LCGMD 10-Q
Lion Copper Corp. (LCGMD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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For the quarterly period ended
For the transition period from __________________ to __________________
(Commission File Number)
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction | (IRS Employer | |
| of incorporation or organization) | Identification No.) |
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Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of August 14, 2025, the registrant's outstanding common stock consisted of
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Lion Copper and Gold Corp.
Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in thousands of U.S. Dollars except for shares and per share amounts)
(Unaudited)
| Lion Copper and Gold Corp. Condensed Interim Consolidated Balance Sheets As at June 30, 2025, and December 31, 2024 (Unaudited - In thousands of U.S. Dollars) |
| Note | June 30, 2025 | Audited December 31, 2024 |
|||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | $ | |||||
| Other receivables | |||||||
| Prepaid and deposit | |||||||
| Mineral properties | 4,12 | ||||||
| Reclamation bonds | |||||||
| Investment in associate | 5 | ||||||
| Right of use asset | |||||||
| Total assets | $ | $ | |||||
| LIABILITIES | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | $ | |||||
| Nuton LLC deposit | 4 | ||||||
| Derivative liabilities | 7 | ||||||
| Convertible debentures | 7,8,11 | ||||||
| Lease liabilities | |||||||
| Total liabilities | |||||||
| Stockholders' equity | |||||||
| Share capital, |
9 | ||||||
| Additional paid-in capital | 10 | ||||||
| Deficit | ( |
) | ( |
) | |||
| Non-controlling interest | 6 | ||||||
| Total stockholders' equity | |||||||
| Total liabilities and stockholders' equity | $ | $ |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
NATURE OF OPERATIONS AND GOING CONCERN (Note 1)
COMMITMENTS (Note 13)
SUBSEQUENT EVENTS (Note 15)
Approved on behalf of the Board of Directors on August 14, 2025:
| /s/ "Thomas Patton" | /s/ "Tony Alford" | |
| Director | Director |
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| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Operations and Comprehensive Loss For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars, except for shares and per share amounts) |
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| Note | 2025 | 2024 | 2025 | 2024 | |||||||||
| Operating expenses | |||||||||||||
| Exploration and evaluation | 4 | $ | $ | $ | $ | ||||||||
| General and administrative | |||||||||||||
| Investor relations and corporate development | |||||||||||||
| Professional fees | 4(a) | ||||||||||||
| Salaries and benefits | 4(a),11 | ||||||||||||
| Share-based payments | 10,11 | ||||||||||||
| Transfer agent and regulatory | |||||||||||||
| Travel | |||||||||||||
| Nuton LLC deposit | 4 | ( |
) | ( |
) | ( |
) | ( |
) | ||||
| Operating loss | ( |
) | ( |
) | ( |
) | ( |
) | |||||
| Non-operating Income/(expenses) | |||||||||||||
| Fair value (loss) gain on derivative liabilities | 7 | ( |
) | ( |
) | ( |
) | ||||||
| Foreign exchange gain (loss) | ( |
) | ( |
) | ( |
) | |||||||
| Accretion expense | 8 | ( |
) | ( |
) | ||||||||
| Share of loss in associate | 5 | ( |
) | ( |
) | ( |
) | ( |
) | ||||
| Interest and other income | |||||||||||||
| Loss on convertible debentures | 8 | ( |
) | ||||||||||
| ( |
) | ( |
) | ( |
) | ( |
) | ||||||
| Net loss and comprehensive loss for the period | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
| Net loss and comprehensive loss attributed to: | |||||||||||||
| Stockholders of the Company | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
| Non-controlling interest | 6 | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
| Loss per share, basic and diluted | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
| Weighted average number of shares outstanding - basic and diluted | |||||||||||||
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
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| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Changes in Equity For the six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars, except for shares) |
| Notes | Common shares | Share capital | Additional paid-in capital |
Deficit | Non-controlling interest |
Total stockholders' equity |
|||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Private placement | - | - | - | ||||||||||||||||
| Private placement - share issuance cost | - | ( |
) | - | - | - | ( |
) | |||||||||||
| Conversion of convertible debentures - original | 8 | - | - | - | |||||||||||||||
| Conversion of convertible debentures - induced | 8 | - | - | - | |||||||||||||||
| Exercise of options | 10 | ( |
) | - | - | ||||||||||||||
| Share-based payments | 10 | - | - | - | - | ||||||||||||||
| Issuance of common shares of FCC | 6 | - | - | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Share-based payments | 6,10 | - | - | - | |||||||||||||||
| Issuance of common shares of FCC | 6 | - | - | - | - | ||||||||||||||
| Exercise of options | 9 | ( |
) | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( |
) | $ | $ |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
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| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Changes in Equity For the six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars, except for shares) |
| Notes | Common shares | Share capital | Additional paid-in capital |
Deficit | Non-controlling interest |
Total stockholders' equity |
|||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Share-based payments | 10 | ( |
) | - | - | ||||||||||||||
| Issuance of common shares of FCC | 6 | - | - | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Share-based payments | 6,10 | - | - | - | |||||||||||||||
| Exercise of options | 9 | ( |
) | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( |
) | $ | $ |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
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| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Cash Flow For the six months ended June 30, 2025, and 2024 (Unaudited - In thousands of U.S. Dollars) |
| 2025 | 2024 | |||||
| Cash flows (used in) provided by operating activities | ||||||
| Loss for the period | $ | ( |
) | $ | ( |
) |
| Non-cash transactions: | ||||||
| Interest expense | ||||||
| Accretion expense | ||||||
| Fair value loss (gain) on derivative liabilities | ( |
) | ||||
| Share of loss of investment in associate | ||||||
| Share-based payments | ||||||
| Loss on convertible debentures | ||||||
| Amortization of ROU asset | ||||||
| Changes in operating assets and liabilities: | ||||||
| Other receivables | ( |
) | ||||
| Accounts payable and accrued liabilities | ( |
) | ||||
| Prepaid and deposit | ( |
) | ( |
) | ||
| Lease liability | ( |
) | ( |
) | ||
| Nuton LLC deposit | ( |
) | ||||
| Net cash (used in) provided by operating activities | ( |
) | ||||
| Cash flows used in investing activities | ||||||
| Capitalized expenditures on mineral properties | ( |
) | ( |
) | ||
| Net cash used in investing activities | ( |
) | ( |
) | ||
| Cash flows provided by (used in) financing activities | ||||||
| Proceeds from convertible debentures | ||||||
| Proceeds for issuance of common shares of FCC | ||||||
| Proceeds from exercise of options | ||||||
| Proceeds from private placement | ||||||
| Share issuance costs | ( |
) | ||||
| Repayment of convertible debentures | ( |
) | ( |
) | ||
| Net cash provided by financing activities | ||||||
| (Decrease) increase in cash and cash equivalents | ( |
) | ||||
| Cash and cash equivalents, beginning of period | ||||||
| Cash and cash equivalents, end of period | $ | $ | ||||
| Supplemental cash flow information | ||||||
| Shares issued for convertible debentures | $ | $ |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
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Lion Copper and Gold Corp. |
| Notes to the Condensed Interim Consolidated Financial Statements |
| For the three and six months ended June 30, 2025 and 2024 |
| (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
1. NATURE OF OPERATIONS AND GOING CONCERN
Lion Copper and Gold Corp. (together with its subsidiaries, "Lion CG" or the "Company") is a copper explorer advancing its flagship copper assets at Yerington, Nevada, through an option to earn-in agreement with Rio Tinto America Inc. ("Rio Tinto"), subsequently assigned to Nuton LLC, a Rio Tinto venture. The Company was incorporated in British Columbia, Canada, on May 11, 1993. Its registered and records offices are located at 1200 - 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T8. On September 19, 2024, the Company voluntarily delisted its common shares from the TSX Venture Exchange ("TSXV"), which were subsequently listed on the Canadian Securities Exchange ("CSE") under the same symbol "LEO" and quoated for trading on the OTCQB Market under the symbol "LCGMF".
