Avrupa Minerals Ltd 6-K, filed May 1, 2025
Avrupa Minerals Ltd. (AVPMF)
About this 6-K
Avrupa Minerals Ltd filed this 6-K on May 1, 2025.
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 October 2024
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: December 12, 2024 | By: /s/ “Winnie Wong” Winnie Wong, Chief Financial Officer |
Exhibits:
99.1News Release dated October 16, 2024
99.2News Release dated November 27, 2024
99.2Interim Financial Statements for the period ended September 30, 2024
99.3Management Discussion and Analysis
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410 – 325 Howe Street, Vancouver, BC Canada V6C 1Z7 | T: (604) 687-3520 | F: (888) 889-4874 | ||
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October 16, 2024 |
| NR 08 – 2024 | ||
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Avrupa Minerals Starts Drilling at Kangasjärvi, Central Finland
Avrupa Minerals Ltd. (AVU:TSXV) is pleased to announce that initial scout drilling at the Kangasjärvi volcanogenic massive sulfide target, located in the Pyhäsalmi Mining District of central Finland, started during the past week. The Company plans to drill two holes, totaling up to 1,000 meters, on the first of two strong, previously un-tested, geophysical targets located in close proximity to historic mining at the location.
During the mid-1980’s, Finnish mining company Pyhäsalmi Mine Oy exploited, via open pit, a small high grade massive sulfide deposit with an in-house calculated resource of approximately 300,000 mt @ 5.4% zinc. The property had remained dormant and un-explored since that time until Akkerman Finland Oy (AFOy—49% Avrupa Minerals, 51% Akkerman Exploration BV) acquired the exploration rights in 2022. AFOy performed an airborne electromagnetic survey (SkyTEM) covering the general mine area and nearby mineral targets, and producing two standout EM conductors close-in to the old mine, but in areas where there has been no historic drilling.
Figure 2. Cross section, looking NNW, of the two EM anomalies with general drilling locations. The conceptual drill hole locations in the Kangas main EM target, are marked as white lines. Also shown are traces of previous holes drilled and the outline of the mined Kangasjärvi zinc deposit in red, between the two drill holes at Kangas Main. Advanced Maxwell geophysical modelling of the EM anomalies yielded a strong target plate which is depicted as a straight red line. (Courtesy of AFOy) |
The main anomaly is located adjacent to the old workings, but across a prominent fault from the open pit-mined area. The Company plans to drill two “wildcat” exploration drill holes into this anomaly to test the recently-generated target. The first hole will be drilled from stratigraphically below the historic mineralization and fault directly into the conductor, while the second hole will be drilled from above the massive sulfide body and fault into the conductor Drill testing of the less-accessible Kangas North target will be subject to the outcome of these first two holes. Advanced geophysical modeling suggests the possible presence of mineralization in these two locations, along with several other locations on the property, to be tested at a later date. Avrupa expects that the drilling will take 4-6 weeks to complete.
Paul W. Kuhn, President and CEO of Avrupa Minerals, commented, “We are excited to begin this first serious look at the potential for significant, polymetallic massive sulfide mineralization. While these first-pass drill holes are highly speculative, we do have good reason to think that there is further mineralization on the Kangasjärvi exploration permit, especially in the vicinity of previously-exploited mineralization. With our highly competent partner, AFOy, overseeing the drilling program, we are looking forward to the results of this initial drilling program at Kangasjärvi.”
Avrupa Minerals Ltd. is a growth-oriented junior exploration and development company directed to discovery of mineral deposits, using a hybrid prospect generator business model. The Company holds one 49%-owned license in Portugal, the Alvalade VMS Project, presently optioned to Sandfire Portugal in an earn-in joint venture agreement. The Company holds one 100%-owned exploration license covering the Slivova Gold Project in Kosovo, optioned to Western Tethyan Resources, and is actively advancing four prospects in central Finland through its partnership with Akkerman Finland Oy (AFOy). Avrupa focuses its project generation work in politically stable and prospective regions of Europe, presently including Portugal, Finland, and Kosovo. The Company continues to seek and develop other opportunities around Europe.
For additional information, contact Avrupa Minerals Ltd. at 1-604-687-3520 or visit our website at www.avrupaminerals.com.
On behalf of the Board,
“Paul W. Kuhn”
Paul W. Kuhn, President & Director
This news release was prepared by Company management, who take full responsibility for its content. Paul W. Kuhn, President and CEO of Avrupa Minerals, a Licensed Professional Geologist and a Registered Member of the Society of Mining Engineers, is a Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators. He has reviewed the technical disclosure in this release. Mr. Kuhn, the QP, has not only reviewed, but prepared and supervised the preparation or approval of the scientific and technical content in the news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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410 – 325 Howe Street, Vancouver, BC Canada V6C 1Z7 | T: (604) 687-3520 | F: (888) 889-4874 | ||
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November 27, 2024 |
| NR 09 – 2024 | ||
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Avrupa Completes First-pass Drilling at Kangasjärvi Massive Sulfide Target, Central Finland
Avrupa Minerals Ltd. (AVU:TSXV) reports that first-pass scout drilling at the Company’s Kangasjärvi project in central Finland has been completed. Avrupa, through the JV entity Akkerman Finland Oy (“AFOy” – Akkerman Exploration b.v. 51%; Avrupa 49%), completed two holes in the Kangas Main EM target area, totaling 709.3 meters. A third hole, testing the Kangas North EM anomaly was postponed due to terrain access issues.
AFOy noted that the two holes were aimed at an untested EM anomaly located directly north of the old Kangasjärvi workings, across a prominent fault. The first was drilled from west to east into the conductor, while the second approached the anomaly from the south. Both holes successfully intersected vein-type and semi-massive mineralization. The first hole KM-01, intersected intermittent sulfides over a length of 82 meters from 194 meters to 276 meters depth.
AFOy also noted that intermittent mineralization in the second hole, KM-02, was more intense and present over a wider interval between 119 meters and 341 meters, down-hole. Pyrite and pyrrhotite are the main sulfide minerals present with local, small amounts of chalcopyrite and minor sphalerite. Mineralization is accompanied by intense hydrothermal alteration of the original mafic volcanic host rocks.
The intercepts are characteristic of a stockwork feeder zone. The sulfide veins and semi-massive replacement mineralization, accompanied by silicification, white mica and cordierite, are directly comparable with the mineralization and alteration found in the footwall of the Pyhäsalmi massive sulfide deposit, located 30 km to the north.
Split core samples have been submitted to the ALS Global laboratory facilities in Outokumpu. Assay results are expected in December.
Meanwhile, AFOy will conduct a geophysical reassessment of the Kangas Main EM anomaly to ascertain whether the conductor has been adequately tested. This may include a down-hole EM survey to detect possible off-hole conductors.
Avrupa Minerals Ltd. is a growth-oriented junior exploration and development company directed to discovery of mineral deposits, using a hybrid prospect generator business model. The Company holds one 49%-owned license in Portugal, the Alvalade VMS Project, presently optioned to Sandfire Portugal in an earn-in joint venture agreement. The Company holds one 100%-owned exploration license covering the Slivova Gold Project in Kosovo, optioned to Western Tethyan Resources, and is actively advancing four prospects in central Finland through its partnership with Akkerman Finland Oy. Avrupa focuses its project generation work in politically stable and prospective regions of Europe, presently including Portugal, Finland, and Kosovo. The Company continues to seek and develop other opportunities around Europe.
