Grid Metals : Audited Financial Statements for period ending December 31, 2024

About this update from Grid Metals Corp.

GRID METALS CORP. CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 and 2023 INDEX Consolidated Statements of Financial Position 1 Consolidated Statements of Operations and Comprehensive Loss 2 Consolidated Statements of Changes in Shareholders' Equity 3 Consolidated Statements of Cash Flows 4 Notes to the Consolidated Financial Statements 5 Independent Auditor's Report To the Shareholders of Grid Metals Corp. Opinion We have audited the consolidated financial statements of Grid Metals Corp. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2024 and 2023, and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in shareholders' equity and consolidated statements of 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 Company as at December 31, 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 ("IFRS").. 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 Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. 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. Material uncertainty related to going concern We draw attention to Note 1 in the consolidated financial statements, which indicates that the Company incurred a net loss during the year ended December 31, 2024. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that material uncertainties exist that cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Impairment of right of use asset How our audit addressed the key audit matter Key audit matter During the year ended December 31, 2024, management assessed there were indicators of impairment on the right of use asset and thus performed an impairment analysis as of December 31, 2024. The assessment of impairment and assessment of impairment indicators requires a significant amount of management judgement. We identified impairment of the right of use asset as a key audit matter due to the significant level of management judgement required in calculating the recoverable amount. This includes an assessment of management's assumptions, which are inherently uncertain. These assumptions, which include the potential use of the asset by market participants, ability to sublet and the ability to generate future cashflow from the asset, include a high degree of judgement and subjectivity. Other information In this regard, our audit procedures included: Discussed indicators of impairment with management; Obtained and evaluated management's position on the recoverable amount; Professionals with specialized skill and knowledge in the field of valuations assisted in assessing the reasonableness of the fair values and assessing the reasonableness of key assumptions used in the calculations; We obtained an understanding of and evaluated management's basis for determining the assumptions and compared them to indicative market information as well as internal evidence available; Evaluated management's disclosure in the notes to the consolidated financial statements of significant judgements in relation to this matter. Management is responsible for the other information. The other information comprises 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 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 Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 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, 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 Company'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 Company or cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company'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 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 judgement 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 risks 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 Company'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 Company'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 Company 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. 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 of the audit resulting in this independent auditor's report is Nimesh Ratnarajah. McGovern Hurley LLP Chartered Professional Accountants Licensed Public Accountants Toronto, Ontario April 24, 2025 GRID METALS CORP. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In Canadian dollars) As at December 31, December 31, 2023 2024 ASSETS Current Cash $ 596,760 $ 2,717,813 Marketable securities (Note 5) 651,392 755,357 Accounts receivable (Note 6) 208,207 5,086,282 Prepaids 21,311 118,961 Total current assets 1,477,670 8,678,413 Non-current Capital assets (Notes 7) 56,938 54,438 Right of use asset (Note 8) - 4,057,632 Total assets 1,534,608 12,790,483 LIABILITIES Current Accounts payable and accrued liabilities (Note 15) 891,083 816,940 Lease obligations (Note 12) 12,140 4,612 Mill lease obligations - current (Note 8) 442,542 1,194,223 Flow through share premium liability (Note 9(d)) - 2,222,778 Total current liabilities 1,345,765 4,238,553 Non-current Term loan payable (Note 14) - 60,000 Long term lease obligations (Note 12) 10,588 - Property acquisition obligation (Note 10) - 241,165 Mill lease obligations (Note 8) - 2,152,634 Total liabilities 1,356,353 6,692,352 SHAREHOLDERS' EQUITY Share capital (Note 9) 67,015,727 66,907,477 Contributed surplus (Note 9) 8,128,402 8,456,158 Deficit (74,965,874) (69,265,504) Total shareholders' equity 178,255 6,098,131 Total liabilities and shareholders' equity $ 1,534,608 $ 12,790,483 Going concern (Note 2) Commitments and contingencies (Note 11) Subsequent events (Note 19) Approved on Behalf of the Board 'Thomas W. Meredith' Director 'Robin E. Dunbar' Director GRID METALS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In Canadian dollars) Years ended December 31 2024 2023 Expenses Exploration and evaluation expenditures (Note 10) $ 6,222,765 $ 7,677,737 Management and directors fees (Note 15) 768,099 1,100,562 Office, general and administrative 705,637 711,064 Share-based payments (Notes 9(b) and 15) 112,752 770,408 Professional and consulting fees (Note 15) 466,452 604,226 Public company costs 143,373 179,259 Amortization (Notes 7 and 8) 808,749 151,197 Accretion (Notes 8 and 10) 229,271 135,237 Flow-through share premium recovery (Note 9(d)) (2,222,778) (764,000) Loss before the undernoted (7,234,320) (10,565,690) Other income 143,899 238,802 Forgiveness of debt (Note 14) 20,000 - Government grant (Note 10) 97,500 - Unrealized gain on marketable securities (Note 5) 230,571 168,397 Proceeds from property option agreement (Notes 5 and 10) 455,000 133,750 Realized (loss) gain on marketable securities (Note 5) 554,461 (347,021) Impairment loss on right of use asset (Note 8) (303,489) - Net loss and comprehensive loss for the year $ (6,036,378) $ (10,371,762) Net loss per share Basic and diluted loss per share $ (0.03) $ (0.06) Weighted average number of common shares outstanding - basic 204,169,109 170,024,203 GRID METALS CORP. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Canadian dollars) Share capital Contributed # of chares Amount Surplus Deficit Total Balance, December 31, 2022 165,162,706 $62,638,803 $8,883,947 $(60,018,082) $11,504,668 Flow through common shares issued in connection with a private placement (Note 9(a)) 28,460,450 5,058,822 - - 5,058,822 Flow through share premium (Note 9(a)) - (2,222,778) - - (2,222,778) Fair value assigned to finders' warrants issued in connection with the private placement (Note 9(c)) - (294) 294 - - Cash share issue costs (Note 9(a)) - (17,399) - - (17,399) Shares issued in satisfaction of a property acquisition (Note 9(a)) 9,092,858 1,144,142 - - 1,144,142 Share-based compensation (Note 9(b)) - - 770,408 - 770,408 Warrants expired (Note 9(c)) - - (1,124,340) 1,124,340 - Warrants exercised (Note 9(c)) 1,160,150 232.030 - - 232,030 Original fair value of warrants exercised (Note 9(c)) - 74.151 (74,151) - - Net loss for the year - - - (10,371,762) (10,371,762) Balance, December 31, 2023 203,876,164 $66,907,477 $8,456,158 $(69,265,504) $6,098,131 Shares issued for DSU vesting (Note 9(a)) 475,000 104,500 (104,500) - - Shares issued in satisfaction of a property acquisition (Note 9(a)) 50,000 3,750 - - 3,750 Share-based compensation (Note 9(b)) - - 112,752 - 112,752 Warrants expired (Note 9(c)) - - (16,766) 16,766 - Options expired (Note 9(b)) - - (319,242) 319,242 - Net loss for the year - - - (6,036,378) (6,036,378) Balance, December 31, 2024 204,401,164 $67,015,727 $8,128,402 $(74,965,874) $ 178,255 2024 2023 Cash flows from operating activities Net loss for the year $ (6,036,378) $ (10,371,762) Adjustments not affecting cash Shares issued for property acquisition 3,750 1,144,142 Share based compensation 112,752 770,408 Realized loss (gain) on marketable securities (554,461) 347,021 Amortization 808,749 151,197 Unrealized gain on marketable securities (230,571) (168,397) Accretion 229,271 135,237 Interest on lease obligations 825 596 Impairment of right of use asset 303,489 - Forgiveness of debt (20,000) - Shares received pursuant to property sale (55,000) (113,750) Flow-through share premium recovery Changes in non-cash working capital (2,222,778) (764,000) Accounts receivable (101,949) 80,169 Prepaids 97,650 212,025 Property acquisition obligation (241,165) - Accounts payable and accrued liabilities 14,069 714,133 Advance on exploration - (279,260) Cash flows from operating activities (7,891,747) (8,142,241) Cash flows from investing activities Proceeds on sale of marketable securities 1,043,997 2,483,932 Purchase of marketable securities (100,000) (400,000) Cash flows from investing activities 943,997 2,083,932 Cash flows from financing activities Issuance of common shares and warrants - 78,798 Collection of subscription receivable 4,980,024 - Payment of Mill lease obligation (100,000) (900,000) Proceeds on exercise of warrants - 232,030 Payment of lease obligations (13,327) (13,980) Repayment of term loan (40,000) - Share issue costs - (17,399) Cash flows from financing activities 4,826,697 (620,551) Change in cash for the year (2,121,053) (6,678,860) Cash, beginning of year 2,717,813 9,396,673 Cash, end of year $ 596,760 $ 2,717.813 Supplemental information Broker warrants issued in connection with the private placement (Note 9 (c)) $ - $ 294 Lease liability and capital asset additions (Notes 7 and 12) 30,618 - Mill lease obligation and right-of-use asset modifications (Note 8) 2,973,512 - GENERAL INFORMATION Grid Metals Corp. (the "Company") was incorporated under the laws of Ontario on July 15, 1997 and is engaged in the business of exploring and developing base and precious metal mineral properties. Substantially all of the efforts of the Company are devoted to these business activities and to date the Company has not earned significant revenues. The principal business address of the Company is 3335 Yonge Street, Suite 304 Toronto, Ontario, M4N 2M1. The consolidated financial statements of the Company for the years ended December 31, 2024 and 2023 were authorized for issue by the Board of Directors on April 24, 2025. GOING CONCERN The Company's ability to realize the costs it has incurred to date on its properties is dependent upon it being able to identify economically recoverable reserves; to finance their exploration and evaluation costs; to resolve any environmental, regulatory, or other constraints which may hinder the successful development of the reserves; and to attain profitable operations. The business of mining and exploration for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the expenditures incurred on the exploration properties and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company's ability to dispose of its interests on an advantageous basis. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to government licensing requirements or regulations, unregistered prior agreements, unregistered claims, Aboriginal claims, and non-compliance with regulatory and environmental requirements. The Company's property interests may also be subject to increases in taxes and royalties, and political uncertainty. The Company has cumulative operating losses at December 31, 2024. The Company expects to incur further losses in the exploration and development of its properties. The Company will have an ongoing need for equity financing for working capital and exploration and development of its properties, and there can be no assurances that financing will be available to the Company. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements. Such adjustments could be material. It is not possible to predict whether the Company will be able to raise adequate financing or to ultimately attain profitable levels of operations. Details of deficit and working capital of the Company are as follows: December 31, 2024 December 31, 2023 Deficit $ 74,965,874 $ 69,265,504 Working capital $ 131,905 $ 4,439,860 BASIS OF PRESENTATION These consolidated financial statements are presented in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). IFRS represents standards and interpretations approved by the IASB, and are comprised of IFRSs, International Accounting Standards ("IASs"), and interpretations issued by the IFRS Interpretations Committee ("IFRICs") and the former Standing Interpretations Committee ("SICs"). MATERIAL ACCOUNTING POLICIES Basis of consolidation These consolidated financial statements include the accounts of the Company and its controlled subsidiaries. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. These consolidated financial statements include the accounts of the Company; its 72.56% owned Maskwa Nickel Chrome Mines Limited, a Manitoba corporation; its wholly-owned subsidiary, Global Nickel Inc., a Canadian federally incorporated company; and its wholly owned subsidiary 1000078824 Ontario Inc., an Ontario corporation that holds the Company's 75% interest in a joint operation with Lithium Equities Investments LP. ("LEI"). The financial statements of the subsidiaries are consolidated from the date that control commences until the date that control ceases. All inter-company balances and transactions have been eliminated. Basis of measurement These consolidated financial statements have been prepared on a going concern basis, under the historical cost basis, except for those financial instruments recorded at fair value through profit and loss and have been prepared using the accrual basis of accounting except for cash flow information. Exploration and evaluation assets - acquisition costs and exploration expenditures Exploration and evaluation expenditures are charged to profit or loss in the period incurred until such time as it has been determined that a mineral property has economically recoverable resources, at which point subsequent costs incurred to develop a mineral property are capitalized. Exploration and evaluation expenditures include acquisition costs of mineral exploration properties, option payments and exploration and evaluation activity. Joint Arrangements A joint arrangement is defined as one over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. There are two types of joint arrangements, joint operations ("JO") and joint ventures ("JV"). A JO is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. A JV is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. The Company recognizes assets, liabilities, revenue and expenses in relation to its interest in joint operations on a line by line basis in accordance with the IFRSs applicable to the particular financial statement line item. With respect to transactions with joint operations that have joint control, the Company recognizes gains and losses only to the extent of the other parties' interests in the joint operation. However, when the transaction provides evidence of a reduction in net realizable value or an impairment loss, the Company fully recognizes those losses. When the Company enters into a transaction with a joint operation, the Company does not recognize its share of gains and losses until it resells the related assets to third parties. However, when the transaction provides evidence of a reduction in net realizable value or an impairment loss the Company recognizes its share of those losses Provisions and decommissioning liabilities Provisions, which include decommissioning liabilities, are liabilities that are uncertain in timing or amount. The Company records a provision when: the Company has a present obligation, legal or constructive, as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. Constructive obligations are obligations that derive from the Company's actions where: by an established pattern of past practice, published policies or a sufficiently specific current statement, the Company has indicated to other parties that it will accept certain responsibilities; and as a result, the Company has created a valid expectation on the part of those other parties that it will discharge those responsibilities. Provisions are reviewed at the end of each reporting year and adjusted to reflect management's current best estimate of the expenditure required to settle the present obligation at the end of the reporting year. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. Provisions are reduced by actual expenditures for which the provision was originally recognized. Where discounting has been used, the carrying amount of a provision increases in each year to reflect the passage of time. This increase (accretion expense) is included in finance costs in the consolidated statement of operations. The Company did not have any material reclamation provisions or decommissioning liabilities as at December 31, 2024 and 2023. Loss per share Basic loss per share is calculated using the weighted average number of shares outstanding. Diluted loss per share is calculated by assuming that any proceeds from the exercise of dilutive stock options and warrants would be used to repurchase common shares at the average market price during the year, with the incremental number of shares being included in the denominator of the diluted loss per share calculation. The diluted loss per share calculation excludes any potential conversion of options, restricted share units, deferred share units, and warrants that would increase earnings per share or decrease loss per share. During the year ended December 31, 2024 and 2023, all outstanding warrants and options were excluded from diluted loss per share calculation as they were anti-dilutive. Income taxes Income tax expense comprises current and deferred income tax. Income tax is recognized in the consolidated statement of operations except to the extent it relates to items recognized in other comprehensive loss or directly in equity. Current income tax Current income tax expense is based on the results for the year as adjusted for items that are not taxable and not deductible. Current tax is calculated using tax rates and laws that were enacted or substantively enacted at the end of the reporting year. Management at the end of each reporting year evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Provisions are established where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax Deferred income taxes are the taxes expected to be payable or recoverable on differences between the carrying amounts of assets in the financial statements and their corresponding tax bases used in the computation of taxable profit, and are accounted for using the asset and liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences between the carrying amounts of assets and their corresponding tax bases. Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Flow-through share financings The Company periodically finances a portion of its exploration activities through the issue of flow-through shares, which transfers the tax deductibility of exploration expenditures to the investor (referred to as renunciation). Proceeds received on the issuance of such shares up to the value of similar non-flow through shares are credited to capital stock and any difference between that amount and the issue price is recognized as a flow-through share premium and recognized as a liability in the consolidated statement of financial position. Upon renunciation to the investor of the tax benefits associated with the related expenditures, a deferred income tax liability and corresponding deferred income tax expense is recognized, and the liability previously recorded as a flow through share premium is recorded to flow-through share premium income. To the extent that suitable deferred tax assets are available, the Company will reduce the deferred income tax liability and record a recovery on the consolidated statement of operations. The related exploration costs are expensed as incurred. Foreign currency translation The Canadian dollar is the functional and reporting currency of the Company and all of its subsidiaries. Monetary assets and liabilities are translated into Canadian dollars at exchange rates in effect at the consolidated statement of financial position date. Non-monetary assets and liabilities are translated at historical exchange rates. Revenues and expenses are translated at the rate at the time of the transaction. Any resulting gain or loss is recorded in the consolidated statement of operations. Share-based payments The Company applies the fair value method of accounting for share-based payments granted to employees and other individuals providing similar services. The fair value of options is determined using an option pricing model that takes into account, as of the grant date, the exercise price, the expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock, and the risk-free interest rate over the expected life of the option. Each tranche of an option that vests over time is considered a separate award and the fair value of each tranche is expensed over its vesting period with the corresponding credit to contributed surplus. The fair value of options granted is recorded in contributed surplus. Cash consideration received from employees on exercise of options is credited to share capital along with the original grant date fair value of the options exercised. The value of options forfeited before vesting is removed from the option reserve and credited to operations, while the value of options that expire after vesting is credited directly to deficit. Share-based payments granted to non-employees are measured at the fair value of goods received unless that cannot be reasonably estimated in which case the estimated fair value of the share-based payments is used. The measurement date is generally the date the goods or services are received. Deferred Share Units (''DSU'') and Restricted Share Units ("RSU") where cash-settled, the fair value of the units awarded, representing the fair market value of the Company's shares is recognized as share-based compensation expense at grant date with a corresponding amount recorded as a share-based liability. The fair value of the units is remeasured at the end of each reporting year and at the date of settlement, with changes in fair value recognized as share-based compensation expense in the year. Where DSU and RSU are equity-settled, the fair value of the units at the date of grant is charged to the statement of loss over the vesting period. Equity settled units are not subsequently remeasured. Performance vesting conditions are taken into account by adjusting the number of units expected to vest at each reporting date so that, ultimately the cumulative amount recognized over the vesting year is based on the number of units that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the units granted. Warrants All warrants issued are valued on the date of grant using the Black-Scholes option pricing model, net of related issue costs and are recorded in contributed surplus. The value of warrants that expire is credited directly to deficit. Property, equipment and right of use assets Recognition and Measurement Capital assets are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes all expenditures that are directly attributable to the acquisition of the asset. Right-of-use assets are measured at the present value of the related obligation discounted by the Company's incremental borrowing rate. In addition, at each reporting period, property, equipment and right of use assets are reviewed to determine whether there is any indication of impairment. Amortization Equipment and automobile are depreciated annually on a straight-line basis using rates of 20% and 30%, respectively. Right-of-use assets are amortized on a straight-line basis over the lesser of the useful life and the lease term of the underlying asset. Segmented information The Company conducts all of its operations in Canada in one business segment. Financial assets Initial recognition and measurement Non-derivative financial assets within the scope of IFRS 9 are classified and measured as "financial assets at fair value", as either fair value through profit or loss ("FVPL") or fair value through other comprehensive income ("FVOCI"), and "financial assets at amortized costs", as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows. Subsequent measurement - financial assets at amortized cost After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The financial assets at amortized cost include the Company's cash and accounts receivable. Subsequent measurement - financial assets at FVOCI Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVOCI. The Company does not measure any financial assets at FVOCI. After initial measurement, investments measured at FVOCI are subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income or loss in the consolidated statements of comprehensive income (loss). When the investment is sold, the cumulative gain or loss remains in accumulated other comprehensive income or loss and is not reclassified to profit or loss. Dividends from such investments are recognized in other income in the consolidated statements of earnings (loss) when the right to receive payments is established. Subsequent measurement - financial assets at FVPL Financial assets measured at FVPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVPL are carried at fair value in the consolidated statements of financial position with changes in fair value recognized in other income or expense in the consolidated statements of earnings (loss). The Company's marketable securities are classified as financial assets at FVPL. Derecognition A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership. Impairment of financial assets The Company's only financial assets subject to impairment are other accounts receivable, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases, and the decrease can be objectively related to an event occurring after the initial impairment was recognized. Financial liabilities Initial recognition and measurement Financial liabilities are measured at amortized cost, unless they are required to be measured at FVPL as is the case for held for trading or derivative instruments, or the Company has opted to measure the financial liability at FVPL. The Company's financial liabilities include accounts payable, accrued liabilities, term loan payable and exploration advances, which are each measured at amortized cost. All financial liabilities are recognized initially at fair value and in the case of long-term debt, net of directly attributable transaction costs. Subsequent measurement - financial liabilities at amortized cost After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in finance cost in the consolidated statements of operations. Derecognition A financial liability is derecognized when the obligation under the liability is discharged, cancelled, or expires with any associated gain or loss recognized in other income or expense in the consolidated statements of operations. Leases At inception of the contract, the Company assesses whether a contract is, or contains, a lease by evaluating if the contract conveys the right to control the use of an identified asset. For contracts that contain a lease, the Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted by any initial direct costs, and costs to dismantle and remove the underlying asset less any lease incentives. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the underlying asset or the end of the lease term. Right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets. The lease liability is initially measured at the present value of lease payments to be paid subsequent to the commencement date of the lease, discounted either at the interest rate implicit in the lease or the Company's incremental borrowing rate. The lease payments measured in the initial lease liability include payments for an optional renewal period, if any, if the Company is reasonably certain that it will exercise a renewal extension option. The liability is measured at amortized cost using the effective interest method and will be remeasured when there is a change in either the future lease payments or assessment of whether an extension or other option will be exercised. The lease liability is subsequently adjusted for lease payments and interest on the obligation. Interest expense on the lease obligation is included in the consolidated statement of loss. The Company has elected not to recognize right-of-use assets and lease liabilities for leases with a lease term of less than 12 months and low value assets and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. Recent and future pronouncements During the year ended December 31, 2024, the Company adopted a number of amendments and improvements of existing standards. These included IFRS 17 and IAS 1. These new standards and changes did not have any material impact on the Company's consolidated financial statements. Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods beginning on or after January 1, 2025 or later periods. Many are not applicable or do not have a significant impact to the Company and have been excluded below. The following have not yet been adopted and are being evaluated to determine their impact on the Company: Presentation and Disclosure in Financial Statements (IFRS 18) In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. The new standards replaces IAS 1 Presentation of Financial Statements . IFRS 18 introduces new categories and required subtotals in the statement of profit and loss and also requires disclosure of management-defined performance measures. It also includes new requirements for the location, aggregation and disaggregation of financial information. The standard is effective for annual reporting periods beginning on or after January 1, 2027, including interim financial statements. Retrospective application is required and early adoption is permitted. Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7) In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments -Disclosures . The amendments clarify the derecognition of financial liabilities and introduces an accounting policy option to derecognize financial liabilities that are settled through an electronic payment system. The amendments also clarify how to asses the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features and the treatment of non-recourse assets and contractually linked instruments (CLIs). Further, the amendments mandate additional disclosures in IFRS 7 for financial instruments with contingent features and equity instruments classified at FVOCI. The amendments are effective for annual periods starting on or after January 1, 2026. Retrospective application is required and early adoption is permitted. The Company expects to adopt these amendments as of their effective dates and is currently assessing their impact on adoption. Material accounting judgements and key sources of estimation uncertainty The preparation of these consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Estimates and judgments are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes can differ from these estimates. The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the amounts recognized in the financial statements are: Income taxes and recoverability of potential deferred tax assets The Company is subject to income, value added, withholding and other taxes in various jurisdictions. Significant judgment is required in determining the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations often involving multiple jurisdictions. The Company's interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made. In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. The Company considers whether relevant tax planning opportunities are within the Company's control, are feasible, and are within management's ability to implement. Examination by applicable tax authorities is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Also, future changes in tax laws could limit the Company from realizing the tax benefits from the deferred tax assets. The Company reassesses unrecognized income tax assets at each reporting year. Share-based payments and warrants Management determines the valuation of share-based payments and warrants using market-based valuation techniques. The fair value of the market-based and performance-based share awards and warrants are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments may include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates. Joint arrangements The Company has a joint arrangement with Lithium Royalty Corp ("LRC"). The Company has joint control over this arrangement as under the contractual agreement with the LRC, unanimous consent is required from all parties to the agreements for certain key strategic, operating, investing and financing policies. The Company's joint arrangement is structured as a partnership and provides the Company and LRC (parties to the agreements) with rights to the assets and obligations for the liabilities under the arrangements. Therefore, this arrangement has been classified as a joint operation. The joint operation does not have any assets or liabilities and the only activities are exploration and evaluation expenditures as described in Note 10. Judgement is required to determine the type of joint arrangement that exists. This judgement involves considering its rights and obligations arising from the arrangement. An entity assesses its rights and obligations by considering the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances. Leases under IFRS 16 Critical judgements are required in the application of IFRS 16, including identifying whether a contract (or part of a contract) includes a lease and determining whether it is reasonably certain that an extension or termination option will be exercised. Sources of estimation uncertainty include estimation of the lease term, determination of an appropriate discount rate and assessment of whether a ROU asset is impaired. Such judgments, estimates and assumptions are inherently uncertain, and changes in these assumptions affect the fair value estimates. Impairment Capital assets and right-of-use assets are tested for impairment if there is an indication of impairment. If the carrying amount of an asset exceeds its recoverable amount, the asset is impaired, and an impairment loss is recognized in profit or loss. The assessment of fair values requires the use of estimates and assumptions related to future operating performance and discount rates, differences in these estimates and assumptions could have a significant impact on the consolidated financial statements. Contingencies Refer to Notes 10 and 11. MARKETABLE SECURITIES The Company's marketable securities have been designated as FVPL and are reported at fair value based on quoted market prices as follows: December 31, 2024 December 31, 2023 1911 Gold Corporation (1) $ 651,392 $ 713,405 Other (2) - 41,952 $ 651,392 $ 755,357 On December 21, 2023, the Company acquired 6,666,667 units (each a "Unit") of 1911 Gold Corporation ("1911") at $0.06 per Unit for total consideration of $400,000. Each Unit consisted of 1 common share and 1 common share purchase warrant, exercisable for two years at a strike price of $0.10. During 2024, the Company sold the 6,666,667 1911 common shares for total proceeds of $974,699 (2023 - $nil). In December 2024, the Company exercised 1,000,000 of warrants and paid $100,000 upon conversion into 1,000,00 1911 common shares. As at December 31, 2024, the Company held 1,000,000 common shares and 5,666,667 warrants (2023 - 6,666,667 common shares and 6,666,667 warrants). During the year ended December 31, 2024, the Company sold all the other public investments for proceeds of $69,298 During the year ended December 31, 2024 the Company sold $nil (2023 - 1,410,300) Canada Nickel common shares, for total proceeds of $nil (2023 - $2,483,932). During the year-ended December 31, 2024, the Company had an unrealized gain on marketable securities of $230,571 (2023 - unrealized gain of $168,397). During the year-ended December 31, 2024, the Company had a realized gain on marketable securities of $544,461 (2023 - realized loss of $347,021). ACCOUNTS RECEIVABLE The balance of accounts receivable is comprised as follows: December 31, 2024 December 31, 2023 Subscription receivable (Note 9(a)) $ - $ 4,980,025 Sales tax recoverable 208,207 106,257 $ 208,207 $ 5,086,282 7. CAPITAL