AAUAF Almaden Minerals Ltd New (QB)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13A-16 or 15D-16

of the Securities Exchange Act of 1934

 

For the month of November 2024

 

Commission File Number: 001-32702

 

Almaden Minerals Ltd.

(Translation of registrant's name into English)

 

Suite 210 – 1333 Johnston St., Vancouver, B.C. Canada V6H 3R9

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

	Form 20-F	☒
	Form 40-F	☐

 

 

 

 

 

 

 

 

Signature

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Almaden Minerals Ltd.
Dated: November 1, 2024
	By:	/s/Duane Poliquin                         Duane Poliquin Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit Index

 

Exhibit	Description of Exhibit
99.1	Financial Statements
99.2	Management's Discussion and Analysis
99.3	Certification of Annual Filings - CEO
99.4	Certification of Annual Filings - CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Interim Financial Statements of

 

 

Almaden Minerals Ltd.

 

 

For the three and nine months ended September 30, 2024

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTICE OF NO AUDITOR REVIEW OF CONDENSED

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

The accompanying unaudited condensed consolidated interim financial statements of Almaden Minerals Ltd (“the Company”) for the three and nine months ended September 30, 2024 have been prepared by the management of the Company and approved by the Company’s Audit Committee and the Company’s Board of Directors.

 

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the consolidated interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.

 

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

 

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by CPA Canada for a review of the condensed consolidated interim financial statements by an entity’s auditor.

 

 

 

 

 

Almaden Minerals Ltd.

Condensed consolidated interim statements of financial position

(Unaudited - Expressed in Canadian dollars)

 

 

		September 30, 2024				December 31, 2023
			$				$
ASSETS
Current assets
Cash and cash equivalents (Note 13)			3,382,281				4,245,983
Gold in trust (Note 8)			1,420,101				1,082,801
Accounts receivable and prepaid expenses (Note 4)			191,519				453,640
			4,993,901				5,782,424
Non-current assets
Right-of-use assets (Note 5)			254,305				330,597
Property, plant and equipment (Note 6)			6,596,571				6,601,742
Exploration and evaluation assets (Note 7)			1				1
			6,850,877				6,932,340
TOTAL ASSETS			11,844,778				12,714,764
LIABILITIES
Current liabilities
Trade and other payables			464,943				851,158
Current portion of lease liabilities (Note 5)			110,498				100,531
			575,441				951,689
Non-current liabilities
Long-term portion of lease liabilities (Note 5)			192,850				277,104
Gold loan payable (Note 8)			5,534,828				4,371,546
Derivative financial liabilities (Note 8)			1,281,377				108,830
			7,009,055				4,757,480
Total liabilities			7,584,496				5,709,169
EQUITY
Share capital (Note 10)			141,040,654				141,040,654
Reserves (Note 10)			23,356,523				23,356,523
Deficit			(160,136,895	)			(157,391,582	)
Total equity			4,260,282				7,005,595
TOTAL EQUITY AND LIABILITIES			11,844,778				12,714,764

Commitments and Contingencies (Note 17)

 

These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on November 1, 2024.

 

They are signed on the Company’s behalf by:

 

 

 

 

 

/s/Duane Poliquin		/s/ Ria Fitzgerald
Director		Director

 

 

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

Almaden Minerals Ltd.

Condensed consolidated interim statements of comprehensive loss

(Unaudited - Expressed in Canadian dollars)

 

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
			$				$				$				$
Expenses
Professional fees (Note 11(a))			64,391				135,820				224,647				587,374
Salaries and benefits (Note 11(a))			335,422				349,007				1,043,853				1,057,538
Travel and promotion			5,720				14,721				15,782				44,533
Depreciation (Note 6)			2,172				2,785				6,499				8,352
Office and license (Note 11(b))			54,805				28,420				97,593				118,164
Amortization of right-of-use assets (Note 5)			25,431				25,430				76,292				76,291
Occupancy expenses (Note 5)			9,894				9,894				30,425				29,964
Interest expense on lease liabilities (Note 5)			7,350				9,620				23,828				30,422
Interest, accretion and standby fees on gold loan payable (Note 8)			151,253				138,604				485,762				400,485
Listing and filing fees			11,437				24,845				94,528				183,334
Insurance			26,446				27,326				82,207				76,164
Directors’ fees (Note 11(a))			26,250				33,750				93,750				106,250
Share-based payments (Note 10(c) and 11(a))			-				370,350				-				742,850
			720,571				1,170,572				2,275,166				3,461,721
Other income (loss)
Administrative services fees (Note 11(b))			292,981				286,213				859,360				837,927
Interest and other income			69,524				107,339				179,906				264,368
Recovery (impairment) of exploration and evaluation assets (Note 7)			80,341				-				(15,260	)			-
Unrealized gain (loss) on derivative financial liabilities (Note 8)			(126,861	)			55,410				(126,861	)			130,068
Unrealized gain (loss) on gold in trust (Note 8)			172,840				(17,148	)			316,142				32,721
Unrealized foreign exchange gain (loss) on gold loan payable (Note 8)			90,959				(91,301	)			(69,747	)			6,029
Unrealized foreign exchange gain (loss) on gold in trust (Note 8)			(17,370	)			21,159				21,158				(2,648	)
Unrealized gain on warrant liability (Note 9)			-				261				-				102,457
Loss on loan extension			-				-				(1,653,459	)			-
Foreign exchange gain (loss)			(52,246	)			48,591				18,614				(1,939	)
			510,168				410,524				(470,147	)			1,368,983
Total comprehensive loss for the period			(210,403	)			(760,048	)			(2,745,313	)			(2,092,738	)
Basic and diluted net loss per share (Note 12)			(0.00	)			(0.01	)			(0.02	)			(0.02	)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Almaden Minerals Ltd.

Condensed consolidated interim statements of cash flows

(Unaudited - Expressed in Canadian dollars)

 

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
			$				$				$				$
Operating activities
Net loss for the period			(210,403	)			(760,048	)			(2,745,313	)			(2,092,738	)
Items not affecting cash
Depreciation			2,172				2,785				6,499				8,352
Amortization of right-of-use assets			25,431				25,430				76,292				76,291
Impairment (recovery) of exploration and evaluation assets			(80,341	)			-				15,260				-
Interest expenses on lease liability			7,350				9,620				23,828				30,422
Interest, accretion and standby fees on gold loan payable			151,253				138,604				485,762				400,485
Loss on loan extension			-				-				1,653,459				-
Unrealized (gain) loss on derivative financial liabilities			126,861				(55,410	)			126,861				(130,068	)
Unrealized (gain) loss on gold in trust			(172,840	)			17,148				(316,142	)			(32,721	)
Unrealized foreign exchange (gain) loss on gold loan payable			(90,959	)			91,301				69,747				(6,029	)
Unrealized foreign exchange (gain) loss on gold in trust			17,370				(21,159	)			(21,158	)			2,648
Unrealized gain on warrant liability			-				(261	)			-				(102,457	)
Share-based payments			-				370,350				-				742,850
Changes in non-cash working capital components
Accounts receivable and prepaid expenses			541,895				33,932				262,121				61,390
Trade and other payables			(26,523	)			(79,156	)			(386,215	)			(190,944	)
Net cash from (used in) operating activities			291,266				(226,864	)			(748,999	)			(1,232,519	)
Investing activities
Property, plant and equipment – purchase			-				-				(1,328	)			(267	)
Exploration and evaluation assets – costs			80,338				12,300				(15,260	)			(658,219	)
Net cash from (used in) investing activities			80,338				12,300				(16,588	)			(658,486	)
Financing activities
Repayment of lease liabilities			(32,980	)			(32,156	)			(98,115	)			(95,642	)
Net cash used in financing activities			(32,980	)			(32,156	)			(98,115	)			(95,642	)
Change in cash and cash equivalents			338,624				(246,720	)			(863,702	)			(1,986,647	)
Cash and cash equivalents, beginning of period			3,043,657				4,918,149				4,245,983				6,658,076
Cash and cash equivalents, end of period			3,382,281				4,671,429				3,382,281				4,671,429
Supplemental cash flow information (Note 13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Almaden Minerals Ltd.

Condensed consolidated interim statements of changes in equity

(Unaudited - Expressed in Canadian dollars)

 

		Share capital								Reserves
		Number of shares				Amount				Share- based payments				Warrants				Total reserves				Deficit				Total
							$				$				$				$				$				$
Balance, January 31, 2023			137,221,408				141,040,654				21,830,405				715,968				22,546,373				(93,771,350	)			69,815,677
Share-based payments			-				-				742,850				-				742,850				-				742,850
Total comprehensive loss for the period			-				-				-				-				-				(2,092,738	)			(2,092,738	)
Balance, September 30, 2023			137,221,408				141,040,654				22,573,255				715,968				23,289,223				(95,864,088	)			68,465,789
Share-based payments			-				-				67,300				-				67,300				-				67,300
Total comprehensive loss for the period			-				-				-				-				-				(61,527,494	)			(61,527,494	)
Balance, December 31, 2023			137,221,408				141,040,654				22,640,555				715,968				23,356,523				(157,391,582	)			7,005,595
Total comprehensive loss for the period			-				-				-				-				-				(2,745,313	)			(2,745,313	)
Balance, September 30, 2024			137,221,408				141,040,654				22,640,555				715,968				23,356,523				(160,136,895	)			4,260,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

1.

Nature of operations

 

Almaden Minerals Ltd. (the “Company” or “Almaden”) was formed by amalgamation under the laws of the Province of British Columbia, Canada on February 1, 2002. The Company is an advance exploration stage public company that is engaged directly in the exploration and development of exploration and evaluation property in Mexico. The Company’s shares are trade on the TSX Exchange under the symbol “AMM”. The address of the Company’s registered office is Suite 1710 –1177 West Hastings Street, Vancouver, BC, Canada V6E 2L3.