For additional information, contact Avrupa Minerals Ltd. at 1-604-687-3520 or visit our website at www.avrupaminerals.com.
On behalf of the Board,
“Paul W. Kuhn”
Paul W. Kuhn, President & Director
This news release was prepared by Company management, who take full responsibility for its content. Paul W. Kuhn, President and CEO of Avrupa Minerals, a Licensed Professional Geologist and a Registered Member of the Society of Mining Engineers, is a Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators. He has reviewed the technical disclosure in this release. Mr. Kuhn, the QP, has not only reviewed, but prepared and supervised the preparation or approval of the scientific and technical content in the news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
AVRUPA MINERALS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND 2023
(Unaudited)
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AVRUPA MINERALS LTD.
Contents
Page
Notice of No Auditor Review of Interim Financial Statements3
Condensed Consolidated Interim Statements of Financial Position4
Condensed Consolidated Interim Statements of Comprehensive Loss5
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity6
Condensed Consolidated Interim Statements of Cash Flows7
Notes to the Condensed Consolidated Interim Financial Statements8 – 25
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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)
Event after the reporting period (Note 15)
These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on November 27, 2024. 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 NINE MONTHS ENDED SEPTEMBER 30
(Unaudited, Presented in Canadian Dollars)
See notes to the condensed consolidated interim financial statements
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(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' equity |
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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 | - | - |
| - | - | - | (3,606) | (3,606) | (40,733) | (44,339) |
Balance as at September 30, 2023 (Unaudited) | 54,674,754 | 10,990,255 |
| 5,959,577 | 297,734 | 1,396,595 | (15,779) | 7,638,127 | (17,760,410) | 867,972 |
Comprehensive loss | - | - |
| - | - | - | 4,750 | 4,750 | (16,048) | (11,298) |
Balance as at December 31, 2023 (Audited) | 54,674,754 | 10,990,255 |
| 5,959,577 | 297,734 | 1,396,595 | (11,029) | 7,642,877 | (17,776,458) | 856,674 |
Share issues: |
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Share issued for private placement | 10,000.000 | 216,539 |
| 133,461 | - | - | - | 133,461 | - | 350,000 |
Share issue costs | - | (29,628) |
| - | - | - | - | - | - | (29,628) |
Comprehensive loss | - | - |
| - | - | - | 4,066 | 4,066 | (40,640) | (36,574) |
Balance as at September 30, 2024 (Unaudited) | 64,674,754 | $ 11,177,166 |
| $ 6,093,038 | $ 297,734 | $ 1,396,595 | $ (6,963) | $ 7,780,404 | $ (17,817,098) | $ 1,140,472 |
See notes to the condensed consolidated interim financial statements
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30
(Unaudited, Presented in Canadian Dollars)
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Cash flows from operating activities |
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Net loss for the period |
| $ | (40,640) | $ | (40,733) |
Items not involving cash: |
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Depreciation |
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| 1,096 |
| 1,535 |
Bad debt recovery |
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| - |
Loss on investment in Akkerman Finland OY |
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| 41,775 |
| 69,000 |
Changes in non-cash working capital items: |
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Sales tax receivables |
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| (5,067) |
| (1,098) |
Due from optionee |
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| 12,897 |
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Advance to related party |
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| (54,826) |
| (28,801) |
Prepaid expenses and advances |
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| (408) |
| 9,043 |
Other receivables |
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| 752 |
Accounts payable and accrued liabilities |
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| (30,767) |
| (83,601) |
Due from/to related parties |
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| 26,789 |
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Exchange difference arising on the translation of foreign subsidiaries |
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| 4,061 |
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Net cash used in operating activities |
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| (64,465) |
| (155,915) |
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Cash flows from investing activities |
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Advance to Akkerman Finland OY |
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| (98,156) |
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Purchase of equipment |
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| (610) |
| - |
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Net cash used in investing activities |
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| (98,766) |
| - |
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Cash flows from financing activities |
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Proceeds from issuance of common shares |
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| 350,000 |
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Share issue costs |
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| (16,128) |
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Net cash provided by financing activities |
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| 333,872 |
| - |
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Change in cash for the period |
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| 170,641 |
| (155,915) |
Cash, beginning of the period |
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| 121,745 |
| 307,531 |
Cash, end of the period |
| $ | 292,386 | $ | 151,616 |
Supplemental disclosure with respect to cash flows (Note 12)
See notes to the condensed consolidated interim financial statements
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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 15th floor, 1111 West Hastings Street, Vancouver, BC, Canada, V6E 2J3. 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 Accounting Standards issued by the International Accounting Standards Board (“IASB”) and interpretations of the IFRS 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 Accounting Standards that are published at the time of preparation.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
3.MATERIAL ACCOUNTING POLICY INFORMATION
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, 2023.
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, 2023. 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 nine-month period ended September 30, 2024 are not necessarily indicative of the results that may be expected for the current fiscal year ending December 31, 2024.
4.EQUIPMENT
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| Furniture and other equipment | Vehicles | Other assets | Total |
Cost |
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As at January 1, 2023 |
| $ 117,861 | $ 38,712 | $ 21,479 | $ 178,052 |
Exchange adjustment |
| 1,370 | 180 | 100 | 1,650 |
As at December 31, 2023 |
| 119,231 | 38,892 | 21,579 | 179,702 |
Additions during the period |
| - | - | 610 | 610 |
Exchange adjustment |
| 3,668 | 1,211 | 672 | 5,551 |
As at September 30, 2024 |
| $ 122,899 | $ 40,103 | $ 22,861 | $ 185,863 |
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Accumulated depreciation |
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As at January 1, 2023 |
| $ 115,259 | $ 38,712 | $ 21,479 | $ 175,450 |
Depreciation for the year |
| 1,775 | - | - | 1,775 |
Exchange adjustment |
| 1,343 | 180 | 100 | 1,623 |
As at December 31, 2023 |
| 118,377 | 38,892 | 21,579 | 178,848 |
Depreciation for the period |
| 647 | - | 449 | 1,096 |
Exchange adjustment |
| 3,655 | 1,211 | 680 | 5,546 |
As at September 30, 2024 |
| $ 122,679 | $ 40,103 | $ 22,708 | $ 185,490 |
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Net book value |
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As at January 1, 2023 |
| $ 2,602 | $ - | $ - | $ 2,602 |
As at December 31, 2023 |
| $ 854 | $ - | $ - | $ 854 |
As at September 30, 2024 |
| $ 220 | $ - | $ 153 | $ 373 |
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NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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, 2024 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
