NexMetals Mining Corp 10-K for FY2024
NexMetals Mining Corp. (NEXM)
About this 10-K
NexMetals Mining Corp filed this 10-K on March 20, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- 42.42M CAD
- compared with a net loss of 32.38M CAD a year earlier
- Diluted EPS
- 0.25 CAD
- unchanged from 0.25 CAD a year earlier
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For
the fiscal year ended
or
For the transition period from _______ to _______
Commission
File Number:
(Exact Name of Registrant as Specified in Its Charter)
| Province
of Ontario, |
||
| (State
or Other Jurisdiction of Incorporation or Organization) |
(I.R.S.
Employer Identification No.) | |
| ||
| Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code
Securities
registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common
Shares
(Title of class)
Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the Registrant is not required to file Reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
Indicate
by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant
was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small Reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller Reporting company | ||
| Emerging Growth company |
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 has filed a Report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial Reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit Report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The
aggregate market value of the voting and non-voting common equity held by non-affiliates on June 30, 2024, was approximately US$
As of March 19, 2025, there were Common Shares issued and outstanding.
PREMIUM RESOURCES LTD.
Annual
Report on Form 10-K
For the year ended December 31, 2024
TABLE OF CONTENTS
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Part
I
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K (this “Report”) for Premium Resources Ltd. (the “Company” or “PREM”) (as defined herein), contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. These risks and other factors include those listed under “Risk Factors” in Part I, Item 1A and elsewhere in this Report. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail under the heading “Risk Factors”. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date hereof. You should read this Report and the documents that we have filed as exhibits to this Report completely and with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless otherwise indicated, all references to “$”, “C$” and “dollars” in this Report refer to Canadian dollars, references to “US$” in this Report refer to United States dollars and references to “BWP” in this Report refer to Botswanan pula. On December 31, 2024, the daily exchange rate: (i) for one United States dollar expressed in Canadian dollars was US$1.00 = C$1.4389 (or C$1.00 = US$0.6950); (ii) for one Botswanan pula expressed in Canadian dollars was BWP 1.00 = C$0.1018 (or C$1.00 = BWP 9.8232); and (iii) for one Botswanan pula expressed in United States dollars was BWP 1.00 = US$0.0707 (or US$1.00 = BWP 14.1346). “This quarter” or “the quarter” means the fourth quarter (“Q4”) of 2024. “Year-to-date” or “year-to-date period” means the twelve months ended December 31 (“YTD”).
Item 1. BUSINESS.
Premium Resources Ltd. and its wholly-owned subsidiaries’ principal business activity is the exploration and evaluation of PREM’s flagship asset, the Selebi nickel-copper-cobalt sulphide mine in Botswana and, separately, the Company’s Selkirk nickel-copper-cobalt-platinum group elements sulphide mine, also in Botswana. The common shares of PREM (“Common Shares”) are listed and posted for trading on the TSX Venture Exchange (the “TSXV”) under the symbol “PREM”. Prior to November 20, 2024, the Company traded on the TSXV under its previous name and symbol, Premium Nickel Resources Ltd. and PNRL, respectively. In addition, the Common Shares are currently quoted on the OTC Pink Open Market under the symbol “PRMLF”.
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The following corporate structure chart sets out details of the direct and indirect ownership of the principal subsidiaries of the Company:
Notes:
| (1) | Premium Nickel Group Proprietary Limited (“PNGPL”) owns the Selkirk Assets (as defined below). | |
| (2) | Premium Nickel Resources Proprietary Limited (“PNRPL”) owns the Selebi Assets (as defined below). |
The Company’s head and registered office is located at One First Canadian Place, 100 King Street West, Suite 3400, Toronto, Ontario, Canada, M5X 1A4.
PREM is a mineral exploration and evaluation company focused on the discovery and advancement of high-quality nickel-copper-cobalt-platinum group elements (“Ni-Cu-Co-PGE”) resources. The principal assets of the Company are the Selebi and Selebi North nickel-copper-cobalt (“Ni-Cu-Co”) mines in Botswana and related infrastructure (together, the “Selebi Mines”), as well as the Ni-Cu-Co-PGE Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licences (collectively, the “Selkirk Mine” and together with the Selebi Mines, the “Mines”).
The Selebi and Selkirk mines are permitted with 10-year mining licences, granted in 2022, and renewable upon the submission of approved mine plans and other customary conditions, and benefit from significant local infrastructure. The Company’s flagship Selebi Mines includes two operational shafts, the Selebi and Selebi North shafts, and related infrastructure such as rail, power and roads.
Summary of Activities
In 2023, PREM commenced its Phase 2 drill program undertaking a combination of resource and continued exploration drilling at the Selebi Mines to demonstrate the size potential of the Selebi Mines mineral system, with the aim of establishing an initial mineral resource estimate on the Selebi Mines (the “Initial Selebi MRE”).
On December 23, 2024, the Company filed the Initial Selebi MRE in conformance with the United States Securities and Exchange Commission’s (“SEC”) Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary, entitled “S-K 1300 Technical Report Summary, Selebi Mines, Central District, Republic of Botswana” (the “Selebi TRS”) and dated December 17, 2024 (with an effective date of June 30, 2024) for its Selebi Mines. The Initial Selebi MRE will serve as the basis for future engineering and economic studies.
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The Selebi North underground (“SNUG”) resource and exploration drilling program continued throughout 2024 and into 2025. During 2024 and up to the date of this Report, the Company has drilled approximately 45,827 metres in 87 holes, bringing the SNUG drilling program total to 63,947 metres in 162 holes. Assays for a total of 33,963 metres across 80 completed holes have not been accounted for in the Initial Selebi MRE.
The Company has begun testing the deeper borehole electromagnetic (“BHEM”) plates from N2 Limb and South Limb at SNUG. These assay results will continue to be released as they are received and confirmed by the Company.
During 2024, drill core from 17 historic holes at the Selkirk Mine were resampled to augment the historical database. Prospecting licences were explored through data compilation, differential global positioning system (“DGPS”) of historic collars, surface prospecting, and two surface electromagnetic (“EM”) surveys. Resampling of additional holes is underway with 20 holes transferred from Selkirk to the core processing facility at Selebi.
On January 31, 2025, the Company filed the Selkirk MRE in conformance with the SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary, entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” (the “Selkirk TRS”) and dated January 8, 2025 (with an effective date of November 1, 2024) for its Selkirk Mine. The Selkirk MRE serves as a solid foundation for advancing the Selkirk deposit to an economic study.
For more information relating to the contemplated activities and milestones on the Mines, please see “Properties – Mining Properties – Selebi Mines” and “Properties – Mining Properties – Selkirk Mine” below.
Highlights and Key Developments
| ● | On January 1, 2024, James Gowans was appointed as the Chair of the board of directors (the “Board of Directors” or the “Board”). | |
| ● | Since January 1, 2024, the Company has reported assay results from the Selebi Mines from a total of 88 drill holes and 1 hole extension, pursuant to news releases issued from January 18, 2024 to January 27, 2025, the full text of which are available on the Company’s website (https://premiumresources.com/). The Company’s website is not incorporated in this Report. | |
| ● | On June 14 and June 21, 2024, the Company closed two tranches of a non-brokered private placement offering of units of the Company (the “Units”), pursuant to which the Company issued a total of 35,256,409 Units at a price of $0.78 per Unit for gross proceeds of approximately $27.5 million (the “June 2024 Financing”). Each Unit is comprised of one Common Share and one Common Share purchase warrant. For a more detailed summary of the June 2024 Financing, see “Liquidity & Capital Resources — Financings”. | |
| ● | On June 24, 2024, Norman MacDonald was appointed to the Board of Directors. | |
| ● | On September 19, 2024, the Company announced the appointment of Paul Martin to the Board of Directors of the Company to fill a vacancy resulting from John Hick’s retirement from the Board of Directors. | |
| ● | On November 11, 2024, the Company announced the extension of the study phase for the Selebi Mines project pursuant to the terms of the Selebi asset purchase agreement (the “Selebi APA”) with the liquidator of BCL Limited (the “BCL Liquidator”). This extension follows successful completion by the Company of the work and investment milestones required by the Selebi APA. It provides the Company with an additional one year, to February 1, 2026, to complete an economic study and make the next milestone payment, in the amount of US$25 million, under the Selebi APA. | |
| ● | On November 18, 2024, the Company announced that it had changed its name from “Premium Nickel Resources Ltd.” to “Premium Resources Ltd.” Further, on November 20, 2024, the Company’s Common Shares commenced trading under the new name and new stock ticker symbol “PREM”. |
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| ● | On December 2, 2024, the Company announced the retirement of Keith Morrison as Chief Executive Officer and a director of PREM, effective December 31, 2024. As of such date, Paul Martin began serving as the Company’s Interim Chief Executive Officer. | |
| ● | On December 23, 2024, the Company filed the Selebi TRS. For details of the Initial Selebi MRE, see “Properties – Mining Properties – Selebi Mines”. | |
| ● | On January 31, 2025, the Company filed the Selkirk TRS. For details of the Selkirk MRE, see “Properties – Mining Properties – Selkirk Mine”. | |
| ● | On March 18, 2025, the Company announced the closing of a significant refinancing, including the introduction of a new strategic investor group and the deleveraging of its balance sheet with the conversion of its three-year term loan (the “Term Loan”) with Cymbria Corporation (“Cymbria”) into equity. See “Liquidity & Capital Resources – Financings”. On closing of the financing, Morgan Lekstrom was appointed Chief Executive Officer effective March 20, 2025. Mr. Lekstrom will also join the Board of Directors of the Company. James K. Gowans will retire as Chair of the Board but continue as a director of PREM, and Paul Martin will transition from his role as Interim Chief Executive Officer to Chairman of the Board. |
Corporate Social Responsibility
The Company is committed to conducting its business in a socially responsible and sustainable manner, with a focus on environmental stewardship, health and safety, community engagement and ethical conduct. The Company has established policies and procedures in its Code of Business Conduct and Ethics to ensure compliance with applicable laws and regulations, as well as industry standards for responsible mining. PREM recognizes the importance of stakeholder engagement and works closely with local communities, indigenous groups and other stakeholders to ensure their concerns and perspectives are heard and addressed.
Exploration and Evaluation Activities
The following table outlines the key milestones, estimated timing and costs related to each of the Mines, based on the Company’s reasonable expectations, intended courses of action and current assumptions and judgement, with information based as of December 31, 2024.
| Key Milestones for Project | Expected Timing of Completion | Anticipated Costs | ||||
| Selebi Mines & Selkirk Mine | ||||||
Advancement towards economic studies(1) | Ongoing, costs to December 31, 2025 | $13 million to $16 million | ||||
| Operating costs | Ongoing, costs to December 31, 2025 | $13 million to $16 million | ||||
Notes:
| (1) | The key milestones are to complete the metallurgical studies, further drilling and advancement of underground development to support drilling, test the deep BHEM plates beneath the Selebi Main deposit, continue the assaying of historical drill core at Selkirk, and advance engineering studies. |
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Readers are cautioned that the above represents the opinions, assumptions and estimates of management considered reasonable at the date the statements are made and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those described above. See “Cautionary Note Regarding Forward-Looking Statements”.
Available Information
We file annual, quarterly, current reports and other information with the SEC. You may read and copy any reports, statement or other information that we file with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (202) 551-8090 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at the Internet site maintained by the SEC at http://www.sec.gov.
The Company’s website is https://premiumresources.com/. The Company’s website is not incorporated in this Report.
Item 1A. RISK FACTORS
The business of the Company being the exploration and evaluation of mineral properties in Botswana and Canada is speculative and involves a high degree of risk. These risks may have a material and adverse impact on the future operations, financial performance and condition of the Company and the value of the Common Shares. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
An investment in the Company’s Common Shares involves a high degree of risk. The following discussion highlights the risks and uncertainties we believe are material to the Company, but the following discussion does not necessarily include all the risks we may face and an investor in the Company’s Common Shares should not interpret the disclosure of a risk in the following discussion to state or imply that the risk has not already materialized. In evaluating an investment in the Company, the risks and uncertainties described below should be carefully considered. If any such risks occur, the business, financial condition and/or liquidity and results of operations of the Company could be materially adversely affected. In this event, the value of the Common Shares could decline and shareholders could lose all or part of their investment.
Further, the Company’s view of risks is not static, and readers are cautioned that there can be no assurance that all risks to the Company, at any point in time, can be accurately identified, assessed as to significance or impact, managed or effectively controlled or mitigated. There can be additional new or elevated risks to the Company that are not described herein or in the Company’s public filings to date.
The summary and risks that follow are organized under headings as determined to be most applicable, but such risks also may be relevant to other headings.
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I. RISKS RELATED TO EXPLORATION & EVALUATION PROJECTS
Inherent risks associated with discovering commercially-viable deposits
The Company’s projects are in their exploration and evaluation stages. The exploration of mineral deposits involves significant financial risks over a prolonged period of time, which may not be eliminated even through a combination of careful evaluation, experience and knowledge.
Most exploration projects do not result in the discovery of commercially-mineralized deposits. The commercial viability of exploiting any precious or base-metal deposit is dependent on a number of factors including infrastructure and governmental regulation, in particular those relating to environment, taxes and royalties. No assurance can be given that minerals will be discovered of sufficient quality, size and grade on any of the Company’s properties to justify a commercial operation.
Development of the Company’s properties will occur only after obtaining satisfactory exploration results. Although the Company’s properties were past producing, few properties which are explored are ultimately developed into economically viable operating mines. There is no assurance that the Company’s mineral exploration activities will result in the discovery of a body of commercial ore on its exploration properties. Several years may pass between the discovery and development of commercial mineable mineralized deposits.
Exploration projects also face significant operational risks including but not limited to an inability to obtain access rights to properties, accidents, equipment breakdowns, labour disputes (including work stoppages and strikes), impact of health epidemics and other outbreaks of communicable diseases and other unanticipated interruptions
Ability to establish our mineral reserves
The Company is a mineral exploration and development company that is focused on the redevelopment of the previously producing Mines. To that end, the Company’s properties have no established mineral reserves at this time. While the Selebi and Selkirk projects have mineral resource estimates (“MREs”), the Company has not yet established any proven or probable mineral reserves on the Selebi Mines or Selkirk Mine projects. The lack of established mineral reserves means that the economic viability of the Selebi and Selkirk projects has not been confirmed. There is no assurance that further exploration will lead to the discovery of an economically viable mineral deposit.
Further, there is no assurance that any of the Company’s projects can be mined profitably. Accordingly, it is not assured that the Company will realize any profits in the short to medium term, if at all. Any profitability in the future from the business of the Company will be dependent upon the development and commercial mining of economically viable mineral deposits, which in itself is subject to numerous risk factors.
The exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time that even a combination of management’s careful evaluation, experience and knowledge may not eliminate. Few properties that are explored are ultimately developed into producing mines. Major expenses may be required to establish resources and reserves by drilling and to construct mining and processing facilities at a particular site. It is impossible to ensure that current work programs of the Company will result in profitable commercial mining operations. The profitability of the Company’s operations will be, in part, directly related to the cost and success of its work programs, which may be affected by a number of factors. Substantial expenditures are required to establish mineral reserves that are sufficient to support commercial mining operations.
Inherent risks associated with the economics of developing mineral properties
Substantial expenses are required to establish and upgrade mineral resources and mineral reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operation or that the funds required for development can be obtained on a timely basis.
The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond the Company’s control and which cannot be predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Depending on the price of minerals produced, the Company may determine that it is impractical to commence commercial production.
II. FINANCIAL RISKS
Negative operating cash flow, reliance on additional financing, and ability to continue operations as a going concern
The Company has negative cash flow from operations. As a result of the expected expenditures to be incurred by the Company for the exploration and advancement of the Company’s material projects, the Company anticipates that negative operating cash flows will continue until one or both of the Company’s material projects enters commercial production (if at all). There can be no assurance that the Company will generate positive cash flow from operations in the future.
The Company will require additional capital in order to fund its future activities for its material projects and maintain and grow its operations. Furthermore, additional financing, whether through the issue of additional equity and/or debt securities and/or project level debt, will be required to continue the development of the Company’s material projects and there is no assurance that additional capital or other types of financing will be available or that these financings will be on terms at least as favourable to the Company as those previously obtained, or at all. These material uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. The accompanying Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities, and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material. In assessing whether a going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the date of this Report.
From time to time, the Company may issue new shares, seek debt financing, dispose of assets, or enter into transactions to acquire assets or shares of other corporations. These transactions may be financed wholly or partially with debt, which may temporarily increase the Company’s debt levels above industry standards.
Failure to obtain additional financing or to achieve profitability and positive operating cash flows will have a material adverse effect on its financial condition and results of operations.
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III. OPERATIONAL RISKS
Uninsured risks and hazards
Mining is capital intensive and subject to a number of risks and hazards, including environmental pollution, accidents or spills, industrial and transportation accidents, labour disputes, changes in the regulatory environment, natural phenomena (such as inclement weather conditions, earthquakes, pit wall failures and cave-ins) and encountering unusual or unexpected geological conditions. Such risks and hazards might impact the Company’s business. Consequently, many of the foregoing risks and hazards could result in damage to, or destruction of, the Company’s mineral properties or future processing facilities, personal injury or death, environmental damage, delays in or interruption of or cessation of exploration or other activities, delay in or inability to receive required regulatory approvals, or costs, monetary losses and potential legal liability and adverse governmental action. The Company may be subject to liability or sustain loss for certain risks and hazards against which it does not or cannot insure or against which it may reasonably elect not to insure because of the cost. This lack of insurance coverage could result in material economic harm to the Company.
Risks of doing business outside Canada
The Company’s material mineral projects are located in the Republic of Botswana. The Company’s anticipated operations outside North America could subject the Company to a variety of additional risks that may negatively impact its business and operations including any of the following: changes in rules and regulations (including required royalties); failure of local parties to honour contractual relations; delays in obtaining or the inability to obtain necessary governmental permits; opposition to mining from environmental or other non-governmental organizations; limitations on foreign ownership; limitations on the repatriation of earnings; economic or tax policies; tariffs and trade barriers; regulations related to customs and import/export matters; longer payment cycles; tax issues; currency fluctuations and exchange controls; rates of inflation; challenges in collecting receivables; cultural and language differences; employment regulations; crimes, strikes, riots, civil disturbances, terrorist attacks, and wars; and deterioration of political relations with Canada or other governments or sanctions imposed by Canada or other governments. There will also be currency exchange risks in connection with the operations of the Company’s foreign mineral assets, including the Mines.
In addition, Botswana is considered an emerging market. Emerging market investments generally pose a greater degree of risk than investments in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from domestic and international developments. Further, the current, or a future government may adopt substantially different policies, take arbitrary action which might halt exploration or production, re-nationalize private assets or cancel contracts, or cancel mining or exploration rights, any of which could result in a material and adverse effect on the Company’s results of operations and financial condition.
Dependence on business and technical expertise of Management Team
The Company is dependent on the business and technical expertise of its management team. If it is unable to rely on this business and technical expertise, or if any of the expertise is inadequately performed, the business, financial condition and results of the operations of the Company could be materially adversely affected until such time as the expertise could be replaced.
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IV. RISKS RELATED TO OUR COMMON STOCK
Internal and external factors could impact the volatility of our Common Share price
The price of Common Shares may be affected by a number of factors, including global macroeconomic developments and market perceptions of the attractiveness of particular industries and location of assets, which may increase the volatility of Common Share prices. The price of Common Shares will also be affected by the Company’s financial conditions or results of operations as reflected in its liquidity position and earnings reports.
Other factors unrelated to the Company’s operations and performance that may have an effect on the price of Common Shares include: reduced trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of shares; the size of the Company’s public float may limit the ability of some institutions to invest in the Company’s securities; and a substantial decline in the price of Common Shares that persists for a significant period of time could cause the Company’s securities to be delisted, further reducing market liquidity.
As a result of any of these factors, the market price of Common Shares at any given point in time may not accurately reflect the Company’s long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
V. ECONOMIC AND MARKET RISKS
The volatility of commodity prices could affect the economic viability of our projects
The advancement of the Company’s properties is dependent on the future prices of minerals and metals. As well, should any of the Company’s properties eventually enter commercial production, the Company’s profitability will be significantly affected by changes in the market prices of minerals and metals.
Base and precious metals prices are subject to volatile price movements, which can be material and occur over short periods of time and which are affected by numerous factors, all of which are beyond the Company’s control. Such factors include, but are not limited to, actual and expected macroeconomic and political conditions, interest and exchange rates, inflation or deflation, fluctuations in the value of the U.S. dollar and foreign currencies, global and regional supply and demand, speculative trading, the costs of and levels of base and precious metals production, the availability and costs of substitutes, investments by commodity funds and other actions of participants in the commodity markets. Such external economic factors are in turn influenced by changes in international investment patterns, monetary systems, the strength of and confidence in the U.S. dollar (the currency in which the prices of base and precious metals are generally quoted), and political developments. The effect of these factors on the prices of base and precious metals, and therefore the economic viability of any of the Company’s exploration projects, cannot be accurately determined. The prices of commodities have historically fluctuated widely, and future price declines could cause the development of (and any future commercial production from) the Company’s properties to be impracticable or uneconomical. As such, the Company may determine that it is not economically feasible to commence commercial production at some or all of its properties, which could have a material adverse impact on the Company’s financial condition and results of operations. In such a circumstance, the Company may also curtail or suspend some or all of its exploration and evaluation activities.
Foreign currency and equity market fluctuations
The Company is also exposed to risks relating to its financial instruments and foreign currency. The Company operates in Canada, Barbados and Botswana and undertakes transactions denominated in foreign currencies such as United States dollars, Euros, and the Botswanan pula, and consequently is exposed to exchange rate risks. The Company is also exposed to equity price risk; the movements in individual equity prices or general movements in the level of the stock market may potentially have an adverse impact on the Company’s earnings. The Company closely monitors individual equity movements and the stock market to determine the appropriate course of action to be taken.
Acquisition of Botswana assets and related purchase commitments
On January 31, 2022, the Company closed the acquisition of the Selebi project. However, pursuant to the terms of the acquisition, the Company has to comply with certain milestone payments, which if not satisfied, will result in the Selebi project reverting to the BCL Liquidator. There are approximately US$55 million in contingent post-closing milestone payments due to the BCL Liquidator in connection with the Selebi project, with (i) US$25 million due on January 31, 2026, and (ii) another US$30 million due upon the earlier of the commissioning and start of production at the Selebi project or four years from the Selebi mining licence renewal date. The failure of the Company to comply with all the post-closing covenants and contingent milestone payments relating to the Selebi project (if and when those milestones are achieved), could materially adversely affect the business, operations and financial conditions of the Company and impact the market price of the Common Shares. In addition, PREM closed its purchase of the Selkirk Mine in August 2022.
VI. REGULATORY RISKS
Compliance with governmental regulation
Exploration, development, and operations on the Company’s properties will be affected to varying degrees by: (i) government regulations relating to such matters as environmental protection, health, safety and labor; (ii) mining law reform; (iii) restrictions on production, price controls, and tax increases; (iv) maintenance of claims; (v) tenure; and (vi) expropriation of property. There is no assurance that future changes in such regulation, if any, will not adversely affect the Company’s operations. Changes in such regulation could result in additional expenses and capital expenditures, availability of capital, competition, reserve uncertainty, potential conflicts of interest, title risks, dilution, and restrictions and delays in operations, the extent of which cannot be predicted. The Company is at the exploration and evaluation stages on its material properties. Exploration on the Company’s properties requires responsible best-exploration practices to comply with the Company’s policies, government regulations, and maintenance of claims and tenure.
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If any of the Company’s projects advance to the development stage, those operations will also be subject to various laws concerning development, production, taxes, labour standards, environmental protection, mine safety and other matters. In addition, new laws governing operations and activities of mining companies could have a material adverse impact on any project in the mine development stage that the Company may possess.
Ability to obtain or adhere to permits, licences and approvals
The operations of the Company require licences and permits from various governmental authorities. The Company believes it holds or is in the process of obtaining all necessary licences and permits to carry on the activities which it is currently conducting under applicable laws and regulations. Such licences and permits are subject to changes in regulations and in various operating circumstances. There can be no guarantee that the Company will be able to obtain all necessary licences and permits that may be required to maintain its mining activities or advance its mineral properties. In addition, if the Company proceeds to production on any exploration property, it must obtain and comply with permits and licences which may contain specific conditions concerning operating procedures, water use, the discharge of various materials into or on land, air or water, waste disposal, spills, environmental studies, abandonment and restoration plans and financial assurances. There can be no assurance that the Company will be able to obtain such permits and licences or that it will be able to comply with any such conditions.
Compliance with environmental regulations
All phases of the Company’s operations are subject to environmental regulation in the jurisdictions in which the Company operates. Environmental legislation is evolving in a manner which has been subject to stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulations, if any, will not adversely affect the Company’s operations. The cost of compliance with changes in governmental regulations has the potential to preclude entirely the economic development of a property. The Company has or will, as applicable, adopt environmental practices designed to ensure that it will comply with or exceed all environmental regulations currently applicable to it.
Changes in tax legislation or accounting rules could affect the profitability of the Company
Changes to, or differing interpretation of, taxation laws in Canada, Barbados, Botswana, or any of the countries in which the Company’s assets or relevant contracting parties are located, could result in some or all of the Company’s profits being subject to additional taxation. New taxation rules or accounting policies enacted could result in the Company’s profits being subject to additional taxation and could have a material adverse effect on the Company’s profitability, results of operations, financial condition and the trading price of the Company’s securities. In addition, the introduction of new tax rules or accounting policies, or changes to, or differing interpretations of, or application of, existing tax rules or accounting policies could make acquiring additional resource properties by the Company less attractive to counterparties. Such changes could adversely affect the Company’s ability to acquire new assets or make future investments.
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VII. EMERGING MARKETS RISKS
Operations in emerging markets
The Company has its material properties and operating subsidiaries in Botswana. It is possible that operating in Botswana may expose the Company to a certain degree of political, economic and other risks and uncertainties. In conducting its operations in Botswana, the Company has, among other things: (i) engaged and maintained experienced management and technical teams located in Botswana and/or with extensive experience in operating properties in Africa; (ii) certain members of the Board of Directors and management routinely visit the Company’s Botswana properties; (iii) retained advisors and technical experts in Botswana including its local counsel, Bookbinder Business Law (“Bookbinder”); and (iv) generally maintained robust internal control over its foreign subsidiaries, all of which are more particularly described below.
Subsidiaries and operations in Botswana
The Company’s principal business activity in Botswana is the re-development of the Mines.
The establishment and development of PNGPL and PNRPL, each of which is a Botswanan entity, adds an additional regulatory framework within which the Company operates and is supplementary to the regulatory framework existing in Canada. The Company holds its interest in the Selebi Mines and the Selkirk Mine indirectly through its 100% owned subsidiaries PNRPL and PNGPL, respectively.
The Company’s operating entities in Botswana are governed in accordance with applicable local laws and entity-wide governance principles. The directors and management of the Company’s operating entities in Botswana are generally comprised of a majority of senior management employees and where required by local laws, local residents, who are generally longstanding local management level employees, or local corporate counsel. In addition, certain members of the Company’s management have experience conducting business in Botswana, as detailed below, where the Company has maintained operations since 2021. Operating in Botswana requires greater internal controls and adherence to a regulatory framework which creates challenges in relation to decision-making, communication, and compliance. The Company has experienced management and has retained local legal advisors and consultants to help facilitate adherence to regulatory requirements of Botswana in order to meet this challenge.
We rely on our experienced Board and management
In addition to their experience with the Company, the Board of Directors and management also has extensive experience operating and managing investments and projects in Africa. Furthermore, they bring diverse expertise in areas such as global strategy, finance, exploration, technology, and corporate development. Their collective experience spans several decades and includes successful ventures in both public and private sectors. Certain members of the Board of Directors, management and senior officers of the Company have made trips to Botswana to gain a deeper understanding of the Company’s operations and projects as well as to impart their experience and knowledge of the local business, culture and practices to the other members of the Board of Directors and officers.
The Company also relies on the expertise of its local Botswana-based personnel, Mr. Borris Kamstra, Mr. Kneipe Setlhare, and Mr. Karabo Monepe, all of whom have extensive mining and government relations experience in Botswana.
Overall, the Company benefits from and relies on the collective wealth of expertise and experience in the Company’s business and operations in Botswana of its Board of Directors, management, locally based personnel and technical teams.
Use of and reliance on experts and local advisors
The Company has retained Bookbinder, a Botswanan law firm to advise on various corporate and regulatory legal issues, including the Company’s right to conduct business in Botswana and title verification over the Botswanan assets, and has relied on advice from Bookbinder with respect to such matters. Additionally, the Company has retained engineering and geoscientific services firms including SRK Consulting, SLR Consulting, DRA Global (“DRA”), SGS Mineral Services, and Expert Process Solutions. The Company ensures that any such counsel or provider retained has their credentials vetted and referenced, with considerable diligence and adherence to local licences, professional associations and regulators.
The Company’s officers and Board of Directors benefit from the advice and guidance provided by its Botswanan legal advisor as well as personnel based in Botswana of new developments in local mining regimes and new requirements that come into force from time to time, as they pertain to and affect the Company’s business and operations in Botswana. Any material developments are subject to oversight and discussion by the Board of Directors.
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Language, cultural differences and business practices
English is the official language of Botswana, in which the Audit and Risk Management Committee of the Company and the Company’s external auditors are proficient. The most widely spoken language in Botswana is Setswana. The languages spoken by the Board, management and technical team of the Company and its subsidiaries include Afrikaans, English and Setswana.
The financial records of the Company and both PNGPL and PNRPL, existing under the laws of Botswana are maintained in English. The Company does not believe that any material language or cultural barriers exist.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 1C. CYBERSECURITY
We, like other companies in our industry, face several cybersecurity risks in connection with our business. Our business strategy, results of operations, and financial condition have not, to date, been materially affected by risks from cybersecurity incidents or threats. During the reporting period, we have not, to our knowledge, experienced any material cybersecurity threats or incidents.
The
Company does not currently have
In designing and evaluating our cybersecurity program, we intend to adopt the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF 2.0”) as a guiding principle. It is important to clarify that our use of the NIST CSF 2.0 will be for guidance purposes to frame our risk identification, assessment and management processes and will not equate to compliance with any specific technical standards or requirements.
| ● | conducting risk assessments to pinpoint material cybersecurity threats to our critical systems, data, products, services, and overall IT infrastructure; | |
| ● | ||
| ● | engagement with external service providers to evaluate, enhance, or support our security measures; and | |
| ● | an incident response plan outlining specific procedures for managing cybersecurity incidents. |
Cybersecurity Governance
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Item 2. PROPERTIES.
In determining the Company’s material properties, management considered both quantitative and qualitative factors, assessed in the context of the Company’s overall business and financial condition. The Company concluded that, as of the date of the filing of this Report, the Company’s only material mining properties are the Selebi Mines and the Selkirk Mine. The Company will update its assessment of individually material mines on an annual basis.
The Company also holds interests in certain exploration stage properties located in Canada, however, the Company has determined that such properties are not independently material to the Company at this time. For more information, see below under the heading “Canada Nickel Projects – Sudbury, Ontario”.
Selebi Mines
The information that follows relating to the Selebi Mines is derived from, and in some instances is an extract from, the Selebi TRS. Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the Selebi TRS, which has been included as Exhibit 96.1 to this Report. In the event that we determine that any modifying factors, estimates and other scientific and technical information in the report materially change, we may update or file a new technical report in the future. The Selebi Mines is an exploration stage property.
Pursuant to Item 1302(b)(5) of Regulation S-K (17 C.F.R. §229.1302(b)(5)), the Company states that the Selebi TRS was prepared by SLR Consulting (Canada) Ltd (“SLR”). The qualified persons of SLR meet the qualifications specified under the definition of “qualified person” under Item 1300 of Regulation S-K.
Property Description and Location
The Selebi Mines are located in Botswana approximately 150 km southeast of the city of Francistown, and 410 km northeast of the national capital Gaborone. The Selebi Mines are readily accessed via paved and gravel roads from the town of Selebi-Phikwe, located just north of the mining licence. With a population of approximately 52,000, the town is accessed via a well-maintained paved road that branches due east from the major A1 highway at the town of Serule, 57 km from the Selebi Mines.