 

The Company is in the business of exploring and developing mineral projects and its principal asset is the Ixtaca precious metals project located on its Tuligtic claim in Mexico. The Company has not yet determined whether this project has economically recoverable mineral reserves. The recoverability of amounts shown for mineral properties is dependent upon the establishment of a sufficient quantity of economically recoverable reserves, the ability of the Company to obtain the necessary financing or participation of joint venture partners to complete development of the properties, and upon future profitable production or proceeds from the disposition of exploration and evaluation assets.

 

These condensed consolidated interim financial statements were 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. As of September 30, 2024, the Company had a working capital surplus of $4,418,460 (December 31, 2023 – $4,830,735). The Company does not currently hold any revenue-generating properties and therefore continues to incur losses. The Company incurred a net loss for the nine months ended September 30, 2024, of $2,745,313 (2023 – $2,092,738) and negative cash flows from operations of $748,999 for the nine months ended September 30, 2024 (2023 – $1,232,519). As at September 30, 2024, the Company had an accumulated deficit of $160,136,895 (December 31, 2023 – $157,391,582). The Company’s ability to continue as a going concern is dependent upon its ability in the future to achieve profitable operations and in the meantime, to obtain the necessary financing to repay its liabilities when they become due. Management estimates that there is sufficient working capital to sustain operations for the next twelve months. External financing will be sought to finance the operations of the Company and enable the Company to continue its efforts towards the exploration and development of its mineral properties. There can be no assurance that steps management is taking will be successful. These condensed consolidated interim financial statements do not include adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern and such adjustments could be material.

 

2.

Basis of presentation

 

(a)

Statement of Compliance with International Financial Reporting Standards (“IFRS”)

 

These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance and compliance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

 

(b)

Basis of preparation

 

These condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. This interim financial report does not include all of the information required of a

 

2.

Basis of presentation (Continued)

 

(b)

Basis of preparation (Continued)

 

full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the annual audited consolidated financial statements of the Company for the year ended December 31, 2023. However, this interim financial report provides selected significant disclosures that are required in the annual audited consolidated financial statements under IFRS.

 

Except as described below, these condensed consolidated interim financial statements follow the same accounting policies and methods of application as the annual audited consolidated financial statements for the year ended December 31, 2023.

 

The changes in accounting policies are also expected to be reflected in the Company's consolidated financial statements as at and for the year ending December 31, 2024.

 

3.

Material accounting policies

 

These condensed consolidated interim financial statements do not include all note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the annual financial statements for the year ended December 31, 2023. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

 

4.

Accounts receivable and prepaid expenses

 

Accounts receivable and prepaid expenses consist of the following:

 

		September 30,				December 31,
		2024				2023
Accounts receivable (Note 11(b))		$	113,457			$	389,895
Prepaid expenses			78,062				63,745
		$	191,519			$	453,640

 

During the period ended September 30, 2024, the Company has recorded value added taxes of $43,425 included in exploration and evaluation assets, as the value added tax relates to certain projects and is expected to be recovered when the assets are sold (Note 7).

 

 

5.

Right-of-use assets and lease liabilities

 

The Company has lease agreements for its headquarter office space in Vancouver, B.C.

 

One lease containing an extension option exercisable only by the Company was exercised on November 22, 2021. The lease was therefore extended from March 31, 2022 to March 31, 2027. The Company reassessed this significant event as a lease modification and has estimated that the potential future lease payments under the extended lease term would result in an increase in lease liability by $508,799.

 

The continuity of lease liabilities is as follows:

 

		September 30, 2024				December 31, 2023
Opening balance		$	377,635			$	465,930
Less: lease payments			(98,115	)			(127,797	)
Interest expense			23,828				39,502
			303,348				377,635
Less: current portion of lease liabilities			(110,498	)			(100,531	)
Long-term portion of lease liabilities		$	192,850			$	277,104

 

 

The continuity of ROU assets is as follows:

 

		September 30, 2024				December 31, 2023
Opening balance		$	330,597			$	432,319
Less: amortization of ROU assets			(76,292	)			(101,722	)
		$	254,305			$	330,597

 

During the nine months ended September 30, 2024, the Company recognized occupancy expenses of $30,425 (2023 - $29,964) related to short term leases.

 

As at September 30, 2024, the remaining payments for the operating lease are due as follows:

 

		2024				2025				2026				2027				2028				Total
Office lease		$	42,668			$	173,970			$	177,268			$	44,523				-			$	438,429

 

 

6.

Property, plant and equipment

 

		Furniture and fixtures and other				Computer hardware				Computer software				Geological library				Field equipment				Mill equipment				Total
		$				$				$				$				$				$				$
Cost
December 31, 2023			160,941				271,807				198,981				51,760				245,647				6,568,841				7,497,977
Additions			-				1,328				-				-				-				-				1,328
September 30, 2024			160,941				273,135				198,981				51,760				245,647				6,568,841				7,499,305
Accumulated depreciation
December 31, 2023			154,426				257,507				194,191				51,132				238,979				-				896,235
Depreciation			977				3,350				1,078				94				1,000				-				6,499
September 30, 2024			155,403				260,857				195,269				51,226				239,979				-				902,734
Carrying amounts
December 31, 2023			6,515				14,300				4,790				628				6,668				6,568,841				6,601,742
September 30, 2024			5,538				12,278				3,712				534				5,668				6,568,841				6,596,571

 

7.

Exploration and evaluation assets

 

		Tuligtic
Exploration and evaluation assets		$
Acquisition costs:
Opening balance - (December 31, 2023)			1
Closing balance - (September 30, 2024)			1
Deferred exploration costs:
Opening balance - (December 31, 2023)			-
Costs incurred during the period
Consulting fees			140,284
Travel and accommodation			32,940
Community relations and miscellaneous			74,314
Environmental and professional fees			27,083
Value-added tax (Note 4)			43,425
Refund - Value-added tax			(302,786	)
Impairment of deferred exploration costs			(15,260	)
Total deferred exploration costs during the period			-
Closing balance - (September 30, 2024)
Total exploration and evaluation assets			1

 

 

7.

Exploration and evaluation assets (Continued)

 

The following is a description of the Company’s most significant property interests:

 

(a)

Tuligtic

 

In 2001, the Company acquired by staking a 100% interest in the Tuligtic property in Puebla, Mexico. The property contains the Ixtaca Zone.

 

(b)

Other

 

Expenditures incurred by the Company in Mexico are subject to Mexican Value added tax (“VAT”). The VAT is included in exploration and evaluation assets as incurred. Under Mexican law, VAT paid can be used in the future to offset amounts resulting from VAT charged on sales. Under certain circumstances and subject to approval from tax authorities, A Company can also apply for an early refund of VAT prior to generating sales. During the nine months ended September 30, 2024, the Company received a VAT recovery of $302,786 (2023 - $428,646) and other income of $83,660 (2023 - $124,209) related to a VAT refund from prior years which is recorded in interest and other income.

 

8.

Gold loan payable and gold in trust

 

On May 14, 2019, the Company entered into a secured gold loan agreement (“Gold Loan”) with Almadex Minerals Ltd. (“Almadex”) or the “Lender” pursuant to which Almadex has agreed to loan up to 1,597 ounces of gold bullion to the Company. The approximate value of this gold at inception was USD$2,072,060 or $2,790,858.

 

Under the terms of the Gold Loan, the Company will be entitled to draw-down the gold in minimum 400 ounce tranches. At any given time, the amount of gold ounces drawn multiplied by the London Bullion Market Association (“LBMA”) AM gold price in US dollars, plus any accrued interest or unpaid fees, shall constitute the Loan Value.

 

The maturity date for the Gold Loan is March 31, 2024, and can be extended by two years at the discretion of the Company (the “Term”). Repayment of the Loan Value shall be made either through delivery of that amount of gold drawn, or through the issuance of common shares of the Company (“Shares”), according to the Lender’s discretion. Mandatory prepayment shall be required in the event that the Company’s Ixtaca gold-silver project located in Puebla State, Mexico (the “Ixtaca Project”) enters into commercial production during the Term, requiring the Company to deliver 100 gold ounces per month to the Lender. In addition, the Company has the right to pre-pay the Loan Value at any time without penalty, in either gold bullion or Shares as chosen by the Lender, and the Lender has the right to convert the Loan Value into Shares at any time during the Term. The conversion rate is equal to 95% of the 5 trading day volume weighted average price of the Share on the Toronto Stock Exchange or an equivalent.

 

The interest rate of the Gold Loan is 10% of the Loan Value per annum, calculated monthly, paid in arrears. Interest payments can either be accrued to the Loan Value, or paid by the Company in cash or gold bullion. A standby fee of 1% per annum, accrued quarterly, will be applied to any undrawn amount on the Gold Loan.

 

 

8.

Gold loan payable and gold in trust (Continued)

 

In addition, the Company has issued Almadex 500,000 transferable share purchase warrants (“Warrants”), with an exercise price of $1.50 per Share and expiry date of May 14, 2024 as an arrangement fee to cover the administrative costs of setting up the credit facility. These warrants were valued at $50,000 using the Black-Scholes option-pricing model with the following assumptions: expected life of five years, risk-free interest rate of 1.54%, expected dividend yield of 0% and expected volatility of 44.25%.

 

Security for the loan is certain equipment related to the Rock Creek Mill, which is not required for the Ixtaca Project. The Gold Loan includes industry standard provisions in the event of default, material breach and change of control.

 

The Gold Loan was recorded at fair value at inception and is subsequently measured at amortized cost using the effective interest method, recognizing interest expense on an effective yield basis.

 

The Company has determined that the Gold Loan contains multiple derivatives which are embedded in the US dollar denominated debt instrument. As the convertible Gold Loan is denominated in US dollars and is convertible into common shares based upon a variable Canadian dollar conversion rate, the fixed for fixed criteria is not met. As such, the conversion option cannot be classified as an equity instrument and is deemed to have no value. The embedded derivative from indexation of the loan principal portion to the movement in the price of gold is classified as a derivate financial liability and is marked to market at each period end using the Black-Scholes option-pricing model.

