Northx Nickel Corp.CSE: NIX

Financial Statement (northx fs q3 2024 2024 11 28 final clean)

Nov 29, 2024 at 12:57 PM UTC · Issued by Northx Nickel Corp.

(Formerly Archer Exploration Corp.)

Condensed Interim Financial Statements

For the Three and Nine Months Ended September 30, 2024 and 2023

(Unaudited - Expressed in Canadian dollars)

NorthX Nickel Corp. (Formerly Archer Exploration Corp.) Condensed Interim Statements of Financial Position (Unaudited - Expressed in Canadian dollars)

		September 30,	December 31,
	Note	2024	2023
		$	$
ASSETS
Current
Cash		1,489,742	2,876,128
Receivables	6	77,827	234,729
Prepaid expenses	7	51,364	129,349
		1,618,933	3,240,206
Other assets	8,13	539,129	57,500
Exploration and evaluation assets	9	5,855,162	37,205,127
Property and equipment	10	82,448	88,135
Total assets		8,095,672	40,590,968
LIABILITIES
Current
Trade and other payables	11	318,841	739,549
Decommissioning and restoration provision	13	544,429	526,310
		863,270	1,265,859
Decommissioning and restoration provision	13	2,154,610	2,100,729
Total liabilities		3,017,880	3,366,588
SHAREHOLDERS' EQUITY
Share capital	14	39,454,039	38,189,779
Warrants reserve	14	4,361,273	3,389,060
Contributed surplus	14	3,748,211	3,206,065
Deficit		(42,485,731)	(7,560,524)
Total shareholders' equity		5,077,792	37,224,380
Total liabilities and shareholders' equity		8,095,672	40,590,968

Nature of operations and going concern (Note 1)

Subsequent events (Note 18)

The accompanying notes are an integral part of these condensed interim financial statements.

NorthX Nickel Corp. (Formerly Archer Exploration Corp.) Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited - Expressed in Canadian dollars)

		Three months ended	Nine months ended
		2024	September 30,	2024	September 30,
	Note	2023	2023
Operating expenses		$	$	$	$
	3,530		4,730
Consulting fees		38,685	108,097
Depreciation	10	449	1,268	3,035	2,131
Filing fees		11,696	13,928	67,289	76,982
General and administrative		36,435	50,626	146,302	220,126
Management fees	15	199,453	423,510	593,071	664,152
Marketing		35,509	101,843	190,252	348,139
Professional fees		66,628	95,142	263,844	347,792
Rent		-	12,000	-	26,727
Share-based payments	14	295,517	238,507	436,628	597,667
		649,217	975,509	1,705,151	2,391,813
Other income (expenses)		(32,750,284)		(32,750,284)
Impairment of exploration and evaluation assets	9	-	-
Amortization of flow through liability	12	-	375,308	-	1,961,258
Change in decommissioning and restoration provision	13	(508,881)	-	(508,881)	(116,588)
Gain (loss) on foreign exchange		(689)	1,001	47	(189)
Interest expense		-	(171)	(9)	(102,777)
Interest income		16,642	28,857	39,071	174,913
Loss before income taxes		(33,892,429)	(570,514)	(34,925,207)	(475,196)
Income taxes		(13,000)		-
Deferred income tax expense		(304,000)	(369,000)
Net loss and comprehensive loss		(33,905,429)	(874,514)	(34,925,207)	(844,196)
Basic and diluted loss per common share		(1.19)	(0.06)	(1.47)	(0.06)
Weighted average number of common shares
outstanding - Basic		28,507,435	15,112,054	23,806,687	15,112,054
Weighted average number of common shares
outstanding - Diluted		30,704,059	15,353,720	26,003,311	15,353,720

The accompanying notes are an integral part of these condensed interim financial statements.

NorthX Nickel Corp. (Formerly Archer Exploration Corp.) Condensed Interim Statements of Cash Flows (Unaudited - Expressed in Canadian dollars)

