Forsys Metals Corp.
Consolidated Financial Statements
December 31, 2024 and 2023
(expressed in Canadian dollars)
Management's Responsibility for Financial Reporting
The consolidated financial statements of Forsys Metals Corp. and the information contained in Management's Discussion and Analysis have been prepared by and are the responsibility of the Company's management. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standards as issued by the International Accounting Standards Board and, where appropriate, reflect management's best estimates and judgments based on currently available information.
Management has developed and maintains a system of internal controls to obtain reasonable assurance that transactions are authorized, the financial information reported is accurate and reliable in all material respects and that the Company's assets are appropriately accounted for and adequately safeguarded.
The Company's independent auditors, BDO Audit Pty Ltd, who are appointed by the Directors, conduct an audit in accordance with Canadian generally accepted auditing standards. Their report outlines the scope of their audit and expresses their opinion on the consolidated financial statements.
The Audit Committee and the Board of Directors meet periodically with management and the independent auditors to review the scope and results of the annual audit, and to review the consolidated financial statements and related financial reporting matters prior to approval of the consolidated financial statements by the Board of Directors.
Mark Frewin | Miles Nagamatsu |
Chief Executive Officer | Chief Financial Officer |
March 26, 2025 |
Tel: +61 8 6382 4600 | Level 9, Mia Yellagonga Tower 2 |
Fax: +61 8 6382 4601 | 5 Spring Street |
www.bdo.com.au | Perth WA 6000 |
PO Box 700 West Perth WA 6872 | |
Australia |
INDEPENDENT AUDITOR'S REPORT
To the shareholders of Forsys Metals Corp.
Report on the Audit of the Financial Report
Opinion
We have audited the consolidated financial statements of Forsys Metals Corp. and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2024 and 2023, and the consolidated statements of net loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2024 and 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRS Accounting Standards).
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation
Carrying Value of Exploration and Evaluation Assets
Key audit matter | How the matter was addressed in our audit |
As disclosed in Note 7 of the consolidated financial statements, the Exploration and Evaluation Asset represents a significant asset of the Group.
Refer to Note 4 and Note 5 of the consolidated financial statements for a description of the accounting policy and significant judgments applied to Exploration and Evaluation Assets.
In accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources, the recoverability of Exploration and Evaluation Assets requires significant judgment by management in determining whether there are any facts or circumstances that exist to suggest that the carrying value of this asset may exceed its recoverable amount. As a result, this is considered a key audit matter.
We have evaluated management's assessment of impairment indicators per IFRS 6 Exploration forand Evaluation of Mineral Resources, including but not limited to:
- Reviewing the Group's rights to explore in the relevant exploration areas and assessing whether the rights to tenure remained current at balance date;
-
Considering the status of the relevant exploration areas by holding discussions with management, and reviewing the
Group's exploration budget and directors' minutes; - Assessing whether any data exists to suggestthat the carrying value of the Exploration and Evaluation assets is unlikely to be recovered through development or sale; and
- Assessing the adequacy of the related disclosures in Note 4, Note 5 and Note 7 to the consolidated financial statements.
Other information
Management is responsible for the other information. The other information comprises the information included in the Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained the Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Ashleigh Woodley.
BDO Audit Pty Ltd
Ashleigh Woodley
Director
Perth, 26 March 2025
Forsys Metals Corp.
Consolidated Statement of Financial Position
(expressed in Canadian dollars) | |||
As at December 31, | |||
2024 | 2023 | ||
Assets | Notes | $ | $ |
Current | 6 | 3,329,334 | 12,405,165 |
Cash and cash equivalents | |||
Receivables | 136,369 | 352,385 | |
Prepaid expenses and other assets | 203,727 | 152,838 | |
Non-current | 3,669,430 | 12,910,388 | |
7 | 17,955,477 | 11,363,621 | |
Exploration and evaluation | |||
Total assets | 21,624,907 | 24,274,009 | |
Liabilities | |||
Current | 342,733 | 125,443 | |
Accounts payable and accrued liabilities | |||
Income taxes payable | 8 | - | 1,909,582 |
342,733 | 2,035,025 | ||
Shareholders' equity | 9 | 176,207,588 | 174,210,964 |
Share capital | |||
Contributed surplus | 50,183,534 | 51,207,780 | |
Equity reserve | 33,364 | 33,364 | |
Accumulated loss | (184,749,819) | (182,089,125) | |
Accumulated other comprehensive loss | (20,392,493) | (21,123,999) | |
Total shareholders' equity | 21,282,174 | 22,238,984 | |
Total liabilities and shareholders' equity | 21,624,907 | 24,274,009 | |
Subsequent events | 18 | ||
On behalf of the Board: | |||
Martin Rowley | Mark Frewin | ||
Director | Director |
The above consolidated statement should be read in conjunction with the accompanying notes. | 1 |
Forsys Metals Corp.