The Selebi Mines infrastructure includes two mines, currently on care and maintenance, Selebi (#2 Shaft) and Selebi North (#4 Shaft), and associated surface infrastructure.
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Land Tenure
The Selebi Mines consists of a single mining licence covering an area of 11,504 hectares. The mining licence is centered approximately at 22°03’00”S and 27°47’00”E.
Mining licence 2022/1L was granted to PNRPL on January 31, 2022, over the Selebi Mines deposits discovered under mining licence 4/72. The original licence which had been granted to BCL Limited (“BCL”) on March 7, 1972, which covered both Selebi and Phikwe project areas, was amended several times and renewed once, and was set to expire on March 6, 2022. The current mining licence is limited to the Selebi and Selebi North deposits and their surrounding areas, expires May 26, 2032, and excludes the Phikwe mines and associated infrastructure.
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History
Exploration in the Selebi Mines area was initiated in 1959 by Bamangwato Concessions Limited (“Bamangwato”) and included soil geochemistry, geological mapping, trenching, and diamond drilling over the then combined Selebi-Phikwe area. The Selebi and Phikwe discoveries were made in 1963 and 1967, respectively, and a single mining lease was granted to Bamangwato in 1967 covering both areas.
Bamangwato changed its name to BCL in 1977 and operated the combined Selebi-Phikwe project from 1970 until its closure in 2016. Nickel and copper ore was mined from an open pit at Phikwe (1971 to 1980), as well as four distinct underground production areas namely Phikwe (1981 to 2016), Southeast Extension (at Phikwe, 1997 to 2016), Selebi North (1990 to 2016) and Selebi (1980 to 2016). Head grades declined from 2010 to 2015 and in October 2016 BCL was placed into provisional liquidation and all its operations put under care and maintenance.
PREM acquired the Selebi Mines and current Selebi mining lease from the BCL Liquidator on January 31, 2022.
Geological Setting, Mineralization and Deposit
The eastern portion of Botswana forms part of the Limpopo Mobile Belt (“LMB”) which represents a deep crustal section through an orogenic province between the Kaapvaal and Zimbabwe Cratons.
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The Selebi Mines are located in highly deformed and metamorphosed Archean gneisses near the north margin of the central zone (“CZ”) of the LMB. The CZ region is characterized by complex structural fold patterns accompanied by regional and cataclastic metamorphism with grades ranging from amphibolite to granulite facies and cataclastic tectonites.
The deposits in the Selebi Mines area are categorized as ortho-magmatic nickel-copper sulphide-type deposits. They are hosted within amphibolite and understood as a tectono-metamorphically modified tholeiitic magma parents with an immiscible sulphide melt which has undergone all the phases of deformation that have affected the enclosing gneisses. They form part of the Selebi-Phikwe belt of intrusions that also contain the Phikwe, Dikoloti, Lentswe, and Phokoje deposits.
All mineralization horizons pinch and swell, are conformable to the gneissic foliation, and are hosted within or at the hanging wall contact of amphibolite with the gneissic country rocks. Mineralization horizons range in thickness from very thin to over 20 m thick and are commonly one to three metres thick (deposit dependent). Orientation follows country rock foliation, and the zones can dip moderately to steeply, and can extend from 150 m to over 2,000 m.
The principal sulphide minerals are pyrrhotite, chalcopyrite, and pentlandite which occur in massive, semi-massive, and disseminated form. Pyrite occurs as localized overgrowth. Magnetite occurs as rounded inclusions in massive sulphides and as later overgrowths.
Selebi Mines Mineral Resource Estimate, June 30, 2024:
| Tonnage | Grade | Contained Metal | ||||||||||||||||||||
| Classification | Deposit | (Mt) | (% Cu) | (% Ni) | (000 t Cu) | (000 t Ni) | ||||||||||||||||
| Indicated | Selebi North | 3.00 | 0.90 | 0.98 | 27.1 | 29.5 | ||||||||||||||||
| Total Indicated | 3.00 | 0.90 | 0.98 | 27.1 | 29.5 | |||||||||||||||||
| Inferred | Selebi Main | 18.89 | 1.69 | 0.88 | 319.2 | 165.5 | ||||||||||||||||
| Selebi North | 5.83 | 0.90 | 1.07 | 52.5 | 62.4 | |||||||||||||||||
| Total Inferred | 24.72 | 1.50 | 0.92 | 371.7 | 227.9 | |||||||||||||||||
The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the Selebi TRS. Readers are cautioned not to assume that all or any part of Indicated Mineral Resources will ever be converted into Mineral Reserves as defined by S-K 1300. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.
Exploration
Exploration work completed at the Selebi Mines from 2021 through to the date of this Report consisted of the sourcing and digitization of existing historical information, confirming collar and down hole location information of selected historical holes, and drilling. PREM also completed gyro, BHEM, televiewer, and downhole physical property surveys on selected high priority historical and recent exploration holes. A focused structural model over a portion of the Selebi deposit was developed by SRK Consulting Ltd. (“SRK”), and a 3D model of mineralization for use in targeting was created at Selebi North by SLR.
Selebi North
In August 2023, an underground resource and exploration drilling program at Selebi North was initiated, which continued throughout 2024 and into 2025. During 2024 and up to the filing of this Report, the Company has drilled approximately 45,827 metres in 87 holes, bringing the SNUG drilling program total to 63,947 metres in 162 holes. Assays for a total of 33,963 metres across 80 completed holes have not been accounted for in the Initial Selebi MRE. The program is a combination of infill and exploration drilling to follow the extension of the mineralization down-dip and down-plunge. The core is sampled and sent to ALS Chemex in Johannesburg for analysis. All holes were surveyed with a gyro instrument and selected holes were surveyed with BHEM. BHEM surveys have been completed in 89 underground holes.
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Selebi Main
A total of 748 metres of surface drilling has been completed at Selebi Main in 2024 and to date. Historic hole sd120 was wedged at 500 metres and sd120-W1a was drilled to a length of 1,201 metres. This new hole, sd120-W1a, completed in September 2024, intersected massive sulphides at a distance of 46 metres north-northeast (minegrid) from the historic hole. A second hole, sd102a, was wedged at 491 metres and abandoned at 538 metres.
Further information on assay results can be found in the Selebi TRS and the Company’s news releases, copies of which are available on the Company’s website (https://premiumresources.com/). The Company’s website is not incorporated in this Report. Assay results are publicly released as they are received and confirmed by the Company.
Studies
The historical BCL operations consisted of an integrated mining, concentrating and smelting complex which operated for over 40 years over the Selebi Phikwe project area. The smelter processed Selebi and Phikwe concentrates and toll treated nickel concentrates received from the Nkomati Nickel Mine and the Phoenix Mine. The concentrator plant and smelter were placed on care and maintenance in 2016 and are located adjacent to the Selebi Mines at the historical Phikwe Mine.
PREM intends to use pre-concentration methods to separate the minerals from waste materials to produce a mill feed and flotation to produce a concentrate for commercial sale, or for further refining, and does not plan to restart the existing concentrator or smelter. Concentrate options are being investigated and include a bulk concentrate and separate nickel and copper concentrates. In 2021, PREM carried out due diligence work that included metallurgical sampling and testing. Subsequent metallurgical study programs were carried out by SGS Canada Inc. (“SGS”) in Lakefield, Ontario for separate copper and nickel concentrate production at a conceptual level. In 2024, samples were collected from underground from both Selebi Main and Selebi North with flotation test work and pre-concentration studies ongoing for these samples.
Engineering trade off studies are nearing completion by DRA Global out of Johannesburg. These include alternative mining methods, electrification of the underground mining fleet, refurbishment of historical critical infrastructure, crushed ore conveying versus use of haul trucks, and blasting options.
During the year ended December 31, 2024, the Company incurred $28,017,207 (2023 - $21,469,132) in exploration and evaluation expenditures on the Selebi Mines. The Company incurred $8,735,401 to acquire the Selebi Mines, and has incurred a further $69,296,576 in exploration and evaluation expenditures project-to-date as at December 31, 2024.
Selkirk Mine
The information that follows relating to the Selkirk Mine is derived from, and in some instances is an extract from, the Selkirk TRS. Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the Selkirk TRS, which has been included as Exhibit 96.2 to this Report. The Selkirk TRS is incorporated herein by reference and made a part hereof. In the event that we determine that any modifying factors, estimates and other scientific and technical information in the report materially change, we may update or file a new technical report in the future. The Selkirk Mine is an exploration stage property.
Pursuant to Item 1302(b)(5) of Regulation S-K (17 C.F.R. §229.1302(b)(5)), the Company states that the Selkirk TRS was prepared by SLR. The qualified persons of SLR meet the qualifications specified under the definition of “qualified person” under Item 1300 of Regulation S-K.
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Property Description and Location
The Selkirk Mine is located in the northeast of Botswana approximately 28 km southeast of the city of Francistown, and 450 km northeast of the national capital Gaborone.
The Selkirk Mine is accessed year-round via paved and gravel roads from Gaborone and Francistown. The Selkirk Mine infrastructure includes relict surface infrastructure supporting the historical underground mine, and the original decline. The Selkirk Mine is quite flat, and beyond the mine footprint is covered in grassland with dispersed and clusters of trees typical of a tree savanna biome.
Land Tenure
The Selkirk Mine consists of a single mining licence covering an area of 1,458 hectares (14.58 km2) and four prospecting licences covering a total of 12,670 hectares (126.7 km2). The mining licence, 2022/7L, is centred approximately at 21°19’13” S and 27°44’17” E and is held by PNGPL, a subsidiary of PREM. The mining licence was renewed for ten years commencing on May 27, 2022, ending on May 26, 2032. The four prospecting licences (PL050/2010, PL051/2010, PL210/2010, and PL071/2011) expired September 30, 2024, and applications for renewal were submitted prior to the expiry date. The Company received verbal confirmation that they were renewed during the first quarter of 2025 and will expire September 30, 2026.
Infrastructure
The area is in a rural district and the available infrastructure is minimal. Strategic services (e.g., electricity and water supplies) could be provided by the Botswana Power Corporation and from existing governmental water pipelines within the Francistown Road Reserve, and potable water could be sourced on site from boreholes. A railway line crosses the western margin of the Selkirk area.
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History
Anglo American Corporation of South Africa established the presence of nickel and copper occurrences at the sites of the ancient copper workings in the area in 1929. Significant exploration started in the mid-1960s by the Tati Territory Exploration Company. The first exploration campaigns included soil sampling, trench sampling, ground geophysics, and diamond drilling. At least four exploration and mining companies have worked on the Selkirk Mine since the 1960s and extensive work has been done to characterize the economic potential of the property.
The Selkirk underground mine was operated from 1989 to 2002 by Tati Nickel Mining Company (“TNMC”), a company created specifically to exploit the deposit. More than 1 Mt of material grading 2.6% Ni and 1.6% Cu was extracted from a semi-elliptical deposit of massive sulphide up to 20 m thick. Since 2003, extensive exploration has been completed to characterize the lower-grade/higher-tonnage halo of disseminated sulphides both surrounding and down plunge (south) of the mined-out high-grade mineralization. Exploration and conceptual studies were conducted by Lion Ore Mining Pty Ltd and subsequently by Norilsk Nickel Group of Companies through their ownership in TNMC.
Geological Setting, Mineralization, and Deposit
The Selkirk Mine lies within the Tati granite-greenstone belt of the Zimbabwe Craton. The mineralized body of the Selkirk deposit is hosted within the Selkirk Formation (>1 km thick) which consists mainly of dacitic and rhyolitic volcaniclastic rocks and minor amounts of mafic volcanic rocks, quartzites, and quartz sericite schists. The Selkirk Formation hosts the Phoenix, Selkirk, and Tekwane meta-gabbronoritic intrusions and the Sikukwe meta-peridotite intrusion and the area around the project hosts intrusive magmatic nickel-copper-platinum group element sulphide deposits, namely the Phoenix deposit, as well as the Tekwane and Cinderella exploration prospects.
Two styles of mineralization are found at Selkirk: (1) massive sulphides (mined-out), located within the metagabbro intrusion as well as small, massive sulphide accumulations at the base of the taxitic metagabbro intrusive, and (2) matrix and disseminated sulphides as a halo surrounding and down-dip of the mined-out massive sulphide body. The disseminated zone that once included the mined-out sulphide lens, lies 50 m to 100 m above the basal contact of the footwall quartz diorite and mimics the footwall contact. Currently available drilling suggests that the shallow, previously mined, massive sulphide lens was synformal in shape and measured up to 70 m to 90 m wide, averaged 20 m thick, and had a plunge extent of 200 m.
The disseminated sulphide mineralization surrounding the massive sulphides is also synformal in shape, averages 120 m wide and 100 m to 150 m thick and plunges shallowly to the south at 25°. It is defined from surface over a distance of 900 m and remains open at depth. Mineralization consists of pentlandite, pyrrhotite, chalcopyrite and pyrite. At least three generations of dykes crosscut the mineralized metagabbro. Numerous faults traversing the deposit have been described in surface and underground mapping, none of which present significant displacement at the deposit scale. The Selkirk metagabbro host has been attributed an age of 2.7 Ga.
Selkirk Mine Mineral Resource Estimate, November 1, 2024:
| Classification | Tonnage | Grade | Contained Metal | |||||||||||||||||||||||||||||||||
| (Mt) | (% Cu) | (% Ni) | (g/t Pd) | (g/t Pt) | (000 t Cu) | (000 t Ni) | (000 oz Pd) | (000 oz Pt) | ||||||||||||||||||||||||||||
| Inferred | 44.2 | 0.30 | 0.24 | 0.55 | 0.12 | 132 | 108 | 775 | 174 | |||||||||||||||||||||||||||
The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the Selkirk TRS. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.
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Exploration
Exploration work completed by PREM to date has consisted of the sourcing and digitization of existing historical information, confirming collar location information on selected historical holes, re-logging selected drill core, sampling mineralized drill core found unsampled on surface, sampling underground drifts, and submitting a number of samples for proof-of-concept metallurgical testing. PREM has also initiated an internal study into the feasibility of the open pit concept and is exploring conceptually with limited test information several different processing options.
The Selkirk MRE serves as a solid foundation for advancing the Selkirk deposit to an economic study. It was prepared using results from 232 surface and 10 underground historical drillholes drilled between 2003 and 2016, five 2016 drillholes sampled by PREM in 2021, and 17 historical drillholes resampled in 2024. Analytical results from PREM re-sampling showed higher PGE values compared to historic results and additional resampling is expected to result in higher Pt and Pd grades and contained metal.
Further, the Selkirk MRE was prepared under the conceptual processing scenario of producing two separate concentrates. Additional work on alternate processing options may result in higher recoveries. Cobalt, a potentially valuable by-product, has not been included in the Selkirk MRE as cobalt analyses are not consistently available throughout the deposit. Planned metallurgical studies will determine payability of cobalt at the Selkirk Mine.
Exploration programs have also been ongoing at the prospecting licences located adjacent to the Selkirk mining licence, with a DGPS of seven historical drillhole collars and two surface electromagnetics surveys completed in Q2 2024. The strongest electromagnetic anomaly occurs over the Rooikoppie Prospect, a gossan that was targeted by BCL drill holes. These five holes were located, DGPS coordinates collected, and two holes, DRKP001 and 002, were sampled in Q3 2024. Assays showed no significant results in Ni, Cu, or PGEs.
Studies
PREM intends to use flotation to produce a concentrate for commercial sale or for further refining. Concentrate options are being investigated and include separate nickel and copper concentrates, and a bulk concentrate.
Metallurgical study programs were carried out by SGS in Lakefield for separate copper and nickel concentrate production at a conceptual level. The conceptual process flowsheet developed by SGS includes the key unit operations of crushing, grinding, and flotation. PREM analyzed select SGS test results on key flotation parameters observed in the production of separate nickel and copper concentrates to simulate estimated metal grades and recoveries for bulk concentrate.
The Company is also investigating producing a lower grade nickel concentrate suitable for hydrometallurgical processing. Phase 1 hydrometallurgical test-work using the Platsol process began in late 2023 and was completed in January 2024.
Results from the metallurgical testing showed recoveries of all the payable metals (Ni, Cu, Co, Au, Pt and Pd) to the solution phase were very high (generally >99%) in the initial batch autoclave testing. The downstream processes have been tested at bench scale and, although it is not possible to precisely quantify final metal recoveries to saleable products until continuous, integrated piloting is completed, overall recoveries of all payable metals should be >95% based on commercial experience of base metal hydrometallurgical plants. This study demonstrated that alternate processing options are potentially viable at Selkirk.
The area is in a rural district and the available infrastructure is minimal. Strategic services (e.g., electricity and water supplies) could be provided by the Botswana Power Corporation and from existing governmental water pipelines within the Francistown Road Reserve, and potable water could be sourced on site from boreholes. A railway line crosses the western margin of the Selkirk area.
During the year ended December 31, 2024, the Company incurred $1,477,696 (2023 - $1,233,342) in exploration and evaluation expenditures on the Selkirk Mine. The Company incurred $327,109 to acquire the Selkirk Mine, and has incurred a further $3,058,502 in exploration and evaluation expenditures project-to-date as at December 31, 2024.
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Maniitsoq Nickel-Copper-PGM Project, Southwest Greenland
No exploration work was carried out in Greenland in 2024. In early December 2024, the Company notified the Government of Greenland that it was relinquishing its licences effective immediately and is awaiting final approval from authorities.
Canadian Nickel Projects - Sudbury, Ontario
Post Creek Property
The Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 64 unpatented mining claim cells in two separate blocks, covering a total area of 847 hectares held by the Company. The Company acquired the property through an option agreement in April 2010, which was subsequently amended in March 2013. As at the date of this Report, the Company holds a 100% interest in the Post Creek property and is obligated to pay advances on a net smelter return of $10,000 per annum, which will be deducted from any payments to be made under the net smelter return.
The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall deposits and accounts for a significant portion of all ore mined in the Sudbury nickel district and, as such, represents favourable exploration targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks of the Sudbury Igneous Complex which both represent potential controls on mineralization.
No exploration work was completed in 2024 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing until 2027. No material expenditures or activities are contemplated on the Post Creek property at this time.
Halcyon Property
The Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships and consists of 62 unpatented mining cells for a total of 1,024 hectares. Halcyon is adjacent to the Post Creek property and is approximately two kilometres north of the producing Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this Report, the Company holds a 100% interest in the Halcyon property and is obligated to pay advances on a net smelter return of $8,000 per annum, which will be deducted from any payments to be made under the net smelter return.
No exploration work was completed on the Halcyon Property in 2024. The claims are in good standing through 2027. No material expenditures or activities are contemplated on the Halcyon property at this time.
Quetico Property
The Quetico property is located within the Thunder Bay Mining District of Ontario and consisted of 99 claim cells in two blocks. Cells were acquired to assess: (a) the Quetico Sub-province corridor, which hosts intrusions with Ni-Cu-Co-PGM mineralization related to a late 2690 Ma Archean magmatic event; and (b) the Neoproterozoic (1100 Ma MCR) magmatic event and related intrusions.
No work was carried out on the Quetico property in 2024. The last remaining claims expired on April 26, 2024.
Internal Controls over the Mineral Resources Estimation Process
The Company uses an industry-standard approach to exploration and mineral resource estimation that results in reasonable and reliable estimates aligned with industry practice and reporting regulations. The Company’s systems cover exploration activities, sample preparation and analysis, mineral processing, metallurgical testing, recovery estimation, and mineral resource estimations. Controls include, but are not limited to, use of certified laboratories, formal quality assurance and quality control (“QA/QC”) protocols, standardized procedures, workflow processes, data verification, supervision and management approval, internal and external reviews, and data security covering record keeping, chain of custody and data storage.
| -20- |
QA/QC protocols over sampling and assaying of drill hole samples encompass the insertion of blind reference material samples including certified reference materials (CRM) and blanks, as well as coarse reject duplicate samples in the primary sample streams. Selective pulp samples are analyzed at a secondary laboratory. All results are reviewed upon receipt and actioned according to predefined failure criteria. Internal reports are prepared to monitor performance and trends over longer periods.
Data is maintained in an industry standard data management software with regular backups and internal controls. Prior to use in mineral resource estimation, a third-party check verifies the drill hole database against laboratory sourced analytical certificates and validates the data through several standard and specific tests, including review of QA/QC results.
The mineral resource estimate is prepared by a third party whose standard workflow includes rigorous internal peer and senior review processes that consider the suitability of technical and economic inputs and assumptions, the geological framework, mineralizing system, and interpolation and classification approaches and execution. Results are reviewed internally by Company management.
Item 3. LEGAL PROCEEDINGS.
We have no knowledge of any material, active, pending or threatened legal, administrative or judicial proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation.
Item 4. MINE SAFETY DISCLOSURES.
Not applicable.
| -21- |
Part II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
The Common Shares are listed and posted for trading on the TSXV under the symbol “PREM”. In addition, the Common Shares are currently quoted on the OTC Pink Open Market under the symbol “PRMLF”.
Holders
As of March 18, 2025, there were 529 holders of record of Common Shares, based on information provided by the Company’s transfer agent and the recently announced financing transaction (see “Liquidity & Capital Resources – Financings”). This figure does not reflect the beneficial ownership of shares held in nominee name. The holders of Common Shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Holders of Common Shares have no pre-emptive rights and no right to convert their Common Shares into any other securities. There are no redemption or sinking fund provisions applicable to the Common Shares.
Dividends
We have not paid, and do not in the foreseeable future intend to pay, any dividends on the Common Shares. The declaration and payment of future dividends to holders of our Common Shares will be at the discretion of the Board of Directors and will depend upon many factors, including our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by the Board of Directors.
Recent Sales of Unregistered Securities
The following table outlines the number of Common Shares and securities that are convertible into Common Shares issued by the Company during the three months ended December 31, 2024.
Convertible Securities
| Date of Issuance | Security | Exercise Price per Security ($) | Number of Securities | |||||||
| December 4, 2024 | Options | 0.49 | 300,000 | |||||||
| December 30, 2024 | DSUs | N/A | 317,500 | |||||||
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
There was no repurchase activity by the Company in respect of Common Shares during the year ended December 31, 2024.
Certain Canadian Federal Income Tax Considerations for U.S. Residents
The following general summary describes the principal Canadian federal income tax considerations under the Income Tax Act (Canada) (the “Tax Act”) generally applicable to a holder who is a beneficial owner of our Common Shares and who, at all relevant times, (i) is not, and is not deemed to be, resident in Canada for purposes of the Tax Act and any applicable income tax treaty or convention, (ii) is resident in the United States for purposes of the Treaty (as defined below) and is fully entitled to all benefits of the Treaty, (iii) deals at arm’s length with us, and is not affiliated with us, for purposes of the Tax Act, (iv) holds our Common Shares as capital property for purposes of the Tax Act, and (v) does not use or hold, and is not deemed to use or hold, our Common Shares in the course of carrying on, or otherwise in connection with, a business in Canada for purposes of the Tax Act (a “U.S. Resident Holder”). Special rules, which are not discussed in this summary, may apply to a U.S. Resident Holder that is an insurer carrying on an insurance business in Canada and elsewhere or an “authorized foreign bank” (as defined in the Tax Act). Generally, our Common Shares will be considered to be capital property to a holder provided that the holder does not use or hold such shares in the course of carrying on a business of trading or dealing in securities and such holder has not acquired them or been deemed to have acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.
This summary is based upon the current provisions of the Tax Act and the regulations thereunder (the “Regulations”) in force as of the date hereof, our understanding of the administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) published in writing by the CRA prior to the date hereof, and the Canada-United States Tax Convention (1980) as amended by the Protocols thereto prior to the date hereof (the “Treaty”). This summary also takes into account all specific proposals to amend the Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that all such Tax Proposals will be enacted in their present form. However, no assurances can be given that the Tax Proposals will be enacted in the form proposed, or at all. This summary is not exhaustive of all possible Canadian federal income tax consequences applicable to a holder of our Common Shares and, except for the foregoing, this summary does not take into account or anticipate any changes in law, whether by legislative, administrative or judicial decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian federal income tax consequences described herein.
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This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular holder or prospective holder of our Common Shares, and no opinion or representation with respect to the tax consequences to any holder or prospective holder of our Common Shares is made. Accordingly, holders and prospective holders of our Common Shares should consult their own tax advisors with respect to the income tax consequences of purchasing, owning and disposing of our Common Shares in their particular circumstances.
Currency
For the purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our Common Shares (including dividends, adjusted cost base and proceeds of disposition) must be expressed in Canadian dollars based on the rate quoted by the Bank of Canada for the applicable day or such other rate of exchange that is acceptable to the CRA.
Dividends
Dividends paid or credited, or deemed to be paid or credited, on our Common Shares to a U.S. Resident Holder will be subject to Canadian withholding tax. Under the Tax Act, the rate of Canadian withholding tax is 25% of the gross amount of such dividends, which rate is subject to reduction under the Treaty. Under the Treaty, the rate of Canadian withholding tax on dividends paid or credited, or deemed to be paid or credited, on our Common Shares to a U.S. Resident Holder who is the beneficial owner of the dividends is reduced to 15% or, in the case of a U.S. Resident Holder that is the beneficial owner of the dividends and is a corporation that beneficially owns at least 10% of our voting shares, the rate is reduced to 5%. U.S. Resident Holders who may be eligible for a reduced rate of withholding tax on dividends pursuant to the Treaty should consult with their own tax advisors with respect to taking all appropriate steps in this regard.
Disposition of Common Shares
A U.S. Resident Holder generally will not be subject to tax under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of a Common Share unless the Common Share constitutes (or is deemed to constitute) “taxable Canadian property” (as defined in the Tax Act) of the U.S. Resident Holder at the time of disposition and the U.S. Resident Holder is not entitled to relief under the Treaty.
Generally, a Common Share will not constitute “taxable Canadian property” of a U.S. Resident Holder at a particular time provided that the Common Share is listed on a “designated stock exchange” (as defined in the Tax Act, which currently includes Tiers 1 and 2 of the TSXV) at that time, unless, at any time during the 60-month period that ends at that time, both: (i) one or any combination of (a) the U.S. Resident Holder, (b) persons with whom the U.S. Resident Holder did not deal at arm’s length for purposes of the Tax Act and (c) partnerships in which the U.S. Resident Holder or a person described in (b) holds a membership interest (directly or indirectly through one or more partnerships), own 25% or more of the issued shares of any class or series of our Company, and (ii) more than 50% of the fair market value of the Common Share was derived directly or indirectly from one or any combination of: (a) real or immovable property situated in Canada, (b) “timber resource properties” (as defined in the Tax Act), (c) “Canadian resource properties” (as defined in the Tax Act) or (d) options in respect of, or interests in, or for civil law rights in, any of the foregoing, whether or not the property exists. If the Common Shares are not listed on any designated stock exchange, the Common Shares would generally be “taxable Canadian property” of a U.S. Resident Holder at any time if, at any particular time during the 60-month period that ends at that time, the condition described in (ii) above is met. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, a Common Share may be deemed to be “taxable Canadian property”.
In the case of a U.S. Resident Holder for whom our Common Shares constitute “taxable Canadian property”, no Canadian taxes will generally be payable on a capital gain realized on the disposition or deemed disposition of such shares by reason of the Treaty, unless the value of such shares is derived principally from “real property situated in Canada” for purposes of the Treaty at the time of the disposition. U.S. Resident Holders for whom Common Shares may constitute “taxable Canadian property” should consult their own tax advisor as to the Canadian federal income tax consequences of the disposition, including potential compliance requirements and withholding under Section 116 of the Tax Act.
Item 6. [RESERVED].
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following management’s discussion and analysis (this “MD&A”) of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the fiscal years ended December 31, 2024 and 2023 (the “Annual Financial Statements”) appearing elsewhere in this Report. This discussion and analysis below includes forward-looking statements that are subject to risks, uncertainties and other factors described in the “Risk Factors” section that could cause actual results to differ materially from those anticipated in these forward-looking statements as a result of various factors. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We caution you to read the “Cautionary Note Regarding Forward-Looking Statements” section of this Report.
This MD&A is intended to assist the reader to assess material changes in the financial condition of the Company during the year ended December 31, 2024, and the results of operations of the Company for the twelve-month periods ended December 31, 2024 and December 31, 2023. The Annual Financial Statements and the financial information contained in this MD&A were prepared in accordance with US GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.
| -23- |
In this MD&A, unless the context otherwise requires, references to the Company or PREM refer to Premium Resources Ltd. and its consolidated subsidiaries. All monetary amounts in the discussion are expressed in Canadian dollars unless otherwise indicated.
This MD&A contains forward-looking information within the meaning of applicable securities laws. All forward-looking information, including information not specifically identified herein, is made subject to cautionary language in this MD&A. Readers are cautioned to refer to the disclosure in this Report under the heading “Cautionary Note Regarding Forward-Looking Statements” when reading any forward-looking information.
Selected Financial Information and Financial Position
The following amounts are derived from the Company’s consolidated financial statements prepared under US GAAP.
| In Canadian dollars, except number of shares outstanding | Three months ended December 31, | Year ended December 31, | ||||||||||||||||||
| Income Statement | 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Net loss | 11,274,951 | 10,176,556 | 42,420,283 | 32,376,069 | 27,306,350 | |||||||||||||||
| Weighted average number of Common Shares outstanding – basic and diluted | 185,708,588 | 138,475,825 | 168,932,859 | 128,509,525 | 109,661,379 | |||||||||||||||
| Basic and diluted loss per share | 0.06 | 0.07 | 0.25 | 0.25 | 0.25 | |||||||||||||||
| Balance Sheet | December 31, 2024 | December 31, 2023 | December 31, 2022 | |||||||||
| Additional paid-in capital | 145,025,333 | 116,069,973 | 77,302,736 | |||||||||
| Common Shares outstanding | 185,708,588 | 149,300,920 | 116,521,343 | |||||||||
| Total assets | 24,953,469 | 37,974,205 | 18,411,643 | |||||||||
| Current liabilities | 4,655,182 | 5,891,289 | 12,462,372 | |||||||||
Net Loss
The net loss of $42,420,283 for the year ended December 31, 2024, was higher by $10,044,214 compared to the prior year net loss of $32,376,069, largely due to increased exploration activities of $6,787,620 relating to the Botswana assets, an increase of $2,333,076 in general and administrative expenses related to share-based compensation and the retirement of the Company’s former Chief Executive Officer, and the higher interest expense and accretion on the Term Loan of $1,434,306.
Total Assets
Total assets as at December 31, 2024, decreased by $13,020,736 from the December 31, 2023, balance as a result of lower cash balances in the current period.
Current Liabilities
Current liabilities as at December 31, 2024, decreased by $1,236,107 from December 31, 2023, due to a decrease in lease liabilities resulting from the repayment of principal and interest on the Syringa Lodge and drilling equipment leases.