	Nine months ended
	2024	September 30,
	2023
Operating activities:	$	$
(34,925,207)
Net Income (loss) for the period	(844,196)
Items not affecting cash:	32,750,284
Impairment of exploration and evaluation assets	-
Depreciation	3,035	2,131
Share-based payments	436,628	597,667
Amortization of flow through liability	-	(1,961,258)
Change in decommissioning and restoration costs	508,881	116,588
Unrealized foreign exchange loss	-	(79)
Interest expense (recovery)	-	(2,438)
Deferred income tax expense (recovery)	-	369,000
Changes in non-cash working capital:	156,902
Receivables	(524,011)
Prepaid expenses	77,985	(104,941)
Trade and other payables	16,120	(77,127)
Other assets	-	(57,500)
Cash used in operating activities	(975,372)	(2,486,164)
Investing activities:	(1,670,842)
Exploration and evaluation costs	(6,339,000)
Asset acquisition costs	-	(77,797)
Purchase of equipment	(12,300)	(15,786)
Decommissioning and restoration costs	(436,881)	(551,949)
Finance assurance for decommissioning and restoration	(481,629)	-
Cash used in investing activities	(2,601,652)	(6,984,532)
Financing activities:	2,275,000
Proceeds from issuance of non-flow-through units	-
Share issuance costs	(84,362)	(1,413)
Cash provided by (used in) financing activities	2,190,638	(1,413)
Change in cash	(1,386,386)	(9,472,109)
Cash, beginning of period	2,876,128	11,526,348
Cash, end of period	1,489,742	2,054,239
Supplemental cash flow information:	39,071
Cash interest received	174,913
Acquisition costs included in trade and other payables	-	(37,672)
Share-based payments included in exploration and evaluation	151,352	-
Change in exploration and evaluation costs included in trade and	436,828	733,740
other payables	14,953
Exploration and evaluation costs from capitalized depreciation	-

The accompanying notes are an integral part of these financial statements.

NorthX Nickel Corp. (Formerly Archer Exploration Corp.) Condensed Interim Statements of Changes in Shareholders' Equity (Unaudited - Expressed in Canadian dollars; except number of shares)

						Total
	Common	Share	Warrants	Contributed		shareholders'
	shares	capital	reserve	surplus	Deficit	equity
Balance, October 1, 2022	#	$	$	$	$	$
1,851,848	3,186,256	699,457	414,785	(4,222,989)	77,509
Shares issued on exercise of options	1,111	3,000	-	(1,000)	-	2,000
Issuance of common shares in the Transaction	11,035,212	28,564,545	-	-	-	28,564,545
Shares issued as Finders' fees in the Transaction	275,883	714,114	-	-	-	714,114
Issuance of non-flow-through units in private placement	757,575	1,960,959	1,039,041	-	-	3,000,000
Issuance of flow-through units in private placement	707,222	2,212,521	969,980	-	-	3,182,501
Issuance of charity flow-through units in private placement	483,091	3,337,422	662,577	-	-	3,999,999
Flow-through premium liability	-	(2,253,573)	-	-	-	(2,253,573)
Share issuance costs	-	(465,948)	(145,944)	-	-	(611,892)
Share-based payments	-	-	-	1,469,329	-	1,469,329
Reclassification from reserves to deficit upon the expiration of	-	-	(40,972)	-	40,972	-
warrants
Reclassification from reserves to contributed surplus upon the	-	388,985	(388,985)	-	-	-
expiration of warrants
Net loss and comprehensive loss for the period	-	-	-	-	(2,454,655)	(2,454,655)
Balance, September 30, 2023	15,111,942	37,648,281	2,795,154	1,883,114	(6,636,672)	35,689,877
Shares issued for other compensatory awards settled	4,166	12,500	-	(12,500)	-	-
Issuance of non-flow-through units in private placement	1,767,066	500,510	347,682	-	-	848,192
Issuance of flow-through units in private placement	2,083,033	702,112	487,726	-	-	1,189,838
Share issuance costs net of tax	-	(284,639)	27,999	-	-	(256,640)
Share-based payments	-	-	-	420,371	-	420,371
Share-based payments - exploration-related	-	-	-	215,622	-	215,622
Reclassification from reserves to deficit upon the	-	-	-	40,972	(40,972)	-
expiration of warrants
Reclassification from reserves to contributed surplus upon the	-	(388,985)	(269,501)	658,486	-	-
expiration of warrants
Net loss and comprehensive loss for the period	-	-	-	-	(882,880)	(882,880)
Balance, December 31, 2023	18,966,207	38,189,779	3,389,060	3,206,065	(7,560,524)	37,224,380
Issuance of non-flow-through units in private placement	9,479,166	1,302,787	972,213	-	-	2,275,000
Share issuance costs net of tax	-	(84,362)	-	-	-	(84,362)
Shares issued for other compensatory awards settled	63,793	45,835	-	(45,835)	-	-
Share-based payments	-	-	-	436,629	-	436,629
Share-based payments - exploration-related	-	-	-	151,352	-	151,352
Net loss and comprehensive loss for the period	-	-	-	-	(34,925,207)	(34,925,207)
Balance, September 30, 2024	28,509,166	39,454,039	4,361,273	3,748,211	(42,485,731)	5,077,792

The accompanying notes are an integral part of these condensed interim financial statements.