The Company acquires its mineral properties through option or lease agreements and capitalizes acquisition costs related to the properties. The underlying value of the amounts recorded as mineral properties does not reflect current or future values. The Company's continued existence depends on discovering economically recoverable mineral reserves and obtaining the necessary funding to advance these properties.
These condensed interim consolidated financial statements ("Interim Financial Statements") are prepared on a going concern basis, which contemplates that the Company will be able to meet its commitments, continue operations and realize its assets and discharge its liabilities in the normal course of business for at least twelve months from the date of approval of these Interim Financial Statements from the Board of Directors. During the six months ended June 30, 2025, the Company incurred a loss of $
The Company has no source of revenue and has specific requirements to maintain its mineral property interests and meet its obligations as they come due. Although the Company has raised funds in the past through debt, equity and strategic investors, there is no assurance that such financing will be available. During the six months ended June 30, 2025, the United States and Canadian governments announced new tariffs on imported goods. This caused uncertainty to raise financing for properties outside of Nuton LLC. If adequate financing is not available or cannot be obtained on a timely basis, the Company may be required to delay, reduce the scope of, or eliminate one or more of its exploration programs, or relinquish its rights under the existing option and acquisition agreements. The above factors represent material uncertainties that cast substantial doubt on the Company's ability to continue as a going concern.
If the going concern assumptions were not appropriate for these Interim Financial Statements, adjustments would be necessary to the carrying values of assets, liabilities, the reported expenses, and the consolidated balance sheet classifications used. Such adjustments could be material.
2. BASIS OF PRESENTATION
Statement of compliance
The Interim Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") including the accounts of the Company and its subsidiaries. All intercompany accounts and transactions were eliminated upon consolidation.
These Interim Financial Statements have been prepared on a historical cost and accrual basis except for certain financial instruments measured at fair value and the cash flow, respectively.
The Company consolidates an entity when it has power over that entity, is exposed, or has rights, to variable returns from its involvement with that entity and can affect those returns through its control over that entity.
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
These Interim Financial Statements include the Interim financial statements of Lion CG and its subsidiaries:
On October 4, 2021, Blue Copper LLC was incorporated in Montana, USA and acquired Blue Copper Prospect in Powell County and Lewis & Clark County in Montana.
On April 5, 2022, Quaterra Alaska Inc. ("Quaterra Alaska") sold its two options to acquire the Butte Valley property to Falcon Butte Minerals Corp. ("Falcon Butte"), formerly 1301666 B.C. Ltd., for $
On December 13, 2022, Quaterra Alaska transferred its
On August 25, 2023, Blue Copper Royalties LLC was incorporated in Wyoming for the purpose of holding certain royalties and on September 6, 2023, FCC transferred the Butte Valley royalty and interest in Nieves to Blue Copper Royalties.
3. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these Interim Financial Statements are consistent with the accounting policies disclosed in Note 3 of the Company's audited consolidated financial statements for the year ended December 31, 2024.
In preparing these Interim Financial Statements, management has made judgements, estimates and assumptions that affect the applicability of the Company's accounting policies. In preparing these Interim Financial Statements, the significant estimates and critical judgments were the same as those applied to the audited consolidated financial statements as at and for the year ended December 31, 2024.
During the year ended December 31, 2024, the Company's ownership in FCC dropped below 50%, with ownership being
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
The Company clarifies that all exploration and development expenditures incurred by Falcon are funded independently by Falcon and its investors. Lion Copper does not provide either direct financial support or intercompany funding for Falcon's exploration activities.
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
4. MINERAL PROPERTIES
Total mineral property acquisition costs are listed in the table below:
| Singatse Peak Services ("SPS") | Falcon Copper Corp. ("FCC") | |||||||||||||||||||||||
| MacArthur | Yerington | Bear | Wassuk | Copper Canyon | Blue Copper | Muncy | Total | |||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Balance December 31, 2023 | ||||||||||||||||||||||||
| Acquisition costs | ||||||||||||||||||||||||
| Paid by Nuton LLC | ( |
) | ( |
) | ||||||||||||||||||||
| Total additions for the year | ||||||||||||||||||||||||
| Balance December 31, 2024 | ||||||||||||||||||||||||
| Acquisition costs | ||||||||||||||||||||||||
| Paid by Nuton LLC | ( |
) | ( |
) | ||||||||||||||||||||
| Total additions for the period | ||||||||||||||||||||||||
| Balance June 30, 2025 | ||||||||||||||||||||||||
The Company owns a
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
Total exploration expenditures recorded on the condensed interim consolidated statements of operations and comprehensive loss are listed in the tables below:
Exploration expenditures incurred for the six months ended June 30, 2025
| Singatse Peak Services | Falcon Copper Corp | |||||||||||||||||||||||
| MacArthur | Yerington | Bear | Wassuk | Blue Copper | Muncy | Other | Total |
|||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Property maintenance | ||||||||||||||||||||||||
| Assay & Labs | ||||||||||||||||||||||||
| Drilling | ||||||||||||||||||||||||
| Environmental | ||||||||||||||||||||||||
| Geophysical surveys | ||||||||||||||||||||||||
| Technical study | ||||||||||||||||||||||||
| Field support | ||||||||||||||||||||||||
| Total expenses incurred | ||||||||||||||||||||||||
| Total Expenditures funded by Nuton LLC | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Total Expenditures not funded by Nuton LLC | ||||||||||||||||||||||||
Exploration expenditures incurred for the three months ended June 30, 2025
| Singatse Peak Services | Falcon Copper Corp | |||||||||||||||||||||||
| MacArthur | Yerington | Bear | Wassuk | Blue Copper | Muncy | Other | Total | |||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Property maintenance | ||||||||||||||||||||||||
| Assay & Labs | ||||||||||||||||||||||||
| Environmental | ||||||||||||||||||||||||
| Geophysical surveys | ||||||||||||||||||||||||
| Technical study | ||||||||||||||||||||||||
| Field support | ||||||||||||||||||||||||
| Total expenses incurred | ||||||||||||||||||||||||
| Total Expenditures funded by Nuton LLC | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Total Expenditures not funded by Nuton LLC | ||||||||||||||||||||||||
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
Exploration expenditures incurred for the six months ended June 30, 2024
| Singatse Peak Services | Falcon Copper Corp | |||||||||||||||||||||||
| MacArthur | Yerington | Bear | Wassuk | Muncy | Blue Copper | Other | Total |
|||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Property maintenance | ||||||||||||||||||||||||
| Assay & Labs | ||||||||||||||||||||||||
| Drilling | ||||||||||||||||||||||||
| Environmental | ||||||||||||||||||||||||
| Geophysical surveys | ||||||||||||||||||||||||
| Technical study | ||||||||||||||||||||||||
| Field support | ||||||||||||||||||||||||
| Total expenses incurred | ||||||||||||||||||||||||
| Total Expenditures funded by Nuton LLC | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Total Expenditures not funded by Nuton LLC | ||||||||||||||||||||||||
Exploration expenditures incurred for the three months ended June 30, 2024
| Singatse Peak Services | Falcon Copper Corp |
|||||||||||||||||||||||
| MacArthur | Yerington | Bear | Wassuk | Muncy | Blue Copper | Other | Total |
|||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Property maintenance | ||||||||||||||||||||||||
| Assay & Labs | ||||||||||||||||||||||||
| Drilling | ||||||||||||||||||||||||
| Environmental | ||||||||||||||||||||||||
| Geophysical surveys | ( |
) | ||||||||||||||||||||||
| Technical study | ||||||||||||||||||||||||
| Field support | ( |
) | ||||||||||||||||||||||
| Total expenses incurred | ( |
) | ||||||||||||||||||||||
| Total Expenditures funded by Nuton LLC | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Total Expenditures not funded by Nuton LLC | ( |
) | ||||||||||||||||||||||
|
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
a) Option Agreement with Nuton LLC
On March 18, 2022, the Company entered into an Option Agreement, as amended, with Nuton LLC whereby Nuton LLC has the exclusive option to earn an initial
Such initial interest may be further increased upon the terms and conditions set forth in the Option Agreement.