Overall Performance and Results of Operations
As at the date of this Report, the Company has not earned revenue nor proved the economic viability of its projects. The Company’s expenses are not subject to seasonal fluctuations or general trends other than factors affecting costs such as inflation and input prices. The Company’s expenses and cash requirements will fluctuate from period to period depending on the level of activity at the projects, which may be influenced by the Company’s ability to raise capital to fund these activities. Comparisons of activity made between periods should be viewed with this in mind. The Company’s quarterly results may be affected by many factors such as timing of exploration activity, share-based compensation costs, capital raised, marketing activities and other factors that affect the Company’s exploration and evaluation activities.
| -24- |
The following table summarizes the Company’s Operations for the three-month and twelve-month periods ended December 31, 2024, and December 31, 2023:
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| 2024 $ | 2023 $ | 2024 $ | 2023 $ | |||||||||||||
| EXPENSES | ||||||||||||||||
| General exploration expenses | 7,714,199 | 6,903,046 | 29,651,360 | 22,863,740 | ||||||||||||
| Depreciation and amortization | 492,787 | 503,523 | 1,581,270 | 744,783 | ||||||||||||
| General and administrative expenses | 2,949,052 | 2,104,114 | 7,980,178 | 5,647,102 | ||||||||||||
| DSUs granted | 138,113 | 234,122 | 1,020,523 | 798,122 | ||||||||||||
| Fair value movement of DSUs | (489,520 | ) | (122,638 | ) | (963,340 | ) | (128,114 | ) | ||||||||
| Net foreign exchange loss | 47,725 | 138,103 | 408,086 | 395,020 | ||||||||||||
| LOSS FOR THE YEAR BEFORE OTHER ITEMS | 10,852,356 | 9,760,270 | 39,678,077 | 30,320,653 | ||||||||||||
| Interest (income) expense, net | (116,547 | ) | (5,919 | ) | (114,114 | ) | 222,387 | |||||||||
| Interest expense and accretion on Term Loan and A&R Promissory Notes | 792,141 | 946,736 | 3,109,319 | 2,357,560 | ||||||||||||
| Other income | (252,999 | ) | - | (252,999 | ) | - | ||||||||||
| Deferred tax recovery | - | (524,531 | ) | - | (524,531 | ) | ||||||||||
| NET LOSS FOR THE PERIOD | 11,274,951 | 10,176,556 | 42,420,283 | 32,376,069 | ||||||||||||
| ● | General exploration expenses increased by $811,153 and $6,787,620 for the three and twelve months ended December 31, 2024, respectively, as the Company ramped-up drilling, geology, geophysics, mine development, and other activities at the Mines over the year. | |
| ● | Depreciation for the three months ended December 31, 2024, was consistent with the prior year comparable period. Depreciation was higher for the year ended December 31, 2024, when compared to the previous year due to significant property, plant and equipment acquisitions in late 2023. | |
| ● | General and administrative expenses increased by $844,938 and $2,333,076 for the three and twelve months ended December 31, 2024, respectively, mainly due to costs of $1,168,729 associated with the retirement of the Company’s Chief Executive Officer in December 2024, higher share-based compensation related to the Company’s new restricted share unit (“RSU”) Plan and a change in the vesting pattern of the Company’s 2024 Stock Option grants, as well as higher filing and professional fees relating to additional regulatory reporting requirements in 2024. | |
| ● | DSUs granted, net of fair value movements, or deferred share units, represents the Company’s long-term incentive program compensation granted to directors of the Company, net of period-end mark to market adjustments. The decrease of $462,891 and $612,825 for the three and twelve months ended December 31, 2024, respectively, is due to downward mark to market adjustments on outstanding units resulting from a decrease in the Company’s share price. In addition, there was a voluntary reduction in directors’ compensation for the three months ended December 31, 2024. | |
| ● | Interest income and expense represents interest income earned on cash and cash equivalent deposits and interest expense on the Company’s lease liabilities and vehicle financing. Net interest income increased by $110,628 and $336,501 for the three and twelve months ended December 31, 2024, respectively, as the Company held higher cash balances arising from the June 2024 Financing in guaranteed investment certificates. Further, the final instalments on the drilling equipment and Syringa Lodge leases were paid in 2024, resulting in lower interest expense for the current year periods. |
| -25- |
| ● | Interest expense and accretion on Term Loan and A&R Promissory Notes comprises the accrued interest on the Company’s Term Loan and A&R Promissory Notes, as well as the accretion of related transaction costs and fees. The decrease of $154,595 for the three months ended December 31, 2024, relates to a higher undiscounted balance on the Term Loan in the current year period. The increase of $751,759 for the year ended December 31, 2024, when compared to the previous year, reflects the cost of the Term Loan being outstanding for a full 12 months in 2024, compared to six months in 2023. | |
| ● | Deferred tax recovery of $524,531 related to the warrants issued with the Term Loan was recognized in the prior year period. |
Cash Flows
The following table summarizes the Company’s cash flows:
| Year ended December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Cash flows | ||||||||
| Operating activities | (37,599,434 | ) | (29,462,860 | ) | ||||
| Investing activities | (1,022,231 | ) | (5,254,964 | ) | ||||
| Financing activities | 25,346,644 | 50,138,346 | ||||||
| Increase (decrease) in cash and cash equivalents before effects of exchange rate changes | (13,275,021 | ) | 15,420,522 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 135,326 | (1,337,885 | ) | |||||
| Change in cash and cash equivalents for the period | (13,139,695 | ) | 14,082,637 | |||||
| Cash and cash equivalents at the beginning of the period | 19,245,628 | 5,162,991 | ||||||
| Cash and cash equivalents at the end of the period | 6,105,933 | 19,245,628 | ||||||
Operating Activities
Net cash used in operating activities for 2024 increased by $8,136,574 compared to 2023 resulting from the ramp-up of drilling, geology, geophysics, mine development, and other activities at the Mines over the year.
Investing Activities
Key investing activities relate to the acquisition of property, plant and equipment. Net cash used in investing activities for 2024 decreased by $4,232,733 compared to 2023. The higher spending in 2023 was related to the acquisition of mobile equipment and the upfront purchase of tools and parts for the three drills which were leased in 2023.
Financing Activities
Net cash provided by financing activities for 2024 decreased by $24,791,702 compared to 2023. During 2023, the Company obtained a Term Loan for gross proceeds of approximately $20.0 million and closed private placements for gross proceeds of approximately $39.8 million, using a portion of those funds to repay a $7.0 million promissory note from Pinnacle Island LP. During 2024, the Company closed private placements for gross proceeds of approximately $27.5 million.
Liquidity & Capital Resources
The Company, being in the exploration and evaluation stage, is subject to risks and challenges similar to companies in a comparable stage of exploration and evaluation. These risks include the challenges of securing adequate capital for exploration and advancement of the Company’s material projects, operational risks inherent in the mining industry, and global economic and metal price volatility, and there is no assurance management will be successful in its endeavors.
| -26- |
The properties in which the Company currently has an interest are in the pre-revenue stage. Operating cash outflows are highly dependent upon the exploration and evaluation programs taking place at that time. As such, the Company is dependent on external financing to fund its activities and the advancement of its projects. In order to carry out the planned project advancement and cover administrative costs, the Company will need to use its existing working capital and raise additional amounts as needed.
As at December 31, 2024, the Company had $6,105,933 in available cash (December 31, 2023 – $19,245,628), with no sources of operating cash flows, and no significant credit lines in place. As at December 31, 2024, the Company had working capital (calculated as total current assets less total current liabilities) of $2,963,061 (December 31, 2023 – $14,787,484). The decrease in working capital is mainly due to lower cash balances in support of exploration and evaluation activities.
Financings
On March 18, 2025, the Company closed a significant refinancing and the deleveraging of its balance sheet with the conversion of the Term Loan into equity (the “Debt Conversion”).
The Company completed a private placement financing issuing 153,333,334 units of the Company at a price of $0.30 per unit for aggregate gross proceeds of approximately $46 million (the “March 2025 Private Placement”). Each unit consists of one Common Share and one-half of one warrant. Each warrant entitles the holder to acquire one additional Common Share at a price of $0.55 per share until March 18, 2028. In addition, the Company issued 4,000,000 Common Shares at an issue price of $0.30 per share to TriView Capital Ltd. for its services as finder.
In accordance with the previously announced debt settlement agreement, the Company has issued to Cymbria an aggregate of 69,607,843 units (“Settlement Units”) at a deemed issue price of $0.30 per unit in full satisfaction of the $20,882,353 principal amount outstanding under the Term Loan, and the settlement of the $268,896 accrued interest in cash. Each Settlement Unit consists of one Common Share and one Common Share purchase warrant (each, a “Settlement Warrant”). Each Settlement Warrant entitles the holder to acquire one additional Common Share at a price of $0.40 per Common Share until March 18, 2028.
The Company also entered into advisory services agreements which include assistance with the identification of a new CEO, the Debt Conversion, and Company strategy. The advisors will continue to provide such services on an ongoing basis until June 30, 2025. The Company issued 12,750,000 Common Shares to the advisors at a deemed price per share of $0.30 as consideration for their services. The shares remain subject to contractual resale restrictions for a 12-month period. The Company also paid its financial advisor a fee of US$1,500,000, consisting of US$500,000 in cash and US$1,000,000 in 3,586,709 Common Shares issued at a price of US$0.28 per share.
The Company also granted: (i) 5,750,000 stock options with each option having an exercise price of $0.50, a term of five years, and vesting as to one-half on the date of grant and the balance on the first anniversary of the date of grant; and (ii) 3,175,000 RSUs, each RSU vesting in full on the first anniversary of the date of grant.
Subject to any changes in the Company’s operational plan, this transaction will provide the Company with the funds required to advance its planned activities and cover administrative costs through to the end of 2025.
On June 14, 2024, the Company closed the first tranche of the June 2024 Financing, pursuant to which the Company issued an aggregate 19,234,614 Units at a price of $0.78 per Unit (the “Issue Price”) for aggregate gross proceeds of $15,002,999. Each Unit is comprised of one Common Share and one common share purchase warrant of the Company (each, a “Warrant”). Each Warrant entitles the holder thereof to acquire one Common Share for a period expiring 60 months following the date of issuance (the “Expiry Date”) at a price of $1.10 per Common Share. If, at any time prior to the Expiry Date, the volume-weighted average trading price of the Common Shares is at least $2.00 per Common Share for a period of 20 trading days, the Company may, at its option, accelerate the Expiry Date within 30 days’ notice to the Warrant holders.
| -27- |
On June 21, 2024, the Company closed the second tranche of the June 2024 Financing and issued an additional 16,021,795 Units at the Issue Price for gross proceeds of $12,497,000. Together with proceeds from the first tranche, the total size of the June 2024 Financing was approximately $27.5 million. As at December 31, 2024, the Company has expended $21,178,020 of the June 2024 Financing.
On December 14, 2023, the Company closed a financing (the “December 2023 Financing”) comprised of a brokered private placement of units (the “December 2023 Private Placement”) and an amended Term Loan. Under the December 2023 Private Placement, the Company issued an aggregate of 13,133,367 Common Shares at a price of $1.20 per Common Share for aggregate gross proceeds of $15,760,040. The principal amount of the Term Loan was increased by $5,882,353 (the “Additional Principal Amount”) from $15,000,000 to $20,882,353. The Additional Principal Amount was subject to an original issue discount of approximately 15% and was advanced by Cymbria to the Company as a single advance of $5,000,000. The net proceeds from the December 2023 Financing were $19,743,845 after fees and expenses, which have been used to advance the exploration and evaluation of the Mines and for general corporate and working capital purposes. As at December 31, 2024, all of the net proceeds of the December 2023 Financing had been expended as planned.
Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future. Factors that could affect the availability of financing include the progress and results of ongoing exploration and evaluation activities at the Mines, the state of international debt and equity markets, as may be impacted by inflation and investor perceptions and expectations with respect to global commodity markets. If necessary, depending on the amount of funding raised, the Company may explore opportunities to defer the timing of certain discretionary expenditures and the Company’s planned initiatives and other work programs may be postponed, or otherwise revised.
Use of Proceeds
The following table provides a summary of the principal use of proceeds of the June 2024 Financing and the December 2023 Financing.
| Principal Purpose | Estimated Amount as at December 31, 2024(1) $000’s | Amounts Expended as at December 31, 2024 $000’s | ||||||
| June 2024 Financing | ||||||||
| Activities relating to the Selebi Mines | 22,500 | (2) | 18,541 | |||||
| Activities relating to the Selkirk Mine | 1,000 | (3) | 936 | |||||
| General corporate and working capital | 3,800 | (4) | 1,701 | |||||
| 27,300 | 21,178 | |||||||
| Principal Purpose | Estimated Amount $000’s | Amounts Expended as at December 31, 2024 $000’s | ||||||
| December 2023 Financing | ||||||||
| Activities relating to the Selebi Mines | 11,520 | (5) | 11,520 | |||||
| Activities relating to the Selkirk Mine | 400 | (6) | 400 | |||||
| General corporate and working capital | 7,839 | (7) | 7,839 | |||||
| 19,759 | 19,759 | |||||||
Notes:
| (1) | The use of the June 2024 Financing proceeds has been updated as of December 31, 2024, to reflect any changes in planned activities, as outlined below. | |
| (2) | Represents approximately: (i) $21,200,000 for the advancement of the Selebi Mines towards an economic study; and (ii) $1,309,125 for the last instalment of the purchase price of the Syringa Lodge. | |
| (3) | Represents the cost to advance the Selkirk Mine to a mineral resource estimate and exploration activities on the prospecting licences. | |
| (4) | Represents approximately: (i) $1,313,014 allocated to the payment of interest on the Term Loan; and (ii) approximately $2,500,000 allocated to general corporate expenses and working capital. | |
| (5) | Represents approximately: (i) $10,120,000 for the advancement of the Selebi Mines towards a NI 43-101 compliant mineral resource estimate; and (ii) $1,400,000 for mining licence extension payment. | |
| (6) | Represents certain geophysics and geology costs, care and maintenance and prospecting licences. | |
| (7) | Represents approximately (i) $2,080,000 allocated to the payment of interest on the Term Loan; and (ii) $5,759,000 allocated to general corporate expenses. |
| -28- |
Going Concern
The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable operations and its ability to obtain adequate financing. The Company incurred a net loss of $42,420,283 for the year ended December 31, 2024 (December 31, 2023 - $32,376,069). To date, the Company has not generated profitable operations from its resource activities. It is not possible to predict whether future financing efforts will be successful or if the Company will attain a profitable level of operations. These material uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. The accompanying Annual Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities, and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material. In assessing whether a going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the date of this Report.
Contractual Obligations and Contingencies
As of December 31, 2024, the Company had no material commitments for capital expenditures over the next 12 months, however the Company had the following contractual obligations and commitments:
Selebi Mines
As per the Selebi APA, the aggregate purchase price payable to the seller for the Selebi Mines is the sum of US$56,750,000 which amount shall be paid in three instalments:
| ● | US$1,750,000 payable on the closing date, and payment of care and maintenance funding contributions in respect of the Selebi Mines from March 22, 2021, to the closing date of US$5,178,747. These payments have been made. |
| ● | US$25,000,000 upon the earlier of: (a) approval by the Botswana Ministry of Mineral Resources, Green Technology and Energy Security (“MMRGTES”) of the Company’s Section 42 and Section 43 applications (for the further extension of the mining licence and conversion of the mining licence into an operating licence, respectively); and (b) on the expiry date of the study phase, January 31, 2026. Pursuant to the Selebi APA, the study phase has been extended for one year from the original expiry date of January 31, 2025. This extension follows successful completion by the Company of the work and investment milestones required by the Selebi APA. |
| ● | The third instalment of US$30,000,000 is payable on the completion of mine construction and production start-up by the Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications. |
As per the terms and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and return the Selebi Mines to the BCL Liquidator if the Company determines that the Selebi Mines are not economical. The Company also has an option to pay in advance the second and third payments if the Company determines that the Selebi Mines are economical. The Company’s accounting policy is to measure and record contingent consideration when the conditions associated with the contingency are met. As of December 31, 2024, none of the conditions of the second and third instalments have been met, hence these amounts are not accrued in the Financial Statements.
In addition to the Selebi APA, the purchase of the Selebi Mines is also subject to a royalty agreement as well as a contingent consideration agreement with the BCL Liquidator. The royalty agreement consists of a net smelter royalty (“NSR”) of 2% on the net value of sales of concentrate or other materials with respect to production from the Selebi mining licence, of which the Company has the right to buy-back 50%. The contingent consideration agreement consists of two components: (i) a sliding scale payment of US$0.50/tonne of ore up to US$1.40/tonne of ore with respect to the discovery of new mineable deposits greater than 25 million tonnes of ore and; (ii) price participation of 15% on post-tax net earnings directly attributable to an increase of 25% or more in commodity prices, on a quarterly basis, for a period of seven years from the date of first shipment of concentrate or other materials.
| -29- |
Both the Selebi Mines and Selkirk Mine are subject to a royalty payable to the Botswana Government of 5% of all precious metals sales and 3% of all base metals sales.
Phikwe South and the Southeast Extension
In August 2023, the Company announced that it had entered into a binding commitment letter with the BCL Liquidator to acquire a 100% interest in two additional deposits, Phikwe South and the Southeast Extension, located adjacent to and immediately north of the Selebi North historical workings. The acquisition of the Phikwe South and the Southeast Extension deposits is subject to customary closing conditions and has not yet closed as of March 19, 2025.
The upfront cost to the Company to acquire these additional mineral properties is US$1,000,000. In addition, the Company has agreed to additional work commitments of US$5,000,000 in the aggregate over four years. As a result of the extension of the Selebi mining licence, the remaining asset purchase obligations of the Company outlined in the Selebi APA will each increase by 10%, US$5,500,000 in total, while the trigger events remain unchanged. The existing 2% NSR and contingent consideration agreement held by the BCL Liquidator with respect to production from the Selebi mining licence will also apply to production from these additional deposits, subject to the Company’s existing buy-back right for 50% of the NSR.
Selkirk Mine
In regard to the Selkirk Mine, the purchase agreement does not provide for a purchase price or initial payment for the purchase of the assets. The Selkirk purchase agreement provides that if the Company elects to develop Selkirk first, the payment of the second Selebi instalment of US$25 million would be due upon the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications (for the further extension of the Selkirk mining licence and conversion of the Selkirk mining licence into an operating licence, respectively). For the third Selebi instalment of US$30 million, if Selkirk were commissioned earlier than Selebi, the payment would trigger on Selkirk’s commission date.
In addition to the Selkirk APA, the purchase of the Selkirk Mine is also subject to a royalty agreement as well as a contingent consideration agreement with the liquidator. The royalty agreement consists of an NSR of 1% on the net value of sales of concentrate or other materials with respect to production from the Selkirk mining licence, of which the Company has the right to buy-back in full. The contingent consideration agreement is on similar terms as the Selebi Mines contingent consideration.
NSR Option
The Company received $2,750,000 (the “Option Payment”) from Cymbria for their right to participate in the Company’s right to repurchase one-half of the Selebi NSR and the entirety of the Selkirk NSR. Cymbria has the right to put its options back to the Company in certain circumstances in return for the reimbursement of the applicable portion of the Option Payment. Cymbria also has the right to compel the Company to repurchase the applicable portion of its NSR from the relevant liquidator.
| -30- |
Term Loan
The Company had an outstanding Term Loan at December 31, 2024, in the amount of $20,882,353 that bore interest at a rate of 10% per annum payable quarterly in arrears, with the principal maturing on June 28, 2026. The Term Loan was subject to certain covenants and provisions on events of default, repayments and mandatory prepayments, including: (i) increase in the interest rate payable on the Term Loan to 15% per annum upon the occurrence of an event of default; (ii) the Company could prepay all or any portion of the principal amount outstanding with a minimum repayment amount of $500,000 and in an integral multiple of $100,000, together with all accrued and unpaid interest on the principal amount being repaid; and (iii) mandatory prepayment was to be made when the Company had non-ordinary course asset sales or other dispositions of property or the Company received cash from the issuance of indebtedness for borrowed money. As at December 31, 2024, the Company was in compliance with the Term Loan covenants.
In March 2025, the Company closed a significant refinancing and the deleveraging of its balance sheet with the conversion of the Term Loan into equity.
While the Company has arranged this additional financing, the proceeds are intended for the advancement of exploration and evaluation activities at the Mines. Therefore, the Company will need to arrange additional financing to meet its commitments under the asset purchase agreements.
Contingencies
There are no environmental liabilities associated with the Mines as at the acquisition dates as all liabilities incurred prior to the acquisitions are the responsibility of the sellers, BCL and TNMC. The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of December 31, 2024, there were no material rehabilitation costs for which the Company expects to incur, and management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.
The Company’s exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions in which the Company operates. It is not possible to estimate any future contingent liabilities and the impact on the Company’s operating results due to future changes in the Company’s re-development of its projects or future changes in such laws and environmental regulations.
Related Party Transactions
Related party transactions are summarized below and include transactions with the following individuals or entities:
Key management (defined as members of the Board of Directors and certain senior officers) compensation was related to the following:
| Year ended December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Salaries and management fees | 1,373,388 | 1,195,550 | ||||||
| One-time retirement benefit | 1,168,729 | - | ||||||
| Site operations and administration | 2,088,356 | 2,394,776 | ||||||
| DSUs granted, net of fair value movements | 57,183 | 670,008 | ||||||
| Share-based compensation | 1,252,483 | 657,138 | ||||||
| 5,940,139 | 4,917,472 | |||||||
As a result of the 2023 financing transactions on June 28, 2023, and December 14, 2023, Cymbria and certain other funds managed by EdgePoint (the “Financing Parties”) acquired a total of 16,037,800 Common Shares. The Financing Parties also acquired on closing of the 2023 financing transactions an aggregate of 6,024,000 warrants with an expiration date of June 28, 2026, and an exercise price of $1.4375. Further, in connection with the June 2024 Financing, EdgePoint subscribed for 7,692,307 Units at $0.78 per Unit for gross proceeds of approximately $6.0 million.
| -31- |
As of December 31, 2024, EdgePoint beneficially owns 23,833,224 Common Shares and 13,716,307 Warrants, representing approximately 12.8% of the issued and outstanding Common Shares (approximately 18.8% on a partially-diluted basis assuming the exercise of all warrants held by EdgePoint). All warrants issued to EdgePoint as part of the June 2024 Financing include customary restrictions providing that EdgePoint will not exercise such number of warrants so as to bring its undiluted share ownership percentage above 20.0% of the Company’s issued and outstanding Common Shares without obtaining the requisite shareholder and Exchange approval.
In connection with the June 2024 Financing, certain insiders of the Company subscribed for an aggregate of 1,389,140 Units for gross proceeds of $1,083,529.
For the year ended December 31, 2024, the Company paid interest of $2,082,830 (2023 - $793,392) to the Financing Parties.
Segmented Disclosure
The Company operates in one reportable operating segment being that of the acquisition, exploration and evaluation of mineral properties in three geographic segments being Canada, Barbados, and Botswana. The Company’s geographic segments are as follows:
December 31, 2024 $ | December 31, 2023 $ | |||||||
| Current assets | ||||||||
| Canada | 4,066,121 | 15,894,177 | ||||||
| Barbados | 89,446 | 104,024 | ||||||
| Botswana | 3,462,676 | 4,680,572 | ||||||
| Total | 7,618,243 | 20,678,773 | ||||||
| Property, plant and equipment | ||||||||
| Canada | - | 8,726 | ||||||
| Botswana | 8,488,405 | 8,691,908 | ||||||
| Total | 8,488,405 | 8,700,634 | ||||||
| Exploration and evaluation assets | ||||||||
| Botswana | 8,846,821 | 8,594,798 | ||||||
The Company’s exploration and evaluation activities are assessed at the individual project level. The Selebi and Selkirk projects below make up the Botswana geographic segment.
| Year ended December 31, 2024 | ||||||||||||||||
| General Exploration Expenses | Selebi $ | Selkirk $ | Other $ | Total $ | ||||||||||||
| Drilling | 6,703,402 | - | - | 6,703,402 | ||||||||||||
| Site operations, administration, and overhead | 4,298,941 | 435,957 | 156,457 | 4,891,355 | ||||||||||||
| Infrastructure and equipment maintenance | 3,872,782 | - | - | 3,872,782 | ||||||||||||
| Geology | 3,042,562 | 505,783 | - | 3,548,345 | ||||||||||||
| Mine development | 3,030,676 | - | - | 3,030,676 | ||||||||||||
| Electricity | 2,904,188 | 27,377 | - | 2,931,565 | ||||||||||||
| Engineering and technical studies | 1,066,361 | 248,343 | - | 1,314,704 | ||||||||||||
| Geophysics | 993,152 | 107,942 | - | 1,101,094 | ||||||||||||
| Freight, tools, supplies, and other consumables | 915,925 | 10,417 | - | 926,342 | ||||||||||||
| Health and safety | 319,146 | 44 | - | 319,190 | ||||||||||||
| Environmental, social and governance | 302,737 | - | - | 302,737 | ||||||||||||
| Share-based compensation | 567,335 | 141,833 | - | 709,168 | ||||||||||||
| Total | 28,017,207 | 1,477,696 | 156,457 | 29,651,360 | ||||||||||||
| -32- |
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements as at December 31, 2024.
Financial Instruments
ASC 820 - Fair Value Measurement establishes a three-tier fair value hierarchy. The fair value hierarchy’s three tiers are based on the extent to which inputs used in measuring fair value are observable in the market, and are as follows:
| Level 1: | Quoted prices (unadjusted) in active markets for identical assets or liabilities; | |
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and | |
| Level 3: | One or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability. |
Determination of fair value and the resulting hierarchy requires the use of observable market data whenever available. The classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.
The carrying value of cash and cash equivalents, trade payables and accrued liabilities approximate their fair value due to their short-term nature, and therefore have been excluded from the table below. A summary of the carrying value and fair value of other financial instruments were as follows:
| December 31, 2024 | December 31, 2023 | |||||||||||||||||||
| Classification | Carrying Value $ | Fair Value $ | Carrying Value $ | Fair Value $ | ||||||||||||||||
| Lease liabilities | Level 2 | - | - | 1,611,143 | 1,611,143 | |||||||||||||||
| DSU liability | Level 1 | 941,664 | 941,664 | 884,481 | 884,481 | |||||||||||||||
| Vehicle financing | Level 2 | 246,137 | 246,137 | 236,124 | 236,124 | |||||||||||||||
| Term Loan | Level 3 | 18,983,212 | 20,862,478 | 17,956,423 | 20,839,975 | |||||||||||||||
| NSR option liability | Level 2 | 2,750,000 | 2,750,000 | 2,750,000 | 2,750,000 | |||||||||||||||
Lease liabilities and vehicle financing - The fair values approximate carrying values as the interest rates are comparable to current market rates.
DSU liability - the fair value of the DSUs is measured using the closing price of the Company’s Common Shares at the end of each reporting period.
Term Loan – the Term Loan is carried at amortized cost. The fair value measurement of the Term Loan was based on an income approach.
NSR option liability – The fair value of the NSR options is determined using a valuation model that incorporates such factors as discounted cash flow projections, metal price volatility, and risk-free interest rate. As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at December 31, 2024 and December 31, 2023 is nil.
The carrying value of cash and cash equivalents, trade payables and accrued liabilities approximate their fair value due to their short-term nature.
| -33- |
Accounting Developments
For a discussion of Recently Adopted and Recently Issued Accounting Pronouncements, refer to Note 2 of the Consolidated Financial Statements.
Critical Accounting Estimates
The preparation of the Consolidated Financial Statements in conformity with US GAAP requires management to make assumptions and estimates that can affect reported amounts of assets, liabilities, revenue and expenses and the accompanying disclosures. Estimates are continuously evaluated and are based on management’s historical experience and on other assumptions believed to be reasonable under the circumstances. However, different estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The areas involving a higher degree of complexity or significant management judgement, or areas where estimates are significant to the consolidated financial statements are:
| (a) | Recoverability of exploration and evaluation assets |
The ultimate recoverability of the exploration and evaluation assets is dependent upon the Company’s ability to obtain the necessary financing to complete the exploration and development and commence profitable production at its projects, or alternatively, upon the Company’s ability to dispose of its interests therein on an advantageous basis. A review of the indicators of potential impairment is at minimum carried out at each reporting period.
Management undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of the assets is higher than the recoverable amount and when mineral licence tenements are relinquished or have lapsed. In undertaking this review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices, foreign exchange rates, availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.
| (b) | Asset lives for depreciation and amortization |
Property, plant and equipment comprise a large component of the Company’s assets and as such, the depreciation of these assets have a significant effect on the Company’s financial statements. Management must make estimates of the useful lives, as well as residual values, of each asset when calculating the depreciation of these assets. These useful life and residual value estimates are subject to various risks and uncertainties, and an asset’s useful life may ultimately be shorter or longer than Management’s estimate, and residual values may differ from what was originally estimated.
| (c) | Going concern |
The consolidated financial statements are prepared on a going concern basis unless management either intends to liquidate the Company or has no realistic alternative but to do so. Assessment of the Company’s ability to continue as a going concern requires the consideration of all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This information includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company’s ability to continue as a going concern, those uncertainties are disclosed.
| (d) | Valuation of share-based compensation and warrants |
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards issued under the Company’s stock option plan. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the estimated term of the awards, and actual and projected stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in net loss over the requisite service period.
As part of the Company’s financing transactions, units are issued containing Common Share purchase warrants. The fair value of these Common Share purchase warrants are calculated using a Monte Carlo model, which models the probability of a number of different outcomes not easily predicted.
| (e) | Deferred tax |
The Company uses the asset and liability method in accounting for deferred taxes. Under this method, deferred taxes are recognized for future income tax. In preparing these estimates, management is required to interpret substantially enacted legislation as well as economic and business conditions along with management’s tax and corporate structure plans which may impact taxable income in future periods.
| (f) | Asset retirement obligations |
Management’s best estimates regarding asset retirement obligations are based on the current economic environment. Changes in estimates of contamination, restoration standards and restoration activities result in changes to provisions from period to period. Actual asset retirement obligations will ultimately depend on future market prices for future restoration obligations.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Quantitative and qualitative disclosures about market risk have been omitted as permitted under rules applicable to smaller reporting companies.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The audited financial statements of Premium Resources Ltd. as of December 31, 2024 and 2023 are appended to this Report beginning on page F-1.
| -34- |
(Formerly Premium Nickel Resources Ltd.)
Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
In accordance with generally accepted accounting principles in the United States and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and stated in Canadian dollars, unless otherwise indicated
INDEX
Independent Auditor’s Report (PCAOB ID 1930)
Consolidated Financial Statements
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Premium Resources Ltd.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Premium Resources Ltd. (Formerly Premium Nickel Resources Ltd ) (the “Company”) as at December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity (deficiency), and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2024 and 2023, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Material Uncertainty Related to Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring net losses and has no source of operating cash flows. Which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| F-2 |
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Going Concern
Critical Audit Matter Description
As described in Note 1, the Company, being in the exploration stage, is subject to risks and challenges similar to companies in a comparable stage. These risks include the challenges of securing adequate capital for exploration and operational risks inherent in the mining industry, and global economic and metal price volatility and there is no assurance management will be successful in its endeavors. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable operations and its ability to obtain adequate financing. To date, the Company has not generated profitable operations from its resource activities and will need to invest additional funds in carrying out its planned exploration and operational activities. Management has prepared future cash flow forecasts, which involves judgement and estimation of key variables, such as planned financing and capital and operational expenditures. Future economic conditions and effects of key events subsequent to the year end, such as debt and equity financing, also impacted management’s judgements and estimates. We identified the Company’s ability to continue as a going concern as a critical audit matter because auditing the Company’s going concern assessment is complex and involves a high degree of auditor judgment to assess the reasonableness of the cash flow forecasts, planned refinancing actions and other assumptions used in the Company’s going concern analysis. The Company’s ability to execute the planned refinancing actions are especially judgmental given that the global financial markets and economic conditions have been, volatile. This matter is also described in the “Material Uncertainty Related to Going Concern” section of our report.
Audit Response
We responded to this matter by performing procedures over management’s assessment of the Company’s ability to continue as a going concern. Our audit work in relation to this included, but was not restricted to, the following:
| ● | We evaluated the cash flow forecasts prepared by management and evaluated the integrity and arithmetical accuracy of the model. | |
| ● | We evaluated the key assumptions used in the model to estimate future cash flows for a reasonable period of time, not exceeding 12 months from the date of the consolidated statements of financial position, by comparing assumptions used by management against budgets, economic and industry indicators and publicly available information. | |
| ● | We evaluated the key assumptions pertaining to estimated cash flows from operating activities and expected cash flows from financing activities, underlying agreements, private placement raises and subsequent events thereafter. | |
| ● | We assessed the adequacy of the going concern disclosures included in Note 1 of the consolidated financial statements and consider these to appropriately reflect the assessments that management has performed. |
We have served as the Company’s auditor since 2022.
 |
|
| Chartered Professional Accountants; | |
| Licensed Public Accountants | |
| March 19, 2025 | |
| PCAOB
ID: |
| F-3 |
Consolidated Balance Sheets
(Expressed in Canadian dollars)
| As at | ||||||||||
| Notes | December
31, 2024 | December 31, 2023 $ | ||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | 3 | |||||||||
| Prepaid expenses | ||||||||||
| Other receivables | 4 | |||||||||
| TOTAL CURRENT ASSETS | ||||||||||
| NON-CURRENT ASSETS | ||||||||||
| Exploration and evaluation assets | 5 | |||||||||
| Property, plant and equipment | 6 | |||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||
| TOTAL ASSETS | ||||||||||
| LIABILITIES | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Trade payables and accrued liabilities | 7 | |||||||||
| Lease liabilities | 8 | |||||||||
| Current portion of DSU liability | 12(e) | |||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||
| NON-CURRENT LIABILITIES | ||||||||||
| Vehicle financing | ||||||||||
| Provision for leave and severance | ||||||||||
| Term Loan | 9 | |||||||||
| NSR option liability | 10 | |||||||||
| DSU liability | 12(e) | |||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||
| TOTAL LIABILITIES | ||||||||||
| SHAREHOLDERS’ (DEFICIENCY) EQUITY | ||||||||||
| Common Shares ( | 12 | |||||||||
| Preferred shares | 12 | |||||||||
| Additional paid-in capital | ||||||||||
| Deficit | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||
| TOTAL SHAREHOLDERS’ (DEFICIENCY) EQUITY | ( | ) | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIENCY) EQUITY | ||||||||||
| Nature of Operations and Going Concern (Note 1) | ||||||||||
| Subsequent Events (Note 19) | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
Approved by the Board of Directors on March 19, 2025.