NorthX Nickel Corp. (Formerly Archer Exploration Corp.)

Notes to the Condensed Interim Financial Statements

For the three and nine months ended September 30, 2024 and 2023 (Unaudited - Expressed in Canadian dollars, except where noted)

1. NATURE OF OPERATIONS AND GOING CONCERN

On May 1, 2024 the company changed its name to NorthX Nickel Corp. (formerly Archer Exploration Corp.) ("NorthX" or the "Company"). The Company was incorporated under the laws of the Province of British Columbia on October 26, 2018. The Company is focusing on the exploration of mineral claims located in Québec and Ontario, Canada. The Company's registered and records office is located at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, BC V7X 1T2. On February 11, 2021, the shares of the Company began trading on the Canadian Securities Exchange (the "Exchange") under the symbol "RCHR". Effective May 1, 2024, coincident with the name change, the Company commenced trading on the Canadian Securities Exchange under the new trading symbol "NIX".

In August 2023, the Company announced the change in its fiscal year end from September 30 to December 31, effective as of December 31, 2023. Accordingly, for the 2024 reporting year, the Company will report its audited financial statements for the twelve month period ended December 31, 2024, along with its comparative figures for the fifteen month period ended December 31, 2023.

At December 31, 2023 the Company had one wholly owned subsidiary, 1273600 B.C. Ltd. On January 25, 2024 1273600 B.C. Ltd. was dissolved by way of voluntary dissolution under the Business Corporations Act.

Going concern

These unaudited condensed interim financial statements for the three and nine months ended September 30, 2024 and 2023 (the "financial statements") have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business.

There are material uncertainties that may cast significant doubt about the appropriate use of the going concern assumption as the Company is in the exploration and evaluation stage and has not generated any revenues. As at September 30, 2024, the Company has a deficit of $42,485,731 (December 31, 2023 - $7,560,524) and for the nine months ended September 30, 2024 and 2023, the Company incurred a net loss of $34,925,207 (2023 -$844,196).

The Company's continuing operations as intended are dependent upon the ability to obtain the necessary financing to explore and commercialize its mineral claims and administer overhead expenses. Should the Company fail to commercialize its mineral claims, or raise sufficient financing to maintain operations, the Company may be unable to realize the carrying value of its net assets. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

Share consolidation

On November 8, 2022, the Company completed a consolidation of its common shares on a three to one basis and on May 1, 2024, the Company completed a consolidation of its common shares on a six to one basis. All share and per share amounts have been retrospectively adjusted to reflect the consolidations. Any references to common shares are on a post-consolidation basis. Numbers of warrants and stock options and their respective exercise prices have been retrospectively adjusted to reflect the effects of the consolidations.

Wallbridge assets acquisition

On July 12, 2022, the Company entered into an asset purchase agreement with Wallbridge Mining Company Limited ("Wallbridge") whereby the Company would acquire from Wallbridge a 100% interest in certain mineral properties located in Québec and Ontario (collectively the "Nickel Assets") in exchange for 11,035,212 common shares of the Company (the "Transaction" or "Wallbridge assets acquisition").

The Company granted Wallbridge a 2% net smelter return ("NSR") royalty less the amount of any pre-existing royalties on encumbered portions of the Grasset Project (Note 5). As a condition precedent to the closing of the Transaction, the Company was required to complete an equity financing for gross proceeds of at least $10,000,000. The equity financing closed on November 18, 2022 for gross proceeds of $10,182,500 (Note 14).

NorthX Nickel Corp. (Formerly Archer Exploration Corp.)

Notes to the Condensed Interim Financial Statements

For the three and nine months ended September 30, 2024 and 2023 (Unaudited - Expressed in Canadian dollars, except where noted)

2. BASIS OF PREPARATION

Statement of compliance

These financial statements were approved by the Board of Directors and authorized for issue on November 27, 2024.

These financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting. These financial statements do not include all disclosures required for annual audited financial statements. Accordingly, they should be read in conjunction with the notes to the Company's audited financial statements for the years ended December 31, 2023 and September 30, 2022 (the "Annual Financial Statements").

The preparation of these financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Future accounting pronouncements

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2024, none of which had a material impact to the Company. There are no relevant IFRS's or IFRS interpretations that are not yet effective that would be expected to have a material impact on the consolidated financial statements.

3. MATERIAL ACCOUNTING POLICY INFORMATION

In the preparation of these financial statements, the Company used the same accounting policies as in Note 3 to the Annual Financial Statements for the 15 month period ending December 31, 2023.

