
| 187,250 | 194,582 |
| 8,865 |
| 829,279 |
Travel |
| 241,444 | 247,277 |
| 63,047 | 22,478 |
| 15,326 |
| 589,572 |
Trenching and road work |
| - | - |
| 34,339 | - |
| - |
| 34,339 |
Reimbursements from optionee |
| (8,961,049) | (4,890,826) |
| (2,889,052) | (45,158) |
| - |
| (16,786,085) |
|
| $ (88,798) | $ 4,145,186 |
| $ 144,524 | $ 1,787,017 |
| $ 500,931 |
| $ 6,488,860 |
|
|
|
|
|
|
|
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Portugal
Licenses have varying required work commitments and carry a 3% Net Smelter Return (“NSR”) payable to the government of Portugal.
Alvalade:
On November 19, 2019, the Company and MAEPA (collectively the “Company”) and Minas de Aguas Teñidas, S.A. (“MATSA”) and its wholly-owned subsidiary EUL (collectively “MATSA”) entered into an Earn-In Joint Venture Agreement (the “Agreement”) in respect of the Alvalade project. Pursuant to the Agreement, PorMining, Unipessoal Lda. (“PorMining”) was incorporated on December 17, 2019 to hold assets and develop mineral rights (both as defined) and EUL can earn up to an 85% interest in PorMining. The earning of this interest, subsequent arrangements that may be entered into to explore the assets and, if warranted, the development of one or more projects are referred to as the “Transaction”.
On March 27, 2020, MAEPA and EUL entered into a Quota Transfer Agreement pursuant to which MAEPA split its 100% interest in the share capital of PorMining into two quotas, representing 51% and 49% of the company’s share capital, and sold the 51% quota to EUL for the nominal value of €510.
On March 27, 2020, the Company, MAEPA, MATSA and EUL entered into the PorMining Lda. Shareholders’ Agreement (the “Agreement”). Pursuant to the Agreement:
·PorMining has five directors. From the effective date until the second option exercise date, three will be nominated by EUL and two by MAEPA. Thereafter, four will be nominated by EUL and one will be nominated by MAEPA. Upon the occurrence of the 51/49 Phase and thereafter, EUL is entitled to nominate three directors and MAEPA two directors. In the event of dilution of the interest of EUL or MAEPA, each will be entitled to proportional representation (as described) equal to its then interest;
·In the event that EUL and/or MAEPA wish to sell or transfer their shares in PorMining, PorMining has a right of first refusal to purchase all or a portion of the shares. To the extent that PorMining does not exercise its right of first refusal to all of the shares, each of EUL and/or MAEPA has a right of first refusal; and
·The Agreement will terminate at such time as there is a final decision regarding the dissolution and liquidation of PorMining, the parties mutually agree on the termination of the Agreement or as provided for under the Earn-In Joint Venture Agreement.
The effective date of the Transaction is the date that PorMining receives (received on June 15, 2020) the mineral rights in its name from the General Directorate of Energy and Geology of Portugal (“DGEG”). The Transaction is comprised of the following phases:
·Phase I – First Option;
·Phase II – Second Option;
·51/49 Phase; and
·Phase III – Development and Operation.
|
|
|
|
|
|
|
|
|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Alvalade: (Continued)
Phase I – First Option
During Phase I, MAEPA granted EUL the sole and exclusive right to hold an undivided 51% interest in PorMining (the first option) for at least three years from the effective date or the issue (issued on June 15, 2020) of the Experimental Exploitation License (the “EEL”) by DGEG to PorMining. EUL’s right to maintain its 51% interest is conditional upon MATSA:
·Paying €400,000 to the Company on or before the effective date (€200,000 was received in December 2019 and the remaining €200,000 was received in June 2020);
·Funding or providing the necessary financial instrument to cover the guarantee, which will be returned to MATSA following the release of the guarantee by DGEG (funded €100,000 in June 2020); and
·Funding expenditures (the first option expenditures) on the mineral rights in an aggregate amount of €2,400,000 (€1,200,000 within the first 12 months following the effective date [met] and €1,200,000 in the next 24 months [met]) on or before three years from the effective date or the issue of the EEL.
Effectively in March 2022, MATSA completed the Phase I First Option by funding a total of €2,500,000 on the Alvalade project, including the €100,000 guarantee with DGEG, and EUL unconditionally earned the 51% interest in PorMining.
During Phase I, MAEPA acted as the operator of the mineral rights with PorMining paying MAEPA an operator’s fee equal to €100,000 per year, paid monthly starting June 16, 2020, funded by MATSA and which formed part of the first option expenditures.
In all other phases, PorMining will be the operator unless it appoints another person to act as operator. The operator is responsible for developing and submitting work programs to the technical committee or the board of directors for consideration and approval and to implement work programs when approved according to the approved budget. The technical committee is comprised of two representatives from each of EUL and MAEPA and will be in effect until the first option exercise date. Thereafter, the board of directors will make all decisions with respect to the mineral rights.
Upon the completion of Phase I, MATSA and PorMining continued with having MAEPA acting as the operator and PorMining continued paying the operator’s fee. During the three months ended March 31, 2023, MAEPA received €25,000 ($36,288) (2022 - €25,000 ($36,898)) operator’s fee where the fund was included in reimbursements from optionee.