“signed” Paul Martin Director and Interim Chief Executive Officer |
“signed” Jason LeBlanc Director |
| F-4 |
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in Canadian dollars)
| 2024 | 2023 | |||||||||
| Year ended December 31, | ||||||||||
| 2024 | 2023 | |||||||||
| Notes | $ | $ | ||||||||
| EXPENSES | ||||||||||
| General exploration expenses | 5 | |||||||||
| Depreciation and amortization | ||||||||||
| General and administrative expenses | 18 | |||||||||
| DSUs granted | 12(e) | |||||||||
| Fair value movement of DSUs | 12(e) | ( | ) | ( | ) | |||||
| Net foreign exchange loss | ||||||||||
| LOSS FOR THE YEAR BEFORE OTHER ITEMS | ||||||||||
| OTHER ITEMS | ||||||||||
| Interest (income) expense, net | ( | ) | ||||||||
| Interest expense and accretion on Term Loan | 9 | |||||||||
| Interest expense and accretion on A&R Promissory Notes | 11 | |||||||||
| Other income | ( | ) | ||||||||
| NET LOSS BEFORE TAX | ||||||||||
| Deferred tax recovery | 17 | ( | ) | |||||||
| NET LOSS FOR THE YEAR | ||||||||||
| OTHER COMPREHENSIVE (INCOME) LOSS | ||||||||||
| Exchange differences on translation of foreign operations | ( | ) | ||||||||
| TOTAL COMPREHENSIVE LOSS FOR THE YEAR | ||||||||||
| Basic and diluted loss per share | ||||||||||
| Weighted average number of Common Shares outstanding – basic and diluted | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
Consolidated Statements of Changes in Shareholders’ (Deficiency) Equity
(Expressed in Canadian dollars)
| Notes | Number of shares | Preferred shares $ | Additional paid-in capital $ | Deficit $ | Accumulated other comprehensive (loss)
income $ | Total (deficiency) equity | |||||||||||||||||||||
| BALANCE, DECEMBER 31, 2023 | | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss for the year | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Share capital issued through private placement | 12(a) | ||||||||||||||||||||||||||
| Share issue costs | 12(a) | - | ( | ) | ( | ) | |||||||||||||||||||||
| Exercise of options, net | 12(a)(c) | ||||||||||||||||||||||||||
| Share-based compensation | 12(c)(d) | - | |||||||||||||||||||||||||
| Exchange differences on translation of foreign operations | - | ||||||||||||||||||||||||||
| BALANCE, DECEMBER 31, 2024 | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| BALANCE, DECEMBER 31, 2022 | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss for the year | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Share capital issued through private placement | |||||||||||||||||||||||||||
| Share issue costs | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Fair value of lender warrants | - | ||||||||||||||||||||||||||
| Deferred tax liability on lender warrants | ( | ) | ( | ) | |||||||||||||||||||||||
| Exercise of options, net | |||||||||||||||||||||||||||
| Exercise of warrants | |||||||||||||||||||||||||||
| Share-based compensation | - | ||||||||||||||||||||||||||
| Exchange differences on translation of foreign operations | - | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE, DECEMBER 31, 2023 | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance | ( | ) | ( | ) | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
| Year ended December 31, | ||||||||||
| Notes | 2024 $ | 2023 $ | ||||||||
| OPERATING ACTIVITIES | ||||||||||
| Net loss for the year | ( | ) | ( | ) | ||||||
| Interest received | ||||||||||
| Interest payment on Term Loan | 9 | ( | ) | ( | ) | |||||
| Interest payment on A&R Promissory Note | ( | ) | ||||||||
| Items not affecting cash: | ||||||||||
| DSUs granted | 12(e) | |||||||||
| Fair value movement of DSUs | 12(e) | ( | ) | ( | ) | |||||
| Share-based compensation | 12(c)(d) | |||||||||
| Depreciation | ||||||||||
| Provision for leave and severance | ||||||||||
| Accrued interest and accretion on loans | ||||||||||
| Deferred tax recovery | 17 | ( | ) | |||||||
| Accrued interest on lease liability | 8 | |||||||||
| Other income | ( | ) | ||||||||
| Changes in non-cash working capital and non-current liability | ||||||||||
| Prepaid expenses and other receivables | ( | ) | ( | ) | ||||||
| Trade payables and accrued expenses | ||||||||||
| Deferred share units redemption | 12(e) | ( | ) | |||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||
| INVESTING ACTIVITIES | ||||||||||
| Acquisition of property, plant and equipment | ( | ) | ( | ) | ||||||
| Expenditures on exploration and evaluation assets | 5 | ( | ) | |||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||||
| FINANCING ACTIVITIES | ||||||||||
| Proceeds from issuance of units | ||||||||||
| Share issue costs | ( | ) | ( | ) | ||||||
| Proceeds from exercise of options and warrants | ||||||||||
| Term Loan proceeds, net of fees | ||||||||||
| A&R Promissory Note repayment | 11 | ( | ) | |||||||
| Vehicle loan repayments, net of financing | ( | ) | ( | ) | ||||||
| Lease payments | 8 | ( | ) | ( | ) | |||||
| NSR Option | 10 | |||||||||
| Net cash provided by financing activities | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||||
| Change in cash and cash equivalents for the year | ( | ) | ||||||||
| Cash and cash equivalents at the beginning of the year | ||||||||||
| Cash and cash equivalents at the end of the year | ||||||||||
| Supplemental cash flow information | ||||||||||
| Income taxes paid | ||||||||||
| Interest paid | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-7 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
Premium Resources Ltd. and its wholly-owned subsidiaries’ (collectively, the “Company” or “PREM” and formerly Premium Nickel Resources Ltd.) principal business activity is the exploration and evaluation of PREM’s flagship asset, the Selebi nickel-copper-cobalt sulphide mine in Botswana and, separately, the Company’s Selkirk nickel-copper-cobalt-platinum group elements sulphide mine, also in Botswana. The common shares of PREM (“Common Shares”) are listed and posted for trading on the TSX Venture Exchange (the “TSXV”) under the symbol “PREM”. Prior to November 20, 2024, the Company traded on the TSXV under its previous name and symbol, Premium Nickel Resources Ltd. and PNRL, respectively. In addition, the Common Shares are currently quoted on the OTC Pink Open Market under the symbol “PRMLF”.
The following corporate structure chart sets out details of the direct and indirect ownership of the principal subsidiaries of the Company:
Notes:
| (1) | Premium Nickel Group Proprietary Limited owns the Selkirk Assets (as defined below). | |
| (2) | Premium Nickel Resources Proprietary Limited owns the Selebi Assets (as defined below). |
The Company’s head and registered office is located at One First Canadian Place, 100 King Street West, Suite 3400, Toronto, Ontario, Canada M5X 1A4.
The principal assets of the Company are the Selebi and Selebi North nickel-copper-cobalt (“Ni-Cu-Co”) mines in Botswana and related infrastructure (together, the “Selebi Mines”), as well as the nickel, copper, cobalt, platinum-group elements (“Ni-Cu-Co-PGE”) Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licences (collectively, the “Selkirk Mine” and together with the Selebi Mines, the “Mines”).
Going Concern
The Company, being in the exploration stage, is subject to risks and challenges similar to companies in a comparable stage of exploration and development. These risks include the challenges of securing adequate capital for exploration and advancement of the Company’s material projects, operational risks inherent in the mining industry, and global economic and metal price volatility, and there is no assurance management will be successful in its endeavors.
| F-8 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
These
consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it
will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary
course of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving
profitable operations and its ability to obtain adequate financing. The Company incurred a net loss of
$
It is not possible to predict whether future financing efforts will be successful or if the Company will attain a profitable level of operations. These material uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.
The
properties in which the Company currently has an interest are in pre-revenue stage. As such, the Company is dependent on external financing
to fund its activities. In order to carry out the planned activities and cover administrative costs, the Company will use its existing
working capital and raise additional amounts as needed. Further, the second instalment under the Selebi APA (defined in Note 5) of $
On March 18, 2025, the Company closed a significant refinancing which included the conversion of the Term Loan into equity (Note 19). While this transaction will provide sufficient capital for the Company to fund operations in the near term, the Company will need further funding to support advancement of the Selebi Mines and the Selkirk Mine toward the development stage.
Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) Statement of Compliance
These consolidated financial statements reflect the accounts of the Company and have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for financial information.
Historically, the Company has prepared its financial statements under International Financial Reporting Standards, as issued by the International Accounting Standards Board, for reporting as permitted by security regulators in Canada, as well as in the United States under the status of a foreign private issuer and a non-accelerated filer as defined by the SEC. In Fiscal 2024, the Company determined that it no longer qualified as a non-accelerated filer under the SEC rules, as the SEC rules apply to foreign private issuers. As a result, the Company elected to report with the SEC on domestic forms and comply with domestic company rules, which permit the Company to continue to avail itself of accommodations available to non-accelerated filers that file on domestic issuer forms. Consequently, the Company transitioned to preparing its financial statements using US GAAP for its SEC filing requirements.
(b) Basis of preparation
These consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial assets and financial liabilities where applicable. The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company as of December 31, 2024, and through the date of this report filing.
| F-9 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
Operating segments are reported in a manner consistent with the internal reporting provided to executive management. The Company determined that it has one reportable operating segment being that of the acquisition, exploration and evaluation of mineral properties in three geographic segments, which are Canada, Barbados and Botswana (Note 15).
The Company’s presentation currency is Canadian dollars. Reference herein of $ or CAD is to Canadian dollars, US$ or USD is to United States dollars, and BWP is to Botswana pula.
(c) Reclassification
Certain
comparative figures on the consolidated balance sheets, consolidated statements of operations and comprehensive loss, consolidated statements
of cash flows, and the notes to the consolidated financial statements have been reclassified to conform to the current year presentation.
These reclassifications have no effect on net loss or shareholders’ equity as previously reported. An adjustment has been made to reduce share-based payments by $
(d) Basis of consolidation
These consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries as summarized in the table below. All intercompany transactions, balances, income and expenses are eliminated upon consolidation.
SCHEDULE OF ITS WHOLLY-OWNED SUBSIDIARIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS
| Name of Entity | Place of Incorporation | Percentage Ownership | Functional Currency | |||
| Premium Resources Ltd. | CAD | |||||
| NAN Exploration Inc. | CAD | |||||
| PNR Amalco Ltd. | CAD | |||||
| Premium Resources International Ltd. | USD | |||||
| Premium Resources Selkirk (Barbados) Limited | USD | |||||
| Premium Resources Selebi (Barbados) Limited | USD | |||||
| Premium Nickel Group Proprietary Limited | BWP | |||||
| Premium Nickel Resources Proprietary Limited | BWP | |||||
(e) Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign denominated monetary items are translated at the rates prevailing on the balance sheet date. Non-monetary items measured at historical cost continue to be carried at the exchange rates prevailing at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate prevailing at the date when fair values were determined.
Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in net loss in the year in which they arise.
| F-10 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive loss. Where the non-monetary gain or loss is recognized in net loss, the exchange component is also recognized in net loss.
(f) Foreign operations
In the Company’s consolidated financial statements, all assets, liabilities and transactions of the Company’s entities with a functional currency other than the Canadian dollar are translated into Canadian dollars upon consolidation. The functional currency of the Company’s subsidiaries in Barbados is the USD, and the BWP for the subsidiaries in Botswana. On consolidation, assets and liabilities have been translated into Canadian dollars at the closing rate on the balance sheet date. Fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into Canadian dollars at the closing rate on the balance sheet date. Income and expenses have been translated into Canadian dollars at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive loss and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised as part of the gain or loss on disposal.
(g) Cash and Cash Equivalents
Cash and cash equivalents include all highly-liquid investments with an original maturity of three months or less. The Company minimizes its credit risk by investing its cash and cash equivalents with major Canadian and international banks and financial institutions with a minimum long-term credit rating of A, as defined by Standard & Poor’s. The Company’s management believes that no concentration of credit risk exists with respect to the investment of its cash and cash equivalents.
(h) Exploration and evaluation assets
Costs of leasing, exploration, evaluation, carrying and retaining unproven mineral properties are expensed as incurred. If the Company identifies proven and probable reserves in its investigation of a property and upon the establishment of commercial feasibility, the property would enter the development stage and future costs would be capitalized until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.
To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration and evaluation costs are being expensed.
ASC 930-805 - Extractive Activities-Mining: Business Combinations states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.
| F-11 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
(i) Impairment of long-lived assets
Long-lived assets, including exploration and evaluation assets and property, plant and equipment, are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the assets; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the assets; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the assets; and current expectation that the assets will more likely than not be sold or significantly disposed of before the end of their estimated useful life.
When indicators of potential impairment are present, the Company prepares a projected undiscounted cash flow analysis for the respective asset or asset group. If the sum of the undiscounted cash flows is less than the carrying value of the asset or asset group, an impairment loss is recognized equal to the excess of the carrying value over the fair value. Fair value can be determined using a market approach, income approach or cost approach. Recognized impairment losses are not reversed.
Based
on the Company’s evaluation,
(j) Leases
At commencement of a contract, the Company assesses whether a contract is, or contains, a lease by determining whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A right-of-use (the “ROU”) asset and lease liability are recognized at the lease commencement date. The lease liability is initially measured at the present value of all future lease payments that have not been paid as of the commencement date of the lease, discounted using the Company’s incremental borrowing rate, unless the rate implicit in the lease is readily determinable. The ROU asset is initially measured at cost, which is calculated as the initial amount of the lease liability, with an adjustment for any initial direct costs incurred, plus adjustments for any lease payments made in advance of the commencement date, and less any lease incentives received.
ASC 842 requires a lessee to classify a lease as either a finance or operating lease. Interest and amortization expense are recognized for finance leases while only a single lease expense is recognized for operating leases, typically on a straight-line basis.
ROU assets are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is remeasured when there is a change in future lease payments, when there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. These adjustments are recorded through profit or loss.
(k) Property, plant and equipment
Property, Plant and Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to net loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in net loss.
| F-12 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
Depreciation is calculated using the straight-line method to charge the cost, less residual value, of the assets to net loss over their estimated useful lives. The depreciation rate applicable to each category of property, plant and equipment is as follows:
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT
| Property, Plant & Equipment | Estimated useful life (years) | |
| Computer and software | ||
| Vehicles | ||
| Equipment | ||
| Furniture and fixtures | ||
| Buildings |
(l) Additional paid-in capital
Additional paid-in capital is presented at the value of the shares issued as the Company’s shares have no stated par value. Transaction costs directly attributable to the issuance of Common Shares are recognized as a deduction from equity. Transactions with shareholders are disclosed separately in equity.
The proceeds from the exercise of stock options or warrants together with amounts previously recorded in additional paid-in capital over the vesting periods are recorded as additional paid-in capital.
(m) Unit placements
The Company uses the relative fair value method with respect to the measurement of shares and warrants issued as private placement units. Under the relative fair value method, the Company first determines the fair value of the Common Shares and warrants issued in a private placement, calculates the total fair value of the issued units, and then allocates the proceeds received between the Common Shares and warrants based on their relative fair values.
(n) Share-based compensation
The Company grants equity settled share-based compensation in the form of share options and restricted share units (“RSUs”) in exchange for the provision of services. The Company records stock-based compensation in accordance with ASC 718 - Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the equity instrument issued.
The Company determines the fair value of the awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in net loss over the requisite service period. At the end of the reporting period, the Company updates its estimate of the number of awards that are expected to vest and adjusts the total expense to be recognized over the vesting period. Where an unvested award is cancelled by the Company or the counterparty, any remaining element of the fair value of the award is expensed immediately or reversed through profit or loss, depending on the type of cancellation.
The Company grants cash settled share-based compensation in the form of DSUs to its Directors in exchange for the provision of services. The Company records the fair value of the liability at the date which it is incurred based on the number of units granted multiplied by the price of the Company’s Common Shares on the date of grant, and adjusts the liability to the fair value at the end of each reporting period and at the date of settlement. Changes in fair value are recognized in net loss for the period.
Basic loss per Common Share is calculated using the weighted average number of Common Shares outstanding during the period and does not include outstanding options, RSUs and warrants. Dilutive loss per Common Share is not presented differently from basic loss per Common Share as the conversion of outstanding stock options, RSUs and warrants into Common Shares would be anti-dilutive given the Company’s ongoing net loss position.
| F-13 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
(q) Income taxes
The Company’s tax provision consists of taxes currently payable or receivable, plus any change during the period in deferred tax assets and liabilities. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for certain temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net loss in the period of the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.
The Company operates in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Therefore, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if available evidence indicates it is more likely than not that the tax position will be sustainable based on its technical merits. The second step is to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized upon ultimate settlement. For tax positions that are 50 percent or less likely of being sustained upon audit, the Company does not recognize any portion of that benefit in the financial statements.
(r) Derivative instruments
The Company evaluates its financial instruments and other contracts to determine if those contracts, or embedded components of those contracts, qualify as derivatives to be separately accounted for in accordance with ASC 815 – Derivatives and Hedging. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market at each balance sheet date and recorded as an asset or liability and the change in fair value is recorded in net loss.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date.
(s) Use of Estimates
The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that can affect reported amounts of assets, liabilities, revenues and expenses and the accompanying disclosures. Estimates and assumptions are continuously evaluated and are based on management’s historical experience and on other assumptions believed to be reasonable at the time of preparation of the consolidated financial statements. However, different estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The more significant areas requiring the use of management estimates and assumptions include the recoverability of exploration and evaluation assets; asset lives for depreciation and amortization; the Company’s ability to continue as a going concern; valuation of share-based compensation and warrants; deferred taxes and valuation allowances; and asset retirement obligations. Management has determined that the Company has no asset retirement obligations at December 31, 2024.
| F-14 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
Recently Adopted Accounting Pronouncements
| a) | ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures. |
The Accounting Standards Update (“ASU”) is applicable to all public entities that are required to report segmented information in accordance with ASC 280 – Segment Reporting and is effective for annual reporting periods beginning after December 15, 2023. ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures was issued to improve a public entity’s disclosure of reportable segments, with the most significant requirement being for a public entity to disclose its significant segment expense categories and amounts for each reportable segment. The Company adopted the new pronouncement effective January 1, 2024, with no impact to its consolidated financial statements.
Recently Issued Accounting Pronouncements and Disclosures Not Yet Adopted
| a) | ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures |
In December 2023, the Financial Accounting Standards Board (“FASB”) issued a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU becomes effective January 1, 2025. The Company is assessing the impact of this ASU, and upon adoption, may be required to include certain additional disclosures in the notes to its financial statements.
| b) | ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures |
In November 2024, FASB issued an ASU which will require entities to provide disaggregated disclosure of specified categories of expenses that are included on the face of the income statement, including: purchases of inventory, employee compensation, depreciation, amortization and depletion. This ASU becomes effective January 1, 2027. The Company is assessing the impact of this ASU, and upon adoption, may be required to include certain additional disclosures in the notes to its financial statements.
| F-15 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
3. CASH AND CASH EQUIVALENTS
A summary of the Company’s cash and cash equivalents is detailed in the table below:
SCHEDULE OF CASH AND CASH EQUIVALENTS
December 31, 2024 $ | December 31, 2023 $ | |||||||
| Cash | ||||||||
| Short-term deposits | ||||||||
| Cash and cash equivalents | ||||||||
4. OTHER RECEIVABLES
A summary of the Company’s other receivables is detailed in the table below:
SCHEDULE OF OTHER RECEIVABLES
December 31, 2024 $ | December 31, 2023 $ | |||||||
| ||||||||
| HST paid on purchases | ||||||||
| VAT paid on purchases | ||||||||
| Other receivables | ||||||||
| Other receivables, net | ||||||||
5. EXPLORATION AND EVALUATION ASSETS
The exploration and evaluation assets of the Company consist of the acquisition costs of mining assets located in Botswana:
SCHEDULE OF EXPLORATION AND EVALUATION ASSETS
Selebi $ | Selkirk $ | Total $ | ||||||||||
| Botswana | ||||||||||||
Selebi $ | Selkirk $ | Total $ | ||||||||||
| Balance, December 31, 2022 | ||||||||||||
| Additions | ||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ( | ) | ||||||
| Balance, December 31, 2023 | ||||||||||||
| Foreign currency translation | ||||||||||||
| Balance, December 31, 2024 | ||||||||||||
The following is a description of the Company’s exploration and evaluation assets and the related spending commitments:
Botswana Assets - Selebi and Selkirk
In September 2021, the Company executed the Selebi Asset Purchase Agreement (“Selebi APA”) with the BCL Limited (“BCL”) liquidator to acquire the Selebi Mines formerly operated by BCL. In January 2022, the Company closed the transaction and ownership of the Selebi Mines transferred to the Company.
Pursuant
to the Selebi APA, the aggregate purchase price payable to the seller for the Selebi Mines shall be the sum of $
| ● | $ | |
| ● | $ | |
| ● | $ |
| F-16 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
The
total acquisition cost of the Selebi Mines included the first instalment of $
In
addition to the Selebi APA, the purchase of the Selebi Mines is also subject to a royalty agreement as well as a contingent
consideration agreement with the liquidator.
The Company also negotiated a separate asset purchase agreement (the “Selkirk APA”) with the liquidator of Tati Nickel Mining Company (“TNMC”) in January 2022 to acquire the Selkirk deposit and related infrastructure formerly operated by TNMC. The transaction closed in August 2022.
The
Selkirk APA does not provide for a purchase price or initial payment for the purchase of the assets. The acquisition cost of the Selkirk
Mine of $
In
addition to the Selkirk APA, the purchase of the Selkirk Mine is also subject to a royalty agreement as well as a contingent consideration
agreement with the liquidator.
In
August 2023, the Company entered into a binding commitment letter with the liquidator of BCL, which is subject to customary closing conditions,
to acquire a
The
upfront cost to the Company to acquire these additional mineral properties is $
Both
the Selebi Mines and Selkirk Mine are subject to a royalty payable to the Botswana Government of
| F-17 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
General Exploration Expenses
Details of the general exploration expenses by nature are presented as follows:
SCHEDULE OF GENERAL EXPLORATION EXPENSES
Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||
| Year ended December 31, 2024 | ||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||
| Drilling | ||||||||||||||||
| Site operations, administration, and overhead | ||||||||||||||||
| Infrastructure and equipment maintenance | ||||||||||||||||
| Geology | ||||||||||||||||
| Mine development | ||||||||||||||||
| Electricity | ||||||||||||||||
| Engineering and technical studies | ||||||||||||||||
| Geophysics | ||||||||||||||||
| Freight, tools, supplies, and other consumables | ||||||||||||||||
| Health and safety | ||||||||||||||||
| Environmental, social and governance | ||||||||||||||||
| Share-based compensation | ||||||||||||||||
| Total | ||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||
| Year ended December 31, 2023 | ||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||
| Drilling | ||||||||||||||||
| Site operations, administration, and overhead | ||||||||||||||||
| Infrastructure and equipment maintenance | ||||||||||||||||
| Geology | ||||||||||||||||
| Mine development | ||||||||||||||||
| Electricity | ||||||||||||||||
| Engineering and technical studies | ||||||||||||||||
| Geophysics | ||||||||||||||||
| Freight, tools, supplies, and other consumables | ||||||||||||||||
| Health and safety | ||||||||||||||||
| Environmental, social and governance | ||||||||||||||||
| Share-based compensation | ||||||||||||||||
| Total | ||||||||||||||||
6. PROPERTY, PLANT AND EQUIPMENT
The tables below set out costs and accumulated depreciation and amortization as at December 31, 2024 and December 31, 2023:
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT
| Cost | Land and Buildings(1) $ | Equipment(1) $ | Furniture and Fixtures $ | Vehicles $ | Computer and Software $ | Total $ | ||||||||||||||||||
| Balance – December 31, 2022 | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance – December 31, 2023 | ||||||||||||||||||||||||
| Balance , Cost | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Additions, Cost | ||||||||||||||||||||||||
| Foreign currency translation | ( | ) | ||||||||||||||||||||||
| Foreign currency translation, Cost | ( | ) | ||||||||||||||||||||||
| Balance – December 31, 2024 | ||||||||||||||||||||||||
| Balance , Cost | ||||||||||||||||||||||||
| Accumulated Depreciation | Land and Buildings(1) | Equipment(1) | Furniture and Fixtures | Vehicles | Computer and Software | Total | ||||||||||||||||||
| Balance – December 31, 2022 | ||||||||||||||||||||||||
| Depreciation during the year | ||||||||||||||||||||||||
| Foreign currency translation | ( | ) | ||||||||||||||||||||||
| Balance – December 31, 2023 | ||||||||||||||||||||||||
| Balance Accumulated Depreciation | ||||||||||||||||||||||||
| Depreciation during the year | ||||||||||||||||||||||||
| Depreciation Accumulated Depreciation | ||||||||||||||||||||||||
| Foreign currency translation | ||||||||||||||||||||||||
| Foreign currency translation Accumulated Depreciation | ||||||||||||||||||||||||
| Balance – December 31, 2024 | ||||||||||||||||||||||||
| Balance Accumulated Depreciation | ||||||||||||||||||||||||
| Carrying Value | Land and Buildings(1) | Equipment(1) | Furniture and Fixtures | Vehicles | Computer and Software | Total | ||||||||||||||||||
| Balance – December 31, 2023 | ||||||||||||||||||||||||
| Balance, Carrying Value | ||||||||||||||||||||||||
| Balance – December 31, 2024 | ||||||||||||||||||||||||
| Balance, Carrying Value | ||||||||||||||||||||||||
Note:
| (1) |
| F-18 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
7. TRADE PAYABLES AND ACCRUED LIABILITIES
A summary of trade payables and accrued liabilities is detailed in the table below:
SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES
December 31, 2024 $ | December 31, 2023 $ | |||||||
| Amounts due to related parties (Note 13) | ||||||||
| Trade payables | ||||||||
| Accrued liabilities | ||||||||
| Total trade payables and accrued liabilities | ||||||||
Included
in the amounts due to related parties at December 31, 2024, is $
8. LEASE LIABILITIES
The following table summarizes quantitative information pertaining to the Company’s finance and operating leases:
SCHEDULE OF FINANCE AND OPERATING LEASES COST
2024 $ | 2023 $ | |||||||
| Year ended December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Lease cost | ||||||||
| Finance lease cost: | ||||||||
| Amortization of finance lease right-of-use assets | ||||||||
| Interest on lease liabilities | ||||||||
| Short-term operating lease cost | ||||||||
| Total lease cost | ||||||||
| 2024 $ | 2023 $ | |||||||
| Year ended December 31, | ||||||||
| 2024 $ | 2023 $ | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | ||||||||
| Financing cash flows from finance leases, principal payment | ||||||||
| Financing cash flows from finance leases, interest payment | ||||||||
| Non-cash additions (reductions) to right-of-use assets and lease liabilities: | ||||||||
| Recognition of right-of-use assets for finance leases | ||||||||
| Depreciation of right-of-use assets for finance leases | ( | ) | ( | ) | ||||
Finance Leases
Syringa Lodge
In July 2022, the Company executed a sales agreement (the “Lodge Agreement”) with Tuli Tourism Pty Ltd. (the “Seller”) for the Syringa Lodge in Botswana.
| F-19 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
Pursuant
to the Lodge Agreement, the aggregate purchase price payable to the Seller shall be the sum of $
In
addition to the above purchase price, the Company was required to pay to the Seller an agreed interest amount of
Drilling Equipment
In March 2023, the Company entered into a drilling equipment supply agreement (the “Equipment Agreement”) with Forage Fusion Drilling Ltd. (“Forage”) to purchase specific drilling equipment on a “rent to own” basis with the purchase price to be paid in monthly payments.
Pursuant
to the Equipment Agreement, the aggregate purchase price payable to Forage was $
Operating Leases
The Company has operating leases primarily related to surveying and mobile equipment with initial lease terms of twelve months or less. The Company records these in general exploration expenses within the statement of operations and comprehensive loss.
9. TERM LOAN
On
June 28, 2023, the Company closed a financing with Cymbria Corporation (“Cymbria”), EdgePoint Investment Group Inc.
and certain other entities managed by it (“EdgePoint”) for aggregate gross proceeds to the Company of $
The
Term Loan had an original principal amount of $
| ● | increase
in the interest rate payable on the Term Loan to | |
| ● | the
Company could prepay all or any portion of the principal amount outstanding with a minimum
repayment amount of $ | |
| ● | mandatory prepayment was to be made when the Company had non-ordinary course asset sales or other dispositions of property or the Company received cash from the issuance of indebtedness for borrowed money. |
As at December 31, 2024, the Company was in compliance with the Term Loan covenants.
| F-20 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
In
connection with the Term Loan, the Company issued an aggregate of
Further,
on December 14, 2023, the Company and Cymbria closed an amendment to the terms of the existing Term Loan, increasing the principal
amount of the Term Loan by $
The Company evaluated the amendment of the Term Loan and determined that it qualified as a non-substantial modification under ASC 470 - Debt. Therefore, a new effective interest rate was determined based on the carrying amount of the original debt instrument, adjusted for the fair value of the Additional Warrants resulting from the modification, and the revised cash flows.
The
fair value of the Non-Transferable Warrants and Additional Warrants was estimated at $
The fair value of the Non-Transferable Warrants and Additional Warrants was calculated using the following assumptions:
SCHEDULE OF FAIR VALUE OF NON-TRANSFERABLE AND ADDITIONAL WARRANTS
| Non-Transferable Warrants | Additional Warrants | |||||||
| Expected dividend yield | % | % | ||||||
| Share price | $ | $ | ||||||
| Expected share price volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Expected life of warrant | ||||||||
The volatility was determined by calculating the historical volatility of stock prices of the Company over the same period as the expected life of the Transferable Warrants using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns.
The
Company used $
For
the year ended December 31, 2024, the Company paid $
| F-21 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
The following is a continuity of the Term Loan:
SCHEDULE OF CONTINUITY OF TERM LOAN
| $ | ||||
| Principal amount of the Term Loan | ||||
| Fair value of the Non-Transferrable Warrants | ( | ) | ||
| Term Loan at fair value on issuance, June 28, 2023 | ||||
| Transaction costs | ( | ) | ||
| Accrued interest | ||||
| Accretion of warrant value and transaction costs | ||||
| Interest paid | ( | ) | ||
| Fair value of Term Loan as of December 14, 2023 | ||||
| Additional principal amount of Term Loan on December 14, 2023 | ||||
| Term Loan issue discount | ( | ) | ||
| Fair value of the Additional Warrants | ( | ) | ||
| Transaction fee for modification | ( | ) | ||
| Fair value of modified Term Loan as of December 14, 2023 | ||||
| Accrued interest | ||||
| Accretion of warrant value and transaction costs | ||||
| Interest paid | ( | ) | ||
| Term Loan balance, December 31, 2023 | ||||
| Accrued interest | ||||
| Accretion of warrant value and transaction costs | ||||
| Interest paid | ( | ) | ||
| Term Loan balance, December 31, 2024 | ||||
Fort Capital Partners acted as financial advisor to the Company on the debt portion of the 2023 Financing Transactions and was paid cash fees of $
10. NSR OPTION
Concurrently
with the closings of the Equity Financing and the Term Loan on June 28, 2023, Cymbria paid an aggregate of $
As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at December 31, 2024 and December 31, 2023 is . The Option payment received in cash was recorded as a non-current liability.