ASSETS The Company's capital assets consist of the following: Right-of-Use Asset Vehicles Total Cost Balance December 31, 2022 Additions $ 65,055 - $ 77,912 - $ 142,967 - Balance December 31, 2023 65,055 77,912 142,967 Additions 30,618 - 30,618 Disposal (65,055) - (65,055) Balance December 31, 2024 30,618 77,912 108,530 Amortization Balance December 31, 2022 47,707 12,237 59,944 Amortization for the year 13,011 15,574 28.585 Balance December 31, 2023 60,718 27,811 88,529 Amortization for the year 12,502 15,616 28,118 Disposal (65,055) - (65,055) Balance December 31, 2024 8,165 43,427 51,592 Net book value Balance December 31, 2023 4,337 50,101 54,438 Balance December 31, 2024 $ 22,453 $ 34,485 $ 56,938 For more information on the Company's right-of-use asset refer to Note 12. MILL LEASE On July 18, 2023, the Company signed a binding lease agreement with 1911 Gold Corporation ("1911 Gold") to use the True North mill, located in Bissett, Manitoba, for the production of lithium spodumene concentrate, while was finalized on October 25, 2023 (the "Lease"). The financial terms of the Lease, as amended, are as follows: an upfront, non-refundable payment of $300,000 (paid prior to commencement); a $550,000 payment by October 25, 2023 (paid prior to commencement); an equity participation payment in an equity offering of $400,000 (paid); monthly payments covering incremental ongoing site expenses for site security, environmental monitoring and maintenance commencing January 1, 2024; payments including for potential environmental liabilities of: o $500,000 on April 30, 2024; o $1,000,000 on December 31, 2024, and o $900,000 on December 31, 2025; $1,000,000 payable upon commencement of commercial production by the Company at the True North Mill which is defined as the processing of at least 200,000 tonnes of lithium material; a payment of $1,000,000 on the fifth anniversary of the Lease; a payment of $2,000,000 if the Parties agree to extend the lease for an additional five-year period at the end of the first five-year term of the Lease; a payment of $1,000,000 on the sixth anniversary of the Lease; a 1% net smelter returns royalty in favour of 1911, subject to the Company having the right of first refusal on any disposition of the royalty by 1911; a fee of $7.50 per tonne of lithium material processed through the True North Mill during the term of the Lease; and, if the Lease is extended, the assumption by the Company of up to $10,000,000 of incremental reclamation obligations prorated equally over years 6-10 of the Lease. On October 25, 2023, the Company used a discount rate of 10%, based on management's estimate of the Company's incremental borrowing rate as at the date of the amendment, to determine the present value of the Lease obligations. Payments made prior to the commencement of the Lease totalling $900,000, the Company's investment in 1911 Units totalling $400,000 (Note 5), and contingent payments totalling $13,500,000 were not included in the calculation of the present value of the Lease obligations. On April 24, 2024, the Company entered into an amending agreement which stipulated a deferral of the April 30, 2024 payment to May 24, 2024. The Company accounted for the lease modification by revaluing the remaining lease payments at a revised discount rate of 10%, based on management's estimate of the Company's incremental borrowing rate as at the date of the amendment. Pursuant to the modification, an adjustment of $7,096 was recorded to the right-of-use asset and mill lease obligation. On June 10, 2024, the Company entered into a second amending agreement which stipulated the following: The May 24, 2024 payment would be deferred into: o $100,000 on June 15, 2024 (paid) o $200,000 on December 31, 2024 o $250,000 on April 31, 2025; following the completion of these payments and provided at least $160,000 in total operating costs have been paid, the Company would have the right to terminate the Lease with no further obligation the Company would have the right to continue the Lease by making the following payments in addition to the amended terms of the lease: o $100,000 on December 31, 2025 o $900,000 on December 31, 2026 o $500,000 on December 31, 2027 The Company accounted for the lease modification by revaluing the remaining lease payments at a revised discount rate of 10%, based on management's estimate of the Company's incremental borrowing rate as at the date of the amendment, and assumed the exercise of its termination option. Pursuant to the modification, an adjustment of $2,966,416 was recorded to the right-of-use asset and mill lease obligation. The continuity of the right-of-use asset for the years ended December 31, 2024 and 2023 is as follows: Cost Balance, December 31, 2022 $ - Additions 4,180,244 Balance, December 31, 2023 4,180,244 Lease modification (2,973,512) Impairment of right of use asset (303,489) Balance, December 31, 2024 $ 903,243 Accumulated amortization Balance, December 31, 2022 $ - Amortization expense 122,612 Balance, December 31, 2023 122,612 Amortization expense 780,631 Balance, December 31, 2024 $ 903,243 Net book value Balance, December 31, 2023 $ 4,057,632 Balance, December 31, 2024 $ - The continuity of the mill lease obligation for the years ended December 31, 2024 and 2023 is as follows: December 31, 2024 December 31, 2023 Balance, beginning of year $ 3,346,857 $ - Additions - 3,280,244 Lease payments (100,000) - Lease modification (2,973,512) - Accretion 169,197 66,613 Balance, end of year 442,542 3,346,857 Current portion of lease obligations (442,542) (1,194,223) Long-term portion of lease obligations $ - $ 2,152,634 See Note 19 as the mill lease was amended after December 31, 2024. CAPITAL STOCK Common shares Authorized The authorized capital stock of the Company consists of an unlimited number of common shares. During the year ended December 31, 2024 the following common share activity occurred: On June 19, 2024, 475,000 common shares were issued in connection with the vesting of deferred share units (Note 9(b)). On March 30, 2024, 50,000 common shares were issued in connection with a property acquisition in the Falcon West area. The shares were valued at $3,750, being the quoted market value of the shares on the date of issuance. During the year ended December 31, 2023 the following common share activity occurred: On December 29, 2023, the Company issued 4,000,000 special flow-through common shares at $0.18 per special flow-through common shares for gross proceeds of $720,000 and 1,151,143 ordinary flow-through common shares at $0.14 per ordinary flow-through common share for proceeds of $161,202. On December 22, 2023, the Company issued 23,209,000 special flow-through common shares at $0.18 per special flow-through common share for gross proceeds of $4,177,620. At December 31, 2023, $4,980,025 of the gross proceeds of the special flow-through common share and flow-through common shares offerings were included in accounts receivable and were collected during the year-ended December 31, 2024 (Note 6). On September 29, 2023, 7,142,858 common shares were issued in connection with the cancellation of an option to purchase an additional interest in the Donner Lake and Campus Creek Joint Ventures. The shares were valued at $857,142 being the quoted market value of the shares on the date they were issued (see Note 9). On April 26, 2023, 1,500,000 common shares were issued in connection with the acquisition of the Gossan Claims (see Note 10). These shares were valued at $0.14 per share being the quoted market value of the shares on the date they were issued. On April 9, 2023, 250,000 common shares were issued in connection with the acquisition of the Eagle Claims (see Note 10). These shares were valued at $0.14 per share being the quoted market value of the shares on the date they were issued. In February 2023, 1,160,150 shares were issued in connection with warrants exercised for $232,030. The original fair value of the warrants was $74,151, which amount was transferred from contributed surplus to capital stock. On January 25, 2023, 200,000 common shares were issued in connection of mining claims located in Manitoba. The shares were valued at $42,000 being the quoted market value of the shares on the date they were issued. Stock option plan and stock-based compensation The Company has an equity incentive plan to provide employees, directors, officers, and consultants with equity offerings and options to purchase common shares of the Company (the "Plan"). Under the Plan, the exercise price of each option equals the market price of the Company's stock on the day of grant and the maximum term of option is five years. The maximum number of shares which may be issued under the program shall not exceed 10% of the issued and outstanding shares. As of December 31, 2024, the maximum number of shares issuable pursuant to the Plan was 20,440,116, of which 9,095,000 shares had been granted, leaving 11,345,116 shares available for issue. The following summarizes the employees, directors, officers, and consultants' stock options that have been granted, exercised, expired, vested, or cancelled during the periods ended December 31, 2024 and 2023. Number of Options Weighted average exercise price Balance, December 31, 2022 5,670,000 $0.24 Options granted 5,550,000 $0.20 Options expired - - Balance, December 31, 2023 11,220,000 $0.22 Options granted - - Options expired (2,125,000) $0.22 Balance, December 31, 2024 9,095,000 $0.22 The total share-based payment expense recorded during the year ended December 31, 2024 was $112,752 (2023 - $770,408). During the year ended December 31, 2024, 2,125,000 options expired (2023 - nil). The original fair value of those options was estimated to be $319,242 (2023 - $nil) which was transferred from contributed surplus to deficit. The following table summarizes information about the share options as at December 31, 2024: Expiry date Number of options outstanding Weighted average remaining life (years) Exercisable Exercise price February 26, 2025 2,140,000 0.16 2,140,000 $ 0.25 June 17, 2025 55,000 0.46 55,000 $ 0.25 May 12, 2026 650,000 1.36 650,000 $ 0.25 October 19, 2026 250,000 1.80 250,000 $ 0.12 March 11, 2027 1,350,000 2.19 1,350,000 $ 0.25 May 2, 2028 4,650,000 3.34 4,650,000 $ 0.20 9,095,000 2.22 9,095,000 $ 0.22 The fair value of options granted has been estimated using the Black-Scholes Option Pricing Model with the following assumptions on the grant date of the options: Expiry date Number of options outstanding Exercise price Expected option life (years) Risk free interest rate Dividend yield Expected volatility (1) Underlying share price Fair value on grant date February 26, 2025 2,140,000 $ 0.25 5.00 1.14% nil 142% $ 0.190 $ 0.17 June 17, 2025 55,000 $ 0.25 5.00 0.37% nil 159% $ 0.190 $ 0.17 May 12, 2026 650,000 $ 0.25 5.00 0.97% nil 150% $ 0.230 $ 0.21 October 19, 2026 250,000 $ 0.12 5.00 1.42% nil 170% $ 0.115 $ 0.11 March 11, 2027 1,350,000 $ 0.25 5.00 1.80% nil 138% $ 0.220 $ 0.19 May 2, 2028 4,650,000 $ 0.20 5.00 2.95% nil 111% $ 0.165 $ 0.13 9,095,000 The expected volatility is based on the Company's historical share price. Deferred Stock Units During the year ended December 31, 2024, there were no Deferred Stock Units ("DSU's") issued to directors of the Company pursuant to the Plan (2023 - nil). DSU's vest immediately and are exchangeable for common shares of the Company upon the retirement of the holder on a one for one basis. There are no other performance criteria. The DSU's are valued at the market price of the Company's common shares as of the date they were issued. The total charge to operations for the DSU's amounted to $nil (2023 - $nil). As of December 31, 2024 the Company there were a total of 1,675,000 DSUs issued pursuant to the Plan (2023 - 2,150,000) as 475,000 were exercised into common shares during the year (2023 - nil). The original fair value of those DSU's was estimated to be $104,500 (2023 - $nil) which was transferred from contributed surplus to share capital. Restricted Share Units At December 31, 2024 there were a total of 1,600,000 Restricted Share Units ("RSU's") issued and outstanding pursuant to the Plan (2023 - 1,600,000) of which 100,000 have vested (2023 - 100,000). The total charge to operations for the RSU's during the year ended December 31, 2024 amounted to $68,129 (2023 - $60,157). During the year ended December 31, 2024 there were no RSU's issued pursuant to the Plan. (2023 - 1,500,000). The RSU's outstanding have vest as follows: 400,000 RSUs vest on performance based metrics; 300,000 vest upon the Company obtaining a listing on the Australian Stock Exchange and 100,000 vest upon, in the estimation of the board, there was a high level of technical performance by the exploration group during 2023 or, upon a new mineral discovery. The RSU's are valued at the market price as of the date they were issued, and the expense is charged to income on a straight-line basis over the five year term of the RSU's. 1,100,000 RSUs vest based on meeting the following performance requirements: 366,668 RSU's vest upon the volume weighted average price ("VWAP") of the Company's shares being above $0.25 for 20 consecutive trading days prior to May 3, 2026. 366,666 RSU's vest upon the VWAP of the Company's shares being above $0.35 for 20 consecutive trading days prior to May 3, 2026. 366,666 RSU's vest upon the VWAP of the Company's shares being above $0.45 for 20 consecutive trading days prior to May 3, 2026. The market based RSUs were valued using the Monte Carlo pricing model assuming a risk free rate of 3.48% and volatility of 95.7% and an underlying share price of $0.165, resulting in a value of $141,937, which is recognized during the three year performance limitation based on the probability of the performance RSUs vesting. Warrants A summary of warrant activity for the years ended December 31, 2024 and 2023 is as follows: Number of warrants Weighted average exercise price Balance, December 31, 2022 26,603,300 $ 0.24 Warrants issued 9,996 $ 0.15 Warrants expired (13,033,150) $ 0.20 Warrants exercised (1,160,150) $ 0.20 Balance, December 31, 2023 12,419,996 $ 0.20 Warrants issued - - Warrants expired (360,000) $0.20 Warrants exercised - - Balance, December 31, 2024 12,059,996 $ 0.20 During the year ended December 31, 2024, 360,000 warrants expired (2023 - 13,033,150). The 360,000 warrants that expired had an original estimated fair value of $16,766 (2023 - $1,124,340), which was transferred from contributed surplus to deficit. The balance of warrants outstanding at December 31, 2024 is as follows: Expiration date Warrants Outstanding Exercise price Term (years) Weighted average remaining life (years) Risk free interest rate Dividend yield Expected volatility (1) Underlying share price Fair value per warrant on issue date September 26, 2025 12,000,000 $ 0.200 3.00 0.74 3.81% nil 95% $ 0.120 $ 0.06 December 29, 2025 9,996 $ 0.150 2.00 0.99 3.88% nil 72% $ 0.230 $ 0.03 February 23, 2027 50,000 $ 0.175 5.00 2.15 1.79% nil 113% $ 0.150 $ 0.12 12,059,996 0.20 0.74 (1) The expected volatility is based on the Company's historical share price. (d) Flow-through share premium continuity The flow-through share premium continuity is as follows: Balance, December 31, 2022 $ 764,000 Expenditures renounced (764,000) Flow-through share premium additions (Note 9(a)) 2,222,778 Balance, December 31, 2023 2,222,778 Expenditures renounced (2,222,778) Flow-through share premium additions - Balance, December 31, 2024 $ - EXPLORATION AND EVALUATION EXPENDITURES Fo r the year en ded December 31, 2024 Donner Lake Campus Falcon Makwa Mayville Eagle Gossan Lithium Creek West Other Total Acquisition $ 6,052 $ - $ 204 $ 16 $ 15 $ - $ 150,929 $ 94,287 $ 251,503 Assays 55,064 37,602 70,062 - 89,224 - 83,623 12,477 348,052 Consulting 41,365 50,936 83,291 29,541 198,966 1,302 106,254 6,510 518,165 Drilling - - 961,695 - 902,569 - 506,678 - 2,370,942 Geological 73,027 40,103 6,912 - 6,611 - - 6,060 132,713 Geophysics 288,208 172,058 197,593 26,050 2,601 - 176,292 331,517 1,194,319 Labour 87,978 42,792 61,028 485 78,949 951 50,027 18,699 340,909 Other 124,153 114,538 90.434 50,316 263,348 546 87,737 9,986 741,058 Project Development - - - - 528,887 - - - 528,887 Staking - - - - - - - - - Subtotal $ 675,847 $ 458.029 $ 1,471,219 $ 106,408 $ 2,071,170 $ 2,799 $ 1,161,540 $ 479,536 $ 6,426,548 Reimbursements from JO partner - - - - (203,783) - - - (203,783) Total $ 675,847 $ 458.029 $ 1,471,219 $ 106,408 $ 1,867,387 $ 2,799 $ 1,161,540 $ 479,536 $ 6,222,765 For the year ended December 31, 2023 Makwa Mayville Eagle Gossan Donner Lake Lithium Campus Creek Falcon West Other Total Acquisition $ 533 $ 312 $ 247,650 $ 1,168,333 $ 857,142 $ - $ 368,020 $ (3,750) $ 2,638,240 Assays - 134,755 - - 406,370 44,723 10,923 7,720 604,491 Consulting 62,215 50,041 7,563 13,322 462,805 7,517 67,244 35,832 706,539 Drilling - 330,714 - - 2,311,604 144,249 - - 2,786,567 Geological 153,809 106,392 - - 363,700 - - 16,344 640,245 Geophysics 3,790 28,677 20,375 4,200 147,543 - - 32,475 237,060 Labour 49,654 58,311 1,741 7,099 242,138 42,715 16,448 11,262 429,368 Other 106,072 67,822 - 50 582,678 8,318 40,865 37,449 843,254 Project Development - - - - 313,005 - - - 313,005 Staking - - - - - - - 22,277 22,277 Subtotal $ 376,073 $ 777.024 $ 277,329 $ 1,193,004 $ 5,686,985 $ 247,522 $ 503,500 $ 159,609 $ 9,221,046 Reimbursements from JO partner - - - - (1,482,852) (60,457) - - (1,543,309) Total $ 376,073 $ 777,024 $ 277,329 $ 1,193,004 $ 4,204,133 $ 187,065 $ 503,500 $159,609 $ 7,677,737 It is in the normal course of business for the Company to acquire and divest exploration and evaluation claims based on the results of exploration. Certain of the properties are subject to a net smelter return royalty ("NSR") payable on future mineral production. MANITOBA Makwa The Company through an exploration agreement with its wholly owned subsidiary Global Nickel Inc, the Company owns a 100% interest in the Makwa property which is a nickel copper platinum group metal exploration project located near Lac du Bonnet, in southeast Manitoba. The mineral rights of the Makwa Property consist of a certain leases, surface leases, and mining claims held by the Company. An annual payment of approximately $10,000 must be made to the province of Manitoba to keep the mineral lease and surface lease in good standing. There is a 1.0% NSR royalty on the Makwa property. The Company has the option to purchase 0.5% of the NSR royalty for $500,000. On December 9, 2024, the Company entered into an option and joint venture agreement with Teck Resources Limited ("Teck"), pursuant to which Teck has been granted the option to