As of September 30, 2024 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
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Mineral exploration expenses for the period ended September 30, 2024 |
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Geological salaries and consulting |
| $ 20,582 | $ - |
| $ 9,641 | $ - |
| $ - |
| $ 30,223 |
Insurance |
| 505 | - |
| - | - |
| - |
| 505 |
Rent |
| - | - |
| 8,941 |
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| 8,941 |
Site costs |
| 1,470 |
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| - |
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| 1,470 |
Travel |
| 1,650 | - |
| - | - |
| - |
| 1,650 |
Reimbursements from optionees |
| (306,239) | - |
| (19,851) | - |
| - |
| (326,090) |
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| $ (282,032) | $ - |
| $ (1,269) | $ - |
| $ - |
| $ (283,301) |
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 |
| 6,606,052 | 6,317,147 |
| 167,328 | 720,879 |
| 12,359 |
| 13,823,765 |
Geology work |
| - | 32,377 |
| 891,582 | 402,515 |
| 364,525 |
| 1,690,999 |
Insurance |
| 25,974 | 52,112 |
| 14,604 | 15,007 |
| - |
| 107,697 |
Legal and accounting |
| 1,020 | 1,244 |
| 58,158 | 13,958 |
| - |
| 74,380 |
Office and administrative fees |
| 254,272 | 279,739 |
| 83,665 | 101,624 |
| 68,446 |
| 787,746 |
Rent |
| 606,084 | 596,896 |
| 51.099 | 88,221 |
| 20,560 |
| 1,362,860 |
Report |
| - | - |
| 39,999 | - |
| - |
| 39,999 |
Site costs |
| 195,833 | 244,377 |
| 188,571 | 194,582 |
| 8,865 |
| 832,228 |
Travel |
| 245,545 | 247,277 |
| 63,047 | 22,478 |
| 15,326 |
| 593,673 |
Trenching and road work |
| - | - |
| 34,339 | - |
| - |
| 34,339 |
Reimbursements from optionees |
| (9,646,149) | (4,890,826) |
| (3,012,494) | (45,158) |
| - |
| (17,594,627) |
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| $ (722,130) | $ 4,145,186 |
| $ 78,595 | $ 1,787,017 |
| $ 500,931 |
| $ 5,789,599 |
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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 December 31, 2023 |
| $ 167,920 | $ - |
| $ - | $ - |
| $ - |
| $ 167,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral exploration expenses for the year ended December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
Geological salaries and consulting |
| $ 24,589 | $ - |
| $ 13,338 | $ - |
| $ - |
| $ 37,927 |
Insurance |
| 149 | - |
| - | - |
| - |
| 149 |
Office and administrative fees |
| 214 | - |
| 2,437 | - |
| - |
| 2,651 |
Rent |
| - | - |
| 6,068 | - |
| - |
| 6,068 |
Report |
|
|
|
| 15,767 |
|
|
|
| 15,767 |
Site costs |
| 158 | - |
| 1,321 | - |
| - |
| 1,479 |
Travel |
| 2,451 | - |
| - | - |
| - |
| 2,451 |
Reimbursements from optionees |
| (378,861) | - |
| (103,591) | - |
| - |
| (482,452) |
|
| $ (351,300) | $ - |
| $ (64,660) | $ - |
| $ - |
| $ (415,960) |
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 |
| 6,585,470 | 6,317,147 |
| 157,687 | 720,879 |
| 12,359 |
| 13,793,542 |
Geology work |
| - | 32,377 |
| 891,582 | 402,515 |
| 364,525 |
| 1,690,999 |
Insurance |
| 25,469 | 52,112 |
| 14,604 | 15,007 |
| - |
| 107,192 |
Legal and accounting |
| 1,020 | 1,244 |
| 58,158 | 13,958 |
| - |
| 74,380 |
Office and administrative fees |
| 254,272 | 279,739 |
| 83,665 | 101,624 |
| 68,446 |
| 787,746 |
Rent |
| 606,084 | 596,896 |
| 42,158 | 88,221 |
| 20,560 |
| 1,353,919 |
Report |
| - | - |
| 39.999 | - |
| - |
| 39,999 |
Site costs |
| 194,363 | 244,377 |
| 188,571 | 194,582 |
| 8,865 |
| 830,758 |
Travel |
| 243,895 | 247,277 |
| 63,047 | 22,478 |
| 15,326 |
| 592,023 |
Trenching and road work |
| - | - |
| 34,339 | - |
| - |
| 34,339 |
Reimbursements from optionees |
| (9,339,910) | (4,890,826) |
| (2,992,643) | (45,158) |
| - |
| (17,268,537) |
|
| $ (440,098) | $ 4,145,186 |
| $ 79,864 | $ 1,787,017 |
| $ 500,931 |
| $ 6,072,900 |
|
|
|
|
|
|
|
|
|
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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. (“Sandfire MATSA” or “MATSA”) and its wholly-owned subsidiary Sandfire Mineira Portugal,Unipessoal Lda. (“SMP”), formerly “EUL”, collectively “Sandfire MATSA” entered into an Earn-In Joint Venture Agreement (the “Agreement”) with respect to 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 SMP 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 SMP 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 SMP for the nominal value of €510.
On March 27, 2020, the Company, MAEPA, Sandfire MATSA and SMP 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 SMP and two by MAEPA. Thereafter, four will be nominated by SMP and one will be nominated by MAEPA. Upon the occurrence of the 51/49 Phase and thereafter, SMP is entitled to nominate three directors and MAEPA two directors. In the event of dilution of the interest of SMP or MAEPA, each will be entitled to proportional representation (as described) equal to its then interest;
·In the event that SMP 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 the shares, each of SMP 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 NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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 SMP 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. SMP’s right to maintain its 51% interest is conditional upon Sandfire 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 Sandfire 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, Sandfire 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 SMP 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 Sandfire 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 SMP 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, Sandfire MATSA and PorMining continued with having MAEPA acting as the operator and PorMining continued paying the operator’s fee. During the nine months ended September 30, 2024, MAEPA received €75,000 ($110,880) (2023 - €75,000 ($109,320)) 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 NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Alvalade: (Continued)
Phase II – Second Option
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 SMP the sole and exclusive right and option to acquire an additional 34% (for an aggregate 85% interest) in PorMining (the second option). SMP’s right to exercise the second option is conditional on Sandfire 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 Sandfire MATSA’s discretion and Sandfire 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, SMP 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 Sandfire MATSA satisfying the second option conditions, SMP automatically earns an additional 34% interest in PorMining for an aggregate interest of 85%.
During Phase II, SMP will fund 100% of all maintenance payments and approved work programs.
As of September 30, 2024, Sandfire MATSA funded €4,359,000 on the Alvalade project Phase II – Second Option. Subsequently, Sandfire MATSA funded another €622,000 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 NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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 SMP’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, SMP 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 Sandfire 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 SMP.
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|
|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(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. On November 2, 2023, Peshter Mining was deregistered and dissolved.
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, and subsequently confirmed via a Definitive Agreement (the “Agreement”) on May 2, 2023, the Company and Western Tethyan Resources (“WTR”) entered into an 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 NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)
Kosovo (Continued)
Slivova (formerly Slivovo) license: (Continued)
The terms of the Agreement are as follows:
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 (spent) | €30,000 (received) |
|
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) |
*In June 2024, the Agreement was amended and the completion date for the expenditure of €650,000 was extended from September 1, 2024 to December 31, 2024.
During Stage 1, the expenditures will be in respect of payments for exploration, drilling, baseline environmental and social surveys, and other payments to landowners.
During Stage 2, the expenditures will be in respect of payments for a NI 43-101 resource estimation, commencement of full Environmental Impact Statement (“EIS”), and other exploration expenses.
During fourth and fifth year from the Effective Date (Stage 3), WTR must complete the EIS, Feasibility Study (“FS”), and Mining License application to earn-in 85% interest in the project.