PREM’s
indirect wholly-owned subsidiary Premium Nickel Resources Proprietary Limited (“PNRP”) acquired the Selebi Mines in
January 2022 out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a
| F-22 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
PREM’s
indirect wholly-owned subsidiary Premium Nickel Group Proprietary Limited (“PNGP”) acquired the Selkirk Mine in August
2022 out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a
Each
of PNRP and PNGP has agreed to grant Cymbria, in exchange for the Option Payment, an option to participate in any such repurchase of
the applicable portion of its NSR from the relevant liquidator. Cymbria will, following the exercise of its option to participate in
any such repurchase, acquire a
Under
the NSR option purchase agreements, Cymbria could acquire a
As
part of the Term Loan conversion into equity that closed on March 18, 2025, (Note 19), the Company and Cymbria amended the terms of
the agreements. Cymbria will now have the right to acquire a
11. PROMISSORY NOTE
On
November 21, 2022, the Company announced a $
On
March 17, 2023, the Company entered into an amended and restated Promissory Note (the “A&R Promissory Note”) extending
the maturity of the Promissory Note from March 22, 2023 to November 24, 2023 (the “Extension”). All other terms of
the Promissory Note remained the same. In connection with the Extension and entering into of the A&R Promissory Note, the Company
agreed to pay an amendment and restatement fee of $
In
connection with the A&R Promissory Note, interest and accretion expense of $ was recorded for the year ended December 31, 2024
(2023 - $
The
fair value of the liability of the Lender Warrants was estimated at $
The fair value of the Lender warrants was calculated using the following assumptions:
SCHEDULE OF LENDER WARRANTS
| March 17, 2023 | ||||
| Expected dividend yield | % | |||
| Share price | $ | |||
| Expected share price volatility | % | |||
| Risk free interest rate | % | |||
| Expected life of warrant | ||||
The volatility was determined by calculating the historical volatility of share prices of the Company over one year using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns.
| F-23 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
On June 28, 2023, the Company repaid the A&R Promissory Note in full, and on March 17, 2024, the Lender Warrants expired unexercised.
The authorized capital of the Company comprises an number of Common Shares without par value and Preferred Shares, issuable in series, of which are authorized to be designated as Series 1 Convertible Preferred Shares.
| a) | Common Shares Issued and Outstanding |
Year ended December 31, 2024
During the year ended December 31, 2024, Common Shares were issued for the net exercise of options. In addition, Common Shares were issued during the year ended December 31, 2024, as a result of the following financing transactions:
On June 14, 2024, the Company closed the first tranche of a non-brokered private placement offering (the “June 2024 Financing”), pursuant to which the Company issued an aggregate units of the Company (the “Units”) at a price of $ per Unit (the “Issue Price”) for aggregate gross proceeds of $. Each Unit is comprised of one Common Share and one Common Share purchase warrant of the Company (each, a “Warrant”).
On June 21, 2024, the Company closed the second tranche of the June 2024 Financing and issued an additional Units at the Issue Price for gross proceeds of $.
Each
Warrant entitles the holder thereof to acquire one Common Share for a period expiring 60 months following the date of issuance (the “Expiry
Date”) at a price of $
All
securities issued under the June 2024 Financing were subject to a hold period of four months plus one day from the date of issuance.
In connection with the June 2024 Financing, SCP Resource Finance LP (“SCP”), in its capacity as financial advisor
to the Company, was paid an advisory fee which the Company has satisfied by issuing to SCP an aggregate of
The
fair value of the Warrants issued under the June 2024 Financing, calculated using the Monte Carlo model, was estimated at $
SCHEDULE OF FAIR VALUE OF WARRANTS
| June 14, 2024 | June 21, 2024 | |||||||
| Expected dividend yield | % | % | ||||||
| Share price | $ | $ | ||||||
| Expected share price volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Expected life of warrant | ||||||||
The volatility was determined by calculating the historical volatility of stock prices of the Company over a 5-year period using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns.
As at December 31, 2024, the Company had Common Shares issued and outstanding (December 31, 2023 – ).
On March 18, 2025, the Company closed a private placement financing (Note 19).
Year ended December 31, 2023
During the year ended December 31, 2023, Common Shares were issued for the net exercise of options, and Common Shares were issued from the exercise of warrants. In addition, Common Shares were issued during the year ended December 31, 2023, as a result of the following financing transactions:
On
February 24, 2023, the Company issued Common Shares at a price of $ per share for gross proceeds of $
On
June 28, 2023, the Company issued units at a price of $ per unit to EdgePoint for aggregate gross proceeds of $
Fort
Capital Partners acted as financial advisor to the Company on the equity portion of the 2023 Financing Transactions and was paid cash
fees of $
The fair value of the Transferable Warrants in connection with the February 2023 Financing and the 2023 Financing Transactions were calculated using the following assumptions:
SCHEDULE OF FAIR VALUE OF WARRANTS IN CONNECTION WITH FINANCING TRANSACTIONS
| February 24, 2023 | June 28, 2023 | |||||||
| Expected dividend yield | % | % | ||||||
| Share price | $ | $ | ||||||
| Expected share price volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Expected life of warrant | ||||||||
| F-24 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
The volatility was determined by calculating the historical volatility of stock prices of the Company over a period, being the expected life of the Transferable Warrants, using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns.
On
December 14, 2023, the company closed an equity and debt financing package of $
| b) | Warrants |
The following summarizes Common Share purchase warrant activity:
SUMMARY OF COMMON SHARE PURCHASE WARRANT ACTIVITY
| Year ended December 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
Number Outstanding | Weighted Average Exercise Price $ | Number Outstanding
| Weighted Average Exercise Price $ | |||||||||||||
| Outstanding, beginning of the year | ||||||||||||||||
| Issued | ||||||||||||||||
| Exercised | ( | ) | ( | ) | ||||||||||||
| Expired | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Outstanding, end of the period | ||||||||||||||||
At December 31, 2024, the Company had outstanding Common Share purchase warrants exercisable to acquire Common Shares as follows:
SCHEDULE OF DETAILS OF WARRANTS OUTSTANDING
| Warrants Outstanding | Expiry Date | Exercise Price $ | ||||||
| February 24, 2025 | ||||||||
| June 28, 2026 | ||||||||
| June 14, 2029 | ||||||||
| June 21, 2029 | ||||||||
| c) | Stock Options |
The Company has a stock option plan (the “Option Plan”) providing the authority to grant options to directors, officers, employees and consultants enabling them to acquire up to Common Shares of the Company. Under the Option Plan, the exercise price of each option shall not be less than the discounted market price on the grant date and as approved by the Board of Directors of the Company. The options can be granted for a maximum term of .
| F-25 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
The following summarizes the option activity under the Option Plan:
SCHEDULE OF OPTION ACTIVITY
| Year ended December 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
Number Outstanding | Weighted Average Exercise Price $ | Number Outstanding | Weighted Average Exercise Price $ | |||||||||||||
| Outstanding, beginning of the year | ||||||||||||||||
| Issued | ||||||||||||||||
| Exercised | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cancelled | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Outstanding, end of the period | ||||||||||||||||
The total intrinsic value of options exercised for the year ended December 31, 2024, was $ (2023 - $).
During the year ended December 31, 2024, the Company granted an aggregate of stock options to employees, directors, officers and consultants with a term of . The options have a weighted average exercise price of $ per Common Share, with vesting annually in equal thirds beginning on the date of grant, and vesting immediately on the date of grant.
During the year ended December 31, 2023, the Company granted an aggregate of stock options to employees, directors, officers and consultants with a term of . The options have an exercise price of $ per Common Share and vest annually in equal thirds beginning on the first anniversary of the date of grant.
For the year ended December 31, 2024, a total of $ (2023 – $) was recorded as share-based compensation expense and credited to additional paid-in capital related to the Option Plan.
The fair value of stock options granted was calculated using the Black-Scholes Option Pricing Model. The volatility is determined using the historical daily volatility over the expected life of the options. The expected life of the options considers the contractual term of the options, as well as an estimate of the time to exercise. The Black-Scholes Option Pricing Model used the following assumptions:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Expected dividend yield | % | % | ||||||
| Expected forfeiture rate | % | % | ||||||
| Expected share price volatility range | - | % | % | |||||
| Weighted average expected share price volatility | % | % | ||||||
| Risk free interest rate | %- | % | - | % | ||||
| Expected life of options | - years | -years | ||||||
| F-26 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
Options Outstanding | Options Exercisable | Expiry Date | Exercise Price $ | Intrinsic Value $ | ||||||||||||
| February 24, 2025 | ||||||||||||||||
| August 19, 2025 | ||||||||||||||||
| January 26, 2026 | ||||||||||||||||
| February 25, 2026 | ||||||||||||||||
| September 29, 2026 | ||||||||||||||||
| October 25, 2026 | ||||||||||||||||
| January 20, 2027 | ||||||||||||||||
| August 8, 2028 | ||||||||||||||||
| August 14, 2029 | ||||||||||||||||
| December 4, 2029 | ||||||||||||||||
| d) | RSU Plan |
On October 29, 2024, the Company’s restricted share unit plan (the “RSU Plan”) was approved by shareholders at its annual general and special shareholders’ meeting. The RSU Plan enables the Company to grant RSUs to eligible participants upon approval by the Board of Directors. The maximum number of Common Shares that are issuable under the RSU Plan is Common Shares. Upon settlement, the holder is entitled to receive one Common Share. The Company may elect, in its sole discretion, to settle the value of the RSUs in cash.
The number and terms of RSUs awarded will be determined by the Board of Directors from time to time and be based on the volume weighted average price on the TSXV for the last five trading days immediately preceding the grant date. The RSU grants are fixed, not subject to vesting conditions other than service, and typically vest on a three-year schedule from the date of grant, with one-third of the RSU grant vesting on each of the first, second and third anniversaries of the date of grant. The Company uses the fair value method of accounting for the recording of RSU grants, and the fair value of the RSUs was determined based on the closing price of the Company’s Common Shares on the grant date.
SCHEDULE OF CONTINUITY OF RSU
| Number of Awards | Weighted Average Grant-Date Fair Value Per Award $ | Fair Value
$ | ||||||||||
| RSUs outstanding at December 31, 2023 | ||||||||||||
| Granted | ||||||||||||
| RSUs outstanding at December 31, 2024 | ||||||||||||
For the year ended December 31, 2024, a total of $ (2023 – $) was recorded as share-based compensation expense and credited to additional paid-in capital related to the RSU Plan.
| e) | DSU Plan |
The Company has a deferred share unit plan (the “DSU Plan”) that enables the Company to grant DSUs to eligible non-management directors upon approval by the Board of Directors. The DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director, the DSUs may be redeemed at any time prior to December 15th in the calendar year following the year in which the holder ceases to be a director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the number of units redeemed multiplied by the five-day volume weighted average price of the Common Shares on that date. The Company may elect, in its sole discretion, to settle the value of the DSUs redeemed in Common Shares on a one-for-one basis, provided shareholder approval has been obtained on or prior to the relevant redemption date.
| F-27 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
SCHEDULE OF DSU GRANTED
| Number of Awards | Price(1) $ | Fair Value $ | ||||||||||
| DSUs outstanding at December 31, 2022 | ||||||||||||
| Granted | ||||||||||||
| Redeemed | ( | ) | ( | ) | ||||||||
| Fair value adjustment | ( | ) | ||||||||||
| DSUs outstanding at December 31, 2023 | ||||||||||||
| Granted | ||||||||||||
| Fair value adjustment | ( | ) | ||||||||||
| DSUs outstanding at December 31, 2024 | ||||||||||||
| Less: current portion | ||||||||||||
| Long-term portion | ||||||||||||
Note:
| (1) |
During the year ended December 31, 2024, the DSU compensation, net of fair value adjustments, was $ (2023 - $).
The DSUs are classified as a derivative financial liability measured at fair value, with changes in fair value recorded in profit or loss. The fair value of the DSUs was determined based on the closing price of the Company’s Common Shares on the respective balance sheet date. As at December 31, 2024, the Company reassessed the fair value of the DSUs at $ and recorded the amount as a DSU liability (December 31, 2023 - $).
13. RELATED PARTY TRANSACTIONS
The following amounts due to related parties are included in trade payables and accrued liabilities (Note 7).
SCHEDULE OF RELATED PARTY TRANSACTIONS
December 31, 2024 $ | December 31, 2023 $ | |||||||
| Directors and officers of the Company | ||||||||
| Amounts due to related parties | ||||||||
Included
in the balance at December 31, 2024, is $
These amounts are unsecured, non-interest bearing and have 30-day fixed terms of repayment with the exception of the retirement payment, as noted above.
| (a) | Related party transactions |
As a result of the 2023 Financing Transactions on June 28, 2023, and December 14, 2023, Cymbria and certain other funds managed by EdgePoint (the “Financing Parties”) acquired a total of Common Shares. The Financing Parties also acquired on closing of the 2023 Financing Transactions an aggregate of warrants with an expiration date of June 28, 2026, and an exercise price of $. Further, in connection with the June 2024 Financing, EdgePoint subscribed for Units at $ per Unit for gross proceeds of approximately $ million.
| F-28 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
As
of December 31, 2024, EdgePoint beneficially owns Common Shares and warrants, representing approximately %
of the issued and outstanding Common Shares (approximately
In
connection with the June 2024 Financing, certain insiders of the Company subscribed for an aggregate of Units for gross proceeds
of $
For
the year ended December 31, 2024, the Company paid interest of $
| (b) | Key management personnel are defined as members of the Board of Directors and certain senior officers. |
| Year ended December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Salaries and management fees | ||||||||
| One-time retirement benefit | ||||||||
| Site operations and administration | ||||||||
| DSUs granted, net of fair value movements | ||||||||
| Share-based compensation | ||||||||
| Key management compensation | ||||||||
The one-time retirement benefit for the year ended December 31, 2024, relates to the retirement of the Company’s former Chief Executive Officer.
| F-29 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820 - Fair Value Measurement establishes a three-tier fair value hierarchy. The fair value hierarchy’s three tiers are based on the extent to which inputs used in measuring fair value are observable in the market, and are as follows:
| Level 1: | Quoted prices (unadjusted) in active markets for identical assets or liabilities; | |
|
Level 2: |
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and | |
| Level 3: | One or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability. |
Determination of fair value and the resulting hierarchy requires the use of observable market data whenever available. The classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.
The carrying value of cash and cash equivalents, trade payables and accrued liabilities approximate their fair value due to their short-term nature and therefore have been excluded from the table below. A summary of the carrying value and fair value of other financial instruments were as follows:
SCHEDULE OF CARRYING VALUE AND FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS
| December 31, 2024 | December 31, 2023 | |||||||||||||||||||
| Classification | Carrying Value $ | Fair Value $ | Carrying Value $ | Fair Value $ | ||||||||||||||||
| Lease liabilities | Level 2 | |||||||||||||||||||
| DSU liability | Level 1 | |||||||||||||||||||
| Vehicle financing | Level 2 | |||||||||||||||||||
| Term loan | Level 3 | |||||||||||||||||||
| NSR option liability | Level 2 | |||||||||||||||||||
Lease liabilities and vehicle financing – The fair values approximate carrying values as the interest rates are comparable to current market rates.
DSU liability – the fair value of the DSUs is measured using the closing price of the Company’s Common Shares at the end of each reporting period.
Term loan – the term loan is carried at amortized cost. The fair value measurement of the term loan was based on an income approach.
| F-30 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
NSR option liability – The fair value of the NSR options is determined using a valuation model that incorporates such factors as discounted cash flow projections, metal price volatility, and risk-free interest rate. As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at December 31, 2024 and December 31, 2023 is .
15. SEGMENTED INFORMATION
The Company has identified its Chief Executive Officer as its Chief Operating Decision Maker (“CODM”). The CODM evaluates the Company’s performance and segmented results based on Loss for the Year Before Other Items. The significant segment expenses reviewed by the CODM are consistent with the expense line items presented in Loss for the Year Before Other Items in the Company’s consolidated statements of operations and comprehensive loss. The CODM uses Loss for the Year Before Other Items to assess segment performance against the Company’s planned results, and to allocate capital investment.
The
Company operates in
SCHEDULE OF INFORMATION ABOUT COMPANY'S GEOGRAPHIC SEGMENTS
December 31, 2024 $ | December 31, 2023 $ | |||||||
| Current assets | ||||||||
| Canada | ||||||||
| Barbados | ||||||||
| Botswana | ||||||||
| Total | ||||||||
| Current assets | ||||||||
| Property, plant and equipment | ||||||||
| Canada | ||||||||
| Botswana | ||||||||
| Total | ||||||||
| Property, plant and equipment | ||||||||
| Exploration and evaluation assets | ||||||||
| Botswana | ||||||||
| Exploration and evaluation assets | ||||||||
16. CONTINGENT LIABILITIES
There are no environmental liabilities associated with the Mines as at the acquisition dates as all liabilities incurred prior to the acquisitions are the responsibility of the sellers, BCL and TNMC. The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of December 31, 2024, there were no material rehabilitation costs for which the Company expects to incur, and management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.
17. INCOME TAXES
The reported recovery of income taxes differs from amounts computed by applying the statutory income tax rates to the reported loss before income taxes as follows:
SCHEDULE OF STATUTORY INCOME TAX RATES
| Year ended December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Net loss before tax | ( | ) | ( | ) | ||||
| Combined basic federal and provincial income tax rate | % | % | ||||||
| Expected income tax recovery at the statutory tax rate | ( | ) | ( | ) | ||||
| Adjustments to expected income tax recovery: | ||||||||
| Permanent differences and other | ( | ) | ||||||
| Share-based compensation | ||||||||
| Change in estimates and other | ( | ) | ||||||
| Differences in foreign tax rates | ||||||||
| Change in valuation allowance | ||||||||
| Deferred tax recovery | ( | ) | ||||||
| F-31 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
The Company has recorded a valuation allowance as the Company believes it is not probable that the deferred tax assets will be realized in the foreseeable future. The Company’s deferred tax assets and liabilities are comprised of the following:
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| As at December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Deferred tax assets | ||||||||
| Non-capital losses available for carry-forward | ||||||||
| Property, plant and equipment | ||||||||
| Resource deductions | ||||||||
| Lease liabilities | ||||||||
| DSU liability | ||||||||
| Share issue costs | ||||||||
| Deferred tax assets | ||||||||
| Deferred tax liabilities | ||||||||
| Term Loan | ( | ) | ( | ) | ||||
| Property, plant and equipment | ( | ) | ( | ) | ||||
| Deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax asset | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax asset (liability) | ||||||||
The Company has Canadian non-capital losses of approximately
$
The potential tax benefit of the non-capital losses has not been recognized in these consolidated financial statements. The non-capital losses that have not been recognized expire as follows:
SCHEDULE OF NON-CAPITAL LOSSES
| Canada $ |
Botswana $ |
Barbados $ | ||||||||||
| 2029 | ||||||||||||
| 2030 | ||||||||||||
| 2031 | ||||||||||||
| 2039 | ||||||||||||
| 2040 | ||||||||||||
| 2041 | ||||||||||||
| 2042 | ||||||||||||
| 2043 | ||||||||||||
| 2044 | ||||||||||||
| Indefinite | ||||||||||||
| Operating loss carryforwards | ||||||||||||
| F-32 |
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)
18. GENERAL AND ADMINISTRATIVE EXPENSES
Details of the general and administrative expenses are presented in the following table:
GENERAL AND ADMINISTRATIVE EXPENSES
| Year ended December 31, | ||||||||
2024 $ | 2023 $ | |||||||
| Advisory and consultancy | ||||||||
| Filing fees | ||||||||
| General office expenses | ||||||||
| Insurance | ||||||||
| Investor relations | ||||||||
| Professional fees | ||||||||
| Salaries and management fees | ||||||||
| One-time retirement benefit | ||||||||
| Share-based compensation | ||||||||
| Total | ||||||||
The one-time retirement benefit for the year ended December 31, 2024, relates to the retirement of the Company’s former Chief Executive Officer (2023 – $). This amount will be paid over a two-year period beginning January 1, 2025, and ending December 31, 2026, in equal monthly instalments.
Share-based compensation expense for 2024 includes the graded vesting associated with both 2023 and 2024 stock option grants, and the 2024 RSU grants under the Company’s new RSU Plan.
19. SUBSEQUENT EVENTS
On March 18, 2025, the Company closed a significant refinancing and the deleveraging of its balance sheet with the conversion of the Term Loan (Note 9) into equity (the “Debt Conversion”).
The
Company completed a private placement financing issuing units of the Company at a price of $ per unit for aggregate
gross proceeds of approximately $
In
accordance with the previously announced debt settlement agreement, the Company has issued to Cymbria an aggregate of
units (“Settlement Units”) at a deemed issue price of $
per unit in full satisfaction of the $
The
Company also entered into advisory services agreements which include assistance with the identification of a new CEO, the Debt Conversion,
and Company strategy. The advisors will continue to provide such services on an ongoing basis until June 30, 2025. The Company issued Common Shares to the advisors at a deemed price per share of $ as consideration for their services. The shares
remain subject to contractual resale restrictions for a 12-month period. The Company also paid its financial advisor a fee of US$
The Company also granted: (i) stock options with each option having an exercise price of $, a term of , and vesting as to one-half on the date of grant and the balance on the first anniversary of the date of grant; and (ii) RSUs, each RSU vesting in full on the first anniversary of the date of grant.
| F-33 |
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
Item 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2024. Throughout the year, Management addressed the weaknesses in internal control over financial reporting that were disclosed in our 2023 Form 10-K, namely: lack of controls and process over significant estimates and judgment applied in assessing complex accounting transactions; lack of segregation of duties over posting and reviewing complex accounting transactions; and lack of communication between legal consultants and management related to SEC filing requirements. Management put in place a series of controls including increasing its technical strength through the engagement of technical consultants and hiring of experienced personnel to address complex, non-routine accounting transactions; the establishment of more thorough review procedures and documentation to ensure proper segregation of duties; and more routine, timely engagement of legal counsel to ensure continued, timely compliance with SEC filing requirements. Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our senior management concluded that our disclosure controls and procedures are effective .
| -35- |
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act, is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, taking into consideration the above-mentioned weaknesses disclosed in our 2023 Form 10-K and corresponding corrective actions. In making this assessment, management used the criteria set forth in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.
Changes in Internal Control over Financial Reporting
Subject to the above remediating controls, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. OTHER INFORMATION.
Insider Trading Arrangements
During
the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act
of 1934, as amended)
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
| -36- |
Part
III
Item 10. DIRECTORS , EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our Directors and Executive Officers
Directors are elected to serve until the next annual general meeting of shareholders or until their successor is duly elected or appointed, their removal by the shareholders, or their resignation. Directors are elected by a plurality of the votes cast at the annual meeting of shareholders.
A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business. Any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board individually or collectively consent in writing to the action.
Executive Officers are appointed by the Board and serve at its pleasure.
The following table sets forth certain information as of the date of this Report concerning our directors and executive officers:
| Name, Position with the Company | Age | Principal Occupation and Business Experience During the Past Five Years | Date of Appointment | |||
James Gowans Director and Independent Chairman |
73 | Corporate Director | January 1, 2024 | |||
Jason LeBlanc Director |
49 | CFO of African-based intermediate gold producer, Allied Gold Corporation (2023-current); CFO of Yamana Gold Inc. (2017-2023) | May 15, 2023 | |||
Mark Christensen Director |
56 | Founder and CEO of KES 7 Capital Inc. | August 4, 2023 | |||
Norman MacDonald Director |
54 | Senior Advisor, Natural Resources at Fort Capital (2021-2024); Senior Portfolio Manager at Invesco Canada | June 24, 2024 | |||
Donald Newberry Director |
49 | CFO of Ohio Truck Sales & Fleet Capital (2022-current); CFO of Nexus Engineering (2019-2022) | October 12, 2022 | |||
William O’Reilly Director |
76 | Corporate Director | August 9, 2022 | |||
Paul Martin
Director and Interim Chief Executive Officer |
64 | Interim CEO of Premium Resources Ltd. (January 2025-present); Interim Chief Executive Officer of Red Pine Exploration (March-August 2024); Interim CEO of Osisko Gold Royalties Ltd (2023); President and CEO of Detour Gold Corporation (2013-2018) |
September 18, 2024 | |||
Peter Rawlins Senior Vice President and Chief Financial Officer |
54 | Chief Financial Officer (2023-current); Vice President, Treasurer of Artemis Gold Inc. (2023); Managing Director of Canadian Imperial Bank of Commerce (2002-2023) | August 8, 2023 | |||
Boris Kamstra Chief Operating Officer of PRIL |
61 | Chief Operating Officer of PRIL(1) | January 1, 2022 | |||
Timothy Moran Chief Legal Officer and Corporate Secretary |
62 | Chief Legal Officer and Corporate Secretary; Corporate Secretary of Premium Nickel Resources Corporation; Principal of Moran Professional Corporation | August 3, 2022 | |||
Kneipe Setlhare President of PNGPL; President of PNRPL |
41 | President of PNGPL; President of PNRPL | September 19, 2021 | |||
Sean Whiteford President of PRIL and Former Director; |
57 | President of PRIL | March 1, 2023 | |||
Sharon Taylor Vice President, Exploration |
63 | Vice President, Exploration | July 16, 2014 |
| (1) | Premium Resources International Ltd. (Barbados) |
| -37- |
The biographies of the individuals appointed as directors and executive officers are as follows:
Board Biographies
The following are brief biographies of the Board:
James Gowans, Director and Independent Chairman
Mr. Gowans has over 30 years of experience as a senior executive in the mining industry, with notable roles at Debswana Diamond Company in Botswana, DeBeers SA, DeBeers Canada Inc., PT Inco, Cominco/Teck and Placer Dome Ltd. Mr. Gowans has served on the boards of numerous Canadian publicly traded mining companies, including Cameco Corporation, Arizona Mining Inc., Trilogy Metals Inc., Detour Gold Corporation, New Gold Inc., Marathon Gold Corp., Paycore Minerals Inc. and Treasury Metals Inc. where he currently serves as Chairman of the Board. He was also CEO and Interim President of Trilogy Metals Inc., held roles as CEO, President, and Director at Arizona Mining Inc., and served as co-President of Barrick Gold Corporation before becoming a Senior Advisor to the Chairman of the board of directors of Barrick Gold Corporation. Mr. Gowans holds a Bachelor of Applied Science in Mineral Engineering degree from the University of British Columbia and has attended the Banff School of Advanced Management. He is a past Chair of the Mining Association of Canada.
Jason LeBlanc, Director
Mr. LeBlanc has over 25 years of financial, business and capital markets experience in the mining industry. He is currently the Chief Financial Officer of Allied Gold Corporation and previously was the Chief Financial Officer of Yamana Gold Inc. from 2017 to 2023, following successively senior roles with Yamana Gold Inc. since 2006 that included debt and equity raises totaling over $2 billion and extensive M&A and other corporate transactions totaling over $15 billion. Mr. LeBlanc holds a Master of Finance degree from the University of Toronto and a Bachelor of Commerce degree from the University of Windsor. He also holds a Chartered Financial Analyst designation.
Mark Christensen, Director
Mark Christensen has spent the last 30 years as a specialist advisor/banker in public and private capital markets. He has experience in a broad range of corporate and capital market transactions, from mergers and acquisitions and “grey market” trading, to equity and debt structured financings totaling in the tens of billions of dollars. Mr. Christensen is the Founder and CEO of KES 7 Capital Inc., a Toronto-based, merchant bank and single-family office that targets bespoke investments in the resource, healthcare, real estate and technology sectors. Prior to founding KES 7 Capital Inc., Mr. Christensen was Vice Chairman and Head of Global Sales and Trading at GMP Securities (now Stifel Canada), which was one of Canada’s largest independent investment banks, where he served as a member of the Executive Committee, Compensation Committee and New Names Committee. Previously he worked in equity research at Midland Walwyn Capital Inc. (now Merrill Lynch/Bank of America) and corporate finance at Goepel McDermid Inc. (now Raymond James Financial). Mr. Christensen’s background in geology and geophysics has provided him with valuable insight into extractive resource industries. He holds a Master of Science degree from the University of Windsor and a Bachelor of Science degree from the University of Hull, United Kingdom.
| -38- |
Norman MacDonald, Director
Mr. MacDonald has over 25 years of experience working at natural resource focused institutional investment firms, including over 10 years as a Senior Portfolio Manager at Invesco. He recently served as Senior Advisor, Natural Resources, at Fort Capital from February 2021 until June 24, 2024. Mr. MacDonald began his investment career at Ontario Teachers’ Pension Plan Board, where he worked for three years in progressive roles from Research Assistant to Portfolio Manager. His next role was as a VP and Partner at Beutel, Goodman & Co. Ltd. Prior to joining Invesco, he was a VP and Portfolio Manager at Salida Capital. Mr. MacDonald is a director and Chair of the board of directors at Osisko Gold Royalties. He holds a Bachelor of Commerce Degree from the University of Windsor and is a CFA Charterholder.
Donald Newberry, Director
Mr. Newberry has over 20 years of experience in a variety of senior financial and project management leadership roles and he is currently the Chief Financial Officer at Ohio Truck Sales. Don has spent most of his career working internationally in the Mining industry for Diavik Diamond Mines, Cleveland Cliffs, and Nyrstar. He is experienced in overseeing large mining projects from studies through to execution, risk management, M&A, integration, and implementing financial controls and oversight of company’s assets. Mr. Newberry completed his Bachelor of Commerce (Accounting) at Ottawa University, Master of Business Administration (MBA) in Global Management at University of Phoenix, and he also completed the Program for Leadership Development (PLD) at Harvard Business School. He is a Chartered Professional Accountant / Certified Management Accountant (CPA, CMA).
William O’Reilly, Director
Mr. O’Reilly is a Corporate Director. He was Managing Partner and a member of the Management Committee of Davies Ward Phillips & Vineberg LLP, a leading Canadian law firm, from 1997 until his retirement from those positions in 2010. He was a partner of that firm from 1976 to 2011, except for the period between 1993 and 1996 when he served as an executive officer of Russel Metals Inc., one of North America’s leading metals distribution companies. Mr. O’Reilly served as a Director of Russel Metals Inc. from 2009 to May 2024.
Paul Martin, Director and Interim Chief Executive Officer
Mr. Martin is a mining executive with over 30 years of experience at the CEO, CFO and director levels, in challenging and changing corporate environments. He has gained significant experience through his various roles at multi operational mining, royalty and exploration companies listed on the Toronto Stock Exchange, TSX Venture Exchange and New York Stock Exchange. He is currently serving as Interim CEO of the Company during a CEO transition period. He currently serves as the Chair of the board of directors of Red Pine Exploration and as a director of Osisko Bermuda Limited. Mr. Martin was Interim CEO at Osisko Gold Royalties Ltd from July to December 2023 and at Red Pine Exploration from March to August 2024, in each case during CEO transition periods. He was previously President and CEO at Detour Gold Corporation from 2013 to 2018 and, prior to that, CFO at Detour from 2008 until 2013. He played a significant role on the senior executive team that permitted, completed a bankable feasibility study, financed, constructed and brought into operation the large-scale Detour Lake gold mine. Mr. Martin has worked in various senior financial roles at New Gold Inc., Gabriel Resources Ltd. and TVX Gold Inc. He has significant experience in governance matters related to publicly listed companies and holds the designation of CPA, CA.
| -39- |
Executive officer Biographies
The following are brief biographies of the executive officers of the Company:
Peter Rawlins, Senior Vice President & Chief Financial Officer
Peter Rawlins was appointed Senior Vice President and Chief Financial Officer in August 2023. In this role, he leads our financial functions, including capital markets, treasury, financial reporting, and internal controls. Peter brings over 20 years of experience in capital markets and treasury within the metals and mining sector. His career includes significant tenures at two leading Canadian banks, culminating in his role as Managing Director in Global Mining at CIBC Corporate Banking. There, he specialized in originating financial solutions for the metals and mining industry, focusing on negotiating and executing financing structures such as project finance, corporate debt, streaming arrangements, and risk management strategies.
Peter also contributed to Artemis Gold by securing project financing for the Blackwater mining project. He holds a Bachelor of Arts degree, an Honours Bachelor of Commerce degree, and a Master of Sciences (MSc) degree in Finance. His academic accomplishments, paired with his extensive practical experience, establish him as a well-rounded and knowledgeable finance professional.