|
|
|
|
|
|
|
|
|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Alvalade: (Continued)
Phase II commenced on the first option exercise date and continues until the first to occur of the second option exercise date and the termination of the second option. On the first option exercise date, the Company granted EUL the sole and exclusive right and option to acquire an additional 34% (for an aggregate 85% interest) in PorMining (the second option). EUL’s right to exercise the second option is conditional on MATSA satisfying the second option conditions as follows:
·Preparing, funding and delivering to PorMining a feasibility study on the mineral rights within five years of the issuance of the EEL or, provided that DGEG grants an extension to all or part of the EEL, the time period for when the second option conditions must be met shall be extended to a maximum of two additional years, for a total of seven years after the issuance of the original EEL;
·Making proper application for a mining license before the end of the term of the EEL; and
·Making all progress payments to Antofagasta as set out in the Debt Cancellation Agreement dated June 12, 2017 as follows:
oUS$250,000 within 60 days after the date of a news release announcing a NI 43-101 compliant technical report having been completed and with results as defined;
oUS$500,000 within 60 days after the date of a news release announcing completion of a feasibility study with results as defined;
oUS$500,000 on the one-year anniversary of the date of the news release announcing the feasibility study noted above;
oUS$750,000 within 60 days of the commencement of commercial production;
oUS$750,000 on the one-year anniversary of commencement of commercial production;
oUS$750,000 on the second anniversary of commencement of commercial production; and
oUS$750,000 on the third anniversary of commencement of commercial production.
The satisfaction of the second option conditions is solely at MATSA’s discretion and MATSA may elect to terminate the second option at any time by delivering notice (the second option termination notice) to the Company. If the second option is terminated, EUL will be entitled to retain its 51% interest in PorMining, plus an additional 1% interest for every €735,294 of expenditures funded during Phase II and the 51/49 Phase will commence.
Upon MATSA satisfying the second option conditions, EUL automatically earns an additional 34% interest in PorMining for an aggregate interest of 85%.
During Phase II, EUL will fund 100% of all maintenance payments and approved work programs.
As of March 31, 2023, MATSA funded €1,459,000 on the Alvalade project Phase II – Second Option. Subsequently, MATSA funded another €265,000 on the Alvalade project in Phase II.
51/49 Phase
The 51/49 Phase commences on termination of the second option and continues until the deemed conversion of the interest of a party to a royalty. During the 51/49 Phase, PorMining will remain the operator subject to the terms of the Agreement and the shareholders’ agreement and the activities of the parties with respect to the mineral rights will continue to be governed by the shareholder’s agreement.
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|
|
|
|
|
|
|
|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Alvalade: (Continued)
If at any time after the 51/49 Phase has commenced EUL’s interest is reduced to below 10% as a result of dilution calculations, its interest will be deemed to be converted to a 1.5% royalty, which royalty shall only be payable up to a maximum total payment of €13,000,000 after which it will no longer be applicable. Upon conversion to the royalty, EUL will have no further rights or interest in respect of the assets under the Agreement or the shareholders’ agreement except for the royalty and the termination provisions apply.
If at any time during the 51/49 Phase MAEPA’s interest is reduced to 15% as a result of dilution calculations, then its interest will be deemed to be converted to a 15% “carried interest” following which MAEPA will not be required to contribute to any further work programs and will not be subject to any further dilution until such time as a feasibility study has been prepared, at which point Phase III will have been deemed to have commenced and MAEPA will have to sell the option.
During the 51/49 Phase, the parties will fund the maintenance payments and contribute to the costs of any approved work and/or development programs in proportion to their proportionate share.
Phase III – Development and Operation
Phase III commences on the second option exercise date and continues until the deemed conversion of the interest of a party to a royalty. Within 90 days of the commencement of Phase III, the Company will transfer its 15% interest in PorMining to MATSA in consideration for €10,000,000 to be paid as follows:
·€3,000,000 upon a construction decision being made by PorMining and all permits having been received from DGEG;
·€3,000,000 upon commencement of commercial production; and
·€4,000,000 upon the first anniversary of commencement of commercial production.
During Phase III, the parties will contribute their respective pro rata share of all approved work programs and budgets.
If at any time after Phase III has commenced MAEPA’s interest is reduced to below 10% as a result of dilution calculations, its interest will be deemed to be converted to a 1.5% royalty as described above for EUL.
|
| March 31, 2023 |
| December 31, 2022 |
|
|
|
|
|
Due from optionee |
|
|
| |
| Alvalade - PorMining | $ 31,096 |
| $ 12,811 |
|
| $ 31,096 |
| $ 12,811 |
|
|
|
|
|
|
|
|
|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Kosovo
Slivova (formerly Slivovo) license:
Byrnecut International Limited (“Byrnecut”) earned an 85% interest in the Slivovo property after forwarding $2,834,986 (€2,000,000) for the Slivovo property to the Company and completing a Preliminary Feasibility Study (“PFS”) by April 10, 2017. Byrnecut and the Company set up a joint venture entity known as Peshter Mining J.S.C. (“Peshter Mining”) to reflect the 85:15 ownership and transferred the Slivovo license into Peshter Mining with Byrnecut being the operator. Avrupa’s interest in Peshter Mining was subsequently diluted to below 10%, resulting in the Company’s interest in Peshter Mining being converted into a 2% Net Smelter Return.
On December 31, 2019, the Company wrote down its interest in Slivovo by $143,154 to $1 as the Company was in negotiations with the Kosovo Mining Bureau, along with Byrnecut and Peshter Mining as to how to possibly extend the life of this license. During fiscal 2020, Byrnecut decided not to proceed with advancing Slivovo. Rather than dropping the license and potentially allowing a third party to stake the open land, Innomatik Exploration Kosovo LLC (“IEK”), Byrnecut and Peshter Mining entered into a binding term sheet (the “TS”) whereby the parties set out the terms on which Peshter Mining would surrender the existing tenements, thereby enabling IEK to apply, as sole beneficial owner, for one or more tenements over the entirety of the tenement area. The license was officially released back to the government. As of December 31, 2020, the Company wrote off $1.
In March 2021, the Company incorporated a wholly-owned subsidiary, AVU Kosova LLC, to apply for a new Slivovo exploration permit. In May 2022, the Company received a seven-year exploration permit known as the Slivova license.