During Stage 4, WTR will complete the Success Payments to the 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”).
| September 30, 2024 | December 31, 2023 |
Due from optionee |
|
|
Alvalade – PorMining | $ 13,358 | $ 18,409 |
Slivova – WTR | 9,206 | - |
| $ 22,564 | $ 18,409 |
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|
AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
6. PROPERTY DEPOSITS / 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.
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 December 31, 2023. As of September 30, 2024, the Company advanced a total of $380,556 (€266,500) to AFOy for exploration expenditures, including the initial €200,000.
·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.
During the period between Stage One and Stage Two, AEbv 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 September 30, 2024, the Company holds a 49% interest in AFOy (December 31, 2023 – 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.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
7. ADVANCE AND INVESTMENT IN AKKERMAN FINLAND OY (Continued)
The nine months ended September 30, 2024 and the year ended December 31, 2023 calculation for the Investment in AFOy is as follows:
Investment in AFOy as at January 1, 2023 |
| $ | 258,532 |
Loss on investment in AFOy |
|
| (27,569) |
Investment in AFOy as at December 31, 2023 |
| $ | 230,963 |
Loss on investment in AFOy |
|
| (41,775) |
Investment in AFOy as at September 30, 2024 |
| $ | 189,188 |
The nine months ended September 30, 2024 and 2023 calculation for the Investment in AFOy is as follows:
|
| 2024 |
| 2023 |
AFOy’s net loss | $ | 85,255 | $ | 140,817 |
The Company’s ownership % |
| 49% |
| 49% |
Share of loss of an associate | $ | 41,775 | $ | 69,000 |
The following table illustrates the summarized financial information of AFOy:
|
| September 30, 2024 | December 31, 2023 | |||
Current assets | $ | 25,792 | $ | 13,595 | ||
Non-current assets |
| 392,502 |
| 380,786 | ||
Current liabilities |
| 10,727 |
| 11,898 | ||
Non-current liabilities |
| 725,909 |
| 606,979 | ||
Loss for the period |
| 85,255 |
| 56,264 | ||
8. CAPITAL AND RESERVES
(a)Authorized:
At September 30, 2024, 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 issuance:
On September 5, 2024, the Company completed a non-brokered private placement by issuing 10,000,000 units (“Unit”) at a price of $0.035 per Unit for gross proceeds of $350,000. 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 $0.10 until September 5, 2027. The warrants were ascribed a value of $133,461. The Company incurred share issue costs in the amount of $29,628 in connection with the financing.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
8. CAPITAL AND RESERVES (Continued)
(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.
Stock option transactions and the number of stock options for the nine months ended September 30, 2024 are summarized as follows:
| Exercise | December 31, |
|
| Expired/ | September 30, |
Expiry date | price | 2023 | Granted | Exercised | cancelled | 2024 |
January 7, 2024 | $0.20 | 45,750 | - | - | (45,750) | - |
March 14, 2027 | $0.08 | 1,575,000 | - |
| - | 1,575,000 |
Options outstanding |
| 1,620,750 | - | - | (45,750) | 1,575,000 |
Options exercisable |
| 1,620,750 | - | - | (45,750) | 1,575,000 |
Weighted average exercise price |
| $0.08 | $Nil | $Nil | $0.20 | $0.08 |
As of September 30, 2024, the weighted average contractual remaining life is 2.45 years (December 31, 2023 – 3.11 years).
Stock option transactions and the number of stock options for the year ended December 31, 2023 are summarized as follows:
| Exercise | December 31, |
|
|
| Expired/ | December 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 |
The weighted average assumptions used to estimate the fair value of options for the nine months ended September 30, 2024, and 2023 were:
|
| 2024 | 2023 |
Risk-free interest rate |
| n/a | n/a |
Expected life |
| n/a | n/a |
Expected volatility |
| n/a | n/a |
Expected dividend yield |
| n/a | n/a |
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 NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
8. CAPITAL AND RESERVES (Continued)
(d)Finder’s Options:
The continuity of finder’s options for the year ended December 31, 2023 is as follows:
| Exercise | December 31, |
|
|
|
| December 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 | $0.075 | $Nil |
The weighted average assumptions used to estimate the fair value of finder’s options for the nine months ended September 30, 2024 and 2023 were:
|
| 2024 | 2023 |
Risk-free interest rate |
| n/a | n/a |
| n/a | n/a | |
Expected volatility |
| n/a | n/a |
Expected dividend yield |
| n/a | n/a |
(e)Warrants:
The continuity of warrants for the nine months ended September 30, 2024 is as follows:
| Exercise | December 31, |
|
|
|
| September 30, |
Expiry date | price | 2023 | Issued |
| Exercised | Expired | 2024 |
February 28, 2025 | $0.125 | 16,666,667 | - |
| - | - | 16,666,667 |
September 5, 2027 | $0.100 | - | 10,000,000 |
| - | - | 10,000,000 |
Outstanding |
| 16,666,667 | 10,000,000 |
| - | - | 26,666,667 |
Weighted average exercise price |
| $0.125 | $0.10 |
| $Nil | $Nil | $0.116 |
As of September 30, 2024, the weighted average contractual life is 1.36 years (December 31, 2023 – 1.16 years).
The continuity of warrants for the year ended December 31, 2023 is as follows:
| Exercise | December 31, |
|
|
|
| December 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 | - |
| - | (4,219,641) | 16,666,667 |
Weighted average exercise price |
| $0.14 | $Nil |
| $Nil | $0.20 | $0.125 |
The weighted average assumptions used to estimate the fair value of warrants for the nine months ended September 30, 2024 and 2023 were:
|
| 2024 | 2023 |
Risk-free interest rate |
| 2.86% | n/a |
Expected life |
| 3 years | n/a |
Expected volatility |
| 137.47% | n/a |
Expected dividend yield |
| nil | n/a |
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
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 nine months ended September 30, 2024
| Short-term employee benefits | Post-employment benefits | Other long-term benefits | Termination benefits | Other expenses | Share-based payments | Total |
Paul W. Kuhn (b) | $ 112.500 | $ Nil | $ Nil | $ Nil | $ Nil | $ Nil | $ 112,500 |
For the nine months ended September 30, 2023
Related party liabilities
|
| Nine months ended | Amounts due to: | ||||||
| Services / Advances | September 30, 2024 | September 30, 2023 | As at September 30, | As at December 31, | ||||
Pacific Opportunity Capital Ltd. (a) | Rent, management, accounting, marketing and financing services | $ | 94,550 | $ | 89,650 | $ | 86,194 | $ | 47,277 |
Paul W. Kuhn (b) | Consulting | $ | 112,500 | $ | 112,500 | $ | Nil | $ | Nil |
Mark T. Brown (d) | Expense reimbursement | $ | Nil | $ | Nil | $ | 1,837 | $ | 465 |
TOTAL: |
| $ | 207,050 | $ | 202,150 | $ | 88,031 | $ | 47,742 |
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| Amounts due from: | |||
Paul W. Kuhn (b) | Consulting services | $ | Nil | $ | Nil | $ | 126,910 (c) | $ | 72,084 (c) |
(a)Pacific Opportunity Capital Ltd., a company controlled by a director of the Company.
(b)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.