In addition, Nuton LLC will evaluate the potential commercial deployment of its Nuton™ technologies at the Company's project site.
The Option Agreement was effective on April 27, 2022, when TSXV approved it.
On May 16, 2022, the Stage 1 work program for the MacArthur project commenced, focusing on metallurgical testing, engineering scoping studies, and a 6,500- foot drill program. Nuton LLC provided $
On January 5, 2023, a 12-month Stage 2 work program was approved, including Yerington Site engineering studies and a 17,000-foot drill program targeting high priority exploration areas. On January 13, 2023, Nuton LLC funded Stage 2 with $
On October 5, 2023, the Option Agreement was amended to modify Stage 2 work program. Under the amendment, Stage 2 was extended and divided into two phases: Stage 2 (work completed through January 12, 2024) and Stage 2b (extending the term to September 12, 2024), allowing for continued testing and evaluation of the NutonTM technologies. On January 4, 2024, Nuton LLC approved and advanced $
On November 15, 2024, the Option Agreement was amended further to extend the term of Stage 2 until June 30, 2025. Stage 2b was mutually agreed to conclude on September 30, 2024, and a new Stage 2c was established to complete a pre-feasibility study from October 1, 2024, through June 30, 2025.
To fund Stage 2c, Nuton LLC advanced an additional $
As of June 30, 2025, Nuton LLC had provided a total of $
A continuity of the Company's Nuton LLC deposit is as follows:
| Balance December 31, 2023 | $ | ||
| Funds received | |||
| Funds applied to prepaids | ( |
) | |
| Funds applied to capitalized acquisition costs | ( |
) | |
| Funds applied to exploration expenditures | ( |
) | |
| Funds applied to general operating expenditures | ( |
) |
|
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
| Balance December 31, 2024 | $ | ||
| Funds applied to capitalized acquisition costs | ( |
) | |
| Funds applied to exploration expenditures | ( |
) | |
| Funds applied to general operating expenditures | ( |
) | |
| Balance June 30, 2025 | $ |
General operating expenditures associated with exploration activities are comprised of salaries of $
b) MacArthur and Yerington Properties, Nevada
Located in the historic copper district of Yerington, Nevada, the Company's Yerington and MacArthur properties are
The MacArthur Project consists of unpatented lode claims and placer claims and covers lands administered by the U.S. Department of Interior - Bureau of Land Management ("BLM").
The MacArthur Project is subject to a
The Yerington Mine Property is centered on the former Anaconda open pit copper mine. This includes fee simple parcels and patented mining claims as well as unpatented lode and placer claims on lands administered by the BLM.
The Yerington Mine Property is subject to a
On March 13, 2025, the Company announced the successful negotiation of a Settlement Agreement with the Nevada Division of Water Resources and the Nevada State Engineering (collectively, the "State") to reinstate 3,452.8 ac-ft of previously forfeited water rights essential for the development of the Yerington Copper project. As a result, the State has officially rescinded its notice of forfeiture, thus restoring all the Company's 6,014.5 ac-ft of water rights to good standing. This Settlement Agreement effectively terminates the legal proceedings initiated by the Company to defend its water rights.
c) Bear Deposit, Nevada
The Bear deposit consists of private land located to the northeast of the Yerington Mine Property, plus several hundred acres beneath the Yerington Mine property.
The Company has five option agreements, entered from March 2013 to May 2015, to acquire a
The outstanding payments required to keep the option agreements in good standing are as follows: $
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
These five option agreements include purchase provisions for cash payments ranging from $
d) Wassuk, Nevada
The Wassuk property consists of unpatented lode claims on lands administered by the BLM.
The property is subject to a
e) Copper Canyon, Nevada
On August 21, 2023, the Company entered into a Purchase and Sale Agreement with Convergent Mining, LLC, whereby the Company purchased the title to the Copper Canyon claims from Convergent Mining, LLC upon closing of agreement. As consideration, the Company paid $
f) Blue Copper Project, Montana
On May 12, 2023, FCC made a payment of $
On April 18, 2023, FCC entered into a lease agreement for a Montana property and paid an initial cash payment of $
During the year ended December 31, 2024, the Company paid an advance rental payment of $
A Plan of Operations for exploration of the Blue Copper Project is approved by the relevant agencies.
g) Cabin Property, Nevada
In 2023, FCC staked approximately
h) Muncy Property, Nevada
On November 22, 2023, FCC entered into an Option to Joint Venture Agreement with Kennecott Exploration Company ("Kennecott"), a Rio Tinto subsidiary.
Pursuant to the agreement, Kennecott grants FCC the sole and exclusive right and option to acquire
- pay the payment commitment of $
- pay an additional payment commitment of $
- pay an additional payment commitment of $
- pay an additional payment commitment of $
- incur expenditures of $
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
- ensure that no less than
- ensure that no less than
If FCC decides to terminate the option at any time, they will grant Kennecott a
If Kennecott elects not to form a joint venture, Kennecott must transfer all their rights in the Muncy Property to the FCC. In return, FCC will grant the optionor a
A Plan of Operations for exploration of the Muncy Property is currently under review for approval by the relevant agencies.