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenues and expenses. Management continually evaluates these judgments, estimates and assumptions based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and judgments which may cause a material adjustment to the carrying amounts of assets and liabilities. The Company's interim results are not necessarily indicative of its results for a full year. The significant assumptions and estimates applied in the preparation of these financial statements are consistent with those applied and disclosed in Note 4 to the Annual Financial Statements for the fifteen month period ending December 31, 2023, in addition to following:

NorthX Nickel Corp. (Formerly Archer Exploration Corp.)

Notes to the Condensed Interim Financial Statements

For the three and nine months ended September 30, 2024 and 2023 (Unaudited - Expressed in Canadian dollars, except where noted)

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued) Exploration and Evaluation Asset Impairment

At each reporting period, management applies judgment in assessing whether there are any indicators of impairment relating to exploration and evaluation assets at the Cash-Generating Unit ("CGU") level to determine whether there is any indication that these assets may be impaired. If any such indication exists, the recoverable amount of the relevant CGU is estimated in order to determine the extent of the impairment loss (if any). A CGU is the smallest identifiable group of assets that has the potential to generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the Company, the CGUs are defined as its key exploration and evaluation projects grouped in a distinct geographic area, reflecting the future economic benefits expected from these assets. Management uses judgment in determining what constitutes a CGU.

Indicators of impairment may include: (i) the period during which the entity has the right to explore in the specific area has expired during the year or will expire in the near future; (ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; and (iii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

When there is objective evidence that a CGU is impaired, the carrying amount of the CGU is compared to its recoverable amount, being the fair value less costs of disposal ("FVLCD"). In the absence of market related comparative information, management makes estimates based on a variety of factors, including market transactions for comparable quality projects, prevailing market sentiment, current economic conditions, and the financial performance of the Company. Management considered recent industry trends and external market data, such as the pricing of similar mineral properties and the demand for resources in the relevant sector. Additionally, the economic outlook and the Company's own financial performance, including cash flow projections and funding capabilities, were factored into the evaluation. Management's estimate of recoverability is based on inputs which have a significant effect on fair value that are not directly observable from market data. These estimates and assumptions were used to assess the recoverable amount of the mineral property and determine the need for any impairment adjustments.

During the period ended September 30, 2024, the Company recognized an impairment on one of its properties. No impairments were recognized during the financial year ended December 31, 2023 (Note 9).

5. WALLBRIDGE ASSETS ACQUISITION

On November 18, 2022, the Company completed its previously announced Transaction. As consideration for the Nickel Assets, the Company issued to Wallbridge 11,035,212 common shares at approximately $2.58 per share for an aggregate fair value of $28,564,545. The Company granted to Wallbridge a 2% NSR royalty on production from the Grasset Project (Note 9). In connection with the Transaction, the Company entered into a finders' fee agreement with two parties. As compensation for the introduction of the Company and Wallbridge, the Company issued to the finders 275,883 common shares at approximately $2.58 per share for an aggregate fair value of $714,114. The Company incurred $250,696 in legal fees prior to the closing of the Transaction and the amount is allocated as part of the consideration.

The acquisition has been accounted for as an equity-settled share-based payment transaction within the scope of IFRS 2 Share-basedPayment. The acquisition did not qualify as a business combination under IFRS 3 Business Combinations, as the significant inputs, processes, and outputs that together constitute a business did not exist in the Company or the Nickels Assets at the time of acquisition. Accordingly, no goodwill was recorded with respect to the acquisition.A summary of the Company's consideration paid and the net assets acquired from Wallbridge as at the November 18, 2022 acquisition date is as follows:

	$
Purchase price:
Fair value of common shares issued to Wallbridge	28,564,545
Fair value of finders' shares	714,114
Transaction costs	250,696
	29,529,355
Net assets acquired:
Cash	2,652,997
Account receivable with Magna	612,230
Exploration and evaluation assets (Note 9)	28,538,141
Property and equipment (Note 10)	87,138
Decommissioning and restoration provision (Note 13)	(2,361,151)
	29,529,355

NorthX Nickel Corp. (Formerly Archer Exploration Corp.)