(c)This amount relates to PorMining paying Paul Kuhn for his technical services consulting in excess of the Contract (defined above in Note 9(b)). Such amount will be used to offset and reduce the Company's monthly fee payable to Paul Kuhn per the Contract.
(d)Mark T Brown is a director of the Company.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
10.LOSS PER SHARE
Basic and diluted loss per share
The calculation of basic and diluted loss per share for the nine months ended September 30, 2024 was based on the loss attributable to common shareholders of $40,640 (2023 – $40,733) and a weighted average number of common shares outstanding of 55,587,163 (2023 – 54,674,754).
Diluted loss per share did not include the effect of 1,575,000 share purchase options and 26,666,667 warrants outstanding at nine months end September 30, 2024 (2023 – 1,620,750 share purchase options and 20,886,308 warrants) as they are anti-dilutive.
11.FINANCIAL INSTRUMENTS
The fair values of the Company’s cash, other receivables, advance to related party, due from optionee, 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. 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 September 30, 2024, the Company had cash of $292,386 (December 31, 2023 - $121,745), advance to related party of $Nil (December 31, 2023 - $72,084), due from optionee of $22,564 (December 31, 2023 - $18,409) and other receivables of $15,882 (December 31, 2023 - $13,559) to settle current liabilities of $109,660 (December 31, 2023 - $100,138).
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.
(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.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
11. FINANCIAL INSTRUMENTS (Continued)
(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 $65,900 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 nine months ended September 30, 2024 and 2023 were as follows:
·As at September 30, 2024, a total of $13,500 (2023 - $Nil) in share issue costs were included in due to related parties.
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.
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AVRUPA MINERALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited, Presented in Canadian Dollars)
14.SEGMENTED FINANCIAL INFORMATION
The Company operates in one industry segment, being the acquisition and exploration of mineral properties. Geographic information is as follows:
AVRUPA MINERALS LTD.
(An Exploration Stage Company)
MANAGEMENT’S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
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 $34.7 million in exploration in addition to funds spent by Avrupa. That exploration has led to two discoveries – one gold deposit in Kosovo and one deposit of polymetallic 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. (“Sandfire MATSA” or “MATSA”) and its wholly-owned subsidiary Sandfire Mineira Portugal, Unipessoal Lda. (“SMP”), formerly 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. The Company currently owns 49% of AFOy.
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 November 27, 2024 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 nine months ended September 30, 2024 and the Company’s audited consolidated financial statements for the year ended December 31, 2023 and the related notes thereto.
Additional information relevant to the Company and the Company’s activities can be found on SEDAR+ www.sedarplus.ca, and/or on the Company’s website at www.avrupaminerals.com.
MAJOR QUARTERLY OPERATING MILESTONES
Alvalade Project (Portugal):
Highlight of the 2023 drilling program
On February 21, 2024, the Company reported that drilling continued throughout the year around the Alvalade pre-exploitation license in several target areas, including Caveira South, Casas Novas, Lousal Northwest, Brejo, and Sesmarias. The Company drilled 14 holes totaling 6,530 meters in 2023: two at Caveira South, one at Casas Novas, four in the Lousal Northwest area, one at Brejo, and six in the Sesmarias massive sulfide VMS deposit area.
Figures 1, 1a. 2023 drilling along trend of Pyrite Belt mineralization within the Alvalade JV license, with Sesmarias enlargement. Background data from 2020-21 helicopter-supported VTEM project. Intense electromagnetic response to railroad tracks and power lines in linear purple colors.
The highlight of the 2023 drilling program was the re-discovery of the high-grade copper-zinc-lead-silver mineralization at Sesmarias in SES23-047 (see AVU news release June 12, 2023). Follow-up drilling at Sesmarias confirmed potential for more high-grade massive sulfide and stockwork mineralization in the Central Zone at Sesmarias (see AVU news release November 28, 2023). The success of the Sesmarias drilling underlies potential for the next phase of drilling there, tentatively commencing in Q2 of 2024. This phase will be aimed at defining the high-grade mineralization located in/around the hinge of the Sesmarias Synform, particularly along strike between the 250 South and 800 South section lines, noted in the figures below. Plans for the next phase are underway.
To enhance targeting at Sesmarias, The Company performed an IP-Resistivity survey at the end of 2023 covering Sesmarias Central and Northern Zones and the Brejo target area just north of Sesmarias. Results were equivocal and not easy to interpret, and remain under evaluation, particularly for the North area and for the Brejo area where we have less historic drilling information. The level of success in the coming phase of drilling will determine how best to move towards a mining license application which will be necessary in the first half of 2025.
Figure 2. Sesmarias section lines, AVU generated. Drillholes in red were completed during 2023 drilling program. Coordinate system, UTM Zone 29 (ED50).
Drilling in the northern target areas of the Alvalade license was less successful than at Sesmarias. Drilling intersected narrow lenses of polymetallic sulfide mineralization in both Caveira South drill holes and wispy, distal facies, replacement sulfide mineralization in the Casas Novas drill hole. The Company hopes to do follow-up drilling in both areas at some point in the future, but there are no plans for this in the up-coming drilling phase. Drilling at Lousal Northwest intercepted the mineral horizon black shales, but no significant sulfide mineralization.
Further to this report, at this time, the Company has completed planning for the upcoming drilling program at Sesmarias to test the potential for more significant massive sulfide mineralization in the central and northern sectors of the deposit. The Company expects to drill about at least 4,200 meters in the upcoming program.
On June 3, 2024, the Company announced that planning was nearly completed for a new phase of drilling at the Sesmarias copper-zinc volcanogenic massive sulfide prospect within the Alvalade Joint Venture Project. The Company planned to drill seven 600-meter holes along a strike length of 550-600 meters in the Central and Northern sectors of the Sesmarias mineralization (Sections 250S through 800S), potentially followed by two more 600-meter holes that will be collared where necessary, for a possible total of 5,400 meters. The new program follows on a successful 6-hole campaign completed during Q3-Q4 2023.
Starting from the north and moving south, in physical location order, we anticipate the following drill holes:
·Section 250S – one drill hole behind (to the NE) of SES21-045/046;
·Section 350S – one drill hole behind (steeper) SES21-043/043A;
·Along strike, in the never-been-tested area and depth between Sections 350S and 500S and behind SES015 – two holes at different inclinations;
·Between Sections 500S and 650S – one drill hole behind (steeper) SES23-051;
·Section 650S – one drill hole from SES23-047/041 location at an intermediate- inclination between high grade SES23-047 and SES21-041;
·Section 800S – one hole behind SES23-048 (to the NE);
·Possibly two more holes, collar location to be determined on basis of results.
·Exact collar locations will be determined closer to the time of drilling.
The following map summarizes the work completed and planned at Sesmarias:
Figure 3. History of drilling at Sesmarias. In the Central Zone, the blue shape between Sections 650S and 800S represents the surface projection of the potential high-grade hinge zone, while the blue area intersected by the discovery holes, SES002 and SES003, is thought to be a faulted-off block from the hinge in that area. In the North Zone, the red area is the projection of the east limb of the synform, while purple is the west limb. In the South Zone, green represents the surface projection of the west limb of the synform, while no drill holes, to date, have targeted the east limb in the South Zone. There is a long, completely untested strike length of potential mineralization between 350S and 500S. Drill hole locations in red represent drilling from last year’s 6-hole program, and notations in turquoise highlight the sections where the upcoming program will test the mineralized massive sulfide body.