As consideration for Byrnecut ensuring that Peshter Mining complies with its obligations under the TS, IEK must pay to Byrnecut milestone cash payments totaling €375,000 and milestone gold payments totaling 850 troy ounces of gold (together known as “Success Payments”) as follows:
Cash
·€125,000 within 30 days of the first to occur of the completion of a positive bankable feasibility study or the board of directors of IEK making a decision to proceed with the development of a commercial mining operation in respect of all or any part of the tenement area;
·€125,000 within 30 days of issue of a mining license in respect of all or any party of the tenement area; and
·€125,000 within 30 days of commencement of construction of a mine within the tenement area.
Gold
·100 troy ounces within 30 days of commencement of commercial production (“CCP”);
·175 troy ounces within 30 days of the one-year anniversary of CCP;
·250 troy ounces within 30 days of the two-year anniversary of CCP; and
·325 troy ounces within 30 days of the three-year anniversary of CCP.
On August 24, 2022, the Company and Western Tethyan Resources (“WTR”) entered into an Option Agreement (the “Agreement”) in respect of the Slivova project. WTR is a private exploration company and is 75% owned by London AIM-listed Ariana Resources PLC. Pursuant to the Agreement, WTR can earn up to an 85% interest in the Slivova project.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Kosovo (Continued)
Slivova (formerly Slivovo) license: (Continued)
Date/Period | Expenditures | Option Payment | Earn-in % |
On September 1, 2022 (Effective Date) | None | €35,000 (received) |
|
On or before March 1, 2023 | €100,000 (spent) | None |
|
On March 1, 2023 | None | €35,000 (received) |
|
On or before September 1, 2023 | €150,000 | €30,000 |
|
On or before September 1, 2024 | €650,000 | None | 51% (Stage 1) |
On or before September 1, 2025 | €1,000,000 | None | 75% (Stage 2) |
During fourth and fifth year from the Effective Date (Stage 3), WTR must complete the Environmental Impact Study (“EIS”), Feasibility Study (“FS”), and Mining License application to earn-in 85% interest in the project.
During Stage 4, WTR will complete Success Payments to previous JV partner, Byrnecut (see “TS” above).
During Stage 5, the Company will participate in the mine build or dilute to 1% Net Smelter Return (“NSR”).
On May 2, 2023, the Company completed the Definitive Agreement with WTR. The terms of the Agreement are:
On Closing
·€35,000 cash payment upon signing the Definitive Agreement on/about March 1, 2023. (Completed)
Earn-In Phase
Stage 1:
·€30,000 cash payment on September 1, 2023;
·If WTR elects to enter the Definitive Agreement, it will invest €800,000, during first two years from the effective date (minimum of €150,000 must be spent by September 1, 2023, post DD Phase) for exploration, drilling, baseline environmental and social surveys, landowners, etc., for 51% of the Project. (Underway)
Stage 2:
·After completion of Stage 1, during the third year from the Effective Date, WTR will invest €1,000,000 for NI 43-101 resource estimation, commencement of full Environmental Impact Statement (“EIS”), etc., for 75% of the Project.
Stage 3:
·During fourth and fifth year from the Effective Date, WTR must complete the EIS, Feasibility Study (“FS”), and Mining License application, for 85% of the Project.
Stage 4:
·WTR completes success payments to previous JV partner, Byrnecut International Ltd., accordingly:
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Kosovo (Continued)
Slivova (formerly Slivovo) license: (Continued)
o€125,000 in cash within 30 days of the first to occur of: 1) Completion of a positive FS (minimum 15% IRR) or; 2) Avrupa or related party making a decision to proceed with development of a mining operation within the license area;
o€125,000 within 30 days of issuance of a mining license for the Project;
o€125,000 within 30 days of commencement of mine construction within the license area;
o100 troy ounces of gold within 30 days of commencement of commercial production (“CCP”), then increasing by 75 troy ounces per year until and including the third anniversary of commercial production when 325 troy ounces will be delivered.
Stage 5:
·Avrupa participates in the mine build or dilutes to 1% NSR.
6. PROPERTY DEPOSITS / TAX DEPOSITS
As of March 31, 2023, the Company had a total of $1,471 (€1,000) (December 31, 2022: $1,446 (€1,000)) of cash pledged for its exploration licenses in Portugal. The advances to the Portuguese regulatory authorities are refundable to the Company, subject to completion of the work obligations described in the exploration license applications.
Tax deposits:
In November 2018, MAEPA paid €56,505 ($88,201) in lieu of bank guarantees of €77,918 ($121,625) to the Directora de Finanças de Braga in Portugal. This amount was comprised of €51,920 ($81,044) in respect of stamp tax and €4,585 ($7,157) in respect of VAT. The stamp tax portion relates to the interpretation that intercompany advances received by MAEPA are financing loans and, accordingly, are subject to stamp tax. The VAT portion relates to certain invoices for vehicle usage and construction services. As of December 31, 2019, the Company estimated that the judicial review process would take approximately one year for the VAT claim and three to five years for the stamp tax claim and that the likelihood of success for each was 50%. As a result, tax deposits were written down by $41,200 (€28,252) during the year ended December 31, 2019. During 2020, the judicial review ruled that approximately €1,971 VAT remained to be paid while the rest were annulled. The Company accepted this ruling. The Company is still waiting for a trial date regarding the stamp tax and it is estimated that the process can take another three to four years.
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|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
7. ADVANCE AND INVESTMENT IN AKKERMAN FINLAND OY
On February 25, 2022, the Company signed a Share Purchase Agreement with Akkerman Exploration B.V. (“AEbv”) to acquire up to a 100% ownership interest in Akkerman Finland OY (“AFOy”), an entity holding certain mineral rights (the “Property”) in Finland.