i) Recon, Nevada, Arizona, and other prospects
During the six months ended June 30, 2025, FCC incurred $
5. INVESTMENT IN ASSOCIATE
On April 5, 2022, the Company received
Summarized financial information of Falcon Butte and a reconciliation of the carrying amount of the investment in the Interim Financial Statements are set out below:
Summarized balance sheet:
| June 30, 2025 | December 31, 2024 | |||||
| Assets | ||||||
| Cash | $ | $ | ||||
| Receivables | ||||||
| Financial asset - Convertible loan receivable | ||||||
| Prepaids & deposits | ||||||
| Investment in associate | ||||||
| Total Assets | $ | $ | ||||
| Liabilities | ||||||
| Accounts payable & accrued liabilities | $ | $ | ||||
| Derivative liabilities | ||||||
| Total Liabilities | $ | $ |
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
Summarized statement of loss
| Six months ended June 30, 2025 |
Six months ended June 30, 2024 |
|||||
| Operating expenses | ||||||
| General and administrative expenses | $ | $ | ||||
| Total operating expenses | ||||||
| Fair value (gain) loss on derivative liability | ( |
) | ||||
| Other income | ( |
) | ( |
) | ||
| Foreign exchange loss (gain) | ( |
) | ||||
| Net loss |
A continuity of the Company's investment in associate is as follows:
| Balance December 31, 2023 | $ | ||
| Company's share of net loss | ( |
) | |
| Balance December 31, 2024 | $ | ||
| Company's share of net loss | ( |
) | |
| Balance June 30, 2025 | $ |
6. NON-CONTROLLING INTEREST
On December 13, 2022, Quaterra Alaska assigned and transferred all right, title and interest in the Groundhog property, Butte Valley Royalty,
As consideration, Quaterra Alaska was issued
On March 2, 2023, FCC completed a private placement financing of $
In addition, the private placement was considered a "triggering event" for SAFE Notes. FCC had previously raised $
On September 6, 2023, FCC carried out a re-organization of its assets and capital structure (the transaction described herein is referred to as the "Reorganization"). On August 25, 2023, a new entity, BCR LLC was organized in Wyoming. BCR LLC subsequently adopted an Operating Agreement that provided for issuance of LLC Interests to its Members in the same amounts as shares issued to Shareholders of FCC. On September 6, 2023, two of the mining assets, referred to as the Butte Valley Royalty and the Nieves Royalty, that had been held by FCC were assigned to BCR LLC in exchange for
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
On October 17, 2023, FCC issued
From February to May 2024, FCC issued a total of
During the six months ended June 30, 2025, FCC issued a total of
| January 5, 2025 | April 14, 2025 | May 28, 2025 | |||||||
| Risk-free interest rate | |||||||||
| Expected life (years) |
|
|
|
||||||
| Annualized volatility | |||||||||
| Forfeiture rate | |||||||||
| Dividend yield |
As a result, the Company's ownership in FCC is reduced to
| Balance December 31, 2023 | $ | ||
| Issuance of common shares | |||
| Net loss and comprehensive loss attributable to NCI | ( |
) | |
| Balance December 31, 2024 | $ | ||
| Issuance of common shares | |||
| Grant of options | |||
| Net loss and comprehensive loss attributable to NCI | ( |
) | |
| Balance June 30, 2025 |
7. DERIVATIVE LIABILITIES
During the year ended December 31, 2024, the Company issued certain share purchase warrants and convertible debt that can be exercised and converted in USD or CAD (Note 8). The warrants and the conversion feature were classified as derivative liabilities, carried at fair value and revalued at each reporting date.
A continuity schedule of the Company's derivative liabilities is as follows:
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
| Balance December 31, 2023 | $ | ||
| Issuance of warrants for private placement (Note 10) | |||
| Issuance of warrants upon conversion of existing debentures (Note 8) | |||
| Issuance of contingent warrants upon conversion of existing debentures (Note 8) | |||
| Issuance of warrants and conversion feature for extinguishment of existing debentures (Note 8) | |||
| Modification of warrants upon restructuring of debentures (Note 8) | |||
| Modification of conversion feature upon restructuring of debentures (Note 8) | |||
| Issuance of warrants - equity (Note 8) | ( |
) | |
| Fair value change on derivative liabilities | ( |
) | |
| Balance December 31, 2024 | $ | ||
| Fair value change on derivative liabilities | |||
| Balance June 30, 2025 | $ |
8. CONVERTIBLE DEBENTURES
On February 16, 2024, the Company issued 12-month convertible debentures of $
These debentures are convertible into common shares of the Company at a price of $
The Company repaid a total of $
Based on the terms of the newly issued debentures, the convertible debentures were determined to be a financial instrument comprising a host debt component, and the conversion feature and warrants denominated in Canadian dollars are classified as a derivative liability. In this case, as the conversion option on the instrument is bifurcated both before and after the modification or exchange, the Company used the 10% cash flow test. As a result, the change in cash flows was considered not substantial for the convertible debentures issued on June 17, 2022, and July 8, 2022, and extinguishment accounting was not applied. A new effective interest rate was determined and there was no gain or loss recorded on the consolidated statements of operations and comprehensive loss. However, the convertible debentures issued on March 2, 2023, surpassed the 10% cash flow test and as a result, the debentures were considered extinguished. A new effective interest was determined and there was a loss on extinguishment recorded on the consolidated statements of operations and comprehensive loss.
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
Under ASC 815, for the convertible debentures that did not meet the 10% cash flow test, the amended conversion feature and the replacement warrants were valued using the Black Scholes model and the difference between the fair value of the original conversion feature and amended conversion feature were reflected on the consolidated statements of operations and comprehensive loss as a gain/loss on the revaluation of the derivative liabilities. The changes in fair value of the warrants associated with the prior debentures was recognized as a gain/loss and the fair value of the replacement warrants were deducted from the face value of the replacement debentures. For the convertible debentures that surpassed the 10% cash flow test, the fair value of the debentures at maturity were present valued using the new effective interest rate of
On March 8, 2024, the Company completed a private placement of $
In conjunction with the Company's CSE listing on September 19, 2024,
Under ASC 815, the conversion of debt with a bifurcated conversion option is accounted for under the debt extinguishment accounting model. Therefore, both the debt and the conversion option that is accounted for as a derivative was derecognized at their carrying amounts and the consideration transferred were measured at its then-current fair value, with any difference recorded as a gain or loss on the extinguishment of the two separate liabilities. The existing debenture settlement resulted in a loss on conversion of $
On November 14, 2024, February 3, 2025, March 11, 2025, May 19, 2025, and May 31, 2025, FCC entered into convertible loan agreements for $
Under ASC 815, the conversion feature does not require bifurcation. Therefore, both the debt and the conversion option is accounted for as a single liability carried at book value plus accrued interest.
The fair value of the warrants and conversion features were determined using the Black-Scholes Option Pricing Model using the assumptions set out as follows:
|
Initial recognition in 2024 |
September 19, 2024 |
December 31, 2024 |
March 31, 2025 |
June 30, 2025 |
|
| Risk-free interest rate | |||||
| Expected volatility | |||||
| Dividend yield | |||||
| Expected life |
|
|
|
|
|
|
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
A continuity schedule of the Company's convertible debt is as follows:
| Balance as at December 31, 2023 | $ | ||
| Issued | |||
| Extinguished debt - fair value of conversion feature | ( |
) | |
| Extinguished debt - fair value of warrants | ( |
) | |
| Modified debt - fair value of warrants | ( |
) | |
| Accretion | |||
| Interest | |||
| Extinguished | ( |
) | |
| Converted | ( |
) | |
| Repayment | ( |
) | |
| Loss on repayment | |||
| Balance as at December 31, 2024 | $ | ||
| Issued | |||
| Interest | |||
| Repayment | ( |
) | |
| Balance as at June 30, 2025 | $ |
9. SHARE CAPITAL
The Company is authorized to issue an unlimited number of common shares without par value.