The following conceptual cross section summarizes the geology and location of massive sulfide mineralization hosted in the Sesmarias synformal structure:
Figure 4. Compilation of geological results from drilling in the Northern and Central sectors at Sesmarias, courtesy of PorMining staff. The field of view is 500 meters left to right, and approximately 1,400 meters of depth (strike length) SE to NW. The interpretation demonstrates potential for more massive and stockwork mineralization in both limbs of the synform and in the hinge area along a significant strike distance. The expectation is to find higher grades in and around the hinge of the synform in the Central Zone, and also to the north into the Northern Zone. Drilling in the upcoming campaign will target the hinge zone and environs of the fold along a strike length of 500-600 meters NW to SE.
Figure 5. Contour map showing inferred massive sulfide mineralization, using copper equivalents (CuEq) as an exploration targeting tool.
Note: We use CuEq strictly as a proxy for total metal content, and as such, simply as an exploration targeting tool. In no way, are we commenting on a possible resource size or value. When reporting drill results, we utilize only individual metals’ values, as reported by an accredited laboratory.
For exploration purposes, using the results from Sesmarias drilling, 2014 to present, we calculate the total amount of copper, lead, zinc, silver, and gold, without respect or indication of any/all further downstream activities, followed by calculating the value of said total metal content (in this case, as of April 3, 2024, using: Cu = US$ 4.11/lb.; Pb = US$ 0.92/lb.; Zn = US$ 1.13/lb.; Ag = US$ 26.25/oz.; and Au = US$ 2273/oz.). Finally, we calculate the equivalent content of copper, or CuEq, by dividing the value of the total contained metals by the price of copper at that time. The shape and contouring of the inferred Sesmarias mineralization, using Leapfrog geological modeling software, is courtesy of the Sandfire Portugal geological team. While metals’ prices have increased sharply since the original CuEq calculations, the shape of the VMS target area remains much the same.
We have designed the upcoming drill program to upgrade the +2% CuEq zone in the SES Central sector and expand the potential +2% CuEq domain into the SES North sector where historic drilling is less concentrated. Yellow and gray zones generally indicate areas where historic drilling missed the target and/or recent, better-targeted drilling is sparse.
On August 13, 2024, the Company announced that drilling at Sesmarias commenced at the end of June. Drilling is designed to upgrade and enhance the body of higher grade, hinge zone, copper-zinc mineralization intersected in previous holes drilled in 2021 and during last year’s successful program (see previous AVU news releases: June 12, 2023; November 28, 2023; and June 3, 2024).
On September 19, 2024, the Company announced the first set of analytical results from the present phase of drilling at the Alvalade Project. The Company completed three drill holes in the current Sesmarias Central program, totaling 1,715.4 meters, with a fourth hole in progress. The Company has seven holes planned, with the contingency of two additional holes to be drilled as/where needed and expected a second drill in the near future to speed up the completion of this phase of drilling. To date, The Company received analytical results from sampling of the first two holes (SES24-53 and SES24-054). Samples from the third hole (SES24-055) are now in the laboratory, and results are pending for these samples.
Results for SES24-054:
SES24-054 intercepts | |||||||||
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| From (m) | To (m) | Total (m) | Cu (%) | Pb (%) | Zn (%) | Ag (g/t) | |
Geological Intercept |
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(includes Fault breccia, massive, semi-massive replacement, stockwork sulfides) |
| 377.2 | 418.4 | 41.2 | 1.59 | 1.71 | 3.36 | 54.90 | |
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including best copper intervals | incl. | 377.2 | 412.4 | 35.2 | 1.78 |
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incl. | 386.8 | 396.8 | 10.0 | 2.24 |
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Best Polymetallic Interval (total) |
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| 377.2 | 405.8 | 28.6 | 1.68 | 2.42 | 4.75 | 73.90 |
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| incl. | 385.8 | 393.8 | 8.0 | 1.90 | 4.98 | 9.78 | 131.30 |
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Table 1. Results for SES24-054 demonstrate further potential for high grade copper and polymetallic mineralization in the hinge zone of the Sesmarias synform in the Central area. This intersect is located approximately 150 meters SE of SES23-047, drilled last year, which intersected 26.95 meters of 2.18% Cu, 2.58% Pb, 5.60% Zn, and 88.20 g/t Ag within a wider interval of 43.40 meters of 1.51% Cu, 2.15% Pb, 4.78% Zn, and 64.1 g/t Ag. (SES23-047 results)
Figure 6. Geological cross section 800 S, looking NW, showing mineralization in SES23-048 (western limb/hinge zone) and SES24-054 (hinge zone). See Figure 3 for location of this section.
Results for SES24-053:
SES24-053 intercepts | |||||||||
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| From (m) | To (m) | Total (m) | Cu (%) | Pb (%) | Zn (%) | Ag (g/t) | |
Geological Intercept |
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Includes stockwork to semi-massive replacement sulfide mineralization |
| 439.70 | 452.85 | 13.15 | 0.31 | 1.57 | 3.00 | 38.4 | |
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incl. |
| 439.70 | 448.85 | 9.15 | 0.40 | 2.09 | 4.02 | 50.5 |
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Table 2. Results for SES24-053 demonstrate polymetallic potential on the western limb of the Sesmarias synform, but perhaps distal from the hinge zone area. Similar zinc-rich, polymetallic mineralization is present in SES23-052, drilled last year, which cut the western limb some 470 meters SE of SES24-053. (Sesmarias Results -- 2023)
Figure 7. Geological cross section 650 S, looking NW, showing mineralization in SES23-047 and SES24-053. See Figure 8 for location of this section.
Following the great copper and polymetallic results in SES24-054, and the strong zinc-lead-silver results in SES24-053, the Company is beginning to see a metal zonation centered in the SES Central hinge zone with high copper and associated base metals, transitioning outwards/upwards and along the limbs of the Sesmarias synform to more zinc-rich mineralization. Previous results in the SES North area show lower copper and stronger zinc-lead in the eastern limb of the synform, but the Company has yet to cross the hinge zone in the north, nor much of the western limb. The present drilling program may shed more light on the perceived metal zonation within the body of mineralization.
Figure 8. Contour map showing 2024 new and planned drill hole collar locations in red color and inferred massive sulfide mineralization, using drillhole interval grade (CuEq) as an exploration targeting tool. The aim of the current phase of drilling is to expand the orange-red zone in the SES Central area, and improve continuity of the high-grade, copper and polymetallic mineralization over a strike length of 600 meters, and forming a central core to the deposit.
Notes concerning Figure 3. We use CuEq strictly as a proxy for total metal content, and as such, simply as an exploration targeting tool. In no way, are we commenting on a possible resource size or value. When reporting drill results, we utilize only individual metals’ values, as reported by an accredited laboratory.
We have designed the present drill program to upgrade the +2% CuEq zone in the SES Central sector and expand the potential +2% CuEq domain into the SES North sector where historic drilling is less concentrated. Yellow and green zones generally indicate areas where historic drilling missed the target and/or recent, better-targeted drilling is sparse.