The acquisition terms are as follow:
·The Company can earn an initial 49% interest in AFOy in Stage One by issuing 1,470,000 common shares (issued at a value of $95,550), paying €150,000 ($211,800) into AFOy for the purpose of paying existing shareholder loans (paid), and depositing €200,000 ($282,400) into a dedicated account (paid), to be spent on exploration expenditures during the period between the completion of Stage One and the completion of Stage Two. The €200,000 ($282,400) was recorded as an advance to AFOy as of March 31, 2023.
·As a Stage Two earn-in, the Company has the option, for a period of 12 months from the date of completion of Stage One, to acquire the remaining 51% interest in AFOy, bringing their total interest to 100%. The Company can exercise the Stage Two option by issuing a further 1,530,000 common shares, paying an additional €15,000 for the purposes of paying existing shareholder loans and accrued interest, and depositing an additional €200,000 into a dedicated account for further exploration expenditures. The option to acquire additional 51% interest expired on March 3, 2023. The Company is currently working with AEbv to defer the payments and share issuances regarding this Stage Two earn-in.
During the period between Stage One and Stage Two, the Company will be the operator for all mining work conducted on the Property. During this same period, the Company and AEbv will form a technical committee comprised of one representative from each party, with AEbv’s representative having the casting vote.
As at March 31, 2023, the Company holds a 49% interest in AFOy (December 31, 2022 – 49%). The investment in associate was assessed for impairment indicators relating to the underlying assets of AFOy in accordance with IAS 36 and IFRS 6.
Investment in AFOy as at January 1, 2022 |
| $ | 14,155 |
Payment – initial 49% interest |
|
| 211,800 |
Issued shares – initial 49% interest | Note 8(b)(iii) |
| 95,550 |
Loss on investment in AFOy |
|
| (62,973) |
Investment in AFOy as at December 31, 2022 |
| $ | 258,532 |
Loss on investment in AFOy |
|
| (11,465) |
Investmnet in AFOy as at March 31, 2023 |
| $ | 247,067 |
The three months ended March 31, 2023 and 2022 calculation for the Investment in AFOy is as follows:
|
| 2023 |
| 2022 |
AFOy’s net loss | $ | 23,397 | $ | 8,159 |
The Company’s ownership % |
| 49% |
| 49% |
Share of loss of an associate | $ | 11,465 | $ | 3,998 |
|
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|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
7. ADVANCE AND INVESTMENT IN AKKERMAN FINLAND OY (Continued)
The following table illustrates the summarized financial information of AFOy:
|
| March 31, 2023 |
| December 31, 2022 |
Current assets | $ | 80,889 | $ | 101,996 |
Non-current assets |
| 268,357 |
| 263,796 |
Current liabilities |
| 5,176 |
| 4,264 |
Non-current liabilities |
| 536,842 |
| 527,717 |
| 23,397 |
| 128,517 |
8. CAPITAL AND RESERVES
(a)Authorized:
At March 31, 2023, the authorized share capital was comprised of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
(b)Share issuances:
i.On February 28, 2022, the Company completed a non-brokered private placement by issuing 16,666,667 units (“Unit”) at a price of $0.075 per Unit for gross proceeds of $1,250,000. Each Unit consists of one common share and one non-transferable warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.125 until February 28, 2025. The warrants were ascribed a value of $554,525. The Company paid finder’s fee of $30,938 and issued 412,500 finder’s warrants. Each finder’s warrant is exercisable into one common share at $0.075 until August 28, 2023. These finder’s warrants were ascribed a value of $19,841. The Company incurred additional share issue costs in the amount of $29,478 in connection with the financing.
iiOn February 28, 2022, the Company issued 3,800,000 shares at a price of $0.075 per share to settle outstanding debt for $285,000.
IiiOn March 3, 2022, the Company issued 1,470,000 shares to earn an initial 49% interest in AFOy (Note 7).
(c)Share Purchase Option Compensation Plan:
The Company has established a stock option plan whereby the Company may grant options to directors, officers, employees and consultants of up to 10% of the common shares outstanding at the time of grant. The exercise price, term and vesting period of each option are determined by the board of directors within regulatory guidelines.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
8. CAPITAL AND RESERVES (Continued)
(c)Share Purchase Option Compensation Plan: (Continued)
Stock option transactions and the number of stock options for the three months ended March 31, 2023 are summarized as follows:
| Exercise | December 31, |
|
| Expired/ | March 31 |
Expiry date | price | 2022 | Granted | Exercised | cancelled | 2023 |
March 14, 2023 | $0.40 | 450,000 | - | - | (450,000) | - |
March 26, 2023 | $0.40 | 10,000 | - | - | (10,000) | - |
January 7, 2024 | $0.20 | 45,750 | - | - | - | 45,750 |
March 14, 2027 | $0.08 | 1,575,000 | - |
| - | 1,575,000 |
Options outstanding |
| 2,080,750 | - | - | (460,000) | 1,620,750 |
Options exercisable |
| 2,080,750 | - | - | (460,000) | 1,620,750 |
Weighted average exercise price |
| $0.15 | $Nil | $Nil | $0.40 | $0.08 |
As of March 31, 2023, the weighted average contractual remaining life is 3.84 years (December 31, 2022 – 3.25 years).