 

At inception, the following assumptions were used: expected life of five years, risk-free interest rate of 1.57% and expected volatility of 11.06%. The fair value of the embedded derivative for the year ended December 31, 2023 decreased by $191,732 based on the following assumptions used in the Black-Scholes option-pricing model: expected life of 0.25 years, risk-free interest rate of 4.00% and expected volatility of 9.93%

 

On March 12, 2024, the Company formally notified the Lender to extend the maturity date of the Gold Loan from March 31, 2024 to March 31, 2026. Under this substantial modification of terms, the Gold Loan was settled and a loss of $328,850 was recognized. Upon recognition of the extended Gold Loan, the following assumptions were used: expected life of two years, risk-free interest rate of 4.00% and expected volatility of 13.94%.

 

On June 26, 2024, the Gold Loan was amended by both the Borrower and the Company in connection with its Ixtaca Project and to extend the maturity date from March 31, 2026 to March 31, 2030. Under this substantial modification of terms, the Gold Loan was settled and a loss of $1,324,609 was recognized. Upon recognition of the amended Gold Loan, the following assumptions were used: expected life of 5.75 years, risk-free interest rate of 3.50% and expected volatility of 13.86%.

 

Upon maturity date, at the discretion of the Lender, Almadex still has the right to convert the Loan Value into Shares at the same conversion rate. However, the maximum number of Shares issuable is at 13,722,000 Shares. If any additional payments are required, the balance of the Loan Value shall be paid by gold bullion.

 

 

 

8.

Gold loan payable and gold in trust (Continued)

 

The continuity of gold loan payable and derivative financial liabilities are as follows:

 

		September 30, 2024				December 31, 2023
Gold loan payable – opening balance		$	4,371,546			$	3,929,015
Accrued interest expense			294,185				353,372
Accrued standby fees			9,679				10,377
Accretion expense			181,898				176,960
Foreign exchange difference			77,384				(98,178	)
			4,934,692				4,371,546
Derecognition of Gold Loan before amendment			(4,858,320	)			-
Recognition of Gold Loan with amended term			6,629,050				-
Less derivatives financial liabilities on recognition			(1,170,594	)			-
Gold loan payable – ending balance		$	5,534,828			$	4,371,546

 

		September 30, 2024				December 31, 2023
Derivative financial liabilities – opening balance		$	108,830			$	306,084
Change in fair value through profit & loss			126,861				(191,732	)
Derecognition of Derivative financial liabilities			(117,271	)			-
Derivative financial liabilities on recognition			1,170,594				-
Foreign exchange difference			(7,637	)			(5,522	)
Derivative financial liabilities – ending balance			1,281,377			$	108,830

 

As at September 30, 2024, Almaden has 397 ounces of gold bullion on its account at a fair value of $1,420,101.

 

The continuity of gold in trust are as follows:

 

		September 30, 2024								December 31, 2023
		Ounces				$				Ounces				$
Gold in trust, opening balance			397				1,082,801				397				974,397
Change in fair value through profit & loss			-				316,142				-				132,895
Foreign exchange difference			-				21,158				-				(24,491	)
			397				1,420,101				397				1,082,801

 

 

9.

Warrant liability

 

In connection with the registered direct offering private placement completed during the year ended December 31, 2021, the Company issued a total of 7,923,077 warrants exercisable at US$0.80 per share. The fair value of these warrants on issuance was $2,371,174, valued using the Black-Scholes option-pricing model with the following assumptions: expected life of three years, risk-free interest rate of 0.53%, expected dividend yield of 0% and expected volatility of 72.42%.

 

The fair value is recorded as a derivative financial liability as these warrants are exercisable in US dollars, differing from the Company’s functional currency. The change in fair value resulted in an unrealized gain of $Nil (September 30, 2023 –$102,457) and is recognized in the condensed consolidated interim statements of comprehensive loss for the period ended September 30, 2024. The warrants expired on March 18, 2024.

 

10.

Share capital and reserves

 

(a)

Authorized share capital

 

At September 30, 2024, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

 

(b)

Warrants

 

The continuity of warrants for the nine months ended September 30, 2024 is as follows:

 

		Exercise				December 31,																September 30,
Expiry date		price				2023				Issued				Exercised				Expired				2024
March 18, 2024			USD$0.80				7,923,077				-				-				(7,923,077	)			-
March 18, 2024			USD$0.80				435,769				-				-				(435,769	)			-
May 14, 2024		$	1.50				500,000				-				-				(500,000	)			-
Warrants outstanding and exercisable							8,858,846				-				-				(8,858,846	)			-
Weighted average exercise price						$	1.08				-				-			$	1.08				-

 

 

(c)

Share purchase option compensation plan

 

The Company’s stock option plan permits the issuance of options up to a maximum of 10% of the Company’s issued share capital. Stock options issued to any consultant or person providing investor relations services cannot exceed 2% of the issued and outstanding common shares in any twelve month period. At September 30, 2024, the Company had reserved 2,057,141 stock options that may be granted. The exercise price of any option cannot be less than the volume weighted average trading price of the shares for the five trading days immediately preceding the date of the grant.

 

 

10.

Share capital and reserves (Continued)

 

(c)

Share purchase option compensation plan (Continued)

 

The maximum term of all options is five years. The Board of Directors determines the term of the option (to a maximum of five years) and the time during which any option may vest. Options granted to consultants or persons providing investor relations services shall vest in stages with no more than 25% of such option being exercisable in any three month period.

 

The Company’s stock option plan permits the option holder to exercise cashless by surrendering a portion of the underlying option shares to pay for the exercise price and the corresponding withholding taxes, if applicable.

 

The continuity of stock options for the nine months ended September 30, 2024 is as follows:

 

Expiry date		Exercise price				December 31, 2023				Granted				Exercised				Expired				September 30, 2024
March 7, 2027		$	0.38				1,125,000				-				-				(125,000	)			1,000,000
June 10, 2027		$	0.33				3,640,000				-				-				(265,000	)			3,375,000
October 4, 2027		$	0.30				755,000				-				-				-				755,000
December 16, 2027		$	0.33				855,000				-				-				-				855,000
February 14, 2028		$	0.30				600,000				-				-				-				600,000
April 3, 2028		$	0.26				1,975,000				-				-				(400,000	)			1,575,000
July 10, 2028		$	0.16				2,520,000				-				-				(50,000	)			2,470,000
September 19, 2028		$	0.18				1,035,000				-				-				-				1,035,000
Options outstanding and exercisable							12,505,000				-				-				(840,000	)			11,665,000
Weighted average
exercise price						$	0.27				-				-			$	0.29			$	0.27

 

Total share-based payments expenses as a result of options granted and vested during the period ended September 30, 2024 was $Nil (2023 - $742,850).

 

11.

Related party transactions and balances

 

(a)

Compensation of key management personnel

 

Key management includes members of the Board, the Chair, the President and Chief Executive Officer, the Chief Financial Officer, the Executive Vice President, and the Vice President, Project Development. The net aggregate compensation paid or payable to key management for services after recovery from Azucar Minerals Ltd. (Azucar) and Almadex (Note 11 (b)) is as follows:

 

 

11.

Related party transactions and balances (Continued)

 

(a)

Compensation of key management personnel (Continued)

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Professional fees		$	-			$	15,000			$	-			$	45,000
Salaries and benefits (1)			65,350				70,275				195,338				218,625
Share-based payments			-				288,550				-				643,550
Director’s fees			26,250				33,750				93,750				106,250
		$	91,600			$	407,575			$	289,088			$	1,013,425

 

(b)

Administrative Services Agreements

 

The Company recovers a portion of rent, office and license expenses from Azucar pursuant to an Administrative Services Agreement dated May 15, 2015 and First Amending Agreement dated December 16, 2015 between the Company and Azucar.

 

The Company also recovers a portion of rent, office and license expenses from Almadex pursuant to an Administrative Services Agreement dated March 29, 2018 between the Company and Almadex.

 

During the three months ended September 30, 2024, the Company received $39,571 (2023 - $18,813) from Azucar for administrative services fees included in other income and received $253,410 (2023 - $267,400) from Almadex for administrative services fees included in other income.

 

During the nine months ended September 30, 2024, the Company received $77,001 (2023 - $56,354) from Azucar for administrative services fees included in other income and received $782,359 (2023 - $781,573) from Almadex for administrative services fees included in other income.

 

At September 30, 2024, included in accounts receivable is $14,430 (December 31, 2023 - $7,005) due from Azucar and $98,679 (December 31, 2023 - $369,045) due from Almadex in relation to expense recoveries.

 

Under the Administrative Services Agreements, the Company is the sole and exclusive manager of Azucar and Almadex that provides general management services, office space, executive personnel, human resources, geological technical support, accounting and financial services at cost with no mark-up or additional direct charge. The three companies are considered related parties through common officers.

 

(c)

Other related party transactions

 

During the three and nine months ended September 30, 2024, the Company employed the Chair’s daughter for a salary of $10,325 and $30,975 less statutory deductions (2023 - $10,325 and $30,975) for marketing and administrative services provided to the Company.

 

 

12.

Net loss per share

 

Basic and diluted net loss per share

 

The calculation of basic net loss per share for the three months ended September 30, 2024 was based on the loss attributable to common shareholders of $210,403 (2023 - $760,048) and a weighted average number of common shares outstanding of 137,221,408 (2023 – 137,221,408).

 

The calculation of basic net loss per share for the nine months ended September 30, 2024 was based on the loss attributable to common shareholders of $2,745,313 (2023 - $2,092,738) and a weighted average number of common shares outstanding of 137,221,408 (2023 – 137,221,408).

 

The calculation of diluted net loss per share for the three and nine months ended September 30, 2024 and 2023 did not include the effect of stock options and warrants, as they were considered to be anti-dilutive.

 

13.

Supplemental cash flow information

 

Supplemental information regarding the split between cash and cash equivalents is as follows:

 

		September 30, 2024				December 31, 2023
Cash		$	1,232,381			$	1,658,863
Term Deposits			2,149,900				2,587,120
		$	3,382,281			$	4,245,983

 

14.

Financial instruments

 

The fair values of the Company’s cash and cash equivalents, accounts receivable and trade and other payables approximate their carrying values because of the short-term nature of these instruments.