Boris Kamstra, Chief Operating Officer of PRIL
Boris is a seasoned leader in the Mining industry, with over 25 years of experience in senior and executive roles. Boris is South African and has worked his entire career within Sub-Saharan Africa. Most recently he was the CEO of Alphamin Resources listed on the TSXV (TSXV:AFM) as well as the Johannesburg Stock Exchange. He was instrumental in bringing the mine located in North Kivu DRC into full operation from a greenfield exploration program. Alphamin Resources is now valued at more than US$1B. His workforce was for the greater part local and was able to integrate strong community involvement as well as an open partnership and business building approach. Boris graduated as a Civil Engineer B.Sc. cum laude from the University of Cape Town. He is also a member of the South Africa Institute of Mining & Metallurgy. He holds an MBA from the WITS Business School, University of Witwatersrand (Dean’s merit list).
Timothy Moran, Chief Legal Officer
Timothy Moran is a Canadian corporate and securities law professional with over 30 years of experience advising domestic and international public and private companies. His clients included companies with mineral exploration interests, blockchain and cryptocurrency business models and investment holding companies. Prior to acting as in-house counsel and corporate secretary for the Company, Timothy was the Senior Vice President, Corporate Development and Chief Legal Officer of Gedex Systems Inc., a pre-revenue high technology company specializing in airborne geophysics exploration. Prior to Gedex Systems Inc., Timothy was a partner for many years at Davies Ward Phillips & Vineberg LLP with a practice specializing in corporate mergers and acquisitions, takeover bids and securities law areas. Timothy has LLB and MBA degrees from the University of Western Ontario and a BASc (Industrial Engineering) degree from the University of Toronto.
Kneipe Setlhare, President of PNGPL; President of PNRPL
Mr. Kneipe Setlhare is a mining engineer with over 14 years of experience in mining operations management, including roles with BCL Mines and Smelting, and Discovery Metals Limited. His most recent role was Executive Country Manager at Giyani Metals Corp., a public company listed on the Toronto Stock Exchange. He is currently the Country Director in Botswana, based in the Gaborone Office. Mr. Setlhare has years of experience managing both private and public companies involved in early-stage exploration, preliminary economic assessment, feasibility study, mine development and commissioning, mine asset acquisitions and disposals.
Sean Whiteford, President of PRIL
Mr. Sean Whiteford is an accomplished geologist and mining executive with over 30 years of multi commodity experience within the global resource sector. He has extensive knowledge of mineral exploration, resource definition, mining, strategy, technology and project studies having held various corporate, operational and technical roles at BHP, Rio Tinto and Cliffs Natural Resources. Mr. Whiteford also has a strong business development background and has completed the Advanced Management Program from Columbia Business School. Most recently he was Vice President, Business Development at Burgundy Diamond Mines Ltd (ASX:BDM) and a Director of PREM. He is a Member of the AUSIMM, PDAC, and SEG.
| -40- |
Sharon Taylor, Vice President, Exploration
Ms. Sharon Taylor holds a B. Sc. from Mount Allison University and an M. Sc. from Queen’s University. She has over 35 years of experience in mineral exploration, including thirteen years with Falconbridge, Noranda, and Xstrata. She has experience in both volcanogenic massive sulfide and nickel exploration in major mining camps including Kidd Creek, Bathurst, Raglan, Sudbury and Kabanga. Her international exploration experience includes nickel projects in Tanzania and Greenland. Ms. Taylor’s area of expertise is the application and interpretation of EM data and integrating results from airborne, ground and downhole EM methods.
Involvement in Certain Legal Proceedings
Except as disclosed below, to our knowledge, during the last ten years, none of our directors and executive officers (including those of our subsidiaries) has:
| ● | Had a bankruptcy petition filed by or against any business of which such person was a General Partner or Executive Officer either at the time of the bankruptcy or within two years prior to that time. | |
| ● | Been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses. | |
| ● | Been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities. | |
| ● | Been found by a court of competent jurisdiction in a civil action, the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. | |
| ● | Been the subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. | |
| ● | Been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; | |
| ● | Been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) Any Federal or State securities or commodities law or regulation; or (ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity. | |
| ● | Been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
James Gowans was a Director of Gedex Systems Inc. (“Gedex”), a company based in Mississauga, Ontario, Canada. On August 9, 2019, Gedex filed a notice of application in the Ontario Superior Court of Justice (the “Court”) under the Companies’ Creditors Arrangement Act (the “CCAA”) requesting an order approving a sale and investor solicitation process (“SISP”) in respect of the property, assets and undertakings of Gedex. The notice of application also sought an order appointing Zeifman Partners Inc. (“Zeifman”) as monitor in the proceedings (in such capacity, the “Monitor”). On August 12, 2019, the Court made an order authorizing and approving, among other things, the commencement of the SISP and a stay of proceedings until September 11, 2019. On the same date, the Court made an additional order granting Gedex protection from its creditors pursuant to the CCAA and appointing Zeifman as the Monitor of Gedex. On August 28, 2019, the first report of the Monitor was issued and, on September 3, 2019, the Court issued a further order granting, among other things, an extension of the stay period until December 10, 2019. On December 5, 2019, the Court certified that all matters to be attended to in connection with these CCAA proceedings have been completed and Zeifman filed its discharge notice on December 23, 2019, terminating the CCAA proceedings.
Mr. Christensen was a Director of Lilis Energy, Inc. (“Lilis”), an exploration and production company operating in the Permian Bason of West Texas and Southeastern New Mexico. Mr. Christensen resigned from the Lilis board of directors on April 14, 2020. On June 29, 2020, Lilis filed petitions under Chapter 11 of the United States Bankruptcy Code. Lilis announced on June 30, 2020 that it had received notification dated June 29, 2020 from the NYSE American LLC that Lilis’ common stock had been suspended from trading on the NYSE American and that Lilis was no longer suitable for listing. On December 2, 2020, Lilis announced the closing of the sale of substantially all of the assets of Lilis and its filing subsidiaries to Ameredev Texas, LLC pursuant to a previously disclosed bankruptcy court-approved purchase and sale agreement.
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Code of Ethics
The Board has found that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company. The Company is committed to the highest standards of legal and ethical business conduct, and to that end the Board has adopted a Code of Business Conduct and Ethics on August 9, 2022. The Board and Chair of the Audit and Risk Management Committee are responsible for overseeing compliance with such Code and the CEO is charged to ensure adherence to the Code. The Company’s directors, officers, employees, consultants and agents are required to certify annually that they have read and understand such Code. A copy of such Code is available on the Company’s website at https://premiumresources.com/about-us/corporate-governance. The Company’s website is not incorporated in this Report.
Insider Trading Policy
The Company has adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of its securities by directors, officers and employees, or the Company itself. These policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company. The Company’s insider trading policies and procedures are filed as an exhibit to this Report.
Delinquent Section 16(a) Reports
As a foreign private issuer, Section 16(a) of the Exchange Act does not apply to our directors and executive officers, or anyone who beneficially owns ten percent (10%) or more of our Common Shares.
Item 11. EXECUTIVE COMPENSATION.
Executive Officer Compensation
For 2024, we are providing compensation disclosure that complies with the requirements of the Canadian Securities Administrators, together with certain additional disclosure, without compromising required Canadian disclosure. As a foreign private issuer (as defined under the applicable SEC rules), we are permitted by Item 402(a)(1) of SEC Regulation S-K to respond to this Item 11 by providing the information required by Items 6.B., 6.E.2 and 6.F of Form 20-F.
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The purpose of this section is to describe the compensation of the executive officers and the directors of the Company in accordance with Form 51-102F6V – Statement of Executive Compensation – Venture Issuers of the Canadian Securities Administrators.
For the financial year ended December 31, 2024, the executive officers of the Company were:
| ● | Keith Morrison, Chief Executive Officer and Director; | |
| ● | Peter Rawlins, Senior Vice President and Chief Financial Officer; and | |
| ● | Boris Kamstra, Chief Operating Officer of PRIL. |
Director and Executive Officer Compensation, Excluding Compensation Securities
The following table sets forth all compensation paid, payable, awarded, granted, given or otherwise provided, directly or indirectly, by the Company, or a subsidiary of the Company, to each named executive officer and director, in any capacity, other than Options, RSUs and DSUs and other compensation securities, for the two most recently completed financial years.
Table of Compensation Excluding Compensation Securities
| Name and Position | Year | Salary, Consulting Fee, Retainer or Commission ($) | Bonus ($) | Committee or Meeting Fees ($) | Value of Perquisites ($) | Value of All Other Compensation ($) | Total Compensation ($) | |||||||||||||||||||
| Keith Morrison(1) | 2024 | 551,376 | Nil | Nil | Nil | 1,168,729 | 1,720,105 | |||||||||||||||||||
| Former Chief Executive Officer and Former Director | 2023 | 556,538 | Nil | Nil | Nil | Nil | 556,538 | |||||||||||||||||||
| Peter Rawlins | 2024 | 400,000 | Nil | Nil | Nil | Nil | 400,000 | |||||||||||||||||||
| Senior Vice President and Chief Financial Officer | 2023 | 127,067 | Nil | Nil | Nil | Nil | 127,067 | |||||||||||||||||||
| Boris Kamstra | 2024 | 863,340 | (2) | Nil | Nil | Nil | Nil | 863,340 | ||||||||||||||||||
| Chief Operating Officer of PRIL | 2023 | 793,066 | Nil | Nil | Nil | Nil | 793,066 | |||||||||||||||||||
| Paul Martin | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Director and Interim Chief Executive Officer | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| John Hick(3) | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Former Director | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| James Gowans | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Director and Independent Chairman | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Jason LeBlanc | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Director | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Mark Christensen | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Director | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Norman MacDonald(4) | 2024 | 58,500 | Nil | Nil | Nil | Nil | 58,500 | |||||||||||||||||||
| Director | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Donald Newberry | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Director | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| William O’Reilly | 2024 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
| Director | 2023 | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||
Notes:
| (1) | Mr. Morrison retired as Chief Executive Officer on December 31, 2024. Compensation for Mr. Morrison’s former position as Chief Executive Officer was paid to Breniklan Limited, a private company controlled by Mr. Morrison, which provided the services of Mr. Morrison as the Company’s Chief Executive Officer. Mr. Morrison did not receive any compensation for his services as a Director of the Company. See “Employment, Consulting and Management Agreements”. The $1,168,729 of other compensation payable to Mr. Morrison in 2024 is comprised of a retirement benefit payable to Mr. Morrison over 24 months. See “Employment, Consulting and Management Agreements”. |
| (2) | Mr. Kamstra’s consulting fees were paid in USD and converted at the average annual exchange rate of USD 1.00:CAD 1.4389. These fees were paid to ANZAC Consulting Ltd., a private company controlled by Mr. Kamstra, which provides the services of Mr. Kamstra as the Company’s Chief Operating Officer of PRIL. See “Employment, Consulting and Management Agreements”. |
| (3) | Mr. Hick was Lead Director of the Company until the appointment of James Gowans as Chair of the Board on January 1, 2024. Mr. Hick resigned as a Director of the Company effective September 18, 2024. |
| (4) | Paid to NAM Management Ltd., a private Company controlled by Norman MacDonald, which provides the consulting services of Mr. MacDonald. See “Employment, Consulting and Management Agreements”. These fees were not related to Mr. MacDonald acting in his capacity as a Director, and Mr. MacDonald did not receive any compensation for his services as a Director of the Company. |
See “Employment, Consulting and Management Agreements” below for disclosure relating to any external management company employing or retaining individuals acting as executive officers of the Company, or that provide the Company’s executive management services.
Options and Other Compensation Securities
The following table sets forth certain information in respect of all compensation securities granted or issued to each named executive officer and director by the Company or one of its subsidiaries in the financial year ended December 31, 2024, for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries.
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Compensation Securities
| Name and Position | Type of Compensation Security |
Number of Compensation Securities, Number of Underlying Securities, and Percentage of Class |
Date of Issue or Grant |
Issue, Conversion or Exercise Price ($) |
Closing Price of Security or Underlying Security on Date of Grant ($) |
Closing Price of Security or Underlying Security at Year End ($) |
Expiry Date | |||||||
| Keith
Morrison(1) Former Chief Executive Officer and Former Director |
Options
RSUs |
750,000
250,000 |
Aug 14, 2024(2) Aug 22, 2024(3) |
1.10
N/A |
0.81
0.71 |
0.44
0.44 |
Aug
14, 2029 Dec 15, 2027 | |||||||
| Peter
Rawlins(4) Senior Vice President and Chief Financial Officer |
Options | 375,000 | Aug 14, 2024 | 1.10 | 0.81 | 0.44 | Aug 14, 2029 | |||||||
| Boris
Kamstra(5) Chief Operating Officer of PRIL |
Options
RSUs |
135,000 110,000 |
Aug
14, 2024 Aug 22, 2024 |
1.10 N/A |
0.81 0.71 |
0.44 0.44 |
Aug
14, 2029 Dec 15, 2027 | |||||||
| Paul
Martin(6) Director and Interim Chief Executive Officer |
DSUs(7) Options DSUs |
8,385 175,000 45,000 |
Sep
30, 2024 Dec 4, 2024(15) Dec 31, 2024 |
0.70 0.49 0.45 |
0.79 0.48 0.44 |
0.44 0.44 0.44 |
NA Dec 4, 2029 NA | |||||||
| John
Hick(8) Former Director |
Options DSUs DSUs DSUs |
30,000 50,000 55,555 55,900 |
Aug
14, 2024 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 |
1.10 0.90 0.81 0.70 |
0.81 1.00 0.83 0.79 |
0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA | |||||||
James Gowans(9) Director and Independent Chairman |
Options DSUs DSUs DSUs DSUs |
50,000 69,444 77,160 89,285 62,500 |
Aug
14, 2024 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 |
1.10 0.90 0.81 0.70 0.45 |
0.81 1.00 0.83 0.79 0.44 |
0.44 0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA NA | |||||||
| Jason
LeBlanc(10) Director |
Options DSUs DSUs DSUs DSUs |
30,000 47,222 52,469 60,714 42,500 |
Aug
14, 2024 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 |
1.10 0.90 0.81 0.70 0.45 |
0.81 1.00 0.83 0.79 0.44 |
0.44 0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA NA | |||||||
| Mark
Christensen(11) Director |
Options DSUs DSUs DSUs DSUs |
30,000 45,833 50,925 59,394 43,750 |
Aug
14, 2024 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 |
1.10 0.90 0.81 0.70 0.45 |
0.81 1.00 0.83 0.79 0.44 |
0.44 0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA NA | |||||||
| Norman
MacDonald(12) Director |
Options DSUs DSUs DSUs |
30,000 2,983 52,251 38,750 |
Aug
14, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 |
1.10 0.81 0.70 0.45 |
0.81 0.83 0.79 0.44 |
0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA | |||||||
| Donald
Newberry(13) Director |
Options DSUs DSUs DSUs DSUs |
30,000 50,000 55,555 64,285 45,000 |
Aug
14, 2024 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 |
1.10 0.90 0.81 0.70 0.45 |
0.81 1.00 0.83 0.79 0.44 |
0.44 0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA NA | |||||||
| William
O’Reilly(14) Director |
Options DSUs DSUs DSUs DSUs |
30,000 50,000 55,555 63,354 40,000 |
Aug
14, 2024 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 |
1.10 0.90 0.81 0.70 0.45 |
0.81 1.00 0.83 0.79 0.44 |
0.44 0.44 0.44 0.44 0.44 |
Aug
14, 2029 NA NA NA NA |
Notes:
| (1) | As at December 31, 2024, Mr. Morrison held 3,938,194 Options exercisable for 3,938,194 Common Shares, and 250,000 RSUs redeemable for 250,000 Common Shares. |
| (2) | The options granted on August 14, 2024, vest annually in equal thirds beginning on the date of grant. These options will be fully vested on August 14, 2026. |
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| (3) | The RSUs granted on August 22, 2024, vest annually in equal thirds beginning on the first anniversary date of the grant. These RSUs will be fully vested on August 22, 2027. |
| (4) | As at December 31, 2024, Mr. Rawlins held 1,100,000 Options exercisable for 1,100,000 Common Shares. |
| (5) | As at December 31, 2024, Mr. Kamstra held 1,025,000 Options exercisable for 1,025,000 Common Shares, and 110,000 RSUs redeemable for 110,000 Common Shares. |
| (6) | Mr. Martin was appointed to the Board on September 18, 2024. As at December 31, 2024, Mr. Martin held 175,000 Options exercisable for 175,000 Common Shares, and 53,385 DSUs. 175,000 Options were received for services performed as Interim Chief Executive Officer, and 53,385 DSUs were received for services performed as a Director. |
| (7) | The issue price of the DSUs is based on a 5-day VWAP of PREM Common Shares prior to the last trading day of each quarter. |
| (8) | As at December 31, 2024, Mr. Hick held 190,000 Options exercisable for 190,000 Common Shares, and 408,279 DSUs. |
| (9) | Mr. Gowans was appointed to the Board on January 1, 2024. As at December 31, 2024, Mr. Gowans held 50,000 Options exercisable for 50,000 Common Shares, and 298,389 DSUs. |
| (10) | As at December 31, 2024, Mr. LeBlanc held 93,288 Options exercisable for 93,288 Common Shares, and 283,753 DSUs. |
| (11) | As at December 31, 2024, Mr. Christensen held 70,822 Options exercisable for 70,822 Common Shares, and 250,228 DSUs. |
| (12) | Mr. MacDonald was appointed to the Board on June 24, 2024. As at December 31, 2024, Mr. MacDonald held 30,000 Options exercisable for 30,000 Common Shares, and 93,984 DSUs. |
| (13) | As at December 31, 2024, Mr. Newberry held 130,000 Options exercisable for 130,000 Common Shares, and 386,697 DSUs. |
| (14) | As at December 31, 2024, Mr. O’Reilly held 130,000 Options exercisable for 130,000 Common Shares, and 390,029 DSUs. |
| (15) | The options granted on December 4, 2024, vested in full on the date of grant. |
Exercise of Compensation Securities
No executive officers or directors of the Company exercised compensation securities during the financial year ended December 31, 2024.
Option Plans and Other Incentive Plans
Option Plan
The Company’s option plan (the “Option Plan”), as amended, is a “fixed” share option plan, pursuant to which PREM may issue up to 27,100,000 Options to eligible persons (as defined below), provided that the number of Common Shares reserved for issuance from treasury under the Option Plan and all other security-based compensation arrangements of the Company and its subsidiaries shall not, in the aggregate, exceed 20% of the number of Common Shares then issued and outstanding. As of December 31, 2024, 19,066,321 Options have been granted and 15,586,771 Options are outstanding under the Option Plan. The Option Plan was approved by the Company’s shareholders on September 20, 2023.
Options under the Option Plan may be granted by the Board to “eligible persons”, who are directors, officers, employees or consultants of PREM or its subsidiaries, eligible persons who are employees of a company providing management services to PREM, or, in certain circumstances, charitable organizations. Options granted under the Option Plan have a maximum exercise period of up to 10 years, as determined by the Board.
The Option Plan limits the number of Options which may be granted to any one individual to not more than 5% of the total Common Shares in any 12-month period (unless otherwise approved by the “disinterested shareholders” of the Company). A “disinterested shareholder” is a shareholder who is not a director, officer, promoter, or other insider of the Company, or its associates or affiliates, as such terms are defined under the Securities Act (Ontario). In addition, unless otherwise approved by the Company’s disinterested shareholders, the number of Common Shares issuable under the Option Plan to all insiders of the Company as a group shall not exceed 10% of the total Common Shares at any point in time.
The number of Options granted to any one consultant or investor relations service provider in any 12-month period must not exceed 2% of the total issued Common Shares. Options granted to investor relations service providers shall vest in stages over at least a one-year period, in accordance with the policies of the TSXV. Subject to the foregoing, any Options granted under the Option Plan will not be subject to any vesting schedule, unless otherwise determined by the Board or required by the policies of the TSXV.
The number of Options granted to all eligible charitable organizations in the aggregate must not exceed 1% of the Common Shares on the date of grant, which Options shall expire on or before the earlier of: (i) the date that is ten years from the grant date; or (ii) the 90th day following the date that the holder of such Options ceases to be an eligible charitable organization under the Option Plan.
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Options under the Option Plan may be granted at an exercise price which is at or above the current discounted market price (as defined under the policies of the TSXV) on the date of the grant. In the event of the death or permanent disability of an optionee, any Option granted to such optionee will be exercisable upon the earlier of 365 days from the date of death or permanent disability, or the expiry date of the Option. In the event of the resignation of an optionee, or the termination or removal of an optionee without just cause, any vested Option granted to such optionee will be exercisable for a period ending on the earlier of: (i) the expiry date of such Option determined as at the date of grant thereof; and (ii) the expiration of 90 days (or such longer period, not to exceed 12 months, as may be specified by resolution of the Board) following the effective date of such resignation or termination. In the event of termination for cause, any unexercised Option granted to such optionee will be cancelled as at the date of termination.
Options may be exercised by the holder thereof: (i) by delivering to PREM a notice specifying the number of Common Shares in respect of which the Option is exercised together with payment in full of the exercise price for each such Common Share; (ii) through a cashless exercise mechanism whereby the Company has certain arrangements with a brokerage firm; or (iii) through a net exercise mechanism whereby the optionee receives only the number of Common Shares that is equal to the quotient obtained by dividing (A) the product of the number of Options being exercised and the difference between the 5-day VWAP on the TSXV immediately preceding the exercise and the exercise price of the subject Option by (B) the 5-day VWAP of the underlying Common Shares.
DSU Plan
The Company’s deferred share unit plan (“DSU Plan”) was adopted by the Board on December 26, 2022 and approved by the Company’s shareholders on September 20, 2023. The DSU Plan enables the Company, upon approval by the Board, to grant deferred share units to eligible non-management directors.
Purpose
The purpose of the DSU Plan is to advance the interests of the Company and its subsidiaries by: (i) increasing the proprietary interests of non-executive directors in the Company; (ii) aligning the interests of non-executive directors of the Company with the interests of the Company’s shareholders generally; and (iii) furnishing non-executive directors with an additional incentive in their efforts on behalf of the Company.
Eligibility
Each director of the Company in office on December 26, 2022, being the effective date of the DSU Plan (the “Effective Date”), became a member of the DSU Plan (“DSUP Member”). Each person who becomes a director at any time subsequent to the Effective Date shall thereupon, without further or other formality, become a member of the DSU Plan. For greater certainty, no investor relations service providers may receive any DSUs under the DSU Plan in their capacity as an Investor Relations Service Provider.
Share Limits and DSU Market Price
The aggregate number of Common Shares made available for issuance from treasury under the DSU Plan shall not exceed 5,000,000 Common Shares, provided that the number of Common Shares reserved for issuance from treasury under the DSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries shall not, in the aggregate, exceed 20% of the number of Common Shares then issued and outstanding. As of December 31, 2024, 2,164,744 DSUs have been granted under the DSU Plan.
Each DSU will have a notional value equal, on any particular date, to the volume weighted average trading price of the Common Shares for the five (5) consecutive trading days prior to such date (“DSU Market Price”).
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Granting Restrictions
The grant of DSUs under the DSU Plan is subject to a number of restrictions:
| (a) | the aggregate number of Common Shares issuable at any time to Insiders (as defined in the DSU Plan) under the DSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries shall not, in the aggregate, exceed 10% of the issued and outstanding Common Shares, calculated on a non-diluted basis (unless disinterested shareholder approval is obtained pursuant to the Corporate Finance Manual of the TSXV); | |
| (b) | within any one-year period, the Company shall not issue to Insiders under the DSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries, in the aggregate, a number of Common Shares exceeding 10% of the issued and outstanding Common Shares, calculated on a non-diluted basis (unless disinterested shareholder approval is obtained pursuant to the Corporate Finance Manual of the TSXV); and | |
| (c) | within any one-year period, the Company shall not issue to any one person, or companies wholly-owned by that person, under the DSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries, in the aggregate, a number of PREM Common exceeding 5% of the issued and outstanding Common Shares, calculated on a non-diluted basis. |
Administration of Grants
The Board may, at any time, grant DSUs to directors of the Company in consideration of service for any period specified in the resolution authorizing such grant (except in lieu of accrued and unpaid compensation amounts).
In addition, DSUP Members may elect to receive DSUs instead of cash remuneration in respect of his or her annual retainer, committee retainer and meeting fees (or any portion thereof). The number of DSUs to be notionally credited to DSUP Members in lieu of cash remuneration shall be determined on a quarterly basis, as of the final day of any quarterly period (the “Crediting Date”), calculated as the quotient obtained when (i) the aggregate value of the cash remuneration that would have been paid to such DSUP Member, is divided by (ii) the DSU Market Price as of the last day of such quarterly period.
Unless otherwise specified by the Board and/or included in any award agreement, DSUs credited to a DSUP Member shall be fully vested on the applicable Crediting Date.
Redemption
The DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director, the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the number of DSUs redeemed multiplied by the DSU Market Price on that date. The Company has the right to elect to settle redemption payments in Common Shares in lieu of cash.
The Company will deduct or withhold from any payment or settlement in Common Shares, for the benefit of a DSUP Member, any amount required in order to comply with the applicable provisions of any federal or provincial law relating to the withholding of tax or the making of any other source deductions.
No Shareholder Rights
DSUs are different from Common Shares and will not entitle a DSUP Member to any shareholder rights, including, without limitation, voting rights, dividend entitlement or rights on liquidation.
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Suspension, Termination or Amendments
The Board may amend, suspend or terminate (and re-instate) the DSU Plan in whole or in part, or amend the terms of DSUs credited in accordance with the DSU Plan, without approval of the Company’s shareholders. However, such suspension, termination or amendment is subject to the receipt of all required regulatory approvals including, without limitation, the approval of the TSXV.
If any such amendment, suspension or termination will materially or adversely affect the rights of a DSUP Member with respect to DSUs credited to such director, then the written consent of the DSUP Member will be obtained. However, a DSUP Member’s written consent will not be required if such amendment, suspension or termination is required in order to comply with applicable laws, regulations, rules, orders of government or regulatory authorities or the requirements of any stock exchange on which shares of the Company are listed.
In addition, the Company may not make the following amendments to the DSU Plan without the approval of the Company’s shareholders: (i) an amendment to remove or exceed the insider participation limit prescribed by the Corporate Finance Manual of the TSXV; (ii) an amendment to increase the maximum number of Common Shares made available for issuance from treasury under the DSU Plan; (iii) an amendment to modify the definition of “Eligible Director” in the DSU Plan; or (iv) an amendment to the amending provision within the DSU Plan.
If the Board (or such other committee of the directors appointed to administer the DSU Plan) terminates the DSU Plan, DSUs previously credited to DSUP Members will remain outstanding and in effect and be settled in due course in accordance with the terms of the DSU Plan.
Non-Transferability of Awards
Except as otherwise may be expressly provided for under the DSU Plan or pursuant to a will or by the laws of descent and distribution, no right or interest of a DSUP Member under the DSU Plan is assignable or transferable.
Clawback
All DSUs granted under the DSU Plan shall be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board.
RSU Plan
The restricted share unit plan (“RSU Plan”) was adopted by the Board on August 22, 2024, and approved by the Company’s shareholders on October 29, 2024. The RSU Plan enables the Company upon approval by the Board to grant restricted share units to eligible participants.
Purpose
The purpose of the RSU Plan is to provide long-term incentive compensation to employees of the Company or its subsidiaries, provide additional incentive for their continued efforts in promoting the growth and success of the business of the Company, and assist the Company in attracting and retaining senior management personnel and other employees.
Eligibility
Any director, officer, employee, consultant or management company employee, other than any investor relations service providers, of the Company or any subsidiary of the Company, is eligible under the RSU Plan. The Board has sole discretion to determine who is eligible under the RSU Plan and to whom RSUs may be granted, subject to the express provisions of the RSU Plan and the rules and policies of the TSXV.
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Share Limits and Market Price
The aggregate number of Common Shares made available for issuance from treasury under the RSU Plan shall not exceed 5,000,000 Common Shares, provided that the number of Common Shares reserved for issuance from treasury under the RSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries shall not, in the aggregate, exceed 20% of the number of Common Shares then issued and outstanding. As of December 31, 2024, 1,000,000 RSUs have been granted under the RSU Plan.
Each RSU will have a notional value equal, on any particular date, to the volume weighted average trading price of the Common Shares for the five (5) consecutive trading days prior to such date (“RSU Market Price”).
Dividends
A participant shall be credited on each dividend payment date (other than stock dividends payable in Common Shares), with additional RSUs. The number of additional RSUs shall be determined by dividing: (a) the product obtained by multiplying (i) a dollar amount equal to such dividend declared and paid by the Company on the Common Shares on a per share basis, by (ii) the number of RSUs held by the participant on the record date for the payment of any such dividend; by (b) the RSU Market Price of Common Shares on such dividend payment date.
Granting Restrictions
The grant of RSUs under the RSU Plan is subject to a number of restrictions, including that:
| (a) | the aggregate number of Common Shares issuable at any time to Insiders (as defined in the RSU Plan) under the RSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries shall not, in the aggregate, exceed 10% of the issued and outstanding Common Shares, calculated on a non-diluted basis (unless disinterested shareholder approval is obtained pursuant to the rules and policies of the TSXV); | |
| (b) | within any one-year period, the Company shall not issue to Insiders under the RSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries, in the aggregate, a number of Common Shares exceeding 10% of the issued and outstanding Common Shares, calculated on a non-diluted basis (unless disinterested shareholder approval is obtained pursuant to the rules and policies of the TSXV); | |
| (c) | within any one-year period, the Company shall not issue to any one consultant under the RSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries, in the aggregate, a number of Common Shares exceeding 2% of the issued and outstanding Common Shares, calculated on a non-diluted basis; and | |
| (d) | within any one-year period, the Company shall not issue to any one person, or companies wholly-owned by that person, under the RSU Plan and all other security-based compensation arrangements of the Company and its subsidiaries, in the aggregate, a number of Common Shares exceeding 5% of the issued and outstanding Common Shares, calculated on a non-diluted basis. |
Administration of Grants
The Board may, at any time other than from December 5 to December 31 in any year, grant RSUs to eligible participants in consideration of service for any period specified in the resolution authorizing such grant (except in lieu of accrued and unpaid compensation amounts).
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Unless otherwise specified by the Board and/or included in any award agreement, RSUs granted to a participant shall vest (a) as to one-third on the first anniversary of the date that such RSU was granted (the “RSU Grant Date”), (b) as to one-third on the second anniversary of the RSU Grant Date, and (c) as to the remaining one-third on the earlier of the third anniversary of the RSU Grant Date and the business day immediately preceding the expiry date of the granted RSUs.
The Board may specify any additional conditions to the vesting of the RSUs, as set out in the relevant award agreement.
Redemption
Depending upon the country of residence of the participant, the holder may be entitled to redeem RSUs on the earlier of either twenty-five days following the Vesting Date (as defined in the RSU Plan), or a date agreed on by the Company and the holder. Upon redemption, the holder is entitled to either a cash payment equal to the RSU Market Price on the Vesting Date, or one Share, at the Company’s discretion.
The Company will deduct or withhold from any payment or settlement in Common Shares, for the benefit of the participant, any amount required in order to comply with the applicable provisions of any federal or provincial law relating to the withholding of tax or the making of any other source deductions.
No Shareholder Rights
RSUs are different from Common Shares and will not entitle any shareholder rights, including, without limitation, voting rights, dividend entitlement or rights on liquidation.
Suspension, Termination or Amendments
The Board may amend, suspend or terminate the RSU Plan in whole or in part, or amend the terms of RSUs credited in accordance with the RSU Plan, without approval of the Company’s shareholders. However, such suspension, termination or amendment is subject to the receipt of all required regulatory approvals including, without limitation, the approval of the TSXV.
If any such amendment, suspension or termination will materially or adversely affect the rights of a participant with respect to RSUs credited to such participant, then the written consent of the participant will be obtained.
If the Board (or such other committee of the directors appointed to administer the RSU Plan) terminates the RSU Plan, the Board may determine whether the RSUs credited shall be vested on the date of the termination of the RSU Plan or held and vested at a later date.
Non-Transferability of Awards
Except in the case of a death of a participant, no right or interest of a participant under the RSU Plan is assignable or transferable. Such rights or interests shall not be encumbered by any means.
Clawback
All RSUs granted under the RSU Plan shall be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board.
Employment, Consulting and Management Agreements
The following is a description of the material terms of each agreement or arrangement under which compensation was provided during the financial year ended December 31, 2024, or is payable in respect of services provided to the Company or any of its subsidiaries that were performed by a director or executive officer.