earn an 70% interest in the Company's Makwa and Gossan claims. In order to exercise the first 51% interest ("First Option"), Teck must make cash payments of $600,000 ($400,000 received to date) and incur an aggregate of $5,700,000 in expenditures. To exercise the remaining 19% ("Second Option"), Teck must incur an aggregate of $10,000,000 in additional expenditures and make a cash payment of $1,000,000 or subscribe to $1,000,000 shares of the Company. If Teck exercises the first 51% interest, a contractual joint venture amongst will be formed between Teck and the Company. From the date of the joint venture formation, Teck and Grid will be deemed to own a fully assessable interest as follows: If Teck has exercised the First Option but not the Second Option, Teck will have a 51% interest and the Company a 49% Interest; and if Teck has exercised the First Option and the Second Option, Teck will have a 70% interest and the Company a 30% Interest. Mayville The Company directly owns a 60% interest in the Mayville property which is a copper nickel platinum group metal exploration project located near Lac du Bonnet, in southeast Manitoba, which includes the base metal rights on the Donner Lake Lithium Property. The property consists of certain mining claims. An additional 29% interest is held through the Company's 72.56% interest in Maskwa Nickel Chrome Mines Limited ("MNCM"), a company which holds the remaining 40% interest in the Mayville property. A royalty payment in the amount of $210,000 will be due in five equal annual payments upon the commencement of commercial production on any portion of the MNCM property. Under the terms of a joint arrangement between MNCM and the Company (also the "Operator"), if the interest of one party in the joint arrangement is diluted below 10%, the interest is converted to a 10% Net Profits Interest which is payable after the property reaches commercial production and the Operator has recouped all capital investment, exploration and preproduction costs related to the property. As the Company owns 72.56% of MNCM this would equate to a 2.74% Net Profits Interest in the property. Gossan Claims During the year ended December 31, 2023, the Company acquired the Ore Fault, Page, and Chrome claims (the "Gossan Claims") located adjacent to the Makwa project. Consideration was $1,100,000 in cash payable over three years ($500,000 payable on closing (paid), $300,000 payable on each of the first (paid) and second anniversaries of closing), 1,500,000 common shares of the Company, valued at $0.14 per share being the quoted market value of the shares on the date they were issued, a 2% net smelter return ("NSR") royalty payable upon the commencement of commercial production from the Gossan Claims, and a $300,000 cash payment due upon the commencement of commercial production from the Gossan Claims. As a triggering event has not yet occurred, this contingent amount has not been reflected these financial statements. The present value of the first and second anniversary cash payments was determined using a 20% discount rate. The difference between the present value and the future value of the payments will be recognized as accretion expense on a pro rata basis to the payment date. During the year-ended December 31, 2024, the Company recognized accretion expense of $60,074 into the statement of operations (2023 - $68,624). Eagle Claims During the year ended December 31, 2023, the Company acquired a 100% interest certain mining claims (the "Eagle Claims") for consideration of $300,000 cash on closing, 250,000 common shares, valued at $0.14 per share being the quoted market value of the shares on the date they were issued, a 2% NSR royalty payable upon the commencement of commercial production from the Eagle Claims, half of which can be bought back by the Company for $1,000,000, and a deferred cash payment of $350,000 if the Company defines a NI 43-101 compliant mineral resource of greater than 2 million tonnes. As a triggering event has not yet occurred, this contingent amount has not been reflected these financial statements. Donner Lithium (formerly Mayville Lithium) The Property consists of certain mining claims in the Bird River area. On January 12, 2022, the Company completed a transaction with Lithium Royalty Corp. ("LRC") to create a lithium exploration property in the Mayville/Donner Lake area and immediately thereafter sell 25% of the designated property to LRC (the "LRC Transaction"). Grid incorporated 1000078824 Ontario Inc., to hold the Donner Lake claims and the Campus Creek claims located in Ontario (see Campus Creek below). LRC also had the right to acquire 20% of 1000078824 Ontario Inc., on commercially reasonable terms subject to Grid's approval (the "Option"). A joint arrangement was formed and 25% of the mineral rights over certain claims from the Mayville Property and the Tanco Property were sold to LRC for a price of $1,563,750 (US$1,250,000). The sale included offtake rights for 25% of products subject to the prior rights of Tanco on the Tanco Property. A 2% gross overriding royalty on lithium and related metals on the entire Donner Lake Property was sold to LRC for an additional C$1,563,750 (US$1.25 million). During the period LRC's interest in the Donner Lake joint arrangement was assigned to LEI, an investment fund managed by Waratah Capital Advisors. On July 5, 2023, the Company announced that it had agreed to acquire and terminate the Option for consideration of 7,142,858 common shares of the Company valued at $0.12 per share being the quoted market value of the shares on the date they were issued. The Option had been assigned by LRC to LEI. The acquisition of the Option was approved by non-interested shareholders of the Company at the Company's annual general meeting on September 29, 2023. Grid is the project operator and has retained the base metal and precious metal mineral rights to the Donner Lithium Property. Tantalum Mining Corporation of Canada Limited holds a 2% Net Smelter Return Royalty on certain claims comprising part of the property and has a right to match commercial terms on the sale of products produced from claims comprising part of the property. Falcon West Lithium The property consists of mining claims located in southeast Manitoba. One claim was acquired in 2022 from a third party for $20,000 cash (paid), 50,000 common shares (issued), and a 2% NSR retained by the vendor which can be bought down to 1% by the Company for a $1,000,000. A parcel of two claims were acquired in 2022 from a second third party for $300,000 cash (paid), 200,000 common shares (issued), and a 2% NSR retained by the vendor which can be bought down to 1% by the Company for a $1,000,000. The balance of the property was acquired by the staking of mining claims. During fiscal 2024, the Company received a grant of $97,500 from the Manitoba Mineral Development Fund to support strategic mineral development projects in the province. Other The Northern Manitoba properties consist of a 100% interest in mineral exploration licenses ("MELs") in the western one-third of the Fox River Belt ("Fox River") and the eastern flank of the Thompson Nickel Belt ("Thompson East"). The spending commitments on the MELs are as follows: Fox River Thompson East Upon Issue $ 51,300 $ 5,250 (paid full) September 8, 2022 $ 51,269 $ 13,250 (spending requirements met) September 8, 2023 $ 102,537 $ 53,000 (spending requirements met) September 8, 2024 $ 153,806 $ 79,500 (spending requirements met) September 8, 2025 $ 307,611 * September 8, 2026 $ 410,148 * Total $ 1,076,671 $ 151,000 * Spending commitments subject to renewal ONTARIO East Bull Lake The East Bull Lake Palladium Property ("EBL") is a platinum group metals ("PGM") exploration project located in the Sudbury Mining Division, Ontario, Canada. The Company has fulfilled its commitments to earn a 100% interest in the mining claims under the option agreements. EBL is subject to underlying royalties held by the original optionors of the property of up to 3%. Campus Creek Lithium Property During the year ended December 31, 2021 the Company entered into an option agreement for the Campus Creek property ("Campus Creek"). Campus Creek consists of certain mining clams in the McNamara Lake area northwest of Thunder Bay, Ontario. The option enabled the Company the right to earn a 100% interest in the mining claims subject to an 2% NSR interest by incurring annual work expenditures, making annual payments of cash, and issuing common shares as follows: On signing - $10,000 and 100,000 shares (paid and issued) Year 1 - $20,000, 125,000 shares and $50,000 of work commitments (paid and issued) Year 2 - $40,000, 133,000 shares and $100,000 of work commitments (paid and issued) Year 3 - $60,000, 150,000 shares and $200,000 of work commitments ($60,000 paid, shares issued) Year 4 - $80,000, 150,000 shares and $400,000 of work commitments ($80,000 paid, shares issued) Pursuant to the LRC Transaction, the Company formed a joint arrangement with LRC covering Campus Creek and sold 25% of the property to LRC for C$312,750 (US$250,000). The Company also sold a 2% gross overriding royalty on the property for C$1,251,000 (US$1,000,000). On closing of the LRC transaction the Company completed all option payments and stock issuances pursuant to the Campus Creek option agreement and the