 

Except for warrant liability and derivative financial liabilities, the Company does not carry any financial instruments at FVTPL.

 

The Company is exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk and commodity and equity price risk.

 

(a)

Currency risk

 

The Company’s property interests in Mexico make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian dollar, the US dollar and the Mexican peso. The Company does not invest in foreign currency contracts to mitigate the risks.

 

 

14.

Financial instruments (Continued)

 

(a)

Currency risk (Continued)

 

As at September 30, 2024, the Company is exposed to foreign exchange risk through the following monetary assets and liabilities denominated in currencies other than the functional currency of the applicable subsidiary:

 

All amounts in Canadian dollars		US dollar				Mexican peso
Cash and cash equivalents		$	1,953,859			$	348,497
Accounts receivable and prepaid expenses			-				305
Gold in trust			1,420,101				-
Total assets		$	3,373,960			$	348,802
Trade and other payables		$	66,366			$	21,851
Gold loan payable			5,534,828				-
Derivative financial liabilities			1,281,377				-
Total liabilities		$	6,882,571			$	21,851
Net assets		$	(3,508,611	)		$	326,951

 

A 10% change in the US dollar exchange rate relative to the Canadian dollar would change the Company’s net loss by $350,000.

 

A 10% change in the Mexican peso relative to the Canadian dollar would change the Company’s net loss by $30,000.

 

(b)

Credit risk

 

The Company’s cash and cash equivalents are held in large financial institutions, located in both Canada and Mexico. Cash equivalents mature at less than ninety days during the twelve months following the statement of financial position date. The Company’s accounts receivable consist of amounts due from related parties which are subsequently collected.

 

To mitigate exposure to credit risk on cash and cash equivalents, the Company has established policies to limit the concentration of credit risk with any given banking institution where the funds are held, to ensure counterparties demonstrate minimum acceptable credit risk worthiness and ensure liquidity of available funds.

 

As at September 30, 2024, the Company’s maximum exposure to credit risk is the carrying value of its cash and cash equivalents, and accounts receivable.

 

(c)

Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Liquidity risk is considered low as the Company has sufficient cash and cash equivalent to meet its current liabilities.

 

Trade and other payables are due within twelve months of the statement of financial position date.

 

 

14.

Financial instruments (Continued)

 

(d)

Interest rate risk

 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to varying interest rates on cash and cash equivalents. The Company has no debt bearing variable interest rate.

 

A 1% change in the interest rate would change the Company’s net loss by $30,000.

 

(e)

Commodity and equity price risk

 

The ability of the Company to explore its exploration and evaluation assets and the future profitability of the Company are directly related to the market price of gold and other precious metals. The Company monitors gold prices to determine the appropriate course of action to be taken by the Company. Equity price risk is defined as the potential adverse impact on the Company’s performance due to movements in individual equity prices or general movements in the level of the stock market.

 

A 1% change in the commodity price would change the Company’s net loss by $14,000.

 

(f)

Classification of financial instruments

 

IFRS 13 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:

 

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

 

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.

 

		Level 1				Level 2				Level 3				Total
			$				$				$				$
Derivative financial liabilities			-				1,281,377				-				1,281,377

 

15.

Management of capital

 

The Company considers its capital to consist of components of equity. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

 

 

15.

Management of capital (Continued)

 

The Company considers its capital to consist of components of equity. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

 

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares and, acquire or dispose of assets.

 

In order to maximize ongoing exploration efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with short term maturities, selected with regards to the expected timing of expenditures from continuing operations.

 

The Company expects its current capital resources will be sufficient to carry its exploration plans and operations for the foreseeable future. There were no changes to the Company’s approach to the management of capital during the period. The Company has no externally imposed capital requirements.

 

16.

Segmented information

 

The Company operates in one reportable operating segment, being the acquisition and exploration of mineral resource properties.

 

The Company’s non-current assets are located in the following geographic locations:

 

		September 30, 2024				December 31, 2023
Canada		$	280,734			$	361,967
United States			6,568,840				6,568,840
Mexico			1,303				1,533
		$	6,850,877			$	6,932,340

 

17.

Commitments and Contingencies

 

ICSID Arbitration

 

On June 14, 2024, the Company formally commenced international arbitration proceedings against the United Mexican States (“Mexico”) under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”), by filing a Request for Arbitration. Almaden is pursuing this arbitration together with Almadex, on behalf of themselves and their Mexican subsidiaries. Through a subsidiary, Almadex held a 2% net smelter return royalty on the Ixtaca project.

 

 

17.

Commitments and Contingencies (Continued)

 

ICSID Arbitration (Continued)

 

The international arbitration claim against Mexico will be prosecuted pursuant to the established and enforceable legal framework of the International Centre for Settlement of Investment Disputes (“ICSID”). Almaden alleges that Mexico has breached its obligations under the CPTPP through actions which blocked the development of the Ixtaca project and ultimately retroactively terminated the Company’s mineral concessions, causing the loss of the Company’s investments in Mexico. Based on a preliminary estimate, Almaden and Almadex will be seeking damages of no less than US$200 million, in the aggregate. As the arbitration proceeds, the Company expects to appoint a quantum expert who will prepare a professional damages assessment for review by the arbitration tribunal.

 

As arbitration proceedings are in early stages, the Company cannot determine the likelihood of succeeding in collecting any amount, as such it has not accrued any amounts in the condensed consolidated interim financial statements with respect to this claim.

 

Litigation management agreement

 

On June 26, 2024, the Company agreed with Almadex and its Mexican subsidiary to streamline the management of the arbitration proceedings by entering into a Litigation Management Agreement (“LMA”). Under the LMA, Almaden will bear the up-front costs of the arbitration and provide overall direction to the arbitration process for itself and its subsidiaries, as well as Almadex and its subsidiaries, with certain limitations. Almadex will remain a party to the arbitration and continue in its cooperation and support of the process.

 

Should the arbitration proceedings result in an award of damages, the pro rata portion of those damages, if any, which may be attributable to Almadex from the 2.0% NSR royalty it held on the Ixtaca project will be determined. Almadex’s award will consist of this pro rata portion, less its pro-rata share of the costs of pursuing the legal claims, including the financing costs (the “Almadex Award”). Almadex will compensate Almaden in the amount of 10% of the Almadex Award in exchange for managing the claim proceedings.

 

Litigation funding agreement

 

On June 26, 2024, the Company entered into a litigation funding agreement (the “LFA”) with a leading legal finance provider (the “Funder”). The LFA provides up to US$9.5 million in non-recourse funding for the Company to pursue its international arbitration proceedings (the “Claims”) against Mexico under the CPTPP. This funding is expected to cover all legal, tribunal and external expert costs of the legal claims, as well as some corporate operating expenses as may be required. The funding is repayable in the event that a damages award is recovered from Mexico, with such repayment being a contingent entitlement to those damages.

 

As at September 30, 2024, cumulative legal and arbitration costs covered by the LFA totaled US$920,835. Should the Claims result in the receipt of a damages award (“Claim Proceeds”), the Funder shall be entitled to the return of its funding capital outlay, plus the greater of 2.5x the funding capital outlay or 30% of Claim Proceeds. The actual return to the Funder may be lower than the foregoing amounts depending on how quickly the Claim is resolved.

 

 

 

20

 

Exhibit 99.2

 

 

ALMADEN MINERALS LTD.

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2024

 

 

INTRODUCTION

 

This Management’s Discussion and Analysis (“MD&A”) for Almaden Minerals Ltd. (“Almaden” or the “Company”) has been prepared based on information known to management as of November 1, 2024. This MD&A is intended to help the reader understand, and should be read in conjunction with, the condensed consolidated interim financial statements of Almaden for the financial period ended September 30, 2024 and supporting notes. The condensed consolidated interim financial statements have been prepared in accordance and compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

 

Management is responsible for the preparation and integrity of the Company’s condensed consolidated interim financial statements, including the maintenance of appropriate information systems, procedures and internal controls. The audit committee of the board of directors of the Company (the “Board”) meets with management regularly to review the Company’s condensed consolidated interim financial statements and MD&A, and to discuss other financial, operating and internal control matters.

 

All currency amounts used in this MD&A are expressed in Canadian dollars unless otherwise noted.

 

The Company’s common stock is quoted on the Toronto Stock Exchange under the symbol “AMM” and the OTCQB under the symbol “AAUAF”.

 

This MD&A contains forward looking statements that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but the nature of its business will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the heading “Risk factors” in our Annual Information Form (“AIF”) and those set forth in this MD&A under the headings “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those described in forward-looking statements.

 

ADDITIONAL INFORMATION

 

The Company’s financial statements, MD&A and additional information relevant to the Company, including the Company’s AIF for the year ended December 31, 2023, can be found on SEDAR+ at www.sedarplus.ca, on the EDGAR section of the SEC’s website at www.sec.gov, and/or on the Company’s website at www.almadenminerals.com.

 

QUARTERLY HIGHLIGHTS

 

During the quarter, the Company continued its international arbitration proceedings against the United Mexican States (“Mexico”) under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”). Almaden is pursuing this arbitration together with Almadex Minerals Ltd. (“Almadex”), on behalf of themselves and their Mexican subsidiaries. Through a subsidiary, Almadex held a 2% net smelter return royalty on the Ixtaca project.

 

The international arbitration claim against Mexico are being prosecuted pursuant to the established and enforceable legal framework of the International Centre for Settlement of Investment Disputes (“ICSID”). Almaden alleges that Mexico has breached its obligations under the CPTPP through actions which blocked the development of the Ixtaca project and ultimately retroactively terminated the Company’s mineral concessions, causing the loss of the Company’s investments in Mexico (the “Claims”).

 

The Tribunal adjudicating the arbitration proceedings was constituted on October 3, 2024 pursuant to ICSID Arbitration Rule 21(1). Further, the Tribunal has scheduled the First Session to be held on November 20, 2024.  During this First Session, the parties to the arbitration and the Tribunal will address the procedure and will determine the procedural calendar governing the arbitration, in accordance with ICSID Arbitration Rule 29.