For exploration purposes, using the results from Sesmarias drilling, 2014 to present, we calculate the total amount of copper, lead, zinc, silver, and gold, without respect or indication of any/all further downstream activities, followed by calculating the value of said total metal content (in this case, as of September 10, 2024, using: Cu = US$ 4.04/lb.; Pb = US$ 0.89/lb.; Zn = US$ 1.23/lb.; Ag = US$ 28.31/oz.; and Au = US$ 2513/oz.). Finally, we calculate the equivalent content of copper, or CuEq, by dividing the value of the total contained metals by the price of copper at that time. The shape and contouring of the inferred Sesmarias mineralization, using Leapfrog geological modeling software, is courtesy of the Sandfire Portugal geological team. While metals’ prices have fluctuated in a fairly narrow range since the original CuEq calculations, the shape of the VMS target area remains much the same, as it depends on metal content, not the price.
Drilling at Sesmarias continued throughout the quarter until November 16, 2024. Eight holes were completed, totaling 4,829.1 meters. Technical drilling conditions were difficult, allowing for much slower than expected progress. Logging, review, and sampling of the drill core are ongoing, with results are expected in early 2025.
Slivova Project (Kosovo)
Work continued at the Slivova gold-silver project in Kosovo during 2023, undertaken by partner Western Tethyan Resources (WTR), and supported by 70%-owner Ariana Resources. Highlights of the work included the completion of a NI 43-101 Preliminary Economic Assessment (PEA) study that included a significant mineral resources’ upgrade. The full PEA document, which includes the NI 43-101 Mineral Resource Estimate, may be accessed on SEDAR+ or via the Avrupa Minerals website: Slivova PEA.
Western Tethyan also commenced environmental and social baseline studies in the project area, committing to a strong and positive social relationship with the communities around the project area, and performed exploration rock and soil sampling around the license to help identify satellite deposits. The government issued trenching and drilling permits for this year, and Western Tethyan is in the midst of planning and budgeting for the 2024 program. Work planned, in addition to continued environmental and social licensing, includes trenching over several untested targets and exploration drilling outside of the main deposit in efforts to increase the mineral resources. Eventually, there may be some infill drilling completed in 2024, as well. We anticipate that Western Tethyan will perform the necessary work to reach the 51% ownership level of the license during 2024, as required by the JV agreement.
On August 13, 2024, the Company updated its drilling program at the Slivova Project. WTR plans to drill ~3,000 meters at the Slivova deposit beginning later this summer. While WTR is presently completing trenching and property-wide soil sampling to upgrade potential satellite deposits to Slivova, the Company expects that most of the upcoming work will be directed towards resource development in the main Slivova deposit. Further information concerning the work plans is expected in the coming weeks.
In June 2024, the Company and WTR extended the completion date for the Stage 1 expenditure of €650,000 at the Slivova Project from September 1, 2024 to December 31, 2024. Recent advice from WTR indicates that the funding target will be attained around mid-December 2024.
WTR continued surface exploration at Slivovo during Q3 2024, completing a trenching program covering potential satellite targets away from the presently-proposed mining area. WTR also spent a considerable amount of effort to move ESG priorities forward within the Project area.
The startup of drilling has been delayed until the end of November. WTR expects to drill around 1000 meters before the end of the year. Four holes are planned: two exploration; one resource infill; and one resource extension. More drilling is expected in Q1 and Q2 2025. The holes in 2025 are expected to be geotechnical holes, designed to support the open pit and underground mining plans. One geohydrology hole is planned as well. WTR expects to drill around 3,500 meters to support the ongoing Slivova feasibility study.
Finland
During 2023, Avrupa’s 49%-held Akkerman Finland Oy (AFOy) continued to advance the exploration program in the Vihanti-Pyhäsalmi VMS District of central Finland. The joint venture now holds two exploration permits covering known massive sulfide deposits (Kangasjärvi and Hallaperä), an application over a massive sulfide deposit (Rauhala), and an exploration permit covering a massive sulfide target (Kolima) that has been approved by the mining bureau, but not yet issued due to appeals court handling of the process.
Basic exploration work, continued review of historic core and geophysical data, and modeling of SkyTEM data from the Kangasjärvi license suggest an outstanding un-drilled target close to the old Kangasjärvi Mine. The joint venture is making plans for drilling at the target in 2024. There are further SkyTEM anomalies that may rate drilling after planned exploration work during the up-coming field season.
Figure 1. Map of Vihanti-Pyhäsalmi VMS District with AFOy-AVU holdings and location of the two major mines, Pyhäsalmi and Vihanti.
Figure 2. Plan view of the Kangasjärvi SkyTEM drill target, showing a strong conductor northwest and across a major area fault from the historic Kangasjärvi Mine. Most of the conductor has never been drilled.
Figure 3. Kangasjärvi SkyTEM drill target, section view. The joint venture plans three diamond drill holes totaling 1000 meters later this year. There are other SkyTEM anomalies around the license that may become drill-ready later this year.
AFOy officially acquired the Hallaperä exploration license in the past year. The license covers a known massive sulfide deposit discovered by Outokumpu in 1967. The deposit is 1,500 meters long and ranges from two to 18 meters thick. It remains open at depth below 200 meters from the surface. The most recent drilling, in 1990, cut 1.85 meters @ 1.72% Cu, 1.7 g/t Au, and 44 g/t Ag, with no further work completed since that time.
Figure 4. Copy of the original geological map of the Hallaperä VMD deposit.
The Finnish mining bureau recently awarded an exploration permit to AFOy for another license covering a massive sulfide deposit near the historic Vihanti Mine. The Rauhala deposit was discovered in 1985 by the Finnish Geological Survey (GTK), and later worked by Outokumpu Oy. It measures nearly 600 meters long and 350 meters wide and averages about 2 meters thick, as presently known. Virtually no work on the deposit has been completed in the past 20-25 years.
Figure 5. Plan view of the Rauha Deposit (blue/black/yellow lenticular outline). The deposit was discovered via a zinc anomaly in till material, and is covered by 2-20 meters of till at its closest point to the surface.
Figure 6. Section view of the sediment-hosted Rauhala Deposit, sub-cropping under 2 to 20 meters of till.
On August 13, 2024, the Company updated its drilling program at the Kangasjärvi Zinc-Copper Prospect. Detailed work carried out at Kangasjärvi over the past three years led to the discovery of exciting new targets close to the historic deposit. The targets consist of strong electromagnetic (EM) anomalism detected by a deep-penetrating, helicopter EM survey. The intense electric conductivity may reflect the presence of an undiscovered center of massive mineralization, including copper-rich sulfides and a stockwork feeder zone. Modelling points to a possible mineral body measuring 500m by 600m, starting at a depth of 100m and continuing down to more than 500m at both the Kangas Main and Kangas North targets. Neither target has been drilled previously.
Figure 7. Location of the two Kangas EM targets, along with historic drilling locations.
On October 16, 2024, the Company announced that initial scout drilling at the Kangasjärvi volcanogenic massive sulfide target started. The Company plans to drill two holes, totaling up to 1,000 meters, on the first of two strong, previously un-tested, geophysical targets located in close proximity to historic mining at the location.