Stock option transactions and the number of stock options for the year ended December 31, 2022 are summarized as follows:
| Exercise | December 31, |
|
| Expired/ | December 31, |
Expiry date | price | 2021 | Granted | Exercised | cancelled | 2022 |
April 26, 2022 | $0.40 | 327,500 | - | - | (327,500) | - |
March 14, 2023 | $0.40 | 450,000 | - | - | - | 450,000 |
March 26, 2023 | $0.40 | 10,000 | - | - | - | 10,000 |
January 7, 2024 | $0.20 | 45,750 | - | - | - | 45,750 |
March 14, 2027 | $0.08 | - | 1,575,000 |
|
| 1,575,000 |
Options outstanding |
| 833,250 | 1,575,000 | - | (327,500) | 2,080,750 |
Options exercisable |
| 833,250 | 1,575,000 | - | (327,500) | 2,080,750 |
Weighted average exercise price |
| $0.39 | $0.08 | $Nil | $0.40 | $0.15 |
The weighted average assumptions used to estimate the fair value of options for the three months ended March 31, 2023, and 2022 were:
|
| 2023 | 2022 |
Risk-free interest rate |
| n/a | 1.34% |
Expected life |
| n/a | 5 years |
Expected volatility |
| n/a | 144.13% |
Expected dividend yield |
| n/a | Nil |
Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Company’s share purchase options.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
8. CAPITAL AND RESERVES (Continued)
(d)Finder’s Options:
The continuity of finder’s options for the three months ended March 31, 2023 is as follows:
| Exercise | December 31, |
|
|
| March 31, |
Expiry date | price | 2022 | Issued | Exercised | Expired | 2023 |
August 28, 2023 | $0.075 | 412,500 | - | - | - | 412,500 |
Outstanding |
| 412,500 | - | - | - | 412,500 |
Weighted average exercise price |
| $0.075 | $Nil | $Nil | $Nil | $0.075 |
As of March 31, 2023, the weighted average contractual remaining life is 0.41 years (December 31, 2022 – 0.66 years).
The continuity of finder’s options for the year ended December 31, 2022 is as follows:
The weighted average assumptions used to estimate the fair value of finder’s options for the three months ended March 31, 2023 and 2022 were:
|
| 2023 | 2022 |
Risk-free interest rate |
| n/a | 0.49% |
Expected life |
| n/a | 1.5 years |
Expected volatility |
| n/a | 149.50% |
Expected dividend yield |
| n/a | Nil |
(e)Warrants:
The continuity of warrants for the three months ended March 31, 2023 is as follows:
| Exercise | December 31, |
|
|
| March 31, |
Expiry date | price | 2022 | Issued | Exercised | Expired | 2023 |
October 23, 2023 | $0.20 | 4,219,641 | - | - | - | 4,219,641 |
February 28, 2025 | $0.125 | 16,666,667 | - | - | - | 16,666,667 |
Outstanding |
| 20,886,308 | - | - | - | 20,886,308 |
Weighted average exercise price |
| $0.14 | $Nil | $Nil | $Nil | $0.14 |
As of March 31, 2023, the weighted average contractual life is 1.31 years (December 31, 2022 - 1.894 years).
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
8. CAPITAL AND RESERVES (Continued)
(e)Warrants: (Continued)
The continuity of warrants for the year ended December 31, 2022 is as follows:
| Exercise | December 31, |
|
|
|
| December 31, |
Expiry date | price | 2021 | Issued |
| Exercised | Expired | 2022 |
February 25, 2022 (1) | $0.40 | 500,000 | - |
| - | (500,000) | - |
October 23, 2023 | $0.20 | 4,219,641 | - |
| - | - | 4,219,641 |
February 28, 2025 | $0.125 | - | 16,666,667 |
| - | - | 16,666,667 |
Outstanding |
| 4,719,641 | 16,666,667 |
| - | (500,000) | 20,886,308 |
Weighted average exercise price |
| $0.22 | $0.125 |
| $Nil | $0.40 | $0.14 |
(1)These warrants have a forced exercise price. If the closing price of the Company’s shares is $0.80 or greater for a period of 20 consecutive trading days, the warrants will expire on the earlier of the 30th day after such notice is given and the original expiry date.
The weighted average assumptions used to estimate the fair value of warrants for the three months ended March 31, 2023 and 2022 were:
|
| 2023 | 2022 |
Risk-free interest rate |
| n/a | 0.88% |
Expected life |
| n/a | 3 years |
| n/a | 161.98% | |
Expected dividend yield |
| n/a | Nil |
9. RELATED PARTY TRANSACTIONS AND BALANCES
The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:
For the three months ended March 31, 2023
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Other expenses | Share-based payments | Total |
Paul W. Kuhn (c) | $ 37,500 | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 37,500 |
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
9. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
| For the three months ended March 31, 2022 | ||||||
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Other expenses | Share-based payments | Total |
Paul W. Kuhn (c) | $ 37,500 | $ Nil | $ Nil | $ Nil | $ Nil | $ 12,460 | $ 49,960 |
Winnie Wong Chief Financial Officer | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 12,460 | $ 12,460 |
Mark T. Brown Director | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 12,460 | $ 12,460 |
Paul L. Nelles (b) | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 12,460 | $ 12,460 |
Paul Dircksen Director | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 12,460 | $ 12,460 |
Frank Hogel | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 12,460 | $ 12,460 |
Related party liabilities
(a)Pacific Opportunity Capital Ltd., a company controlled by a director of the Company.
(b)Paul L. Nelles is a director of Innomatik.
(c)On June 1, 2019, the Company entered into a Contract for Services (the “Contract”) with a contractor to serve as the Company’s president and chief executive officer. The contractor is responsible for providing technical oversight and guidance, establishing corporate goals and objectives and setting and implementing corporate strategies. Pursuant to the Contract:
·The contractor will receive a fee of $12,500 per month and a rent allowance of €4,000 for the first four months;
·If the Company is substantially sold or has a change of control (as defined), the contractor will receive a payment equal to two years of fees; and
The contract remains effective until terminated in writing by either the Company or the contractor. The Company may terminate the contract at any time without notice or payment in lieu thereof for cause or at any time without cause by providing six months’ written notice or by paying the contractor in lieu of notice. The contractor may terminate the contract at any time by providing the Company with three months’ written notice.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
9. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
(d)This amount relates to PorMining paying Paul Kuhn for his technical services consulting in excess of the Contract (defined above in Note 9(c)). Such amount will be used to offset and reduce the Company's monthly fee payable to Paul Kuhn per the Contract.