 

On June 27, 2024, the Company announced that it had agreed with Almadex and its Mexican subsidiary to streamline the management of the arbitration proceedings by entering into a Litigation Management Agreement (“LMA”). Under the LMA, Almaden will bear the up-front costs of the arbitration and provide overall direction to the arbitration process for itself and its subsidiaries, as well as Almadex and its subsidiaries, with certain limitations. Almadex will remain a party to the arbitration and continue in its cooperation and support of the process.

 

Should the Claims result in an award of damages (“Claim Proceeds”), the pro rata portion of the Claim Proceeds, if any, which may be attributable to Almadex from the 2.0% NSR royalty it held on the Ixtaca project will be determined. Almadex’s award will consist of this pro rata portion, less its pro rata share of the costs of pursuing the Claims, including the financing costs (the “Almadex Award”). Almadex will compensate Almaden in the amount of 10% of the Almadex Award in exchange for managing the Claims.

 

Coincidental with announcing the LMA, Almaden entered into a litigation funding agreement (the “LFA”) with a leading legal finance provider (the “Funder”). The LFA provides up to US$9.5 million in non-recourse funding for the Company to pursue the Claims. This funding is expected to cover all legal, tribunal and external expert costs of the Claims, as well as some corporate operating expenses as may be required. The funding is repayable in the event that Claim Proceeds are recovered from Mexico, with such repayment being a contingent entitlement to the Claim Proceeds.

 

As at September 30, 2024, cumulative legal and arbitration costs covered by the LFA totaled US$920,835. Should the Claims result in the Claim Proceeds, the Funder shall be entitled to the return of its funding capital outlay, plus the greater of 2.5x the funding capital outlay or 30% of Claim Proceeds. The actual return to the Funder may be lower than the foregoing amounts depending on how quickly the Claim is resolved.

 

Finally, also on June 27, 2024, Almaden announced that it had agreed with Almadex to extend the maturity of the gold loan (see press release of May 14, 2019) from March 31, 2026 to the earlier of March 31, 2030, or the receipt by Almaden or its subsidiary of any Claim Proceeds.

 

In return for this amendment, in addition to its obligation to repay the gold loan, Almaden agreed to pay Almadex 2.0% of the gross amount of any Claim Proceeds that Almaden may receive as a result of the Claims, such repayment to be subordinate to amounts due under the LFA, and any additional legal and management costs.

 

Almaden has retained Boies Schiller Flexner LLP to act as legal counsel in this dispute.

 

OVERALL PERFORMANCE

 

Overview

 

Company Mission and Focus

 

The Company’s goal is to evaluate exploration and development opportunities while also seeking compensation from the Government of Mexico for actions which blocked the development of the Ixtaca project and ultimately retroactively terminated the Company’s mineral concessions, causing the loss of the Company’s investments in Mexico.

 

RISKS AND UNCERTAINTIES

 

Below are some of the risks and uncertainties that the Company faces. For a full list of risk factors, please refer to the Company’s AIF for the year ended December 31, 2023, as filed on SEDAR on March 20, 2024, under the heading “Annual Information Form”.

 

Industry

 

The Company is engaged in the exploration and development of mineral properties, an inherently risky business. There is no assurance that a mineral deposit will ever be discovered, developed and economically produced. Few exploration projects result in the discovery of commercially mineable ore deposits. If market conditions make financings difficult, it may be difficult for the Company to find joint venture partners or to finance development of its projects. The Company may be unsuccessful in identifying and acquiring projects of merit.

 

Exchange rate fluctuations

 

Fluctuations in currency exchange rates, principally the Canadian/U.S. Dollar and the Canadian/Mexican Peso exchange rates, can impact cash flows. The exchange rates have varied substantially over time. Fluctuations in exchange rates may give rise to foreign currency exposure, either favourable or unfavourable, which will impact financial results. The Company does not engage in currency hedging to offset any risk of exchange rates fluctuation.

 

Title to mineral properties

 

While the Company has investigated title to its mineral properties, this should not be construed as a guarantee of title. The properties may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects.

 

Environmental

 

The Company’s exploration and development activities are subject to extensive laws and regulations governing environmental protection. The Company is also subject to various reclamation-related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by NGOs opposed to mining has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.

 

Laws, Regulations, and Permits

 

The Company’s exploration activities are subject to extensive federal, provincial, state and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety, waste disposal, protection of the environment, protection of historic and archeological sites, protection of endangered and protected species and other matters in all the jurisdictions in which it operates. The Company is required to have a wide variety of permits from governmental and regulatory authorities to carry out its activities. These permits relate to virtually every aspect of the Company’s exploration and exploitation activities. Changes in these laws and regulations or changes in their enforcement or interpretation could result in changes in legal requirements or in the terms of the Company’s permits that could have a significant adverse impact on the Company’s existing or future operations or projects. Obtaining permits can be a complex, time-consuming process. There can be no assurance that the Company will be able to obtain the necessary permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Company from continuing or proceeding with existing or future operations or projects. Any failure to comply with permits and applicable laws and regulations, even if inadvertent, could result in the interruption or closure of operations or material fines, penalties or other liabilities. The Company applies the expertise of its management, advisors, legal counsel, employees and contractors to ensure compliance with current laws.

 

 

Possible dilution to present and prospective shareholders

 

The Company’s plan of operation, in part, contemplates the financing of its business by the issuance of securities and possibly incurring debt. Any transaction involving the issuance of previously authorized but unissued common shares, or securities convertible into common shares, would result in dilution, possibly substantial, to present and prospective shareholders. The Company has traditionally sought joint venture partners to fund in whole or in part exploration projects. Offering an interest in its projects to partners would dilute the Company’s interest in the projects.

 

Trading volume

 

The relatively low trading volume of the Company’s shares reduces the liquidity of an investment in its shares.

 

Volatility of share price

 

Market prices for shares of early-stage companies are often volatile. Factors such as announcements of mineral discoveries or discouraging exploration results, changes in financial results, and other factors could have a significant effect on share price.

 

Competition

 

There is competition from other mining exploration companies with operations similar to Almadex. Many of the companies with which it competes have operations and financial strength greater than the Company.

 

Dependence on management

 

The Company depends heavily on the business and technical expertise of its management.

 

Conflict of interest

 

Some of the Company’s directors and officers are directors and officers of other natural resource or mining-related companies. These associations may give rise from time-to-time to conflicts of interest. If a conflict arises, the Company may miss the opportunity to participate in certain transactions.

 

Risk related to proceedings under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”)

 

On December 13, 2023 the Company delivered to the United Mexican States (“Mexico”) a Request for Consultations in accordance with the CPTPP relating to an investment dispute with Mexico, on March 14, 2024, the Company delivered to Mexico notice of its intention to submit a claim to arbitration against Mexico in accordance with Article 9.19.3 of the CPTPP, and on June 14, 2024 the Company announced that it had commenced international arbitration proceedings against Mexico by filing its Request for Arbitration with the International Centre for Settlement of Investment Disputes (“ICSID”). These legal proceedings, or others that could be brought against or by the Company in the future, could have a material adverse effect on our financial position or prospects. While the Company believes it has valid reasons to commence legal proceedings, litigation matters are inherently uncertain and there is no guarantee that the arbitration will be successful, or that the likely outcome of this matter will be consistent with the ultimate resolution of the matter. Any legal proceedings require the Company to incur significant expense, devote significant resources, and may generate adverse publicity, which could materially, and possibly adversely, affect its business. The Company’s inability to enforce its rights and the enforcement of rights on a prejudicial basis by foreign courts or international arbitral tribunals could have an adverse effect on the Company’s outlook. Outcomes in any legal proceedings and the process for recovering funds even if there is a successful outcome in any legal proceedings can be lengthy and unpredictable. Furthermore, there is a risk that the Company will be unable to secure the necessary funding to advance any legal proceedings.

 

Political, economic and social environment

 

The Company’s mineral properties may be adversely affected by political, economic and social uncertainties which could have a material adverse effect on the Company’s results of operations and financial condition. Areas in which the Company holds or may acquire properties may experience local political unrest and disruption which could potentially affect the Company’s projects or interests. Changes in leadership, social or political disruption or unforeseen circumstances affecting political, economic and social structure could adversely affect the Company’s property interests or restrict its operations. The Company’s mineral exploration and development activities may be affected by changes in government regulations relating to the mining industry and may include regulations on production, price controls, labour, export controls, income taxes, expropriation of property, environmental legislation and safety factors.

 

Any shifts in political attitudes or changes in laws that may result in, among other things, significant changes to mining laws or any other national legal body of regulations or policies are beyond the control of the Company and may adversely affect its business. The Company faces the risk that governments may adopt substantially different policies, which might extend to the expropriation of assets or increased government participation in the mining sector. In addition, changes in resource development or investment policies, increases in taxation rates, interest rates, higher mining fees and royalty payments, revocation or cancellation of mining concession rights or shifts in political attitudes in jurisdictions where the Company operates may adversely affect the Company’s business.

 

As a result of social media and other web-based applications, companies today are at much greater risk of losing control over how they are perceived

 

Damage to the Company’s reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity, whether true or not. Although the Company places a great emphasis on protecting its image and reputation, it does not ultimately have direct control over how it is perceived by others. Reputation loss may lead to increased challenges in developing and maintaining community relations, decreased investor confidence and act as an impediment to the Company’s overall ability to advance its projects, thereby having a material adverse impact on the Company’s business, financial condition or results of operations.

 

The Company may be subject to legal proceedings that arise in the ordinary course of business

 

Due to the nature of its business, the Company may be subject to regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of its business. The Company’s operations are subject to the risk of legal claims by employees, unions, contractors, lenders, suppliers, joint venture partners, shareholders, governmental agencies or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. Plaintiffs may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. Defense and settlement costs can be substantial, even with respect to claims that have no merit. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. The litigation process could, as a result, take away from the time and effort of the Company’s management and could force the Company to pay substantial legal fees or penalties. There can be no assurances that the resolutions of any such matters will not have a material adverse effect on the Company’s business, financial condition and results of operations.