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Keith Morrison
Keith Morrison and the Company entered into an employment agreement dated December 15, 2014, setting out the terms and conditions of Mr. Morrison’s employment as Chief Executive Officer of the Company.
Effective on June 1, 2018, the Company and Mr. Morrison agreed to amend the terms of Mr. Morrison’s employment from direct employment to contracted consultant. In connection with the foregoing, the Company and Lacnikdon Limited, a private company controlled by Mr. Morrison, entered into a service agreement, pursuant to which Lacnikdon Limited provided the services of Mr. Morrison as the Company’s Chief Executive Officer. In 2022, the Company terminated its agreement with Lacnikdon Limited and entered into a services agreement with Breniklan Limited, a private company controlled by Mr. Morrison for his continuing service as Chief Executive Officer of the Company. Under the services agreement, Breniklan Limited was entitled to a monthly service fee of $48,697.04. All such amounts were paid to Mr. Morrison and attributable to the services he provided to the Company.
In anticipation of Mr. Morrison’s retirement from the Company, the agreement with Brenicklan was amended on December 1, 2024. The Company will pay Brenicklan Limited a total of $1,168,728.96, payable in 24 equal monthly instalments of $48,697.04 beginning January 31, 2025, and ending December 31, 2026. This amount is payable to Brenicklan Limited irrespective of any future services to be provided by Mr. Morrison. The contract with Mr. Morrison will terminate on December 31, 2026, and consideration for any future services provided, of which will only be at the request of the Company, will be payable at an hourly rate of $450. Under the amended agreement, Mr. Morrison will continue to be an eligible participant under the Company’s various security-based compensation arrangements, and therefore previously granted equity compensation will continue to vest in accordance with the plans.
Peter Rawlins
Peter Rawlins and PREM entered into an employment agreement effective July 20, 2023 providing for Mr. Rawlin’s employment as Chief Financial Officer commencing September 18, 2023. The agreement provides for an annual rate of base salary equal to $400,000.
If Mr. Rawlins’ employment is terminated by Mr. Rawlins himself, for good reason, or by the Company without cause, in each case as set out and defined in the employment agreement, (other than on account of Mr. Rawlins’ death or permanent disability) in either case within twenty-four (24) months following a change of control of PREM, on such termination date, he shall be entitled to: (i) a lump sum payment in lieu of notice equal to 1.75 times the sum of Mr. Rawlins’ base salary plus the average annual incentive compensation paid to Mr. Rawlins calculated based upon the last three fiscal years ended immediately preceding the termination date; (ii) the continuation of medical, dental and pension benefits for a twenty-four (24) month period; and (iii) any other payments owed to Mr. Rawlins. In addition, any unvested securities convertible into or exchangeable for securities or shares of the Company or any affiliate or any other equity linked entitlements related to the Common Shares shall be accelerated so that such rights become immediately exercisable for a period of 180 days after such termination date. If Mr. Rawlin’s employment is terminated without cause, other than within two years following a change of control, on such termination date, he shall be entitled to: (i) a lump sum payment in lieu of notice equal to 1.75 times the sum of Mr. Rawlins’ base salary plus the average of the annual cash performance bonus paid to Mr. Rawlins in the last three fiscal years immediately preceding the termination date; (ii) the continuation of medical, dental and pension benefits for a twenty-one (21) month period; and (iii) any other payments owed to Mr. Rawlins.
The estimated payment under Mr. Rawlin’s employment agreement resulting from a change of control is $1,449,032. The estimated payment under Mr. Rawlin’s employment agreement resulting from a termination without cause is $743,750.
Boris Kamstra
Boris Kamstra is the Chief Operating Officer of PRIL. PRIL entered into a consulting agreement with ANZAC Consulting Ltd (“ANZAC”) dated January 1, 2023. Under the agreement, ANZAC provides the services of Mr. Kamstra who is responsible for providing leadership for and input to the design, build, redevelopment and commissioning of the Company’s projects in Botswana, delivering Stage 3 (Hot Commissioning) wherein the projects are producing commercial levels of saleable concentrates, and assuming responsibility and authority for the effective leadership and management of the re-engineering, engineering, construction and commissioning of the Botswana projects so as to confidently and reasonably project financial results in line with objectives as provided by the Company. PRIL agreed to pay ANZAC a monthly service fee of US$50,000. All such amounts are paid to Mr. Kamstra and attributable to the services he provided to PRIL. The agreement may be terminated by either PRIL or ANZAC on 90 days’ written notice and does not contain any change of control, severance or constructive dismissal provision.
| -51- |
Norman MacDonald
PREM, Norman MacDonald and NAM Management Ltd. (“NAM”), a private company controlled by Mr. MacDonald, entered into a consulting agreement dated June 24, 2024. Under the consulting agreement, NAM provided the services of Mr. MacDonald and performed such services for PREM as agreed to from time to time by PREM and NAM. The initial services included providing advice and assistance to PREM, in collaboration with the Chief Executive Officer, the Chief Financial Officer and other senior officers of PREM and its affiliates, in connection with (i) the capital markets strategy of PREM and the execution thereof, (ii) the other financing strategies and opportunities of PREM, (iii) capital budgeting, and (iv) such other advice or services as PREM may reasonably request from time to time. The Company incurred $58,500 under this agreement in 2024, and all such amounts were paid to Mr. MacDonald and attributable to the services he provided to the Company. In September 2024, this consulting agreement was mutually terminated.
Estimated Incremental Payments
The following shows the estimated incremental payments that would be payable to each of the executive officers of the Company in the event of a change of control or termination without cause of such executive officers on December 31, 2024.
| Name | Estimated Change of Control Payment(1) ($) | Estimated Termination Without Cause Payment(2) ($) | ||||||
| Peter Rawlins, Senior Vice President and Chief Financial Officer | 1,449,032 | 743,750 | ||||||
Note:
| (1) | Represents the sum of (a) 1.75 times the sum of: (i) the executive’s base salary; and (ii) the value of the incentive options granted, and (b) 24 months of medical and dental benefits. | |
| (2) | Represents 1.75 times the executive’s base salary and 21 months of medical and dental benefits. |
Oversight and Description of Director and Executive Officer Compensation
The Company has a Human Resources and Compensation Committee (“HRCC”), currently comprised of Paul Martin (Chair), Jason LeBlanc and Mark Christensen.
The HRCC is responsible for overseeing the Company’s remuneration policies and practices and determining the compensation of the executive officers and directors. The HRCC meets on an annual basis to determine such compensation on a discretionary basis and in accordance with the Company’s executive compensation program.
The Company’s executive compensation program has three principal components: base salaries, consulting fees and equity incentive plans, including Options, DSUs and RSUs.
Base Compensation
The Company provides executive officers with base salaries or consulting fees, which represent their minimum compensation for services rendered, or expected to be rendered. The executive officers’ base compensation depends on the scope of their experience, responsibilities, leadership skills, performance, length of service, general industry trends and practices, competitiveness and the Company’s existing financial resources.
The amount of base compensation is determined through negotiation of employment terms with each executive officer and is determined on an individual basis. While base compensation is intended to fit into the Company’s overall compensation objectives by serving to attract and retain talented executive officers, the size of the Company and the nature and stage of its business also impacts the level of base compensation. Compensation is set with informal reference to the market for similar jobs in Canada and internationally.
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Incentive Bonuses
Incentive bonuses, in the form of cash payments or equity grants, are designed to add a variable component of compensation based on corporate and individual performance for executive officers and employees. As the Company grows and develops its projects, it is expected that an annual incentive award program will be formalized that will clearly articulate performance objectives and specific measurable goals that will be linked to individual performance criteria set for the executive officers. No bonuses were paid to executive officers or employees during the Company’s financial year ended December 31, 2024.
Option-Based and Other Equity-Based Awards
Options are granted pursuant to the Option Plan to provide an incentive to the directors, officers, employees and consultants of the Company to achieve the longer-term objectives of the Company, to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company and to attract and retain persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in the Company.
DSUs are granted pursuant to the DSU Plan to directors of the Company to advance the interests of the Company and its subsidiaries by: (i) increasing the proprietary interests of non-executive directors in the Company; (ii) aligning the interests of non-executive directors of the Company with the interests of the Company’s shareholders generally; and (iii) furnishing non-executive directors with an additional incentive in their efforts on behalf of the Company.
RSUs are granted pursuant to the RSU Plan to employees of the Company to provide long-term incentive compensation to employees of the Company or its subsidiaries, provide additional incentive for their continued efforts in promoting the growth and success of the business of the Company, and assisting the Company in attracting and retaining senior management personnel and other employees.
The Company awards Options, DSUs and RSUs based upon the recommendation of the HRCC. Grants of options and RSUs are based on the HRCC’s review of a proposal from the Chief Executive Officer. Previous grants of Options and RSUs are taken into account when considering new grants.
The implementation of new incentive plans and amendments to the Option Plan, DSU Plan and/or RSU Plan are the responsibility of the HRCC.
Other Compensation
Other than as outlined herein, the Company has no other forms of compensation, although payments may be made from time to time to individuals, or the companies they control, for the provision of consulting services. Such consulting services are paid for by the Company at competitive industry rates for work of a similar nature by reputable arm’s length services providers.
Executive Officer Compensation
Compensation paid and awarded to each named executive officer of the Company is set out above under “Table of Compensation Excluding Compensation Securities” and “Compensation Securities”. Each named executive officer received base compensation and equity-based awards in the most recently completed financial year. No incentive bonuses were paid to executive officers during the Company’s financial year ended December 31, 2024. Neither total compensation nor any significant element of total compensation was tied to performance criteria or goals for the Company’s financial year ended December 31, 2024. The RSUs granted during the year were in recognition of the successful completion and publication of the maiden NI 43-101 compliant mineral resource estimate for the Selebi Mine. No other significant events occurred during the most recently completed financial year that significantly affected compensation. The HRCC determines the amount to be paid for each significant element of compensation on a discretionary basis and in accordance with the Company’s executive compensation program. At this time, the HRCC does not reference a peer group to determine executive officer compensation. No significant changes to the Company’s compensation policies were made during or after the most recently completed financial year that could or will have an effect on director or named executive officer compensation.
Compensation Risks
The HRCC is responsible for considering, reviewing and establishing executive compensation programs, and for assessing whether the programs encourage unnecessary or excessive risk taking. The Company believes the programs are balanced and do not motivate unnecessary or excessive risk taking.
Base compensation amounts are fixed in amount and thus do not encourage risk taking. The Company does not currently have any annual incentive or bonus programs.
RSU and Option awards are important to further align the interests of executive officers with those of the Company’s shareholders. The ultimate value of the awards is tied to the Company’s share price and, since awards are staggered and subject to multi-year vesting schedules, they help ensure that executive officers have significant value tied to long-term share price performance.
Hedging
The Company has not established any policies related to the purchase by directors or executive officers of financial instruments (including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by any director or executive officer of the Company.
Pension Disclosure
No pension, retirement or deferred compensation plans, including defined contribution plans, have been instituted by the Company and none are proposed at this time.
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Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security Beneficial Ownership Table
The following table lists, as of March 19, 2025, the number of Common Shares of the Company that are beneficially owned by: (i) each person or entity known to our Company to be the beneficial owner of more than 5 % of the outstanding Common Shares; (ii) each named executive officer and director of the Company; and (iii) all executive officers and directors as a group. Information relating to beneficial ownership of Common Shares by our principal shareholders and management is based upon information furnished by each person using beneficial ownership concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
Common Shares of the Company that are Beneficially Owned | ||||||||
| Beneficial Owner | # | (%) | ||||||
| Directors | ||||||||
| Paul Martin Director and Interim Chief Executive Officer | 1,675,000 | * | ||||||
James Gowans Director and Independent Chairman | 356,410 | * | ||||||
| Jason LeBlanc Director | 1,431,096 | * | ||||||
| Mark Christensen Director | 3,812,934 | * | ||||||
| Norman MacDonald Director | 1,493,200 | * | ||||||
| Donald Newberry Director | 521,083 | * | ||||||
| William O’Reilly Director | 1,540,433 | * | ||||||
| Executive Officers | ||||||||
| Peter Rawlins Senior Vice President and Chief Financial Officer | 1,076,667 | * | ||||||
| Boris Kamstra Chief Operating Officer of PRIL | 1,175,833 | * | ||||||
| All Executive Officers and Directors | 17,030,592 | 4.50 | % | |||||
| Beneficial Owners with Greater than 5% Ownership | ||||||||
| EdgePoint Investment Group Inc.(1) | 176,765,217 | 34.5 | % | |||||
| Delbrook Capital Advisors Inc. | 26,450,000 | 6.0 | % | |||||
Note:
| * | Represents less than 1%. | |
| (1) | Reflects the Common Shares and Warrants as reported on Schedule 13G filed with the SEC on September 27, 2024, on behalf of EdgePoint Investment Group Inc., which reflects EdgePoint Investment Group Inc. as having sole voting and dispositive power over 23,833,224 Common Shares and 13,716,307 Common Shares issuable upon the exercise of warrants. Also reflects the conversion of the $20,882,353 Term Loan to 69,607,843 Common Shares and 69,607,843 Common Share purchase warrants, over which, for purposes of this table, we have presumed Edgepoint has sole voting and dispositive power. The business address for EdgePoint Investment Group is 150 Bloor Street West, Suite 500, Toronto, Ontario, Canada, M5S 2X9. |
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Securities Authorized for Issuance Under Our Equity Compensation Plans
The Company grants awards under its Option Plan, DSU Plan, and RSU Plan. See “Option Plan”, “DSU Plan”, and “RSU Plan” in Item 11 of this Report.
Equity Compensation Plan Information
The following table sets out information as of December 31, 2024, with respect to outstanding security-based compensation arrangements.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(1) | Weighted-average exercise price of outstanding options, warrants and rights (b)(2) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
| Equity compensation plans approved by security holders | 18,751,515 | 1.28 | 14,868,935 | |||||||||
| Equity compensation plans not approved by security holders | Nil | Nil | Nil | |||||||||
| Total | 18,751,515 | 1.28 | 14,868,935 | |||||||||
Note:
| (1) | The number of securities to be issued in column (a), and the number of securities available in column (c), include DSUs. The Company expects to settle these in cash, however they may be paid in shares at the discretion of the Company. | |
| (2) | The weighted average exercise price does not take into account the shares issuable upon vesting of RSUs or the settlement of DSUs, as these awards do not have an exercise price. |
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
There have been no transactions since January 1, 2024, in which the Company was or is to be a participant and the amount involved exceeds US$120,000 and in which any executive officer or director of the Company, any shareholder beneficially owning more than 5% of any class of our voting securities or an immediate family member of any such persons had or will have a direct or indirect material interest.
Procedures for Approval of Related Party Transactions
Our Board of Directors is charged with reviewing and approving all potential related party transactions. All such related party transactions must then be reported under applicable SEC rules. We have not adopted other procedures for review, or standards for approval, of such transactions, but instead review them on a case-by-case basis.
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Director Independence
The independence of our directors is determined under Nasdaq Rules.
For the purposes of this Report, as of March 19, 2025, the Board has determined that 6 of our 7 current directors are independent persons under the Nasdaq Rules, which is the majority of the Board: James Gowans, Norman MacDonald, Mark Christensen, Jason LeBlanc, Donald Newberry and William O’Reilly. Paul Martin is currently Interim Chief Executive Officer of the Company and is therefore not independent. Norman MacDonald has served as a financial advisor to the Company in connection with a significant equity and debt financing in June 2024 for which he was paid $58,500, however his advisory services were terminated in September 2024 and he is not providing any ongoing consulting services to the Company. The Board considered his services as a financial advisor to the Company in making its determination that he is independent
Committees
The Company has four committees of its Board in place:
| 1. | Audit and Risk Management Committee (“ARMC”); | |
| 2. | Human Resources and Compensation Committee; | |
| 3. | Sustainability Committee; and | |
| 4. | Corporate Governance & Nominating Committee (“CGNC”). |
The ARMC is comprised of Jason LeBlanc (Chair), Paul Martin and Donald Newberry. The ARMC is responsible for providing oversight of the Company’s financial reporting, internal controls, and risk management processes. Key responsibilities include ensuring the accuracy, completeness, and reliability of the financial statements and disclosures, effectiveness of internal controls, overseeing risk management processes, ensuring compliance with applicable laws, regulations, and internal policies and procedures, and overseeing the Company’s external auditors. The Board has determined that all members of the ARMC are financially literate, and that Mr. LeBlanc qualifies as an “audit committee financial expert” for purposes of the SEC’s rules.
The HRCC is made up of Paul Martin (Chair), Jason LeBlanc and Mark Christensen. The HRCC is responsible for overseeing the Company’s remuneration policies and practices and determining the compensation of executive officers and directors. The Company’s executive compensation program has three principal components: base salaries, consulting fees and equity incentive plans, including Options, DSUs and RSUs.
The Sustainability Committee is made up of Donald Newberry (Chair), Mark Christensen, Norman MacDonald, and Paul Martin. The Sustainability Committee discusses, develops and applies, specialist geotechnical knowledge related to the Company’s materials and disclosure.
The CGNC is made up of William O’Reilly (Chair), Donald Newberry and Mark Christensen. The CGNC is responsible for maintaining the system of rules, practices and processes by which the Company is directed and controlled. Its primary function is to assist the Board in fulfilling its oversight responsibilities by: (i) assessing the effectiveness of the Board as a whole as well as evaluating the contribution of individual members; (ii) assessing and improving the Company’s governance practices; (iii) proposing new nominees for appointment to the Board; and (iv) orienting new directors.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
| Year ended December 31, | ||||||||
2024 ($) | 2023 ($) | |||||||
| Audit fees(1) | 633,638 | 261,480 | ||||||
| Audit-related fees(2) | Nil | Nil | ||||||
| Tax fees(3) | 4,173 | 41,866 | ||||||
| All other fees(4) | Nil | Nil | ||||||
| Total fees | 637,811 | 303,346 | ||||||
Notes:
| (1) | “Audit fees” include aggregate fees billed by the Company’s external auditor in each of the last two fiscal years for audit fees. 2024 Audit fees include annual audits for both US GAAP and International Financial Reporting Standards (“IFRS”) prepared statements. | |
| (2) | “Audit-related fees” include the aggregate fees billed in each of the last two fiscal years for assurance and related services by the Company’s external auditor that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit fees” above. The services provided could include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attestation services not required by legislation or regulation. | |
| (3) | “Tax fees” include the aggregate fees billed in each of the last two fiscal years for professional services rendered by the Company’s external auditor for tax compliance, tax advice and tax planning. Tax advice could include assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities. | |
| (4) | “All other fees” include the aggregate fees billed in each of the last two fiscal years for products and services provided by the Company’s external auditor, other than “Audit fees”, “Audit-related fees” and “Tax fees” above. |
Part IV
Item 15. exhibits and financial statement schedules
| (a) | Documents filed as part of this Report. |
| (i) | Financial Statements - see Item 8. Financial Statements and Supplementary Data | |
| (ii) | Financial Statement Schedules – None |
(Financial statement schedules have been omitted either because they are not applicable, not required, or the information required to be set forth therein is included in the financial statements or notes thereto.)
| (iii) | Report of Independent Registered Public Accounting Firm. | |
| (iv) | Notes to Financial Statements. |
| (b) | Exhibits |
The exhibits listed on the accompanying Exhibit Index are filed as part of this Report.
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Exhibit Index
| -57- |
*Filed herewith.
**Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
†Indicates a management contract or compensatory plan or arrangement.
Item 16. Form 10-K SUMMARY.
Not applicable.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 19, 2025
| PREMIUM RESOURCES LTD. | ||
| By: | /s/ Paul Martin | |
| Name: | Paul Martin | |
| Title: | Interim Chief Executive Officer and Director | |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Paul Martin and Peter Rawlins, acting alone or together with another attorney-in-fact, as his true and lawful attorney-in-fact, with full power of substitution and re-substitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments to this Report, and to file the same, with exhibits thereto and other documents in connection with therewith, with the SEC, hereby ratifying and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.
| Name and Signature | Title | Date | ||
| /s/ Paul Martin | Interim Chief Executive Officer and Director (principal executive officer) |
March 19, 2025 | ||
| Paul Martin | ||||
| /s/ Peter Rawlins | Senior Vice President and Chief Financial Officer (principal financial and accounting officer) |
March 19, 2025 | ||
| Peter Rawlins | ||||
| /s/ James Gowans | Director and Independent Chairman | March 19, 2025 | ||
| James Gowans | ||||
| /s/ William O’Reilly | Director | March 19, 2025 | ||
| William O’Reilly | ||||
| /s/ Donald Newberry | Director | March 19, 2025 | ||
| Donald Newberry | ||||
| /s/ Jason LeBlanc | Director | March 19, 2025 | ||
| Jason LeBlanc | ||||
| /s/ Mark Christensen | Director | March 19, 2025 | ||
| Mark Christensen | ||||
| /s/ Norman MacDonald | Director | March 19, 2025 | ||
| Norman MacDonald |
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Exhibit 19
PREMIUM RESOURCES LTD.
(“PREM” or the “Company”)
TIMELY DISCLOSURE, CONFIDENTIALITY AND INSIDER TRADING POLICY
| 1. | Purpose of this Policy |
The purpose of this timely disclosure, confidentiality and insider trading policy (the “Policy”) of the Company is to set forth certain policies to ensure that:
| ● | the Company complies with its timely disclosure obligations as required under applicable securities laws; |
| ● | the Company prevents the selective disclosure of material changes (as defined herein) to analysts, institutional investors, market professionals and others; |
| ● | documents released by the Company or public oral statements made by a person with actual, implied or apparent authority to speak on behalf of the Company that relate to the business and affairs of the Company do not contain a misrepresentation (as defined herein); |
| ● | all persons to whom this Policy applies understand their obligations to preserve the confidentiality of Undisclosed Material Information (as defined herein); |
| ● | all appropriate parties who have Undisclosed Material Information are prohibited from trading in securities of the Company on such Undisclosed Material Information and Tipping (as defined herein) under applicable laws, stock exchange rules and this Policy; and |
| ● | the Chief Executive Officer and the Chief Financial Officer receive reports prior to such officers executing their certifications related to the Company’s Core Documents (as defined herein) setting out the evaluation, findings and conclusions of the Disclosure Committee (as defined herein) regarding the effectiveness of the Company’s disclosure controls and procedures (as defined herein) and the Disclosure Committee’s assessment of the quality of the disclosure made in the Core Documents. |
| 2. | Application of this Policy |
The main groups of persons to whom this Policy apply are set forth in Schedule “A” attached hereto. Each section of the Policy that imposes restrictions and obligations will describe which groups of persons are subject to that section. References in this Policy to “any person to whom this Policy applies” or similar references are intended to include persons in all of the groups described in Schedule “A”.
| 3. | Disclosure Committee |
| 3.1 | Structure of the Disclosure Committee |
The Company will create a corporate disclosure committee (the “Disclosure Committee”), which would be responsible for approving press releases and other public disclosure materials in situations where there is insufficient time or it is otherwise not practicable for the Board to approve same. The Disclosure Committee shall consist of members of the board of directors (the “Board”) of the Company and members of management as designated from time to time by the Board. The composition of the Disclosure Committee may change from time to time and the Company shall advise all persons to whom this Policy applies of any such changes. A majority of the members of the Disclosure Committee present in person or by conference call at the time a meeting of this committee is convened shall constitute a quorum for all purposes. The Disclosure Committee may adopt disclosure controls and procedures in addition to those set out herein.
| 3.2 | Responsibilities of the Disclosure Committee |
The Disclosure Committee shall have the responsibility to:
| (a) | evaluate the necessity of making public disclosures; |
| (b) | review and approve, before they are Generally Disclosed (as defined herein), each Document (as defined herein) to assess the quality of the disclosures made in the Document including, but not limited to, whether the Document is accurate and complete in all material respects; |
| (c) | review and approve the guidelines and procedures to be distributed to appropriate management and other Company personnel designed to gather the information required to be disclosed in Core Documents; |
| (d) | establish timelines for the preparation of Core Documents, which timelines shall include critical dates and deadlines during the disclosure process relating to the preparation of drafts, the circulation of drafts to appropriate Company personnel, the Company’s independent auditors, and the Audit Committee of the Board, the receipt of comments and the review of the comments by the Disclosure Committee. Such timetables should allow for circulation of draft Core Documents to the Chief Executive Officer, the Chief Financial Officer, the Audit Committee of the Board and the Board, sufficiently in advance of the applicable filing deadline in order to enable such persons to review carefully the filing and discuss any questions and comments related thereto; |
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| (e) | make determinations about whether: |
| (i) | a Material Change has occurred; |
| (ii) | selective disclosure has been or might be made; or |
| (iii) | a misrepresentation has been made; |
| (f) | oversee the design and implementation of this Policy and the Company’s “disclosure controls and procedures,” which are defined as controls and procedures that are designed to ensure that information required to be disclosed by the Company in its Core Documents is recorded, processed, summarized and reported within the specified time periods; |
| (g) | periodically evaluate the effectiveness of the Company’s disclosure controls and procedures, particularly prior to the filing of each Core Document, and assist the Chief Executive Officer and the Chief Financial Officer with their evaluation of the effectiveness of such disclosure controls and procedures. The Disclosure Committee’s evaluation shall include but not be limited to assessing the adequacy of the controls and procedures in place to ensure that material information required to be disclosed in the Company’s Core Documents is being recorded, processed, summarized and reported; |
| (h) | make recommendations to the Chief Executive Officer and the Chief Financial Officer with respect to the disclosures to be contained in Core Documents to be filed by the Company; |
| (i) | in its discretion, conduct interim evaluations of the Company’s disclosure controls and procedures in the event of significant changes in securities regulatory requirements, Canadian or United States GAAP, legal, or other regulatory policies, or stock exchange requirements, or if it otherwise considers such evaluations appropriate; |
| (j) | educate the Directors, Officers, Employees and Contractors about the matters contemplated by this Policy; |
| (k) | monitor the effectiveness of, and compliance with, this Policy and report to the Chairman of the Corporate Governance and Nominating Committee of the Board on the operation of this Policy, or to the Chief Executive Officer and the Chief Financial Officer in the case of the effectiveness of the disclosure controls and procedures and the Disclosure Committee’s assessment of the quality of the disclosures made in Documents, and recommend any necessary changes to this Policy; |
| (l) | annually review and reassess the adequacy of this Policy and, if necessary, recommend any proposed changes to the Chief Executive Officer and the Chief Financial Officer for approval by the Board, such that it complies with changing requirements and best practices; |
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| (m) | compile information which may be required to be reported upon or disclosed and communicated to the executive officers of the Company to allow the Company to meet its disclosure obligations on a timely basis; and |
| (n) | report to the Chief Executive Officer and the Chief Financial Officer prior to such officers executing their certifications related to the Company’s Core Documents setting out the evaluation, findings and conclusions of the Disclosure Committee regarding the effectiveness of the Company’s disclosure controls and procedures and the Disclosure Committee’s assessment of the quality of the disclosures made in the Company’s Core Documents. |
| 3.3 | Meetings of the Disclosure Committee |
Any member of the Disclosure Committee may call a meeting of the Disclosure Committee, with or without notice as circumstances dictate, to consider any matter within the mandate of the Disclosure Committee.
| 3.4 | Consulting Outside Advisors |
The Disclosure Committee may consult with the Company’s external legal counsel and other appropriate expert advisors as it considers necessary in connection with this Policy.
| 3.5 | Quiet Periods |
The Company may impose Quiet Periods from time to time. A “Quiet Period” means any period designated as such by the Disclosure Committee, beginning the first day Undisclosed Material Information comes to the knowledge of the Company and ending the end of the second Business Day (as defined herein) following the General Disclosure of such Undisclosed Material Information to the public. During Quiet Periods, any person to whom this Policy applies are prohibited from commenting on current activities, other than to cite or refer to existing public disclosure. Communications should be limited to commenting on publicly available or non-Material Information. During Quiet Periods, any person to whom this Policy applies should also avoid initiating meetings (in person or by phone) with investment analysts, shareholders, potential investors and the media on items significant to investors, other than responding to unsolicited inquiries concerning factual information. The Company does not, however, have to stop all communications with analysts or investors during this period; for example, the Company may participate in investment meetings and conferences organized by other parties, as long as Undisclosed Material Information has not been selectively disclosed.