10. LOSS PER SHARE
Basic and diluted loss per share
The calculation of basic and diluted loss per share for the three months ended March 31, 2023 was based on the loss attributable to common shareholders of $6,203 (2022 – $173,987) and a weighted average number of common shares outstanding of 54,674,754 (2022 – 40,245,050).
Diluted loss per share did not include the effect of 1,620,750 share purchase options, 20,886,308 warrants and 412,500 finder’s options outstanding at three months end March 31, 2023 (2022 – 2,408,250 share purchase options, 20,886,308 warrants and 412,500 finder’s options) as they are anti-dilutive.
11. FINANCIAL INSTRUMENTS
The fair values of the Company’s cash, sales tax receivable, other receivables, advance to related party, due from optionee, property deposits, accounts payables and accrued liabilities and due to related parties approximate their carrying values because of the short-term nature of these instruments.
The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, interest risk, commodity price risk and currency risk.
(a)Credit risk
The Company’s cash is held in financial institutions in Canada, Portugal and Kosovo and property deposits are held by Portuguese regulatory authorities. Amounts are receivable from optionee and a related party.
(b)Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure.
As at March 31, 2023, the Company had cash of $248,261 (December 31, 2022 - $307,531), advance to related party of $26,139 (December 31, 2022 - $22,323), sales tax receivables of $3,812 (December 31, 2022 - $3,627) and other receivables of $12,746 (December 31, 2022 - $10,713) to settle current liabilities of $154,590 (December 31, 2022 - $208,936).
Accounts payable and accrued liabilities are due within the current operating period.
(c)Interest rate risk
Interest rate risk is not material as the Company does not have any significant financial assets or liabilities subject to fluctuation in interest rates.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
11. FINANCIAL INSTRUMENTS (Continued)
(d)Equity market price risk
The Company is exposed to price risk with respect to equity market prices. Price risk as it relates to the Company is defined as the potential adverse impact on the Company’s ability to finance due to movements in individual equity prices or general movements in the level of the stock market. The Company closely monitors individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company.
(e)Currency risk
The Company’s property interests in Portugal, Finland and Kosovo make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks. The Company has net monetary assets of $137,800 dominated in Euros. A 1% change in the absolute rate of exchange in US dollars and Euros would affect its net income by $700.
IFRS 7 establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Company does not have any financial instruments that are measured at fair value.
12. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
The non-cash transactions during the three months ended March 31, 2023 and 2022 were as follows:
·As at March 31, 2023, a total of $Nil (2022 - $10,000) in share issue costs were included in due to related parties.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited, Presented in Canadian Dollars)
13. MANAGEMENT OF CAPITAL RISK
The Company manages its cash, common shares, warrants and share purchase options as capital (see Note 8). The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets or adjust the amount of cash and cash equivalents held.
In order to maximize ongoing operating efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with maturities of 90 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.
The Company expects its current capital resources will be sufficient to carry out its exploration or operations in the near term.
14. SEGMENTED FINANCIAL INFORMATION
The Company operates in one industry segment, being the acquisition and exploration of mineral properties. Geographic information is as follows:
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AVRUPA MINERALS LTD.
(An Exploration Stage Company)
MANAGEMENT’S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023
OVERVIEW AND INTRODUCTORY COMMENT
Avrupa Minerals Ltd. (“Avrupa” or the “Company”) is a growth-oriented junior exploration and development company listed on the TSX Venture Exchange under the trading symbol “AVU”. The Company is currently focusing on discovering economic mineral deposits, using a hybrid prospect generator model (getting other partners to fund our properties to minimize dilution as well as funding our own exploration programs on our top projects), in politically stable and prospective regions of Europe, including Portugal, Kosovo and Finland.
Over the course of 14 years, Avrupa has brought in partners on its exploration projects that have invested approximately $27 million in exploration in addition to funds spent by Avrupa. That exploration has led to two discoveries – one gold deposit in Kosovo and one area of VMS mineralization in the prolific Iberian Pyrite Belt famous for large copper-zinc deposits in southern Portugal.
While Avrupa has been focused on advancing its exploration projects with funds from partners who can earn an interest in its projects by spending exploration funds thereby reducing dilution for shareholders, the Company completed its own exploration program at the Alvalade property. This resulted in the Company entering into an Earn-in Joint Venture Agreement for the Alvalade project with Minas de Aguas Teñidas, S.A. (“MATSA”) and its wholly-owned subsidiary Emisurmin Unipessoal Lda. (“EUL”) in November 2019.
On December 14, 2021, the Company signed a binding letter agreement (the “Letter Agreement”) with Dutch holding company, Akkerman Exploration B.V. (“AEbv”) to acquire 100% ownership of Akkerman Finland OY (“AFOy”). AFOy owns three mineral reservations in the past-producing and highly prospective Vihanti-Pyhäsalmi VMS district in central Finland and one gold project in the Oijarvi greenstone belt Finland. On February 25, 2022, the Letter Agreement was superseded by the Share Purchase Agreement.
Avrupa continues to upgrade its precious and base metal targets to JV-ready status in a variety of districts, with the idea of attracting potential partners to project-specific and/or regional exploration programs, and to look for new projects in certain mineral belts in Europe, or nearby.
This MD&A is dated May 26, 2023 and discloses specified information up to that date. Unless otherwise noted, all currency amounts are expressed in Canadian dollars. The following information should be read in conjunction with the unaudited condensed consolidated interim financial statements and the related notes for the three months ended March 31, 2023 and the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes thereto.
Additional information relevant to the Company and the Company’s activities can be found on SEDAR at www.sedar.com, and/or on the Company’s website at www.avrupaminerals.com.