 

The prices of gold, silver and other metals

 

The price of gold is affected by numerous factors including central bank sales or purchases, producer hedging activities, the relative exchange rate of the U.S. dollar with other major currencies, supply and demand, political, economic conditions and production levels. In addition, the price of gold has been volatile over short periods of time due to speculative activities.

 

The price of silver is affected by similar factors and, in addition, is affected by having more industrial uses than gold, as well as sometimes being produced as a by-product of mining for other metals with its production thus being more dependent on demand for the main mine product than supply and demand for silver. The prices of other metals and mineral products that the Company may explore for have the same or similar price risk factors.

 

Cash flows and additional funding requirements

 

The Company currently has no revenue from operations. Additional capital would be required to continue with advancement and development of mineral properties. The sources of funds currently available to the Company are equity capital or the offering of an interest in its projects to another party. The Company believes it currently has sufficient financial resources to undertake all of its currently planned programs.

 

Impairment of Exploration and Evaluation Assets

 

The Company assesses its exploration and evaluation assets quarterly to determine whether any indication of impairment exists. Common indications of impairment, which is often subjective, include but are not limited to, that the right to explore the assets has expired or will soon expire and is not expected to be renewed, that substantive expenditure of further exploration is not planned, or that results are not compelling enough to warrant further exploration by the Company.

 

SUMMARY OF QUARTERLY RESULTS

 

The following tables provide selected financial information for the Company’s eight most recently completed fiscal quarters, stated in Canadian dollars in accordance with IFRS:

 

	Quarter Ended Sep 30, 2024 ($)	Quarter Ended June 30, 2024 ($)	Quarter Ended Mar 31, 2024 ($)	Quarter Ended Dec 31, 2023 ($)
Revenue	Nil	Nil	Nil	Nil
Other income (loss)	510,168	(1,006,744)	26,429	(62,942,349)
Comprehensive loss	(210,403)	(1,781,844)	(753,066)	(61,527,494)
Basic & diluted net loss per share	(0.00)	(0.01)	(0.01)	(0.44)
Total assets	11,844,778	11,920,179	12,160,073	12,714,764
Total long term liabilities	7,009,055	6,850,931	5,316,487	4,757,480
Cash dividends declared	Nil	Nil	Nil	Nil

 

	Quarter Ended Sep 30, 2023 ($)	Quarter Ended June 30, 2023 ($)	Quarter Ended Mar 31, 2023 ($)	Quarter Ended Dec 31, 2022 ($)
Revenue	Nil	Nil	Nil	Nil
Other income	410,524	432,495	525,964	(6,551,078)
Comprehensive loss	(760,048)	(782,425)	(550,265)	(9,653,810)
Basic & diluted net loss per share	(0.01)	(0.01)	(0.00)	(0.07)
Total assets	76,616,631	76,932,845	77,474,606	78,050,210
Total long term liabilities	7,893,373	7,744,769	7,817,837	7,805,729
Cash dividends declared	Nil	Nil	Nil	Nil

 

Quarterly variances in other income are dependent on the interest income earned from various levels of cash balances, financing activities related to the gold loan and cost recoveries from administrative services earned from Azucar Minerals Ltd. (“Azucar”) and Almadex. The main changes in comprehensive loss include non-cash impairments, share-based payments relating to the fair values of stock options granted, professional fees relating to the legal matters, unrealized gain (loss) on derivative financial liabilities from fair value adjustment on the gold loan payable and foreign exchange gain (loss) from foreign exchange rate fluctuations. Further details are discussed in Review of Operations and Financial Results section below.

Review of Operations and Financial Results

 

Results of Operations for the three months ended September 30, 2024 compared to the three months ended September 30, 2023

 

For the three months ended September 30, 2024, the Company recorded a comprehensive loss of $210,403, or $0.00 per common share, compared to a comprehensive loss of $760,048, or $0.01 per common share, for the three months ended September 30, 2023. The decrease in comprehensive loss of $549,645 was primarily a result of a $450,001 decrease in operating expenses and a $99,644 increase in other income.

 

As the Company is in exploration stage, it has no revenue from mining operations. Other income of $510,168 (2023 – $410,524) during the three months ended September 30, 2024 relates primarily to the reversal of impairment of exploration and evaluation assets of $80,341 (2023 – $Nil) from the Tuligtic Property due to the value-added tax recovery in Mexico. Another contributing factor is the unrealized gain on gold loan in trust of $172,840 compared to an unrealized loss on gold in trust of $17,148 for the three months ended September 30, 2023, due to an increase in gold commodity price in 2024.

 

The Company has an administrative services agreement with Azucar and Almadex whereby overhead and salary expenses are proportionally allocated as described under the heading “Transactions with Related Parties”. Amounts earned from administrative service fees depends on the business activities of each company. During Q3 2024, the Company a higher administrative services fees earned from Azucar of $39,571 (2023 - $18,813), and a slight decrease in administrative service fees from Almadex of $253,410 (2023 - $267,400) due to operational activities within each company.

 

Operating expenses were $720,571 during the three months ended September 30, 2024 (2023 - $1,170,572). Certain operating expenses were reported on a gross basis and recovered through other income from the administrative services agreements with Azucar and Almadex. The decrease in operating expenses of $450,001 is mainly due to a decrease of $370,350 from no stock option grants in 2024 Q3 compared to the 2023 Q3 share-based payments. Another contributing factor to a decrease in operating expenses is the decrease in professional fees of $71,429 in 2024 Q3 compared to 2023 Q3 due to the reduction of consulting needs in Mexico as the activities of the Tuligtic Project slows down.

 

Results of Operations for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

 

For the nine months ended September 30, 2024, the Company recorded a comprehensive loss of $2,745,313, or $0.02 per common share, compared to a comprehensive loss of $2,092,738, or $0.02 per common share, for the nine months ended September 30, 2023. The increase in comprehensive loss of $652,575 was primarily a result of a $1,839,130 decrease in other income offset by a $1,186,555 decrease in operating expenses.

 

As the Company is in exploration stage, it has no revenue from mining operations. Other loss of $470,147 (2023 – Other income of $1,368,983) during the nine months ended September 30, 2024, relates primarily to the loss on loan extension of $1,653,459 (2023 - $Nil) due to the settlement of the gold loan from Almadex to extend the maturity date to March 31, 2030. Another contributing factor is the unrealized loss on derivative financial liabilities of $126,861 compared to an unrealized gain on derivative financial liabilities of $130,068 for the nine months ended September 30, 2023.

 

The impairment of exploration and evaluation assets is due to the Mexican government’s action to revoke the Company’s mineral concession title and to prevent any further exploration and development plans on the Tuligtic Property. In light of these events and the investment dispute with Mexico under CPTPP, the Company carried out an impairment assessment of the Tuligtic Property and took a prudent approach in our judgement of the facts and circumstances, and based on the cancelled mineral concessions, the Company determined the recoverable amount under applicable accounting standards to be $1 as at September 30, 2024. As a result, the Company recognized a full impairment loss of $15,260 (2023 - $Nil) as of the nine months ended September 30, 2024. This impairment has been taken without prejudice to, or without at present attributing any specific value to the legal remedies that may be obtained through any arbitration proceedings or otherwise.

 

The Company has an administrative services agreement with Azucar and Almadex whereby overhead and salary expenses are proportionally allocated as described under the heading “Transactions with Related Parties”. Amounts earned from administrative service fees depends on the business activities of each company. During Q3 2024, the Company had a small increase in administrative services fees earned from Azucar of $77,001 (2023 - $56,354), and a slight increase in administrative service fees from Almadex of $782,359 (2023 - $781,573) due to operational activities within each company.

 

Operating expenses were $2,275,166 during the nine months ended September 30, 2024 (2023 - $3,461,721). Certain operating expenses were reported on a gross basis and recovered through other income from the administrative services agreements with Azucar and Almadex. The decrease in operating expenses of $1,186,555 is mainly due to a decrease of $742,850 from no stock option grants during the nine months ended September 30, 2024, compared to September 30, 2023 share-based payments. Another contributing factor to a decrease in operating expenses is the decrease in professional fees of $362,727 during the nine months ended September 30, 2024, compared to September 30, 2023 due to the reduction of consulting needs in Mexico as the activities of the Tuligtic Project slows down.

 

LIQUIDITY AND CAPITAL RESOURCES

 

At September 30, 2024, the Company had working capital of $4,418,460, including cash and cash equivalents of $3,382,281, compared to working capital of $5,616,511, including cash and cash equivalents of $4,671,429 at September 30, 2023. The decrease in working capital of $1,198,051 is due the cash balances being used for expenditures in exploration and evaluation assets and corporate affairs.

 

The Company has long term liabilities of $7,009,055 at September 30, 2024 compared to $4,757,480 at December 31, 2023 that relates to other components of long-term liabilities relate to long-term portion of lease liabilities of $192,850 (December 31, 2023 - $277,104) for office lease, gold loan payable of $5,534,828 (December 31, 2023 - $4,371,546) entered with Almadex on May 14, 2019, and derivative financial liabilities of $1,281,377 (December 31, 2023 - $108,830) related to the gold loan.

 

Three months ended September 30, 2024

 

Net cash from operating activities during the three months ended September 30, 2024 was $291,266 (2023 net cash used in operating activities - $226,864), after adjusting for non-cash activities.

 

Net cash from investing activities during the three months ended September 30, 2024 was $80,338 (2023 – $12,300) related to expenditures in exploration and evaluation assets while waiting for its development permits.

 

Net cash used in financing activities during the three months ended September 30, 2024 was $32,980 (2023 - $32,156).

 

Management estimates that the current cash position and potential future cash flows will be sufficient for the Company to carry out its business for the upcoming year.

 

Nine months ended September 30, 2024

 

Net cash used in operating activities during the nine months ended September 30, 2024 was $748,999 (2023 - $1,232,519), after adjusting for non-cash activities.

 

Net cash used in investing activities during the nine months ended September 30, 2024 was $16,588 (2023 – $658,486) related to expenditures in exploration and evaluation assets while waiting for its development permits.

 

Net cash used in financing activities during the nine months ended September 30, 2024 was $98,115 (2023 - $95,642).