Share transactions for the six months ended June 30, 2025
a) In June 2025, the Company issued
Share transactions for the year ended December 31, 2024
a) On February 16, 2024 and March 8, 2024, the Company issued
b) On March 8, 2024, the Company closed a private placement consisting of an aggregate of
c) In June 2024, the Company issued
d) On November 8, 2024, the Company closed a private placement consisting of
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
10. ADDITIONAL PAID-IN CAPITAL
a) Stock options
The Company has a stock option plan under which the Company is authorized to grant stock options up to
Under the stock option plan, all stock options are granted at the discretion of the Company's board of directors, including any vesting provisions if applicable. The term of any stock option grants may not exceed ten years, and the exercise price may not be lower than the closing price of the Company's share on the last trading day immediately preceding the date of grant. Typically, stock options granted have five-year terms and are vested either immediately or subject to certain milestone requirements.
During the six months ended June 30, 2025, the Company granted the following stock options:
The performance options were valued using a Monte Carlo simulation model with the following inputs:
| April 4, 2025 | |
| Risk-free interest rate | |
| Expected volatility | |
| Dividend yield | |
| Market Cap | $ |
| Exercise Price | $ |
| Simulation Paths |
During the year ended December 31, 2024, the Company granted the following stock options:
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
The continuity of the number of stock options issued and outstanding is as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||
| Number of options |
Weighted average exercise price (CAD) |
Number of options |
Weighted average exercise price (CAD) |
|||||||||
| Outstanding, beginning of period | ||||||||||||
| Granted | ||||||||||||
| Expired | ( |
) | ( |
) | ||||||||
| Cancelled | ( |
) | ||||||||||
| Exercised | ( |
) | ( |
) | ||||||||
| Outstanding, end of period | ||||||||||||
As of June 30, 2025, the number of stock options outstanding and exercisable were:
| Expiry date |
Exercise price (CAD) |
Number of options outstanding |
Remaining contractual life in years |
Number of options exercisable |
||||||||
| June 20, 2025* |
|
|||||||||||
| August 18, 2025 |
|
|||||||||||
| June 18, 2026 |
|
|||||||||||
| October 21, 2026 |
|
|||||||||||
| May 25, 2027 |
|
|||||||||||
| March 2, 2028 |
|
|||||||||||
| July 21, 2028 |
|
|||||||||||
| March 1, 2029 |
|
|||||||||||
| July 26, 2029 |
|
|||||||||||
| December 10, 2029 |
|
|||||||||||
| April 4, 2030 |
|
|||||||||||
| Balance, June 30, 2025 | ||||||||||||
*Under the Company's Stock Option Plan, the expiry date of certain stock options has been extended beyond June 20, 2025, as the original expiry fell within a corporate trading blackout period.
As of December 31, 2024, the number of stock options outstanding and exercisable were:
| Expiry date |
Exercise price (CAD) |
Number of options outstanding |
Remaining contractual life in years |
Number of options exercisable |
||||||||
| June 20, 2025* |
|
|||||||||||
| August 18, 2025 |
|
|||||||||||
| June 18, 2026 |
|
|||||||||||
| October 21, 2026 |
|
|||||||||||
| May 25, 2027 |
|
|||||||||||
| March 2, 2028 |
|
|||||||||||
| July 21, 2028 |
|
|||||||||||
| March 1, 2029 |
|
|||||||||||
| July 26, 2029 |
|
|||||||||||
| December 10, 2029 |
|
|||||||||||
| Balance, December 31, 2024 |
During the six months ended June 30, 2025, an amount of $
|
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
|
Six months ended June 30, 2025 |
Six months ended June 30, 2024 |
|||||
| Risk-free interest rate | ||||||
| Expected life (years) |
|
|
||||
| Annualized volatility | ||||||
| Forfeiture rate | ||||||
| Dividend yield |
b) Share purchase warrants
During the year ended December 31, 2024, the Company granted the following share purchase warrants:
The continuity of the number of share purchase warrants outstanding as of June 30, 2025 and December 31, 2024 is as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||
|
Number of warrants |
Weighted average exercise price |
Number of warrants |
Weighted average exercise price |
|||||||||
| Outstanding, beginning of period | $ | |||||||||||
| Issued | ||||||||||||
| Expired | ( |
) | ( |
) | ||||||||
| Cancelled | ( |
) | ||||||||||
| Outstanding, end of period | ||||||||||||
The following table summarizes warrants outstanding as of June 30, 2025 and December 31, 2024:
| Expiry date | Currency | Exercise price | June 30, 2025 | December 31, 2024 | ||||||
| February 16, 2025 | USD | |||||||||
| March 8, 2029 | USD | |||||||||
| March 8, 2029 | USD | |||||||||
| September 19, 2029 | USD | |||||||||
| November 8, 2029 | USD | |||||||||
| Outstanding at the end of the period | ||||||||||
11. RELATED PARTY TRANSACTIONS
The Company's related parties include its directors and officers whose remuneration was as follows, subject to change of control provisions for officers:
| Three months ended June 30 | Six months ended June 30 | |||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Salaries | $ | $ | $ | $ | ||||||||
| Share-based payments | ||||||||||||
| Interest on convertible debenture | ||||||||||||
| $ | $ | $ | $ | |||||||||
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
All related party transactions are in the normal course of business and have been measured at the exchange amount.
As at June 30, 2025, the Company had $
Other transactions for the six months ended June 30, 2024
a) On February 16, 2024, the former CEO, former CFO and directors of the Company restructured $
b) On March 8, 2024, the former CFO and directors converted $
c) On March 8, 2024, the Company recognized
d) On March 8, 2024, former CFO and directors subscribed for
12. SEGMENTED INFORMATION
The Company's operations constitute a single operating segment and therefore a single reportable segment, because the chief operating decision maker ("CODM"), the Company's board of directors, manages the business activities using information of the Company as a whole. The Company has determined that it operates as a single reportable segment, focused on the exploration of its mineral interest in the United States. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the consolidated balance sheet as total assets.
13. COMMITMENTS
To acquire certain mineral property interests as per Note 4, the Company must make optional acquisition expenditures to satisfy the terms of existing option agreements, failing which the rights to such mineral properties will revert to the property vendors.
14. FINANCIAL INSTRUMENT RISKS
The board of directors has overall responsibility for establishing and oversight of the Company's risk management framework. The Company examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. Financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, lease liabilities, Nuton LLC deposit, convertible debentures, derivative liabilities.
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The three levels of the fair value hierarchy are:
- Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities.
- Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
- Level 3 - Inputs that are not based on observable market data.
The Company's activities expose it to financial risks of varying degrees of significance, which could affect its ability to achieve its strategic objectives for growth and stockholder returns. The principal financial risks to which the Company is exposed are liquidity risk, currency risk, interest rate risk, credit risk and commodity price risk. The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and reviews the Company's policies on an ongoing basis.
The carrying values of cash, accounts payable, accrued liabilities and Nuton LLC deposit approximate their fair values because of their immediate or short term to maturity and the Company's convertible debentures and lease liabilities are recorded at amortized cost.