MAJOR QUARTERLY OPERATING MILESTONES
Alvalade Project (Portugal):
On March 3, 2023, the Company provided an update on progress at the Alvalade Project. The Company completed four exploration holes, totaling 2,693 meters, in the current phase of drilling, and started a fifth hole. The first two holes tested possible NW strike extension of the Lousal massive sulfide deposit (LNW22-001) and electromagnetic anomalism on a parallel trend to Lousal mineralization (LNW22-002). The third hole targeted a strong geophysical anomaly in mineral-host black shales, located about 4 kilometers further north of the Lousal NW holes (RAI22-001). The fourth hole tested another geophysical anomaly in the Casas Novas target sector, two kilometers south of the Caveira Mine area (INC22-001). All four holes cut through weakly mineralized, strongly folded and faulted, target black shales. Geochemical results from sampling of the first three holes suggested proximity to potential massive sulfide systems, particularly in the two Lousal NW drill holes. Results from INC22-001 were pending.
Figure 7. Location map for Phase 9 drilling locations, as well as drill hole locations for two historic drill holes included in following interpretative geological and targeting cross section.
Figure 8. Schematic cross section showing Lousal NW drilling results, along with historic drilling at Monte da Bela Vista. There is no previous drilling in the western portion of the section, thus the geological interpretation is only predictive.
Subsequent to completing the two LNW holes, the Company performed a stationary-loop SQUID TEM electromagnetic survey to further attempt to identify potential massive sulfide mineralization in this sector. The survey identified an electrical conductor located west of the drilling in favorable geological target area, supported by anomalous base metal results from previous soil sampling work. Further electromagnetic studies, using a moving electrical loop for more detail, supported the presence of a strong conductor. The schematic location of the conductor was shown in red cross-hatch in the Lousal NW cross section, which would be tested by a new drill hole, LNW23-003. Furthermore, geochemical results from sampling of the first two LNW holes suggested the possibility of nearby sulfide mineralization. The Joint Venture continued detailed geochemical studies and interpretation covering the use of low-level results from elements including gold, silver, arsenic, antimony, manganese, molybdenum, thallium, tin, copper, lead, and zinc, to determine potential proximity to massive sulfide mineralization. In this case, while drilling did not intercept massive sulfide mineralization, the results from sampling of the weakly mineralized black shales, typically the host rock material for mineral deposits in this portion of the Iberian Pyrite Belt (“IPB”), suggested the presence of the kind of hydrothermal system that forms massive sulfide deposits in the IPB.
The Company continued planning for further drill holes in the target areas between Caveira and Lousal, and would soon return to the Sesmarias area to start drilling for extensions of the known mineralization, southwards, and at the Brejo target north of the Sesmarias North sector. The Company also expected to receive detailed airborne gravity information, which would enhance the targeting in the main sectors of interest.
Slivova Project (Kosovo)
On March 2, 2023, the Company reported that presumptive Slivova Gold Project partner, Western Tethyan Resources (“WTR”), completed its detailed due diligence study of the Slivova Gold Deposit and elected to continue with Stage 1 of the earn-in joint venture program at Slivova.
During the 6-month due diligence period, WTR developed a small mine concept for the Slivova Project, studying “feasible access, mining, processing, and tailings management options”. At this level of investigation, WTR found that the Slivova Project demonstrates “potential for low initial capex, moderate operating costs, and attractive NPV and IRR in the context of the low initial capex and the current estimated mine life” (from WTR news release of March 2, 2023).
WTR further added that as a result of their studies, they would initiate a Preliminary Economic Assessment and Scoping Study for the Slivova Project, and that they have engaged UK-based consultants Bara Consulting UK and Knight Piesold to do the study. The two companies conducted the due diligence studies and are already duly familiar with the Slivova Project.
On May 9, 2023, the Company announced that it entered into a definitive option agreement with WTR to advance the Slivova Project. WTR can earn-in to 75% of the Project by funding exploration and development for €1,800,000 over three years, and then a further 10% by making certain milestone and success payments, producing an Environmental Impact Statement, delivering a Feasibility Study, and completing a Mining License application.
WTR spent more than €275,000 for Due Diligence, development of a Concept Study, and continuing work on a PEA.
On May 2, 2023, the Company completed the Definitive Agreement with WTR. The terms of the Agreement are:
On Closing
·€35,000 cash payment upon signing the Definitive Agreement on/about March 1, 2023. (Completed)
Earn-In Phase
Stage 1:
·€30,000 cash payment on September 1, 2023;
·If WTR elects to enter the Definitive Agreement, it will invest €800,000, during first two years from the effective date (minimum of €150,000 must be spent by September 1, 2023, post DD Phase) for exploration, drilling, baseline environmental and social surveys, landowners, etc., for 51% of the Project. (Underway)
Stage 2:
·After completion of Stage 1, during the third year from the Effective Date, WTR will invest €1,000,000 for NI 43-101 resource estimation, commencement of full Environmental Impact Statement (“EIS”), etc., for 75% of the Project.
Stage 3:
·During fourth and fifth year from the Effective Date, WTR must complete the EIS, Feasibility Study (“FS”), and Mining License application, for 85% of the Project.
Stage 4:
·WTR completes success payments to previous JV partner, Byrnecut International Ltd., accordingly:
o€125,000 in cash within 30 days of the first to occur of: 1) Completion of a positive FS (minimum 15% IRR) or; 2) Avrupa or related party making a decision to proceed with development of a mining operation within the license area;
o€125,000 within 30 days of issuance of a mining license for the Project;
o€125,000 within 30 days of commencement of mine construction within the license area;
o100 troy ounces of gold within 30 days of commencement of commercial production (“CCP”), then increasing by 75 troy ounces per year until and including the third anniversary of commercial production when 325 troy ounces will be delivered.
Stage 5:
·Avrupa participates in the mine build or dilutes to 1% NSR.