Notes to the Condensed Interim Financial Statements

For the three and nine months ended September 30, 2024 and 2023 (Unaudited - Expressed in Canadian dollars, except where noted)

6. RECEIVABLES

A summary of the Company's receivables is as follows:

		September 30,	December 31,
		2024	2023
		$	$
Input Tax Credits recoverable	77,827	234,729
		77,827	234,729
7.	PREPAID EXPENSES
A summary of the Company's prepaid expenses is as follows:

		September 30,	December 31,
		2024	2023
		$	$
Insurance	6,146	41,456
Vendor prepayments	45,218	87,893
		51,364	129,349
8.	OTHER ASSETS
A summary of the Company's other assets is as follows:

		September 30,	December 31,
		2024	2023
		$	$
Investments	57,500	57,500
Finance assurance for closure plan (Note 13)	481,629	-
		539,129	57,500

Investments represents guaranteed investment certificates held with the bank as collateral for the Company's credit cards issued to key management personnel and reclamation bond. The GICs bears interest at a rate of Prime less 2.9%.

NorthX Nickel Corp. (Formerly Archer Exploration Corp.)

Notes to the Condensed Interim Financial Statements

For the three and nine months ended September 30, 2024 and 2023 (Unaudited - Expressed in Canadian dollars, except where noted)

9. EXPLORATION AND EVALUATION ASSETS

A summary of the Company's exploration and evaluation assets is as follows:

						NW	Ontario	Quebec
	Grasset	Parkin	Sudbury W Wahnapitae	Wisner	Ontario	Other	Other	Total
	$	$	$	$	$	$	$	$	$
Balance, October 1, 2022	-	-	-	-	-	-	-	-	-
Acquisition and Maintenance Costs	27,367,462	979,858	302,412	233,929	116,965	58,482	10,000	-	29,069,108
Assay and Analysis	111,170	-	-	-	-	27,385	-	-	138,555
Camp Costs	860,216	-	-	-	-	122	58,907	-	919,245
Communications	33,735	-	-	-	-	3,260	1,602	-	38,597
Drilling	2,979,344	-	-	-	-	-	-	-	2,979,344
Field and Equipment	157,724	5,063	-	-	-	11,007	14,211	-	188,005
Fuel	76,831	-	-	-	-	78	-	-	76,909
Geological Consulting	480,715	30,045	6,064	3,728	-	107,091	31,232	2,340	661,215
Geophysics	565,647	388,666	-	-	-	-	2,898	-	957,211
Ground Logistics	418,023	-	-	-	-	-	-	-	418,023
Helicopter	449,305	-	-	-	-	-	-	-	449,305
Permit and Environment	3,989	-	-	-	-	-	-	-	3,989
Property Maintenance	32,655	33,887	4,612	10,350	8,948	30,173	48,256	2,674	171,555
Salaries and Wages	748,724	49,791	-	92	-	14,214	-	-	812,821
Share-Based Payments	215,622	-	-	-	-	-	-	-	215,622
Travel and Transportation	87,681	281	-	-	-	13,316	4,345	-	105,623
	7,221,381	507,733	10,676	14,170	8,948	206,646	161,451	5,014	8,136,019
Balance, December 31, 2023	34,588,843	1,487,591	313,088	248,099	125,913	265,128	171,451	5,014	37,205,127
Acquisition and Maintenance Costs	-	12,000	20,000	-	-	-	-	-	32,000
Assay and Analysis	20,733	-	162	-	-	-	-	-	20,895
Camp Costs	109,377	-	-	-	-	-	17,745	-	127,122
Communications	1,845	-	-	-	-	-	-	-	1,845
Drilling	311,684	-	-	-	-	-	-	-	311,684
Field and Equipment	46,420	-	-	-	-	-	550	-	46,970
Fuel	3,843	-	-	-	-	-	-	-	3,843
Geological Consulting	262,999	47,409	10,963	4,604	3,113	1,542	25,610	8,394	364,634
Geophysics	36,292	9,225	-	-	-	-	11,176	-	56,693
Government Grants	-	(200,000)	-	-	-	-	-	-	(200,000)
Ground Logistics	10,300	-	-	-	-	-	-	-	10,300
Health and Safety	366	-	-	-	-	-	75	-	441
Impairment Charge	(32,750,284)	-	-	-	-	-	-	- (32,750,284)
Permit and Environment	517	-	-	-	-	-	-	-	517
Property Maintenance	16,773	28,306	3,132	295	8,549	10,065	4,374	592	72,086
Salaries and Wages	289,009	-	-	-	-	-	85,500	-	374,509
Share-Based Payments	151,352	-	-	-	-	-	-	-	151,352
Travel and Transportation	19,825	-	-	-	-	-	5,603	-	25,428
	(31,468,949)	(103,060)	34,257	4,899	11,662	11,607	150,633	8,986	(31,349,965)
Balance, September 30, 2024	3,119,894	1,384,531	347,345	252,998	137,575	276,735	322,084	14,000	5,855,162