Consolidated Statement of Net Loss and Comprehensive Loss
(expressed in Canadian dollars)
Years ended December 31, | ||
2024 | 2023 | |
Notes | $ | $ |
Expenses | 357,963 | 218,156 | |
Professional fees | |||
Directors' fees | 16 | 565,369 | 606,825 |
Consulting fees | 16 | 850,674 | 686,378 |
Bonuses | - | 164,638 | |
Stock-based compensation | 10, 16 | 343,378 | 4,220,000 |
Advisory fees | 130,000 | 93,500 | |
Public company costs | 260,237 | 218,970 | |
General and administrative | 416,631 | 160,547 | |
Foreign exchange loss | 5,139 | (4,554) | |
Other expense (income) | (17,612) | 3,522 | |
Interest income | (301,283) | (601,340) | |
2,610,496 | 5,766,642 | ||
Net loss before income taxes | (2,610,496) | (5,766,642) | |
Income taxes | 12 | 50,198 | 56,862 |
Net loss | (2,660,694) | (5,823,504) | |
Other comprehensive income (loss), net of taxes | |||
Item that may be reclassified subsequently to loss | 731,506 | (1,326,893) | |
Foreign currency translation | |||
Comprehensive loss | (1,929,188) | (7,150,397) | |
Net loss per Class A common share - basic and diluted | (0.01) | (0.03) | |
Weighted average number of Class A | |||
common shares outstanding | 196,255,123 | 195,169,467 |
The above consolidated statement should be read in conjunction with the accompanying notes. | 2 |
Forsys Metals Corp.
Consolidated Statement of Changes in Equity
(expressed in Canadian dollars) | |
Years ended December 31, | |
2024 | 2023 |
$ | $ |
Share capital | ||
Balance, beginning of year | 174,210,964 | 174,210,964 |
Exercise of stock options | 629,000 | - |
Fair value of stock options exercised | 496,074 | - |
Fair value of PSUs exercised | 871,550 | - |
Balance, end of year | 176,207,588 | 174,210,964 |
Warrants | ||
Balance, beginning of year | - | 6,097,115 |
Fair value of expired warrants | - | (6,097,115) |
Balance, end of year | - | - |
Contributed surplus | ||
Balance, beginning of year | 51,207,780 | 46,987,780 |
Stock-based compensation | 343,378 | 4,220,000 |
Fair value of stock options exercised | (496,074) | - |
Fair value of PSUs exercised | (871,550) | - |
Balance, end of year | 50,183,534 | 51,207,780 |
Equity reserve | ||
Balance, beginning and end of year | 33,364 | 33,364 |
Accumulated loss | ||
Balance, beginning of year | (182,089,125) | (182,362,736) |
Fair value of expired warrants | - | 6,097,115 |
Net loss | (2,660,694) | (5,823,504) |
Balance, end of year | (184,749,819) | (182,089,125) |
Accumulated other comprehensive loss | ||
Balance, beginning of year | (21,123,999) | (19,797,105) |
Currency translation differences on foreign operations | 731,506 | (1,326,894) |
Balance, end of year | (20,392,493) | (21,123,999) |
The above consolidated statement should be read in conjunction with the accompanying notes. | 3 |
Forsys Metals Corp.
Consolidated Statement of Cash Flows
(expressed in Canadian dollars) | |||
Years ended December 31, | |||
2024 | 2023 | ||
Cash from (used in) | Notes | $ | $ |
Operating activities | (2,660,694) | (5,823,504) | |
Net loss | |||
Interest income | (301,283) | (601,340) | |
Item not affecting cash | 343,378 | 4,220,000 | |
Stock-based compensation | |||
Changes in non-cash operating working capital | 216,016 | (289,412) | |
Receivables | |||
Prepaid expenses and other assets | (50,889) | (94,530) | |
Accounts payable and accrued liabilities | 267,487 | 22,753 | |
Income taxes payable | (2,001,444) | (142,113) | |
Total cash outflow from operating activities | (4,187,429) | (2,708,146) | |
Financing activities | 629,000 | - | |
Exercise of stock options | |||
Investing activities | 301,283 | 601,340 | |
Interest income | |||
Exploration and evaluation | 7 | (5,861,815) | (2,067,881) |
Total cash outflow from investing activities | (5,560,532) | (1,466,542) | |
Net decrease in cash | (9,118,961) | (4,174,688) | |
Cash and cash equivalents, beginning of year | 12,405,165 | 16,923,009 | |
Effect of exchange rate changes on cash | 43,130 | (343,157) | |
Cash and cash equivalents, end of year | 6 | 3,329,334 | 12,405,164 |
The above consolidated statement should be read in conjunction with the accompanying notes. | 4 |