Kangasjärvi Project (Finland)
On May 11, 2023, the Company reported that Tukes (Finland’s mineral exploration licensing authority) approved the Kangasjärvi application, and following no appeals during the 37-day comment period. The exploration license is fully in force. AFOy has started to fulfill obligations related to the issuance of the new license, including payment of the annual fees directly to the landowners within the permit area, as well as planning the next phase of exploration. AFOy and Avrupa plan to initiate drill testing of a promising deep EM anomaly adjacent to the historic Kangasjärvi zinc mine, along with continued review and compilation of substantial amounts of historic geological and drilling data from around the license area.
Kolima Project (Finland)
On May 11, 2023, the Company reported that Tukes also approved the Kolima application, but three appeals which must be reviewed before an exploration license can be granted were filed. Consequently, AFOy and Avrupa decided to temporarily suspend exploration work at Kolima until the outcome of the court proceedings is established.
QUARTERLY FINANCIAL CONDITION
Capital Resources
The Company is aware of the current conditions in the financial markets and has planned accordingly. The Company’s current treasury and the future cash flows from warrants and options, along with the planned developments within the Company as well as with its JV partner might not be sufficient to carry out its activities throughout 2023. The Company might have to raise additional financing under difficult financial conditions. If the market conditions prevail or improve, the Company will make adjustment to budgets accordingly.
Liquidity
As at March 31, 2023, the Company had a working capital of $167,803 (December 31, 2022 – $157,445). With respect to working capital, $248,261 was held in cash (December 31, 2022 - $307,531). The decrease in cash was due to the general administrative expenses and exploration work expenses totaling $59,270.
Operations
Excluding the non-cash depreciation of $509 (2022 - $291) and share-based payment of $Nil (2022 - $98,123), the Company’s first quarter general and administrative expenses amounted to $115,285 (2021 - $151,686), a decrease of $36,401 mainly due to professional fees of $24,262 (2022 - $80,155) as the Company incurred consulting fees related to acquisition of the ownership of AFOy during the first quarter of 2022.
During the three months ended March 31, 2023, the Company incurred exploration costs totaling $15,548 including $5,765 on Alvalade in Portugal and $9,783 on Slivova in Kosovo. During the three months ended March 31, 2022, the Company incurred exploration costs of $7,442 on Alvalade in Portugal.
During the three months ended March 31, 2023, the Company reported a loss of $6,203 (2022 – $173,987), a decrease of $167,784.
SIGNIFICANT RELATED PARTY TRANSACTIONS
During the quarter, there was no significant transaction between related parties.
COMMITMENTS, EXPECTED OR UNEXPECTED, OR UNCERTAINTIES
As of the date of the MD&A, the Company has no outstanding commitments.
Property deposits:
As of March 31, 2023, the Company had a total of $1,471 (€1,000) (December 31, 2021: $1,446 (€1,000)) of cash pledged for its exploration licenses in Portugal. The advances to the Portuguese regulatory authorities are refundable to the Company, subject to completion of the work obligations described in the exploration license applications.
Tax deposits:
In November 2018, MAEPA paid €56,505 ($88,201) in lieu of bank guarantees of €77,918 ($121,625) to the Directora de Finanças de Braga in Portugal. This amount was comprised of €51,920 ($81,044) in respect of stamp tax and €4,585 ($7,157) in respect of VAT. The stamp tax portion relates to the interpretation that intercompany advances received by MAEPA are financing loans and, accordingly, are subject to stamp tax. The VAT portion relates to certain invoices for vehicle usage and construction services. As of December 31, 2019, the Company estimated that the judicial review process would take approximately one year for the VAT claim and three to five years for the stamp tax claim and that the likelihood of success for each was 50%. As a result, tax deposits were written down by $41,200 (€28,252) during the year ended December 31, 2019. During 2020, the judicial review ruled that approximately €1,971 VAT remained to be paid while the rest were annulled. The Company accepted this ruling. The Company is still waiting for a trial date regarding the stamp tax and it is estimated that the process can take another two to three years.
Other than disclosed in this MD&A – Quarterly Highlights, the Company does not have any commitments, expected or unexpected, or uncertainties.
RISK FACTORS
In our MD&A filed on SEDAR April 28, 2023 in connection with our annual financial statements (the “Annual MD&A”), we have set out our discussion of the risk factors Exploration risks, Market risks and Financing risk which we believe are the most significant risks faced by Avrupa. An adverse development in any one risk factor or any combination of risk factors could result in material adverse outcomes to the Company’s undertakings and to the interests of stakeholders in the Company including its investors. Readers are cautioned to take into account the risk factors to which the Company and its operations are exposed. To the date of this document, there have been no significant changes to the risk factors set out in our Annual MD&A.
DISCLOSURE OF OUTSTANDING SHARE DATA
The authorized share capital of the Company consists of an unlimited number of common shares without par value. The following is a summary of the Company’s outstanding share data as at March 31, 2023:
| Issued and Outstanding | ||
| March 31, 2023 |
| May 26, 2023 |
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Common shares outstanding | 54,674,754 |
| 54,674,754 |
Stock options | 1,620,750 |
| 1,620,750 |
Warrants | 20,886,308 |
| 20,886,308 |
Finder’s options | 412,500 |
| 412,500 |
Fully diluted common shares outstanding | 77,594,312 |
| 77,594,312 |
Cautionary Statements
This document contains “forward-looking statements” within the meaning of applicable Canadian securities regulations. All statements other than statements of historical fact herein, including, without limitation, statements regarding exploration results and plans, and our other future plans and objectives, are forward-looking statements that involve various risks and uncertainties. Such forward-looking statements include, without limitation, our estimates of exploration investment, the scope of our exploration programs, and our expectations of ongoing administrative costs. There can be no assurance that such statements will prove to be accurate, and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations are disclosed in the Company’s documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates or opinions change, except as required by law. Forward-looking statements are subject to risks, uncertainties and other factors, including risks associated with mineral exploration, price volatility in the mineral commodities we seek, and operational and political risks. Readers are cautioned not to place undue reliance on forward-looking statements.
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