The Company's derivative liabilities are measured at its fair value at the end of each reporting period and is categorized as Level 2 in the fair value hierarchy.
a) 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. To mitigate this risk, the Company has a planning and budgeting process in place to determine the funds required to support its ongoing operations and capital expenditures. The Company ensures that sufficient funds are raised from equity offerings or debt financing to meet its operating requirements, after considering existing cash and expected exercise of stock options and share purchase warrants. See Note 1 for further discussion.
b) Currency risk
Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates in the United States and Canada; and is exposed to currency risk from transactions denominated in CAD. Currently, the Company does not have any foreign exchange hedge programs and manages its operational CAD requirements through spot purchases in the foreign exchange markets. Based on CAD financial assets and liabilities' magnitude, the Company does not have material sensitivity to CAD to USD exchange rates.
c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to the interest rate risk on its liabilities through its outstanding borrowings and the interest earned on cash balances. The Company monitors its exposure to interest rates and maintains an investment policy that focuses primarily on the preservation of capital and liquidity.
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Lion Copper and Gold Corp. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
d) Credit risk
Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk through its cash and cash equivalents. Cash and cash equivalents are held in large Canadian and US financial institutions that have high credit ratings assigned by international credit rating agencies.
15. SUBSEQUENT EVENTS
1) On August 5, 2025, the Company announced the results of the pre-feasibility study for its Yerington Copper Project.
2) In August 2025,
3) On July 24, 2025, FCC issued $
The conversion price is the lowest of:
a) The price per share equal to a
b) The price per share equal to the Valuation Cap divided by the number of shares of Common Shares and Preferred Shares outstanding; and
c) A
4) On July 15, 2025, FCC granted
a)
b)
c)
d)
e)
| 27 | Page |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of applicable United States and Canadian securities legislations ("Forward-Looking Statements"). Forward-Looking Statements reflect the expectations of management and consist of statements that are not only historical fact but also relate to predictions, expectations, belief, plans, projections, objectives, assumptions, future events, or future performance. Forward-Looking Statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", "plan" or similar words. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. The Company cautions investors that any Forward-Looking Statements provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in Forward-Looking Statements as a result of various estimates, risks, and uncertainties. Readers should not place undue reliance on Forward-Looking Statements. Forward-Looking Statements in this annual report and in documents incorporated by reference herein include, but are not limited to, statements with regard to:
• planned exploration activity including both expected drilling and geological and geophysical related activities;
• future foreign exchange rates;
• future sources of liquidity, cash flows and their uses;
• realization of anticipated benefits of acquisitions and dispositions;
• expected levels of operating costs, general and administrative costs, costs of services and others; and
• treatment under government regulation and taxation regimes.
Forward-Looking Statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the Forward-Looking Statements, including, without limitation:
• risks related to exploration and development of natural resource properties;
• the uncertain nature of estimating mineral resources and mineral reserves;
• uncertainty in the Company's ability to obtain funding;
• copper price fluctuations;
• recent market events and conditions;
• risks related to governmental regulations;
• risks related to the Company's business being subject to environmental laws and regulations;
• risks related to the Company's inability to meet its financial obligations under agreements to which it is a party; and
• risks related to the Company's ability to recruit and retain qualified personnel.
These Forward-Looking Statements are based on the beliefs of our management as well as on assumptions made by and information currently available to us at the time such statements were made. We undertake no obligation to update forward-looking statements should circumstances or estimates or opinions change.
Lion Copper and Gold Corp.
Management's Discussion and Analysis
For the three and six months ended June 30, 2025
Dated: August 14, 2025
(In thousands of U.S. dollars except for shares and per share amounts)
This Management's Discussion and Analysis ("MD&A") of Lion Copper and Gold Corp. and its subsidiaries (collectively, "Lion Copper" or the "Company"), dated August 14, 2025, should be read in conjunction with the condensed interim consolidated financial statements for the three and six months ended June 30, 2025 and the audited consolidated financial statements for the year ended December 31, 2024, and related notes thereto which have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").
Additional information about the Company, including the Company's press releases, quarterly and annual reports is available through the Company's filings with the securities regulatory authorities in Canada at www.sedarplus.com or the United States Securities Exchange Commission ("SEC") at www.sec.gov/edgar. Information about mineral resources, as well as risks associated with investing in the Company's securities is also contained in the Company's most recently filed Form 10-K.
John Banning, Chief Executive Officer for the Company, is a Qualified Person ("QP") under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), and has approved the scientific and technical information in this MD&A.
ABOUT LION COPPER
Lion Copper was incorporated in British Columbia, Canada, on May 11, 1993, and its common shares are listed on the Canadian Securities Exchange ("CSE") under the symbol "LEO "and quoted for trading on the OTCQB Market under the symbol "LCGMF".
During the second quarter ended June 30, 2022, the Company determined that it no longer met the definition of a foreign private issuer under U.S. securities laws because more than 50% of its outstanding voting common shares being held, directly or indirectly, by U.S. residents, most of its directors being U.S. citizens, and its primary operations are in the United States. Consequently, the Company adopted U.S. GAAP accounting policies and the SEC reporting system effective January 1, 2023.
On March 18, 2022, the Company entered an option to earn-in agreement with Rio Tinto America Inc. ("Rio Tinto"), subsequently assigned to Nuton LLC, a Rio Tinto Venture, (the "Nuton Agreement"), to advance studies and exploration at the Company's copper projects in Mason Valley, Nevada. The Nuton Agreement outlines 3-stage investments, including a fully funded feasibility study, to earn a 65% interest in the projects, comprising 34,494 acres of land, including the historical Yerington mine, the historic MacArthur project, the Wassuk property, the Bear deposit, and associated water rights (the "Mining Assets").
Nuton LLC is evaluating the potential commercial deployment of its Nuton™ technology at the Company's Yerington Copper Project. Nuton™ offers copper heap leaching technologies to deliver greater copper recovery from mined materials and access new sources of copper, such as low-grade sulfide resources and reprocessing of stockpiles and mineralized waste. These technologies have the potential to deliver leading environmental performance through more efficient water usage, lower carbon emission, and the ability to reclaim mine sites by reprocessing waste.
In October 2023 and November 2024, Stage 2 was modified into Stage 2b and Stage 2c, with the respective terms extended to September 30, 2024 and June 30, 2025. Stage 2c includes advanced studies at Yerington and completion of a Pre-Feasibility Study (the "PFS") incorporating Nuton™ technologies.
As of June 30, 2025, the Company had received a total of $28,000 funding from Nuton LLC, of which $19,000 was advanced from Stage 3. The Company incurred cumulative expenditures of $25,639, consisting of $17,674 for exploration & evaluation, $7,198 for exploration-related overhead, and $767 for capital items under the Nuton Agreement.
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Under the Nuton Agreement, within 60 days of the completion of Stage 2c, Nuton LLC shall provide written notice to the Company whether it elects to advance to Stage 3 and fund a comprehensive Feasibility Study (the "FS") not to exceed $50,000, including $19,000 advanced from Stage 3. The Company issued a press release on August 5, 2025, announcing the results of the PFS for its Yerington Copper Project and expects to publish the PFS technical report by September 18, 2025. Upon completion of the FS, Nuton LLC and the Company will decide whether to create an investment vehicle into which the Mining Assets will be transferred, with Nuton LLC holding not less than 65% interest in the investment vehicle.