 

Management estimates that the current cash position and potential future cash flows will be sufficient for the Company to carry out its business for the upcoming year.

 

DISCLOSURE OF OUTSTANDING SHARE DATA

 

Common Shares

 

The authorized share capital of the Company consists of an unlimited number of common shares without par value. As of date of this MD&A, there were 137,221,408 common shares issued and outstanding and 148,886,408 common shares outstanding on a diluted basis. The Company had the following common shares outstanding as at the dates indicated:

 

	Number of Common Shares Issued & Outstanding	Share Capital Amount
December 31, 2022	137,221,408	$141,040,654
December 31, 2023	137,221,408	$141,040,654
November 1, 2024	137,221,408	$141,040,654

 

Warrants

 

The following table summarizes information about warrants outstanding at November 1, 2024:

 

	Exercise	December 31,				November 1,
Expiry date	price	2023	Issued	Exercised	Expired	2024
March 18, 2024	US$ 0.80	8,358,846	-	-	(8,358,846)	-
May 14, 2024	$1.50	500,000	-	-	(500,000)	-
Warrants outstanding and exercisable		8,858,846	-	-	(8,858,846)	-
Weighted average exercise price		$ 1.08	-	-	$ 1.08	-

 

The table in Note 10(c) to the Company’s audited annual consolidated financial statements for the year ended December 31, 2023 summarizes information about warrants outstanding as at December 31, 2023.

 

Stock Options

 

The Company grants directors, officers, employees, and contractors options to purchase common shares under its stock option plan. This plan and its terms, as well as options outstanding as at December 31, 2023, are detailed in Note 10(d) to the Company’s audited annual consolidated financial statements for the year ended December 31, 2023.

 

The following table summarizes information about stock options outstanding at November 1, 2024:

 

Expiry date	Exercise price	December 31, 2023	Granted	Exercised	Expired	November 1, 2024
March 7, 2027	$ 0.38	1,125,000	-	-	(125,000)	1,000,000
June 10, 2027	$ 0.33	3,640,000	-	-	(265,000)	3,375,000
October 4, 2027	$ 0.30	755,000	-	-	-	755,000
December 16, 2027	$ 0.33	855,000	-	-	-	855,000
February 14, 2028	$ 0.30	600,000	-	-	-	600,000
April 3, 2028	$ 0.26	1,975,000	-	-	(400,000)	1,575,000
July 10, 2028	$ 0.16	2,520,000	-	-	(50,000)	2,470,000
September 19, 2028	$ 0.18	1,035,000	-	-	-	1,035,000
Options outstanding and exercisable		12,505,000	-	-	(840,000)	11,665,000
Weighted average exercise price		$ 0.27	-	-	$ 0.29	$ 0.27

 

ENVIRONMENTAL PROVISIONS AND POTENTIAL ENVIRONMENTAL CONTINGENCY

 

The Company’s mining and exploration activities are subject to various federal, provincial and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment and believes its operations are in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. The Company estimates that future reclamation and site restoration costs based on the Company’s exploration activities to date are not significant however the ultimate amount of reclamation and other future site restoration costs to be incurred in the future is uncertain.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

The Company has no off-balance sheet arrangements.

 

CONTRACTUAL COMMITMENTS

 

The Company has no contractual commitments.

 

TRANSACTIONS WITH RELATED PARTIES

 

(a)

Compensation of key management personnel

 

Key management includes members of the Board, the Chair, the President and Chief Executive Officer, the Chief Financial Officer, the Executive Vice President, and the Vice President, Project Development. The net aggregate compensation paid or payable to key management for services after recovery from Azucar and Almadex (Note 11(b) of the September 30, 2024 condensed consolidated interim financial statements) was as follows:

 

Three months ended September 30, 2024		Fees				Share-based Payments				Total
Chairman		$	3,600			$	-			$	3,600
President & CEO			8,625				-				8,625
CFO			15,625				-				15,625
Executive VP			37,500				-				37,500
VP Project Development			-				-				-
Directors			26,250				-				26,250
		$	91,600			$	-			$	91,600

 

Nine months ended September 30, 2024		Fees				Share-based Payments				Total
Chairman		$	14,400			$	-			$	14,400
President & CEO			21,563				-				21,563
CFO			50,000				-				50,000
Executive VP			109,375				-				109,375
VP Project Development			-				-				-
Directors			93,750				-				93,750
		$	289,088			$	-			$	289,088

 

Three months ended September 30, 2023		Fees				Share-based Payments				Total
Chair		$	5,400			$	94,350			$	99,750
President & CEO			8,625				62,350				70,975
CFO			18,750				21,350				40,100
Executive VP			37,500				20,000				57,500
VP Project Development			15,000				13,500				28,500
Directors			33,750				77,000				110,750
		$	119,025			$	288,550			$	407,575

 

Nine months ended September 30, 2023		Fees				Share-based Payments				Total
Chair		$	27,000			$	94,350			$	121,350
President & CEO			60,375				102,350				162,725
CFO			56,250				69,350				125,600
Executive VP			75,000				67,000				142,000
VP Project Development			45,000				37,500				82,500
Directors			106,250				273,000				379,250
		$	369,875			$	643,550			$	1,013,425

 

(b)

Administration Services Agreements

 

The Company recovers a portion of rent, office and license expenses from Azucar pursuant to an Administrative Services Agreement dated May 15, 2015 and First Amending Agreement dated December 16, 2015 between the Company and Azucar.

 

The Company also recovers a portion of rent, office and license expenses from Almadex pursuant to an Administrative Services Agreement dated March 29, 2018 between the Company and Almadex.

 

During the three months ended September 30, 2024, the Company received $39,571 (2023 - $18,813) from Azucar for administrative services fees included in other income and received $253,410 (2023 - $267,400) from Almadex for administrative services fees included in other income.

 

During the nine months ended September 30, 2024, the Company received $77,001 (2023 - $56,354) from Azucar for administrative services fees included in other income and received $782,359 (2023 - $781,573) from Almadex for administrative services fees included in other income.

 

At September 30, 2024, included in accounts receivable is $14,430 (December 31, 2023 - $7,005) due from Azucar, and $98,679 (December 31, 2023 - $369,045) due from Almadex in relation to expense recoveries.

 

Under the Administrative Services Agreements, the Company is the sole and exclusive manager of Azucar and Almadex that provides general management services, office space, executive personnel, human resources, geological technical support, accounting and financial services at cost with no mark-up or additional direct charge. The three companies are considered related parties though common officers.

 

(c)

Other related party transactions

 

During the three and nine months ended September 30, 2024, the Company employed the Chair’s daughter for a salary of $10,325 and $30,975 less statutory deductions (2023 - $10,325 and $30,975) for marketing and administrative services provided to the Company.

 

FINANCIAL INSTRUMENTS

 

The fair values of the Company’s cash and cash equivalents, accounts receivable, and trade and other payables approximate their carrying values because of the short-term nature of these instruments. Significant assumptions are discussed in Critical Accounting Estimates section of this MD&A.

 

Except for warrant liability and derivative financial liabilities, the Company does not carry any financial instruments at fair value through profit or loss (FVTPL).

 

The Company is exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest rate risk, and commodity and equity price risk.

 

(a)

Currency risk

 

The Company’s property interests in Mexico make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian dollar, the US dollar and the Mexican Peso. The Company does not invest in foreign currency contracts to mitigate the risks.

 

As at September 30, 2024, the Company was exposed to foreign exchange risk through the following monetary assets and liabilities denominated in currencies other than the functional currency of the applicable subsidiary:

 

All amounts in Canadian dollars		US dollar				Mexican peso
Cash and cash equivalents		$	1,953,859			$	348,497
Accounts receivable and prepaid expenses			-				305
Gold in trust			1,420,101				-
Total assets		$	3,373,960			$	348,802
Trade and other payables		$	66,366			$	21,851
Gold loan payable			5,534,828				-
Derivative financial liabilities			1,281,377				-
Total liabilities		$	6,882,571			$	21,851
Net assets		$	(3,508,611	)		$	326,951

 

A 10% change in the US dollar exchange rate relative to the Canadian dollar would change the Company’s net loss by $350,000.

 

A 10% change in the Mexican Peso exchange rate relative to the Canadian dollar would change the Company’s net loss by $30,000.

 

(b)

Credit risk

 

The Company’s cash and cash equivalents are held in large financial institutions, located in both Canada and Mexico. Cash equivalents mature at less than ninety days during the twelve months following the statement of financial position date. The Company’s accounts receivable consist of amounts due from related parties which are subsequently collected.

 

To mitigate exposure to credit risk on cash and cash equivalents, the Company has established policies to limit the concentration of credit risk with any given banking institution where the funds are held, to ensure counterparties demonstrate minimum acceptable credit risk worthiness and ensure liquidity of available funds.

 

As at September 30, 2024, the Company’s maximum exposure to credit risk was the carrying value of its cash and cash equivalents, and accounts receivable.

 

(c)

Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Liquidity risk is considered low as the Company has sufficient cash and cash equivalent to meet its current liabilities.

 

Trade and other payables are due within twelve months of the statement of financial position date.

 

(d)

Interest rate risk

 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to varying interest rates on cash and cash equivalents. The Company has no debt bearing variable interest rate.

 

A 1% change in the interest rate would change the Company’s net loss by $30,000.

 

(e)

Commodity and equity price risk

 

The ability of the Company to explore its exploration and evaluation assets and the future profitability of the Company are directly related to the market price of gold and other precious metals. The Company monitors gold prices to determine the appropriate course of action to be taken by the Company. Equity price risk is defined as the potential adverse impact on the Company’s performance due to movements in individual equity prices or general movements in the level of the stock market.

 

A 1% change in the commodity price would change the Company’s net loss by $14,000.

 

(f)

Classification of financial instruments

 

IFRS 13 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:

 

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

 

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy.

 

		Level 1				Level 2				Level 3				Total
		$				$				$				$
Derivatives financial liabilities			-				1,281,377				-				1,281,377

 

Management of Capital

 

The Company considers its capital to consist of components of equity. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

 

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares and, acquire or dispose of assets.