work requirements were cancelled. During the period LRC's interest in Campus Creek the joint arrangement was assigned to LEI, an investment fund managed by Waratah Capital Advisors, and Grid acquired the Option, as discussed above (see Donner Lake). Other On March 15, 2023, the Company entered into an option agreement to sell 100% interest in certain mining claims. In order to acquire the interest, the optionee much make the following payments Pay $20,000 within 5 days of regulatory approval (received) Issue 350,000 shares prior to March 24, 2023 (received) Issue 500,000 shares on or before the first anniversary of regulatory approval (received) Issue 750,000 shares on or before the second anniversary of regulatory approval Upon exercise of the option, the Company will earn a 1.5% net smelter royalty, of which 1% can be purchased for $1,000,000. COMMITMENTS AND CONTINGENCIES See Notes 8, 9 and 10 for details of other commitments and contingencies. The Company's exploration and evaluation activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its operations are materially in compliance with all applicable laws and regulations. During 2023 flow-through common shares were issued in the amount of $5,058,822, and as a result the Company fulfilled the $5,058,822 on eligible exploration expenses before December 31, 2024. During 2024 there were no flow-through common shares issued. The Company has indemnified the subscribers of current and previous flow-through share offerings against any tax related amounts that become payable by the shareholder as a result of the Company not meeting its expenditure commitments. The Company has agreed to compensate the Sagkeeng First Nation ("First Nations") for impact of all exploration activities related to certain properties. The Company will pay 4% of expenditures incurred up to $999,999, 2% of expenditures incurred from $1,000,000 to $5,000,000, 1% of expenditures incurred from $5,000,000 to $6,000,000 and 0.6% of expenditures exceeding $6,000,000. Exploration expenditures incurred consist of all activities completed on the ground at the project including but not limited to; geological mapping, prospecting and sampling. line-cutting and geophysical surveys, drilling and environmental work completed at site. An employment contract between the Company and its President & CEO provides for the following: Upon termination without cause the President is entitled to one month's severance for every year since 1998 to a maximum of twenty-four months, plus a prospective bonus equal to the greater of the last bonus paid to the president or 75% of his then annual salary. In this instance the estimated contingent liability would amount to approximately $750,000. In the event of a change of control, if the President is terminated, or constructively dismissed, within nine months of the change of control the President is entitled to two year's remuneration plus a prospective bonus equal to the greater of two times the average annual bonus paid to the president or one year's annual remuneration. In this instance the estimated contingent liability would amount to approximately $850,000. The minimum amount due in one year pursuant to this contract is $275,000. A contract between the Company and Harris Capital Corporation, for Chief Financial Officer ("CFO") consulting services, provides for the following: Upon termination without cause the CFO is entitled to six month's notice. In this instance the estimated contingent liability would be $60,000. In the event of a change of control, if the CFO is terminated the CFO is entitled to 12 month's remuneration. In this instance the estimated contingent liability would be $120,000. The minimum amount due in one year pursuant to this contract is $120,000. Subsequent to the year-end, the CFO resigned and waived the contingent liability. An employment contract between the Company and its Chief Development Officer ("CDO") provides for the following: Upon termination without cause the CDO is entitled to six month's notice. In this instance the estimated contingent liability would amount to approximately $125,000. In the event of a change of control, if the CDO is terminated, or constructively dismissed, within six months of the change of control the CDO is entitled to one year's remuneration. In this instance the estimated contingent liability would be approximately $250,000. The minimum amount due in one year pursuant to this contract is $250,000. As a triggering event has not occurred, these contingent obligations have not been recorded in these financial statements. LEASE OBLIGATIONS As of December 31, 2024 the Company reported a lease for office premises in the amount of $1,083 per month base rent, until October 31, 2026. As of December 31, 2023 the Company reported a lease for office premises in the amount of $1,165 per month base rent, until April 30, 2024. The Company recognized a right-of-use asset and corresponding lease obligations related to the office premises, analyzed as follows: December 31, December 31, 2024 2023 Balance, beginning of year $ 4,612 $ 17,996 Additions 30,618 - Interest 825 596 Payments (13,327) (13,980) Balance, end of year 22,728 4,612 Current portion of lease obligations (12,140) (4,612) Long-term portion of lease obligations $ 10,588 $ - EXPLORATION PROGRAM ADVANCES Pursuant to the Donner Lake and Campus Creek lithium exploration and development joint arrangements with LEI described in Note 10, the Company is entitled to request cash calls from LEI at the beginning of each quarter for their proportionate share of the estimated Exploration Costs, as adjusted pursuant to the joint arrangement agreements. The following is continuity schedule of the exploration advances: Balance, December 31, 2022 $ 279,260 Exploration costs advanced by minority joint arrangement partner 1,315,398 Minority share of exploration expenses on joint arrangements during the year (1,664,719) Minority share of operator's fee (124,854) Unrecovered portion of exploration expenses on joint arrangements during the year 194,915 Balance, December 31, 2023 $ - Exploration costs advanced by minority joint arrangement partner 203,783 Minority share of exploration expenses on joint arrangements during the year (515,240) Minority share of operator's fee (38,643) Unrecovered portion of exploration expenses on joint arrangements during the year 350,100 Balance, December 31, 2024 $ - TERM LOAN PAYABLE The term loan payable of $60,000 was taken by the Company under the Canada Emergency Business Assistance program ("CEBA"). The terms of the loan are as follows: It is unsecured, Non-interest bearing, Upon the repayment 66⅔% of the principal amount of the loan on or prior to January 18, 2024, the remainder of the CEBA loan will be forgiven. Prior to January 18, 2024, the Company repaid $40,000 of the principal amount of the CEBA loan. As a result, the remaining $20,000 amount was forgiven based on CEBA guidelines. RELATED PARTY TRANSACTIONS Director's fees, professional fees and other compensation of directors and key management personnel were as follows for the years ended December 31, 2024 and 2023: 2024 2023 $ $ Short-term compensation and benefits 1,108,574 1,441,666 Share-based payments (stock option, RSU and DSU grants) 108,017 584,919 Total key management compensation 1,216,591 2,026,585 Short-term compensation and benefits charged to exploration and evaluation expenditures amounted to $150,189 (2023 - $115,335). Amounts due to key management personnel included in accounts payable amounted to $106,278 (2023 - $51,438). Legal fees were charged by a legal firm during the period ended December 31, 2024, of which an officer of the Company is an employee, for legal and corporate secretarial services in the amount of $41,891 (2023 - $119,186). Accounts payable and accrued liabilities include $nil owing to the legal firm (2023 - $nil). Amounts due to related parties included in accounts payable are unsecured, non-interest bearing and due on demand. See also Notes 9(b) and 11. INCOME TAXES a) Provision for Income Taxes The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% (2023 - 26.5%) to the effective tax rate is as follows: 2024 $ 2023 $ Loss before income taxes (6,036,378) (10,371,762) Expected income tax recovery based on statutory rate (1,600,000) (2,749,000) Adjustment to expected income tax recovery: Flow through renunciation 752,000 606,000 Capital gain (109,000) - Stock-based compensation 30,000 204,000 Expenses not deductible for tax purposes 707,000 (211,000) Change in unrecorded deferred tax asset 220,000 2,150,000 Deferred income tax provision (recovery) - - b) Deferred Income Tax Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities. 2024 2023 $ $ Unrecognized deferred tax assets Deferred income tax assets have not been recognized in respect of the following deductible temporary differences: Capital loss carry-forwards 4,244,000 4,752,000 Share issue costs 173,000 786,000 Other 577,000 1,598,000 Non-capital loss carry-forwards 18,562,000 16,456,000 Exploration and evaluation assets 10,354,000 9,742,000 Total 33,910,000 33,334,000 The tax losses expire from 2025 to 2044. The other temporary differences do not expire under current legislation. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.

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