PERFORMANCE HIGHLIGHTS
Completion of Pre-Feasibility Study for Yerington Copper Project
On August 5, 2025, the Company announced the results of a PFS on its 100% owned Yerington Copper Project. The PFS demonstrated a post-tax NPV (7%) of $694 million and an IRR of 14.6% based on a copper price of $4.30/lb. The study estimates average annual production of 120 million pounds of refined copper cathode over a 12-year mine life, with a peak of 151 million pounds in Years 5-7.
Reinstatement of Water Rights
On March 13, 2025, the Company announced the successful negotiation of a settlement agreement with the Nevada Division of Water Resources and the Nevada State Engineering (collectively, the "State") to reinstate 3,452.8 ac-ft of previously forfeited water rights essential for the development of the Yerington Copper project. As a result, the State has officially rescinded its notice of forfeiture, thus restoring all the Company's 6,014.5 ac-ft of water rights to good standing. This Settlement Agreement effectively terminates the legal proceedings initiated by the Company to defend its water rights.
MINERAL PROPERTIES
PFS Work Programs
During the year ending December 31, 2024 and six months ended June 30, 2025, PFS progressive work for the Yerington Copper Project included geotechnical drilling and studies, metallurgical testing, and engineering studies along with the development of mine operating permitting strategies.
Fourteen hollow stem auger drill holes were completed in January 2025 on the legacy sulfide tailings facility. These drill holes collected samples, which have been utilized for laboratory testing to evaluate and optimize infrastructure locations for the PFS.
Metallurgical column leach testing of MacArthur and Yerington transition and oxide material, which started in September 2024, was completed in January 2025. Column leach testing of sulfides is ongoing by Nuton™. Results from the metallurgical programs were utilized for the PFS.
Water Rights
Separate from the reinstatement of the Company's water rights, on May 20, 2025, the Company participated in a prehearing conference at the Nevada Division of Water Resources (NDWR) office in Carson City, Nevada in the matter of protested applications 93718-93721 and 93723-93725 to change points of diversion, places of use, and/or manner of use for existing water rights. The prehearing conference was held as part of the statutory process for resolving protested water rights applications.
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On June 26, 2025, the Company received a Notice of Procedures and Disclosures from NDWR, which provided notice from the Stage Engineer that he intends to hold a hearing to consider the matter of protested Applications 93718 through 93725. The received Notice follows the statutory process for resolving protested water rights applications, it outlines the schedule for evidentiary exchange and the issues to be addressed by the parties.
Bear Deposit
Studies were conducted and are ongoing to evaluate the Mineral Resource estimate potential of the Bear Deposit.
RESULTS OF OPERATIONS
During the three and six months ended June 30, 2025, excluding non-cash items, the Company incurred $2,386 and $4,955 expenses, compared to $3,746 and $7,567 during the same period in 2024. Approximately 83% of these expenses were covered by Nuton LLC, with the net expenses being equally attributed to corporate and Falcon Copper-related project expenditure that were not covered by Nuton LLC.
Exploration and evaluation ("E&E") activities include drilling, technical study, property maintenance, environmental, geological mapping and geophysical survey. The Company focused on completing its PFS during the 2025 period, resulting in significantly lower drilling and field work-related expenses compared to 2024.
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Expenses | $ | $ | $ | $ | ||||||||
| Exploration and evaluation | 987 | 2,389 | 2,150 | 5,049 | ||||||||
| General and administrative | 109 | 164 | 217 | 381 | ||||||||
| Investor Relations | 58 | 11 | 77 | 23 | ||||||||
| Professional fees | 654 | 636 | 1,358 | 1,118 | ||||||||
| Salaries and benefits | 540 | 490 | 1,035 | 879 | ||||||||
| Transfer agent and regulatory | 19 | 22 | 56 | 60 | ||||||||
| Travel | 19 | 35 | 62 | 58 | ||||||||
| 2,386 | 3,747 | 4,955 | 7,568 | |||||||||
| Exploration funded by Nuton LLC | (963 | ) | (2,343 | ) | (2,051 | ) | (4,930 | ) | ||||
| General operating funded by Nuton LLC | (977 | ) | (759 | ) | (2,102 | ) | (1,390 | ) | ||||
| 446 | 645 | 802 | 1,248 | |||||||||
| Other expenses | ||||||||||||
| Loss on convertible debentures | - | - | - | 1,750 | ||||||||
| Fair value gain on derivative liabilities | 1,008 | 427 | 1,782 | (253 | ) | |||||||
| Foreign exchange (gain) loss | (19 | ) | 7 | 11 | 8 | |||||||
| Interest and other expenses | 76 | 95 | 148 | 214 | ||||||||
| Share-based payments | 171 | - | 1,257 | 660 | ||||||||
| 1,236 | 529 | 3,198 | 2,379 | |||||||||
| Net and comprehensive loss | 1,682 | 1,174 | 4,000 | 3,627 | ||||||||
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During the three and six months ended June 30, 2025, the Company recognized $171 and $1,257 in share-based payments, respectively, compared to $Nil and $660 in the prior periods. The increase is due to the 12,180,000 options that were granted in the current period in FCC coupled with the vesting of options previously granted in LCG. This compares to the grant of 14,295,000 options in the prior period.
In addition, the Company recognized a loss of $1,750 on the conversion, repayment, and extinguishment of certain convertible debentures in 2024, which was not applicable in 2025.
SUMMARY OF QUARTERLY RESULTS
| Q2'25 | Q1'25 | Q4'24 | Q3'24 | Q2'24 | Q1'24 | Q4'23 | Q3'23 | |||||||||||||||||
| General administration | (1,570 | ) | (2,492 | ) | (1,856 | ) | (1,502 | ) | (1,358 | ) | (1,821 | ) | (1,161 | ) | (2,148 | ) | ||||||||
| Fair value (loss) gain on derivative liabilities | (1,008 | ) | (774 | ) | 39 | 439 | (427 | ) | 680 | (131 | ) | 6 | ||||||||||||
| Foreign exchange gain (loss) | 19 | (30 | ) | (28 | ) | (4 | ) | (7 | ) | (1 | ) | (2 | ) | - | ||||||||||
| Interest and other expenses (income) | (76 | ) | (72 | ) | 387 | (41 | ) | (95 | ) | (119 | ) | (407 | ) | (94 | ) | |||||||||
| Loss on convertible debentures | - | - | - | - | - | (1,750 | ) | - | - | |||||||||||||||
| Exploration expenditures | (987 | ) | (1,163 | ) | (1,603 | ) | (1,591 | ) | (2,389 | ) | (2,660 | ) | (1,597 | ) | (1,344 | ) | ||||||||
| Nuton LLC deposit | 1,940 | 2,213 | 2,310 | 2,336 | 3,102 | 3,218 | 1,682 | 1,262 | ||||||||||||||||
| Net loss | (1,682 | ) | (2,318 | ) | (751 | ) | (363 | ) | (1,174 | ) | (2,453 | ) | (1,616 | ) | (2,318 | ) | ||||||||
| Basic loss per share | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) |
The Company's results have been driven by its general corporate and exploration activities. Other income and expenses fluctuate due to changes in the fair value of the Company's convertible notes and investment in associate.