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| 4. | Individuals Who Are Authorized to Speak on Behalf of the Company |
| 4.1 | Unless otherwise authorized by the Disclosure Committee, only the individuals (“Spokespersons”) listed below are authorized to make public oral statements, and otherwise communicate with analysts, the media and investors on behalf of the Company and only with respect to the areas noted opposite their respective names. The list may be changed by the Disclosure Committee from time to time. |
| Spokesperson | Area | |
Chief Executive Officer
Chairman
|
All
All
| |
| Chief Financial Officer | Corporate and Financial |
| 4.2 | Any person (other than a Spokesperson) to whom this Policy applies who is approached by the media, an analyst, investor or any other member of the public to comment on the business and affairs of the Company, must refer all inquiries to the Chief Executive Officer and must immediately notify the Chief Executive Officer that the approach was made. |
| 5. | Procedures Regarding the Preparation and Release of Documents |
| 5.1 | The procedures in this section apply to all Directors, Officers, Employees and Contractors. |
| 5.2 | A “Document” means any public written communication, including a communication prepared and transmitted in electronic form: |
| ● | that is required to be filed with the Ontario Securities Commission (“OSC”) or any other securities regulatory authority in Canada, either on SEDAR+ (www.sedarplus.com) or otherwise; |
| ● | that is not required to be filed with the OSC or on the SEDAR+ web site, but is so filed; |
| ● | that is filed or required to be filed with any stock exchange or similar institution under its bylaws, rules or regulations; or |
| ● | the content of which would reasonably be expected to effect the market price or value of the securities of the Company. |
| 5.3 | A “misrepresentation” means: |
| ● | an untrue statement of a material fact (as defined herein); or |
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| ● | an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the circumstances in which it is made. |
| 5.4 | The Act distinguishes between “core documents” and “non-core documents”. |
For the purpose of this Policy, the following documents are “Core Documents”:
| - | press releases |
| - | prospectuses; |
| - | take-over bid circulars; |
| - | issuer bid circulars; |
| - | directors’ circulars; |
| - | rights offering circulars; |
| - | management’s discussion and analysis (“MD&A”); |
| - | annual information forms; |
| - | information circulars; |
| - | annual financial statements; |
| - | interim financial statements. |
| - | material change reports; and |
| - | investor presentations. |
| 5.5 | Prior to the time that any Document is to be released to the public, filed with the OSC, any other securities regulatory authority in Canada or filed on SEDAR+, the following procedures must be observed: |
| ● | the Document must be prepared in consultation with, and be reviewed by, personnel in all applicable internal departments of the Company, and input from external experts and advisors should be obtained as necessary; |
| ● | any Core Document, other than a material change report, must be reviewed and approved by the Disclosure Committee; |
| ● | any press release which contains Undisclosed Material Information or any material change report must be reviewed and approved by the Chief Executive Officer, the Chief Financial Officer and at least one other member of the Disclosure Committee; |
| ● | any press release which does not contain Undisclosed Material Information must be reviewed and approved by the Chief Executive Officer or the Chief Financial Officer and at least one other member of the Disclosure Committee; |
| ● | in the event a report, statement or opinion of any expert is included or summarized in a Document, the written consent of the expert to the use of the report, statement or opinion or extract thereof and the specific form of disclosure shall be obtained. In addition, the Disclosure Committee must be satisfied that: |
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| (i) | there are no reasonable grounds to believe that there is a misrepresentation in the part of the Document made on the authority of the expert; and |
| (ii) | part of the Document fairly represents the expert report, statement or opinion; |
| ● | Core Documents, other than material change reports, must be provided to the Directors sufficiently in advance of the time they are to be filed or released to allow the Directors to review and comment on such documents. It is recognized that the requirement to make prompt disclosure of material changes by way of press releases may make it difficult to have certain press releases and material change reports reviewed by the Directors; and |
| ● | in the case of interim financial statements, annual financial statements and interim and annual MD&A, such documents must be reviewed and approved by the Audit Committee in accordance with the Audit Committee Charter following approval of the Disclosure Committee and prior to submission to the Board as a whole. |
| 5.6 | In the event that a Document contains any Forward-Looking Information (as defined herein) this information must be specifically identified as such and the following additional disclosure shall be provided in written form proximate to each place in the Document where the Forward-Looking Information appears: |
| ● | reasonable cautionary language identifying the Forward-Looking Information as such; |
| ● | identifying the material factors that could cause actual results to differ materially from expected results from a conclusion, forecast or projection in the Forward-Looking Information; and |
| ● | a statement of the material factors or assumptions that were applied in the Forward-Looking Information. |
| 5.7 | “Forward-Looking Information” means all disclosure regarding possible events, conditions or results (including future-oriented financial information with respect to prospective results of operations, a prospective financial position or prospective changes in financial position that is based on assumptions about future economic conditions and courses of action) that is presented as either a forecast or a projection. An example would be the discussion of trends and prospects for the Company in its MD&A. |
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| 6. | Procedures Regarding Public Oral Statements |
| 6.1 | The procedures in this section apply to all Directors, Officers, Employees, Contractors and Spokespersons and any other person with actual or implied authority to make a public oral statement. |
| 6.2 | A “public oral statement” is any oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed. Examples include speeches, presentations, news conferences, interviews and discussions with analysts where the Corporation’s business and affairs, prospects or financial condition is discussed. The following procedures should be observed in respect of any public oral statements made by or on behalf of the Corporation: |
| ● | such public oral statements should be made only by the Spokespersons authorized by this Policy to make public oral statements on behalf of the Company; |
| ● | any public oral statement referring to a statement, report or opinion of an expert in whole or in part must have the prior consent of said expert prior to a Spokesperson making a public oral statement related thereto; and |
| ● | the Spokespersons must ensure that any public oral statements on behalf of the Company do not contain a misrepresentation and comply with Section 14 of this Policy (Avoiding Selective Disclosure) and Section 5.6 of this Policy (Forward-Looking Information) and should normally script their comments and prepare answers to anticipated questions in advance of the meeting or conference; |
| ● | any Undisclosed Material Information that is contained in the script must be Generally Disclosed before the meeting or conference or deleted from the script if it is premature for the information to be Generally Disclosed; |
| ● | after the public orals statements are made, the Company’s participants should normally meet and review the disclosures made during the course of the meeting or conference to determine if any Undisclosed Material Information was unintentionally disclosed; |
| ● | if Undisclosed Material Information was disclosed, the participants must advise a member of the Disclosure Committee, who shall take immediate steps to ensure that the information is Generally Disclosed; and |
| ● | pending the Undisclosed Material Information being Generally Disclosed, the Company must contact the parties to whom the Undisclosed Material Information was disclosed and inform them (1) that the information is Undisclosed Material Information and (2) of their legal obligations with respect to the Material Information. |
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| 6.3 | Where a public oral statement contains Forward-Looking Information, the Spokesperson must, prior to making such a public oral statement make the following cautionary statement indicating that the public oral statement contains Forward-Looking Information; |
“Some of my commentary may contain forward-looking information, therefore, you are cautioned that PREM’s actual results could differ materially from my conclusions, forecasts or projections. I refer you to the section entitled “Description of the Business – Risk Factors” in our most recent annual information form available on SEDAR+ which sets out certain material factors that could cause actual results to differ.”
| 7. | Disclosure Controls and Procedures |
The following disclosure controls and procedures of the Company have been reasonably designed to ensure that information required to be disclosed is recorded, processed, summarized and reported on a timely basis:
| (a) | The Disclosure Committee shall assign responsibility to the appropriate individuals to draft the required disclosures in the material public disclosures of the Company and shall develop a timeline to ensure the drafting and review is conducted in a timely manner. |
| (b) | All personnel who are requested to have direct input into the preparation of Core Documents will be provided with instructions and such other additional information as they may require to ensure that they are familiar with the Company’s obligations, the importance of compliant and accurate disclosure and the reliance which is being placed upon them. |
| (d) | The Disclosure Committee shall meet as many times as may be necessary to review the draft public disclosure, consider all comments raised by members of the Disclosure Committee and other reviewers. Concerns will be addressed with outside counsel and the independent auditors, as necessary. |
| (e) | Where it considers it necessary or advisable, the Disclosure Committee will have portions of Core Documents reviewed by another knowledgeable person. All financial information shall be reviewed by the auditors. |
| (f) | To serve as an additional record of the procedures employed, and to emphasize the importance of accurate and reliable information in the Company’s material public disclosures, the Disclosure Committee shall ask the appropriate senior executives to provide his or her confirmation on a quarterly basis that all material information has been brought forward to the Disclosure Committee. Each will be asked to provide their certification in a form to be approved by the Disclosure Committee. |
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| (g) | In addition, the Company will establish a policy requiring the appropriate senior managers to provide their confirmation on a quarterly basis, that all material information has been communicated to the responsible executive officers. |
| (h) | At least on an annual basis, and prior to completion of the annual filings, the Disclosure Committee shall report to the Chief Executive Officer and the Chief Financial Officer and to the Board: |
| (i) | that it has followed the disclosure controls and procedures; |
| (ii) | the Disclosure Committee’s findings and conclusions regarding the effectiveness of the Company’s disclosure controls and procedures; and |
| (iii) | the Disclosure Committee’s assessment of the quality of the disclosures made in the Company’s Core Documents, |
and the Disclosure Committee shall meet with the Chief Executive Officer and/or the Chief Financial Officer to discuss any questions, which either may have, and to report in person, upon the request of the Chief Executive Officer and/or the Chief Financial Officer.
| (i) | If for any reason the Disclosure Committee cannot agree upon their report, it shall meet with the Chief Executive Officer and the Chief Financial Officer to discuss its procedures and the issues, which remain outstanding. |
| 8. | Timely Disclosure of Material Information |
| 8.1 | “Material information” consists of both “material facts” and “material changes”. A “material fact” means a fact that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of the securities of the Company. A “material change” means a change in the business, operations or capital of the Company that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the Company and includes a decision to implement such a change if such a decision is made by the Board or by senior management of the Company who believe that confirmation of the decision by the Board is probable. |
| 8.2 | Any person to whom this Policy applies who becomes aware of information that is potentially Material Information must immediately disclose that information to the Corporate Secretary or, in his or her absence, the Chief Executive Officer or other member of the Disclosure Committee and the Corporate Secretary, Chief Executive Officer or such other member of the Disclosure Committee shall advise the Disclosure Committee. Schedule “B” attached hereto lists examples of Material Information. |
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| 8.3 | Upon the occurrence of any change that may constitute a material change in respect of the Company, the Disclosure Committee, in consultation with such other advisors as it may consider necessary, shall: |
| ● | consider whether the event constitutes a material change; |
| ● | if it does constitute a material change, prepare a press release and a material change report describing the material change as required under applicable laws; |
| ● | determine whether a reasonable basis exists for filing the material change report on a confidential basis. In general, filings will not be made on a confidential basis although, in exceptional circumstances (such as disclosure related to a potential acquisition), confidential disclosure may be appropriate; |
| ● | to the extent practicable, circulate the draft press release and material change report to the members of the Board and senior management together, if applicable, with the recommendation that it be filed on a confidential basis; |
| ● | if applicable, for example when disclosure would be “unduly detrimental” to the interests of the Company (e.g., if release of the material change would prejudice negotiations in a corporate transaction), following approval by the Disclosure Committee, file the material change report on a confidential basis and when the basis for confidentiality ceases to exist, and the event remains material, issue a press release and file a material change report in compliance with applicable securities laws, including the Act. During the period of time while a confidential material change has not been publicly disclosed, the Company shall not release a document or make a public oral statement that, due to the undisclosed material change, contains a misrepresentation. |
| 8.4 | Press releases disclosing Material Information will be transmitted to the TSX Venture Exchange or Toronto Stock Exchange (the “TSX”), as the case may be, relevant regulatory bodies and major news wire services that disseminate financial news to the financial press. Press releases must be pre-cleared by the TSX if issued during trading hours. |
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| 9. | Internet Chat Rooms and Bulletin Boards |
| 9.1 | Directors, Officers, Employees and Contractors must not discuss or post any information relating to the Company or any of its subsidiaries or trading in securities of the Company in Internet chat rooms, newsgroups or bulletin boards. Any material discussion or rumours identified on Internet chat rooms, newsgroups or bulletin boards should be reported to the Corporate Secretary. |
| 10. | Rumours |
| 10.1 | The Company shall not comment on rumours. This also applies to rumours on the Internet or any other social media platform. Spokespersons will respond consistently to those rumours, saying: “It is our policy not to comment on market rumours or speculation.” If the TSX or a securities regulatory authority requests that the Company make a statement in response to a market rumour, the Disclosure Committee will consider the matter and make a recommendation to the Chief Executive Officer as to the wording and context of any response. |
| 11. | Website |
| 11.1 | Disclosure of Material Information on the Company’s website does not constitute General Disclosure and is not adequate disclosure of Material Information. The Company must ensure that Material Information is disseminated to all required securities regulators and Generally Disclosed before any disclosure is made on the Company’s website. |
| 11.2 | The Chief Executive Officer (or an officer or employee designated by him) and the Director, Investor Relations (or a person acting in such capacity) of the Company are responsible for creating and maintaining the Company’s website. The Company’s website must be maintained in accordance with the following: |
| ● | the following information must be included on the website: |
| (1) | all Material Information that has previously been Generally Disclosed, including, without limitation, all documents filed on SEDAR+ or a link to those documents on SEDAR+; |
| (2) | all non-Material Information that is given to analysts, institutional investors and other market professionals (such as fact sheets, fact books, slides of investor presentations, materials distributed at analyst and industry conferences); |
| (3) | web replays of shareholder meetings or analysts’ conferences; and |
| (4) | all press releases or a link to those press releases; |
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| ● | the website must contain an e-mail link to an investor relations contact for the Company to facilitate communication with investors; |
| ● | the website must include a notice that advises the reader that the information was accurate at the time of posting, but may be superseded by subsequent disclosures; |
| ● | inaccurate information must be promptly removed from the website and a correction must be posted; |
| ● | information contained on the website must be removed or updated when it is no longer current; |
| ● | a list of all analysts known to follow the Company may be posted on the investor relations page, but analysts’ reports must not be posted on the Company’s website or linked to the Company’s website; |
| ● | all links from the Company’s website must be approved by the Company’s Chief Financial Officer and all links must include a notice that advises the reader that he or she is leaving the Company’s website and that the Company is not responsible for the contents of the other site; and |
| ● | no links will be created from the Company’s website to Internet chat rooms, newsgroups or bulletin boards. |
| 11.3 | All information on the Company’s website will be retained for a period of six years from the date of issue. |
| 11.4 | The Chief Executive Officer should maintain a file (for at least six years) containing all known material public information about the Corporation, including continuous disclosure documents, new releases, analysts’ reports, transcripts or tape recordings of conference calls, debriefing notes, notes from meetings and telephone conversations with analysts and investors, and newspaper articles. |
| 11.5 | If the Company is considering a distribution of its securities, the content of the website must be reviewed with the Company’s corporate counsel before and during the offering to ensure compliance with applicable securities laws. |
| 12. | Confidentiality of Undisclosed Material Information |
| 12.1 | “Undisclosed Material Information” of the Company is Material Information about the Company that has not been “Generally Disclosed”, that is, disseminated to the public by way of a press release together with the passage of a reasonable amount of time (24 hours, unless otherwise advised that the period is longer or shorter, depending on the circumstances) for the public to analyze the information. |
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| 12.2 | Any person to whom this Policy applies and who has knowledge of Undisclosed Material Information must treat the Material Information as confidential until the Material Information has been Generally Disclosed. |
| 12.3 | Undisclosed Material Information shall not be disclosed to anyone except in the necessary course of business. If Undisclosed Material Information has been disclosed in the necessary course of business, anyone so informed must clearly understand that it is to be kept confidential, and, in appropriate circumstances, execute a confidentiality agreement. Schedule “C” attached hereto lists circumstances where securities regulators believe disclosure may be in the necessary course of business. When in doubt, all persons to whom this Policy applies must consult with the Chief Executive Officer to determine whether disclosure in a particular circumstance is in the necessary course of business. For greater certainty, disclosure to analysts, institutional investors, other market professionals and members of the press and other media will not be considered to be in the necessary course of business. “Tipping”, which refers to the disclosure of Undisclosed Material Information to third parties outside the necessary course of business, is prohibited. |
| 12.4 | In order to prevent the misuse of inadvertent disclosure of Undisclosed Material Information, the procedures set forth below should be observed at all times: |
| ● | Documents and files containing confidential information should be kept in a safe place to which access is restricted to individuals who “need to know” that information in the necessary course of business and code names and/or encrypted passwords should be used if necessary; |
| ● | Confidential matters should not be discussed in places where the discussion may be overheard; |
| ● | Transmission of documents containing Undisclosed Material Information by electronic means will be made only where it is reasonable to believe that the transmission can be made and received under secure conditions such as a dedicated server; and |
| ● | Unnecessary copying of documents containing Undisclosed Material Information must be avoided and all copies of documents must be promptly removed from meeting rooms and work areas at the conclusion of the meeting and must be destroyed if no longer required. The use of memory sticks should be avoided. |
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| 13. | Avoiding Selective Disclosure |
| 13.1 | When participating in shareholder meetings, news conferences, analysts’ conferences and private meetings with analysts or institutional investors, Spokespersons must only disclose information that either (1) is not Material Information or (2) is Material Information but has previously been Generally Disclosed. For greater certainty, acceptable topics of discussion include the Company’s business prospects (subject to the provisions of this Policy), the business environment, management’s philosophy and long-term strategy. Any selective disclosure of Undisclosed Material Information, including Earnings Guidance, is not permitted. |
| 13.2 | To protect against selective disclosure, the procedures outlined in Section 6 (Procedures Regarding Public Oral Statements) should be followed. |
| 13.3 | If Material Information that has not been Generally Disclosed is inadvertently disclosed, the Company shall contact the parties to whom the Material Information was disclosed and inform them: (a) that the information is Undisclosed Material Information, and (b) of their legal obligations with respect to the Material Information. |
| 14. | Analyst Reports and Meetings with Analysts |
| 14.1 | When reviewing analysts’ reports, comments of Directors, Officers, Employees and Contractors must be limited to identifying factual information that has been Generally Disclosed that may affect an analyst’s model and pointing out inaccuracies or omissions with respect to factual information that has been Generally Disclosed. |
| 14.2 | Any comments must contain a disclaimer that the report was reviewed for factual accuracy only. No comfort or guidance shall be expressed on the analysts’ earnings models or earnings estimates and no attempt shall be made to influence an analyst’s opinion or conclusion. |
| 14.3 | Analysts reports are proprietary products of the analyst’s firm. Re-circulating a report by an analyst may be viewed as an endorsement by the Company of the report. For these reasons, the Company should not provide analysts’ reports through any means to persons outside of the Company or to employees of the Company, including posting such information on its website. |
| 14.4 | The Company may from time to time give Earnings Guidance or any other Forward-Looking Information through voluntary disclosure by way of a press release, provided that the cautionary language described in Section 5.6 accompanies the information. |
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| 14.5 | The Company recognizes that meetings with analysts and significant investors are an important element of the Company’s investor relations program. The Company may meet with analysts and investors on an individual or small group basis as needed, and should initiate contacts or respond to analyst and investor calls in a timely, consistent and accurate fashion in accordance with this policy. |
| 14.6 | The Company should provide only non-material information through individual and group meetings, in addition to regular publicly disclosed information. It is recognized that an analyst or investor may construct this information into a mosaic that could result in material information. However, the Company should not alter the materiality of information by breaking down the information into smaller, non-material components. |
| 14.7 | The Company should maintain a “frequently asked questions” section on its web site (if applicable) and should thereby provide the same sort of detailed, non-material information to individual investors or reporters that it has provided to analysts and institutional investors. |
| 14.8 | Spokespersons should keep notes of telephone conversations with analysts and investors and, where applicable, more than one Company representative should be present at all individual and group meetings. A debriefing should be held after such meetings and, if such debriefing uncovers selective disclosure of previously Undisclosed Material Information, the Company should promptly disclose such information via news release. |
| 15. | Trading of Securities of the Corporation |
| 15.1 | “Insider Trading” which refers to persons in a Special Relationship with the Company purchasing or selling or otherwise monetizing securities of the Company while in possession of Undisclosed Material Information, is prohibited. |
| 15.2 | In addition to Section 15.1, Directors, Officers, Head Office Employees and Consultants shall not purchase or sell or otherwise monetize securities of the Corporation except during a “Trading Window”, provided there is no “Blackout Period” in effect. |
“Trading Window” means: (1) the period of time beginning on the second day on which the TSXV is open for trading and on which the trading in the Company’s securities is not halted or suspended (a “Trading Day”) after the financial results for the first, second, third fiscal quarter or the fiscal year (as applicable) have been disclosed by way of a news release and ending ten (10) days prior to the scheduled issuance of the financial news release for the next fiscal quarter or fiscal year (as applicable); and (2) any other period designated by the Disclosure Committee and communicated to those persons to whom this Policy applies. If the Trading Window ends on a weekend or statutory holiday, it shall be deemed to have ended on the last Business Day before the weekend or statutory holiday.
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“Blackout Period” means: (1) any time when trading securities of the Company is prohibited pursuant to this Policy; and (2) any other period designated by the Disclosure Committee and communicated to those persons to whom this Policy applies.
“Business Day” means any day, other than a Saturday or Sunday, on which banks located in Toronto, Ontario are open for business during normal banking hours.
| 15.3 | Any person to whom this Policy applies may not trade in securities of the Company without the prior approval of the Corporate Secretary or, in his or her absence, the Chief Executive Officer or any other member of the Disclosure Committee. The approved trade must be conducted in an orderly manner at an “at market” price. Approval of a trade is only valid for a 48-hour period from the start of the next Business Day immediately following such approval; if the trade is not completed within such 48-hour period, approval of the trade must be re-requested. |
| 15.4 | Notwithstanding Section 15.2, a Director, Officer, Employee or Contractor may purchase or sell securities during a Blackout Period with the prior written consent of the Chief Executive Officer. The Chief Executive Officer will grant permission to purchase or sell during a Blackout Period only in the case of unusual, exceptional circumstances. Without limiting the generality of the foregoing provisions of this paragraph, “unusual, exceptional circumstances” may include the sale of securities in the case of severe financial hardship or where the timing of the sale is critical for significant tax planning purposes. |
| 15.5 | The trading prohibitions in Sections 15.1, 15.2 and 15.3 do not apply to the acquisition of securities through the exercise of share options or shares issued under similar incentive plans but do apply to the sale of the securities acquired through the exercise of the option or similar securities issued under an incentive plan. |
| 15.6 | The period beginning at the end of each quarter and ending two (2) trading days following the date of public disclosure of the financial results for that quarter is particularly sensitive, as officers, directors and employees will often possess Undisclosed Material Information about the expected financial results for the quarter. Accordingly, to ensure compliance with this policy and applicable securities laws, all directors, officers and employees having access to internal financial statements or other Undisclosed Material Information shall refrain from undertaking transactions involving the purchase or sale of the Company’s securities during this time. |
| 15.7 | From time to time due to specific or anticipated events, the Company may feel it necessary to issue a Blackout Period for a specific or indefinite period covering some or all team members. The Company will notify the team members affected by these Blackout Periods. |
| 17 |
| 15.8 | Under no circumstances will share options or other long-term compensation awards be granted while a Blackout Period is in effect. |
| 16. | Insider Reports |
| 16.1 | An insider (as defined in the Act) of the Company (an “Insider”) is required to file (on SEDI) an initial insider report within five (5) days of becoming an Insider and subsequent insider reports within five (5) days following any trade of securities of the Company. If an Insider of the Company does not own or have control over or direction over securities of the Company, or if ownership or direction or control over securities of the Company remains unchanged from the last report filed, a report is not required. |
| 16.2 | If an Insider has made a trade and requires assistance with the filing of an insider report, such Insider should contact the Chief Executive Officer who will arrange for assistance with the preparation and filing of an insider report. |
| 17. | Commitment |
| 17.1 | To demonstrate its determination and commitment to the purposes of this Policy, the Company asks each Employee to review this Policy periodically throughout the year. The Employee should take the opportunity to discuss with management any circumstances that may have arisen that could be considered a breach of this Policy. |
| 17.2 | The following individuals are required to sign this Policy annually: Directors, Officers, existing employees who are senior managers or managers of business units of the Company, full-time or quasi full-time consultants to the Company and such other employees, consultants and/or advisers of or to the Company as the Chief Executive Officer and/or the Corporate Governance and Nominating Committee of the Company may, from time to time, designate. Individuals listed above are required to sign the Policy when they are engaged or when the Policy is significantly revised. All Employees of the Company are to be given a copy of this policy. |
| 18. | Managing Expectations |
| 18.1 | The Company should try to ensure, through its regular public dissemination of quantitative and qualitative information, that analysts’ estimates are in line with the Company’s own expectations. The Company should not confirm, or attempt to influence, an analyst’s opinions or conclusions and should not express comfort with analysts’ models and earnings estimates. |
| 18.2 | If the Company has determined that it will be reporting results materially below or above what it considers to be generally publicly held expectations, it should disclose this information in a news release in order to enable discussion without risk of selective disclosure. |
| 18 |
| 19. | Potential Liability |
| 19.1 | Insiders may be subject to penalties of up to the greater of (a) $5 million and (b) triple any profits earned and imprisonment for engaging in transactions in the Company’s securities at a time when they have knowledge of Undisclosed Material Information about the Company. |
| 19.2 | Insiders may also be liable for improper transactions by any person to whom they have disclosed Undisclosed Material Information on the Company or to whom they have made recommendations or expressed opinions on the basis of such information. The various provincial securities commissions have imposed large penalties even when the disclosing person did not profit from the trading. The various provincial commissions and the stock exchanges use sophisticated electronic surveillance techniques to detect insider trading. |
| 19.3 | All directors, officers, employees or contractors of the Company are strictly bound by the terms of this policy and will be advised of this Policy and its importance. This Policy must be strictly complied with by all such persons. Persons who violate this Policy will be subject to disciplinary action by the Company, which may include restrictions on future participation in equity incentive plans or termination of employment. |
| 20. | Directors, Officers, Employees and Contractors of Subsidiaries and Affiliates |
| 20.1 | The Company does not purport, by this Policy, to impose any obligation hereunder directly on persons who are not Directors, Officers, Employees or Contractors of the Company. However, the Company will take reasonable means to encourage the adoption by all Subsidiaries and Affiliates of the Company of policies and practices that are consistent with the intent and provisions hereof. |
Approved by the Board of Directors of Premium Resources Ltd. on August 9, 2022.
| 19 |
Noncompliance with this Policy is a serious breach of the terms and conditions of engagement and will be dealt with accordingly.
RECEIPT AND ACKNOWLEDGEMENT
I, ________________________________________, hereby acknowledge that I have received and read
(Print Name)
a copy of the “Disclosure, Confidentiality and Insider Trading Policy” of Premium Resources Ltd. and agree to comply with its terms. I understand that violation of insider trading or tipping laws or regulations may subject me to severe civil and/or criminal penalties, and that violation of the terms of the above-noted policy may subject me to discipline by the Company up to and including termination.
| Signature | Date |
| 20 |
Schedule “A”
Individuals and Entities to Whom This Policy Applies
“Directors, Officers, Employees and Contractors” means a director on the Board, an officer, an Employee or an independent contractor (who is engaged in an employee-like capacity) of the Company or its subsidiaries. As described below, all Directors, Officers, Employees and Contractors are also persons in a Special Relationship with the Company.
“Employee” means a full-time, part-time, contract or secondment employee of the Company or any of its subsidiaries.
“Insider” means:
| (1) | a director on the Board or a Senior Officer of the Company; |
| (2) | a person who beneficially owns, directly or indirectly, more than 10% of the voting securities of the Company or who exercises control or direction over more than 10% of the votes attached to the voting securities of the Company (a “10% Shareholder”); |
| (3) | a director or a Senior Officer of a subsidiary of the Company; or |
| (4) | a director or a Senior Officer of a 10% Shareholder of the Company. |
As described herein, (1) Directors, Officers, Employees and Contractors and (2) persons in a Special Relationship with the Company are all considered to be Insiders.
“Persons in a Special Relationship with the Company” means:
| (1) | Directors, Officers, Employees and Contractors; |
| (2) | each 10% Shareholder; |
| (3) | each director, officer, employee or contractor of a 10% Shareholder; |
| (4) | each member of an operating or advisory committee of the Company or its subsidiaries; |
| (5) | each director, officer, partner and employee of a Company that is engaging in any business or professional activity with the Company or its subsidiaries and who routinely comes into contact with Material Information; |
| (6) | each person or corporation that learned of Material Information with respect to the Company from a person or corporation described in (1) though (5) of this definition and knew or ought reasonably to have known that the other person or corporation was in such a special relationship; and |
| (7) | any member of the immediate family or household of any of the individuals referred to in (1) through (6) who resides in the same household as that individual. |
| 21 |
A corporation is considered to be a “Subsidiary” of another corporation if it is controlled by (1) that other, (2) that other and one or more companies, each of which is controlled by that other, or (3) two or more companies, each of which is controlled by that other; or it is a subsidiary of a corporation that is that other’s subsidiary. In general, a corporation will control another corporation when the first corporation owns more than 50% of the outstanding voting securities of that other corporation.
“Senior Officer” means:
| (1) | the chair, a vice-chair or a Lead Director of the Board of Directors of the Company or any of its subsidiaries, the President, Chief Executive Officer, Chief Financial Officer, a Vice-President, the Corporate Secretary, the Controller, the Treasurer or the General Manager of the Company or any of its subsidiaries or any of their operating divisions; or |
| (2) | any other individual who performs functions for the Company or any of its subsidiaries similar to those normally performed by an individual occupying any of the offices listed in (1) above. |
| 22 |
Schedule “B”
Examples of Information That May Be Material
(Based on National Policy 51-201)
Changes in corporate structure
| ● | changes in share ownership that may affect control of the Company |
| ● | changes in corporate structure such as reorganizations, amalgamations, or mergers |
| ● | take-over bids, issuer bids, or insider bids |
Changes in capital structure
| ● | the public or private sale of additional securities |
| ● | planned repurchases or redemptions of securities |
| ● | planned splits of common shares or offerings of warrants or rights to buy shares |
| ● | any share consolidation, share exchange, or stock dividend |
| ● | changes in a Company’s dividend payments or policies |
| ● | the possible initiation of a proxy fight |
| ● | material modifications to the rights of security holders |
Changes in financial results
| ● | a significant increase or decrease in near-term earnings prospects |
| ● | unexpected changes in the financial results for any period |
| ● | shifts in financial circumstances, such as cash flow reductions, major asset write-offs or write-downs |
| ● | changes in the value or composition of the Company’s assets |
| ● | any material change in the Company’s accounting policies |
Changes in business and operations
| ● | any development that affects the Company’s resources, technology, products or markets |
| ● | a significant change in capital investment plans or corporate objectives |
| ● | major labour disputes or disputes with major contractors or suppliers |
| ● | significant new contracts, products, patents, or services or significant losses of contracts or business |
| ● | significant discoveries by resource companies |
| ● | changes to the Board or executive management, including the departure of the Company’s Chairman, Lead Director, CEO, CFO, COO or President (or persons in equivalent positions) |
| ● | the commencement of, or developments in, material legal proceedings or regulatory matters |
| ● | waivers of corporate ethics and conduct rules for officers, directors, and other key employees |
| ● | any notice that reliance on a prior audit is no longer permissible |
|
● | de-listing of the Company’s securities or their movement from one quotation system or exchange to another |
Acquisitions and dispositions
| ● | significant acquisitions or dispositions of assets, property or joint venture interests |
| ● | acquisitions of other companies, including a take-over bid for, or merger with, another corporation |
Changes in credit arrangements
| ● | the borrowing or lending of a significant amount of money |
| ● | any mortgaging or encumbering of the Company’s assets |
| ● | defaults under debt obligations, agreements to restructure debt, or planned enforcement procedures by a bank or any other creditors |
| ● | changes in rating agency decisions |
| ● | significant new credit arrangements |
| 2 |
Schedule “C”
Examples of Disclosures That May Be Necessary in the Course Of Business
(Reproduced from National Policy 51-201)
| (1) | Disclosure to: |
| ● | vendors, suppliers, or strategic partners on issues such as research and development, sales and marketing, and supply contracts |
| ● | employees, officers and directors |
| ● | lenders, legal counsel, auditors, underwriters, and financial and other professional advisors to the Company |
| ● | parties to negotiations |
| ● | labour unions and industry associations |
| ● | government agencies and non-governmental regulators |
| ● | credit rating agencies (provided that the information is disclosed for the purpose of assisting the agency to formulate a credit rating and the agency’s ratings generally are or will be publicly available) |
| (2) | Disclosures in connection with a private placement |
| (3) | Communications with controlling shareholders, in certain circumstances |
Exhibit 23.1
SLR Consulting (Canada) Ltd. 55 University Ave., Suite 501, Toronto, ON M5J 2H7 |
 |
January 31, 2025
Consent of Qualified Person
Re: Form 8-K of Premium Resources Ltd. (the “Company”)
SLR Consulting (Canada) Ltd. (“SLR”), in connection with the Company’s Current Report on Form 8-K to be filed on January 31, 2025 (the “Form 8-K”), consents to:
| ● | the public filing of the technical report titled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” (the “Technical Report Summary”), with an effective date of November 1, 2024, and dated January 8, 2025, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (“S-K 1300”); |
| ● | the use of and references to our name, including our status as an expert or “qualified person” (as defined in S-K 1300), in connection with the Form 8-K and the Technical Report Summary, to any quotation from or summarization in the Form 8-K of the parts of the Technical Report Summary for which SLR is responsible and to the filing of the Technical Report Summary as an exhibit to the Form 8-K. |
SLR confirms that we have read the Form 8-K and that it fairly and accurately reflects, in the form and context in which it appears, the information in the Technical Report Summary for which we are responsible.
SLR Consulting (Canada) Ltd.
Per:
/s/ Jason J. Cox
Jason J. Cox, P.Eng.
Global Technical Director
Exhibit 23.2
SLR Consulting (Canada) Ltd. 55 University Ave., Suite 501, Toronto, ON M5J 2H7
|
 |
June 28, 2024
Consent of Qualified Person
Re: Form 10-K of Premium Nickel Resources Ltd. (the “Company”)
SLR Consulting (Canada) Ltd. (“SLR”), in connection with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), consents to:
| ● | the incorporation by reference by the Company and use of the technical report titled “Technical Report Summary on the Selebi Mines, Central District, Republic of Botswana” (the “Technical Report Summary”), with an effective date of May 31, 2024 and dated June 27, 2024, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (“S-K 1300”), as an exhibit to and referenced in the Form 10-K; |
| ● | the use of and references to our name, including our status as an expert or “qualified person” (as defined in S-K 1300), in connection with the Form 10-K and the Technical Report Summary; and |
| ● | any extracts from or a summary of the Technical Report Summary in the Form 10-K and the use of any information derived, summarized, quoted, or referenced from the Technical Report Summary, or portions thereof, that was prepared by us, that we supervised the preparation of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K. |
SLR is responsible for authoring, and this consent pertains to, the Technical Report Summary. SLR certifies that it has read the Form 10-K and that it fairly and accurately represents the information in the Technical Report Summary for which it is responsible.
SLR
Consulting (Canada) Ltd.
Per:
/s/ Jason J. Cox
Jason
J. Cox, P.Eng.
Global Technical Director
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paul Martin, certify that:
1. I have reviewed this Annual Report on Form 10-K of Premium Resources Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | March 19, 2025 | |
| By: | /s/ Paul Martin | |
| Paul Martin | ||
| Interim Chief Executive Officer | ||
| (principal executive officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Peter Rawlins, certify that:
1. I have reviewed this Annual Report on Form 10-K of Premium Resources Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | March 19, 2025 | |
| By: | /s/ Peter Rawlins | |
| Peter Rawlins | ||
| Senior Vice President and Chief Financial Officer | ||
| (principal financial and accounting officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the report of Premium Resources Ltd. (the “Company”) on Form 10-K for the period ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: March 19, 2025 | /s/ Paul Martin | |
| Paul Martin | ||
| Interim Chief Executive Officer | ||
| (principal executive officer) |
| Dated: March 19, 2025 | /s/ Peter Rawlins | |
| Peter Rawlins | ||
| Senior Vice President and Chief Financial Officer | ||
| (principal financial and accounting officer) |