 

In order to maximize ongoing exploration efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with short term maturities, selected with regards to the expected timing of expenditures from continuing operations.

 

The Company expects its current capital resources will be sufficient to carry out its exploration plans and operations for the foreseeable future. The Company is not subject to externally imposed capital requirements. There were no changes to the Company’s approach to the management of capital during the period. The Company is not subject to externally imposed capital requirements.

 

CRITICAL ACCOUNTING ESTIMATES

 

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgements and estimates that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Based on historical experience and current conditions, management makes assumptions that are believed to be reasonable under the circumstances. These estimates and assumptions form the basis for judgements about the carrying value of assets and liabilities and reported amounts for revenues and expenses. Actual outcomes may differ from these judgements and estimates. These estimates and assumptions are also affected by management’s application of accounting policies, which is contained in Note 2 (d) of the December 31, 2023 annual consolidated financial statements. The impacts of such judgements and estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods.

 

Significant assumptions about the future, and other sources of judgements and estimates that management has made at the statement of financial position dates, that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

 

o

the analysis of the functional currency for each entity of the Company determined by conducting an analysis of the consideration factors identified in IAS 21, “The Effect of Changes in Foreign Exchange Rates”. In concluding that the Canadian dollar is the functional currency of the parent and its subsidiary companies, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates. As no single currency was clearly dominant, the Company also considered secondary indicators, including the currency in which funds from financing activities are denominated and the currency in which funds are retained;

 

o

Management makes an assessment about the Company’s ability to continue as a going concern by taking into the account the consideration of the various factors discussed in Note 1. Judgement is applied by management in determining whether or not the elements giving rise to factors that cause doubt about the ability of the Company to continue as a going concern are present;

 

o

the estimated useful lives of property, plant and equipment which are included in the consolidated statements of financial position and the related depreciation included in profit or loss;

 

o

the recoverability of the value of exploration and evaluation assets, which is recorded in the statements of financial position;

 

o

the provision for income taxes which is included in profit or loss and composition of deferred income tax liability included in the consolidated statement of financial position and the evaluation of the recoverability of deferred tax assets based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions;

 

o

the assessment of indications of impairment of each exploration and evaluation asset and property plant and equipment and related determination of the net realizable value and write-down of those assets where applicable;

 

o

the estimated incremental borrowing rate used to calculate the lease liabilities; and

 

o

the estimated fair value of gold in trust

 

In addition to the foregoing, the Company uses the Black-Scholes option pricing model to determine the fair value of options, warrants, and derivative financial liabilities in order to calculate share-based payments expense, warrant liability and the fair value of finders’ warrants and stock options. Certain inputs into the model are estimates that involve considerable judgment or could be affected by significant factors that are out of the Company’s control.

 

CHANGES IN ACCOUNTING POLICY, INCLUDING INITIAL ADOPTION

 

Application of new and revised accounting standards effective January 1, 2024

 

Certain new accounting standards and interpretations have been published that are effective from January 1, 2024; however, these standards have been assessed by the Company and are not expected to have a material impact on the Company’s consolidated financial statements.

 

IAS 1 –Presentation of Financial Statements (“IAS 1”) was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. These amendments were further revised by the issuance of Non-current Liabilities with Covenants (Amendments to IAS 1) on October 31, 2022 which further narrowed the scope of the amendments. The amendments are effective for annual periods beginning on January 1, 2024.

 

Application of this amendment is expected to result in a reclassification of warranty liability and derivative financial liabilities from non-current to current liabilities on the statement of financial position.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting that occurred during the period ended September 30, 2024 that materially affected, or that is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

CAUTIONARY NOTES REGARDING FORWARD LOOKING STATEMENTS

 

This MD&A contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information”). Forward-looking information contained herein is made as of the date of this document and the Company disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws. Forward-looking information includes statements that use forward-looking terminology such as “plans”, “expects”, “budget”, “estimates”, “intends”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements included in this document include, but are not limited to, statements with respect to: the Company’s forecasts and expected cash flows; the Company’s projected capital and operating costs; the timing, outcome, impact, and procedures relating to the arbitration proceedings under the CPTPP; the expected extension of the Rock Creek Mill storage; disclosure regarding litigation financing; requirements for additional capital and expected use of proceeds; the Company’s cash resources and their adequacy to meet the Company’s working capital and litigation needs for its next fiscal year; the possible effect of changes in interest rates and exchange rates on the Company’s future operations; unanticipated reclamation expenses; limitations on insurance coverage; the Company’s outlook with respect to the price, demand and need for precious and other metals and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management, in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about: both Almaden’s and the applicable Mexican authorities’ legal positions; stability and predictability in Mexico’s response to the arbitration process under the CPTPP; stability and predictability in the application of the CPTPP and arbitral decisions thereon; the ability to finance the arbitration process, and continued respect for the rule of law in Mexicofuture economic and political conditions; future currency exchange rates remaining as estimated; availability of funds; favourable equity capital markets; the ability to raise any necessary capital on reasonable terms to advance the Company’s business objectives; future metal prices; the timing and reliability of sampling and assay data; the accuracy of budgeted exploration and development costs and expenditures; the cut-off grades. While the Company considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, legal, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause actual actions, events, conditions, results, performance or achievements to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct. Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, risks related to: resource exploration and development; uncertainty in developing a commercially viable mining operation; history of net losses; lack of cash flow and assurance of profitability; the need for additional capital; uncertainty of obtaining additional funding requirements; the application of the CPTPP and arbitral decisions thereon; continued respect for the rule of law in Mexico; political risk in Mexico; crime and violence in Mexico; corruption in Mexico; treatment of environmental matters and indigenous consultation under Mexican laws and regulations; impact of environmental impact assessment requirements on the Company’s planned exploration and development activities on the Ixtaca project; uncertainty as to the outcome of arbitration; community relations; governmental regulations; risks related to mineral properties being subject to prior unregistered agreements, transfers or claims and other defects in title; changes in mining, environmental or agrarian laws and regulations and changes in the application of standards pursuant to existing laws and regulations; governmental regulations and the ability to obtain necessary licences and permits; possible dilution to present and prospective shareholders; the material risk of dilution presented by a large number of outstanding share purchase options; volatility of share price; mineral prices not supporting corporate profit; unfavourable laws and regulations; political risk in jurisdictions where the Company operates; certainty of mineral title and the outcome of litigation; political, economic and social uncertainties; community relations; uncertainty of reserves and mineralization estimates; risks related to mineral properties being subject to prior unregistered agreements, transfers or claims and other defects in title; changes in environmental laws; dependence on management and other key personnel; conflicts of interest; foreign operations; changes to taxation regimes; foreign currency fluctuations; operating hazards and risks associated with the mining industry; the ability to manage growth; competition from other mining exploration companies; lack of a dividend policy; cybersecurity risks; foreign incorporation and civil liabilities; the Company being deemed a passive foreign investment company; the relatively low trading volume of the Common Shares; impairment of exploration and evaluation assets;; accidents, labour disputes and other risks of the mining industry; availability of third party contractors; failure of equipment to operate as anticipated; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; changes in the application of standards pursuant to existing laws and regulations which may increase costs of doing business and restrict operations; and the unknown direct and indirect consequences of the COVID-19 pandemic, as well as those factors discussed under the heading “Risk Factors” in the Company’s Annual Information Form and all exhibits attached thereto. Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.

 

The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking information contained herein. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information.

 

BOARD OF DIRECTORS AND MANAGEMENT

 

Directors:

Duane Poliquin, P.Eng

Morgan Poliquin, P.Eng, Ph.D

Kevin O’Kane, P.Eng, GCB.D

Alfredo Phillips, ACT, MPA

Ria Fitzgerald, B.Com, CFA

 

Audit Committee members:

Ria Fitzgerald, B.Com, CFA

Kevin O’Kane, P.Eng, GCB.D

Alfredo Phillips, ACT, MPA

 

Compensation Committee members:

Alfredo Phillips, ACT, MPA

Ria Fitzgerald, B.Com, CFA

Kevin O’Kane, P.Eng, GCB.D

 

Nominating & Corporate Governance Committee members:

Alfredo Phillips, ACT, MPA

Kevin O’Kane, P.Eng, GCB.D

Ria Fitzgerald, B.Com, CFA

 

Management:

Duane Poliquin, P.Eng – Chair

Morgan Poliquin, P.Eng, Ph.D – Chief Executive Officer, President

Korm Trieu, CPA, CA – Chief Financial Officer, Corporate Secretary

Douglas McDonald, M.A.Sc, B.Com. – Executive Vice President

John Thomas, P.Eng, BSc., MSc. PhD – Vice President, Project Development

 

 

 

17

Exhibit 99.3

 

CERTIFICATION OF INTERIM FILINGS

 

FULL CERTIFICATE

 

Almaden Minerals Ltd.

 

I, Morgan Poliquin, Chief Executive Officer of Almaden Minerals Ltd., certify the following:

 

1.

Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”), of Almaden Minerals Ltd. (the “issuer”) for the interim period ended September 30, 2024.

 

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

 

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

 

4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

 

5.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

 

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

 

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

 

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

 

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

 

5.1

Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control-Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

5.2

ICFR – material weakness relating to design: N/A.

 

 

5.3

Limitation on scope of design: N/A

 

6.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

 

 

Date: November 1, 2024

 

“Morgan Poliquin”

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.4

 

 

CERTIFICATION OF INTERIM FILINGS

 

FULL CERTIFICATE

 

Almaden Minerals Ltd.

 

I, Korm Trieu, Chief Financial Officer of Almaden Minerals Ltd., certify the following:

 

1.

Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”), of Almaden Minerals Ltd. (the “issuer”) for the interim period ended September 30, 2024.

 

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

 

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

 

4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

 

5.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

 

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

 

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

 

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

 

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

 

5.1

Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control-Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

5.2

ICFR – material weakness relating to design: N/A.

 

 

5.3

Limitation on scope of design: N/A

 

6.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

 

 

Date: November 1, 2024

 

“Korm Trieu”

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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