The Company's results are also impacted by non-recurring events such as the $1,750 loss in convertible debentures in 2024.
LIQUIDITY AND CAPITAL RESOURCES
The Company is in an advanced exploration stage that to date has not earned any revenue. Its operations have been dependent mainly on the Nuton LLC funding in the last few years without diluting shareholders' value.
During the six months ended June 30, 2025, the Company utilized the $16,500 previously received from Nuton LLC, to cover approximately 84% (2024 - 84%) of the expenses, excluding non-cash items. Cash on hand is approximately $7,800, including $3,800 from FCC, as of August 14, 2025.
The following table summarizes the Company's cash flows for the six months ended June 30, 2025, and 2024:
| 2025 | 2024 | |||||
| Cash provided (used) by operating activities | $ | (5,149 | ) | $ | 4,490 | |
| Cash used in investing activities | (225 | ) | (155 | ) | ||
| Cash provided by financing activities | 936 | 1,673 | ||||
| Increase in cash and cash equivalents | (4,438 | ) | 6,008 | |||
| Cash and cash equivalents, beginning of period | 7,999 | 2,310 | ||||
| Cash and cash equivalents, end of period | $ | 3,561 | $ | 8,318 |
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During the six months ended June 30, 2025, the Company repaid $6 in convertible debentures and received $44 in proceeds relating to the exercise of stock options. The Company also received $482 pursuant to the issuance of 4,150,000 shares of FCC. FCC also issued 12-month convertible debentures totaling $416.
On July 24, 2025, FCC issued $4,065 in convertible debentures at a 10% discount. The debentures are convertible into common shares of FCC and mature nine months from the issue date. Each debenture holder received bonus preferred shares equal to 20% of the debenture’s face value.
The Company has no operating revenues and therefore must utilize its cashflows from financing transactions to maintain its capacity to meet ongoing operating activities. Should Nuton LLC decide not to proceed with Stage 3, the Company will need to secure additional financing to maintain its mineral property interests, advance its copper projects and fulfill its obligations as they come due. While the Company has successfully raised funds in the past, there is no assurance it will be able to do so in the future. This represents material uncertainty that may cast substantial doubt about the Company's ability to continue as a going concern, as outlined in Note 1 of the June 30, 2025 condensed interim consolidated financial statements.
TRANSACTIONS WITH RELATED PARTIES
The Company's related parties include its directors and officers whose remuneration was as follows, subject to change of control provisions for officers:
| (In thousands) | Six months ended June 30, 2025 |
Six months ended June 30, 2024 |
||||
| Salaries (1) | $ | 405 | $ | 212 | ||
| Share-based payments (2) | 719 | 281 | ||||
| Interest on convertible debenture (3) | - | 126 | ||||
| $ | 1,124 | $ | 619 |
(1) Charles Travis Naugle, former CEO, Director - $72 (2024 - $104); Stephen Goodman, former CFO, Director - $Nil (2024 - $83); Steven Dischler, former CEO - $82 (2024 - $17); Lei Wang, CFO - $45 (2024 - $8); John Banning, CEO, former COO - $118 (2024 - $Nil); Doug Stiles, VP of Sustainability and Environment - $88 (2024 - $Nil)
(2) Charles Travis Naugle, former CEO, Director - $471 (2024 - $Nil); Stephen Goodman, former CFO Director - $Nil (2024 - $66); Tony Alford, Director - $47 (2024 - $215), Thomas Patton, Director - $47 (2024 - $Nil); Steven Dischler, former CEO - $44 (2024 - $Nil); John Banning, CEO, former COO - $43 (2024 - $Nil); Doug Stiles, VP of Sustainability and Environment - $29 (2024 - $Nil); Lukas Naugle, brother of a director - $38 (2024 - $Nil)
(3) Charles Travis Naugle, former CEO, Director - $Nil (2024 - $40); Tony Alford, Director - $Nil (2024 - $79); Ekaterina Naugle, spouse of a director - $Nil (2024 - $5); Stephen Goodman, former CFO, Director $Nil (2024 - $2).
These transactions have occurred in the normal course of the business and are measured at the equivalent amount of the services rendered.
OUTSTANDING SHARE INFORMATION
As of the date of this MD&A, the Company has:
-
411,891,862 common shares
-
69,504,650 stock options exercisable at prices ranging from CAD 0.072 to CAD 0.245, with expiration dates between August 18, 2025 and April 4, 2030
-
94,780,289 warrants exercisable at approximately $0.06 expirying from March 8, 2029 through November 8, 2029
OFF - BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements as of this MD&A date.
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PROPOSED TRANSACTIONS
The Company has no proposed transactions other than as disclosed in this MD&A.
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis contains "forward-looking information" and "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and other applicable securities laws.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategy", "goals", "objectives", "potential", "possible" or variations thereof or stating that certain actions, events, conditions or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
The Forward-Looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Statements. Such factors include, but are not limited to, general business and economic uncertainties; exploration and resource extraction risks; uncertainties relating to surface rights; the actual results of current exploration activities; the outcome of negotiations; conclusions of economic evaluations and studies; future prices of natural resource based commodities; increased competition in the natural resource industry for properties, equipment and qualified personnel; risks associated with environmental compliance and permitting, including those created by changes in environmental legislation and regulation; the risk of arbitrary changes in law; title risks; and the risk of loss of key personnel.
The foregoing lists of factors and assumptions are not exhaustive. The reader should also consider carefully the matters discussed under the heading "Risk Factors and Uncertainties" elsewhere in this MD&A. Forward-Looking Statements contained herein are made as of the date hereof (or as of the date of a document incorporated herein by reference, as applicable). No obligation is undertaken to update publicly or otherwise revise any Forward-Looking Statements or the foregoing lists of factors and assumptions, whether as a result of new information, future events or results or otherwise, except as required by law. Because Forward-Looking Statements are inherently uncertain, readers should not place undue reliance on them. The Forward-Looking Statements contained herein are expressly qualified in their entirety by this cautionary statement.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Disclosure controls and procedures
The Company's management is responsible for establishing and maintaining adequate disclosure controls and procedures. The Company's management, including our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on that evaluation, the principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, the Company has maintained effective disclosure controls and procedures in all material respects, including those necessary to ensure that information required to be disclosed in reports filed or submitted with the SEC (i) is recorded, processed, and reported within the time periods specified by the SEC, and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow for timely decision regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not aware of any material current, pending, or threatened litigation with respect to the Company.
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
The Company has no active mining operations or dormant mining assets currently and has no outstanding mine safety violations or other regulatory safety matters to report.
Item 5. Other Information
Not applicable.
Item 6. Exhibits
________________
(1) Previously filed as exhibit to the Form 20-F filed April 30, 2020 and incorporated herein by reference.
(2) Previously filed as exhibit to the Form 10-K filed March 31, 2023 and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 14, 2025
| LION COPPER AND GOLD CORP. | ||
| (Registrant) | ||
| By: | /s/ John Banning | |
| Principal Executive Officer | ||
| By: | /s/ Lei Wang | |
| Principal Financial Officer | ||