During the mid-1980’s, Finnish mining company Pyhäsalmi Mine Oy exploited, via open pit, a small high grade massive sulfide deposit with an in-house calculated resource of approximately 300,000 mt @ 5.4% zinc. The property had remained dormant and un-explored since that time until Akkerman Finland Oy acquired the exploration rights in 2022. AFOy performed an airborne electromagnetic survey (SkyTEM) covering the general mine area and nearby mineral targets, and producing two standout EM conductors close-in to the old mine, but in areas where there has been no historic drilling.
Figure 8. Two strong EM anomalies to be targeted on first-pass scout drilling at Kangasjärvi. Ideally, the Company hopes to drill two holes at the Kangas target and one hole at Kangas North. Difficult access to Kangas North may preclude drilling there, for now. Flight lines are approximately 100 meters apart, and distance between the two conductors is about 700 meters. (Courtesy of AFOy)
Figure 9. Cross section, looking NNW, of the two EM anomalies with general drilling locations. The conceptual drill hole locations in the Kangas main EM target, are marked as white lines. Also shown are traces of previous holes drilled and the outline of the mined Kangasjärvi zinc deposit in red, between the two drill holes at Kangas Main. Advanced Maxwell geophysical modelling of the EM anomalies yielded a strong target plate which is depicted as a straight red line. (Courtesy of AFOy)
The main anomaly is located adjacent to the old workings, but across a prominent fault from the open pit-mined area. The Company plans to drill two “wildcat” exploration drill holes into this anomaly to test the recently-generated target. The first hole will be drilled from stratigraphically below the historic mineralization and fault directly into the conductor, while the second hole will be drilled from above the massive sulfide body and fault into the conductor Drill testing of the less-accessible Kangas North target will be subject to the outcome of these first two holes. Advanced geophysical modeling suggests the possible presence of mineralization in these two locations, along with several other locations on the property, to be tested at a later date. Avrupa expects that the drilling will take 4-6 weeks to complete.
On November 27, 2024, the Company announced that that first-pass scout drilling at the Company’s Kangasjärvi project in central Finland has been completed. Avrupa, through the JV entity Akkerman Finland Oy (“AFOy” – Akkerman Exploration b.v. 51%; Avrupa 49%), completed two holes in the Kangas Main EM target area, totaling 709.3 meters. A third hole, testing the Kangas North EM anomaly was postponed due to terrain access issues.
AFOy noted that the two holes were aimed at an untested EM anomaly located directly north of the old Kangasjärvi workings, across a prominent fault. The first was drilled from west to east into the conductor, while the second approached the anomaly from the south.
Both holes successfully intersected vein-type and semi-massive mineralization. The first hole KM-01, intersected intermittent sulfides over a length of 82 meters from 194 meters to 276 meters depth.
AFOy also noted that intermittent mineralization in the second hole, KM-02, was more intense and present over a wider interval between 119 meters and 341 meters, down-hole. Pyrite and pyrrhotite are the main sulfide minerals present with local, small amounts of chalcopyrite and minor sphalerite. Mineralization is accompanied by intense hydrothermal alteration of the original mafic volcanic host rocks.
The intercepts are characteristic of a stockwork feeder zone. The sulfide veins and semi-massive replacement mineralization, accompanied by silicification, white mica and cordierite, are directly comparable with the mineralization and alteration found in the footwall of the Pyhäsalmi massive sulfide deposit, located 30 km to the north.
Split core samples have been submitted to the ALS Global laboratory facilities in Outokumpu. Assay results are expected in December.
Meanwhile, AFOy will conduct a geophysical reassessment of the Kangas Main EM anomaly to ascertain whether the conductor has been adequately tested. This may include a down-hole EM survey to detect possible off-hole conductors.
QUARTERLY FINANCIAL CONDITION
Capital Resources
On September 5, 2024, the Company completed a non-brokered private placement by issuing 10,000,000 units (“Unit”) at a price of $0.035 per Unit for gross proceeds of $350,000. Each Unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at an exercise price of $0.10 per common share until September 5, 2027. The Company incurred $29,628 share issue costs in connection with the financing.
The proceeds from the issuance of the Units will be used by the Company to fund drilling and exploration programs in Finland, to fund ongoing operations in Portugal and Kosovo, and for general corporate purposes.
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 2024. 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 September 30, 2024, the Company had a working capital of $233,559 (December 31, 2023 – $132,571). With respect to working capital, $292,386 was held in cash (December 31, 2023 - $121,745). The increase in cash was due to (a) net proceeds from share issuance of $333,872; while being offset by (b) the general administrative expenses and exploration work expenses totaling $64,465; (c) advance to Akkerman Finland OY of $98,156; and (d) purchase of equipment of $610.
For the three months ended September 30, 2024 compared with the three months ended September 30, 2023:
Excluding the non-cash depreciation of $370 (2023 - $512) and bad debt recovery of $113 (2023 - $Nil), the Company’s third quarter general and administrative expenses amounted to $76,676 (2023 - $70,712), an increase of $5,964 mainly due to (a) investor relations of $9,452 (2023 - a negative amount of $10,449) as a result of the cancellation of an invoice in 2023; (b) consulting fees, wages and benefits of $51,105 (2023 - $42,638); while being offset by the decrease in (c) professional fees of $18,846 (2023 - $28,500) as the Company has been closely monitoring its use of cash.
During the three months ended September 30, 2024, the Company incurred exploration costs totaling $22,151 including $9,083 on Alvalade in Portugal and $13,068 on Slivova in Kosovo. During the three months ended September 30, 2023, the Company incurred exploration costs totaling $27,756 including $8,901 on Alvalade in Portugal and $18,855 on Slivova in Kosovo.
During the three months ended September 30, 2024, the Company recorded a loss of investment in AFOy of $2,466 (2023 - $16,060) for its share of operating loss in AFOy.
During the three months ended September 30, 2024, the Company reported a net income of $24,069 (2023 – $37,900), a decrease of $13,831.
For the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023:
Excluding the non-cash depreciation of $1,096 (2023 - $1,535) and bad debt recovery of $17,052 (2023 - $Nil), the Company’s general and administrative expenses amounted to $298,029 (2023 - $298,375), a decrease of $346 mainly due to professional fees of $63,975 (2023 - $91,557), while being offset by the increase in investor relations of $47,592 (2023 - $30,310) as the Company has been closely monitoring its use of cash.
During the nine months ended September 30, 2024, the Company incurred exploration costs totaling $42,789 including $24,207 on Alvalade in Portugal and $18,582 on Slivova in Kosovo. During the nine months ended September 30, 2023, the Company incurred exploration costs totaling $55,176 including $20,116 on Alvalade in Portugal and $35,060 on Slivova in Kosovo.
During the nine months ended September 30, 2024, the Company recorded a loss of investment in AFOy of $41,775 (2023 - $69,000) for its share of operating loss in AFOy.
During the nine months ended September 30, 2024, the Company reported a loss of $40,640 (2023 – $40,733), a decrease of $93.
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.
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 29, 2024 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 September 30, 2024:
| Issued and Outstanding | ||
| September 30, 2024 |
| November 27, 2024 |
|
|
|
|
Common shares outstanding | 64,674,754 |
| 64,674,754 |
Stock options | 1,575,000 |
| 1,575,000 |
Warrants | 26,666,667 |
| 16,666,667 |
Fully diluted common shares outstanding | 92,916,421 |
| 82,916,421 |