HELIOSTAR METALS LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
SEPTEMBER 30, 2023, AND 2022
HELIOSTAR METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Presented in Canadian Dollars)
Note | September 30, 2023 | March 31, 2023 | |
$ | $ | ||
Assets | |||
Current | |||
Cash | 1,016,556 | 4,129,232 | |
Short-term investments | 5 | 28,750 | 28,750 |
Marketable securities | 6 | - | 30,000 |
Amounts receivable | 76,458 | 45,598 | |
Prepaid amounts and advances | 7 | 1,712,455 | 2,331,552 |
2,834,219 | 6,565,132 | ||
Non-current | |||
Long-term prepaid amounts | 7 | 50,367 | 71,081 |
Exploration and evaluation assets | 8 | 25,955,874 | 25,724,527 |
Equipment | 9 | 1,249,102 | 1,327,062 |
27,255,343 | 27,122,670 | ||
30,089,562 | 33,687,802 | ||
Liabilities | |||
Current | |||
Accounts payable and accrued liabilities | 393,809 | 1,091,275 | |
Due to related parties | 11 | - | 195,635 |
393,809 | 1,286,910 | ||
Non-current | |||
Long-term liabilities | 4 | 174,120 | 168,717 |
Reclamation and closure cost provisions | 12 | 375,932 | 187,898 |
Consideration payable | 4 | 2,447,896 | 2,308,246 |
2,997,948 | 2,664,861 | ||
Total Liabilities | 3,391,757 | 3,951,771 | |
Shareholders' equity | |||
Share capital | 13 | 82,633,629 | 76,820,382 |
Accumulated other comprehensive income | 282,795 | 282,795 | |
Reserves | 13 | 10,590,615 | 9,136,749 |
Deficit | (66,809,234) | (56,503,895) | |
26,697,805 | 29,736,031 | ||
30,089,562 | 33,687,802 |
Nature of operations and continuance of operations (Note 1)
Subsequent events (Note 16)
These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on November 15, 2023. They are signed on the Company's behalf by:
/s/ Jacques Vaillancourt, Director | /s/ Ken Booth, Director |
See notes to the condensed consolidated interim financial statements | 2 |
HELIOSTAR METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Presented in Canadian Dollars)
Three months ended | Six months ended | |||
September 30, | September 30 | |||
Note | 2023 | 2022 | 2023 | 2022 |
Exploration and evaluation
Exploration expenditures
General and administrative
Accretion of provision for reclamation and closure
Depreciation Directors' fees Insurance
Investor relations and marketing Management fees
Office operations Professional fees Regulatory fees Rent
Share-based compensation
Transfer agent Travel and promotion
8 | $ | 4,284,878 | $ | 141,149 | $ | 7,235,309 | $ | 508,881 |
$ | 4,228 | $ | - | $ | 8,456 | $ | - | |
9 | 38,980 | 7,211 | 77,960 | 14,421 | ||||
11 | 14,750 | 22,062 | 29,500 | 44,125 | ||||
16,436 | 13,231 | 30,388 | 29,444 | |||||
222,949 | 142,999 | 944,160 | 321,745 | |||||
11 | 104,250 | 104,250 | 208,500 | 208,500 | ||||
135,511 | 130,951 | 263,048 | 245,598 | |||||
93,654 | 68,490 | 167,717 | 106,640 | |||||
32,053 | 11,243 | 48,265 | 19,764 | |||||
6,682 | 6,682 | 13,364 | 13,364 | |||||
11, 12 | 543,870 | 155,637 | 965,335 | 340,617 | ||||
(c),(e) | ||||||||
3,952 | 3,185 | 9,395 | 6,065 | |||||
7,587 | 1,277 | 23,036 | 2,588 | |||||
$ | 1,224,902 | $ | 667,218 | $ | 2,789,124 | $ | 1,352,871 |
Loss before the undernoted | (5,509,780) | (808,367) | (10,024,433) | (1,861,752) | |
Other income / (expense) | |||||
Foreign exchange loss | (410,316) | (34,430) | (143,788) | (72,098) | |
Interest income | 8,905 | 184 | 18,047 | 184 | |
Contingent payable revaluation loss | (121,197) | - | (139,650) | - | |
Changes in fair value of marketable securities | 6 | - | (13,750) | - | (68,750) |
Loss from sale of marketable securities | (5,515) | - | (15,515) | - | |
(528,123) | (47,996) | (280,906) | (140,664) |
Loss and Comprehensive loss for the period
Basic and diluted loss per share
Weighted average number of common shares outstanding (basic and diluted)
$ (6,037,903) $ (856,363) $ (10,305,339) $ (2,002,416)
$ | (0.04) | $ | (0.02) | $ | (0.07) | $ | (0.04) |
166,692,636 50,734,818 147,773,612 46,901,641
See notes to the condensed consolidated interim financial statements | 3 |
HELIOSTAR METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Presented in Canadian Dollars)
Share Capital | |||||||||||
Number of | Accumulated | Total | |||||||||
Amount | Reserves | Comprehensive | Deficit | Shareholders' | |||||||
Shares | |||||||||||
Loss | Equity | ||||||||||
Balance, March 31, 2022 | 43,026,340 | $ | 54,732,184 | $ | 7,237,729 | $ | 282,795 | $ | (51,972,189) | $ | 10,280,519 |
Private placement | 12,020,000 | 3,005,000 | - | - | - | 3,005,000 | |||||
Share issuance costs - cash | - | (41,842) | - | - | - | (41,842) | |||||
Share issuance costs - warrants | - | (5,078) | 5,078 | - | - | - | |||||
Share-based compensation | - | - | 340,617 | - | - | 340,617 | |||||
Loss for the period | - | - | - | - | (2,002,416) | (2,002,416) | |||||
Balance, September 30, 2022 | 55,046,340 | $ | 57,690,264 | $ | 7,583,424 | $ | 282,795 | $ | (53,974,605) | 11,581,878 | |
Balance, March 31, 2023 | 147,773,612 | $ | 76,820,382 | $ | 9,136,749 | $ | 282,795 | $ | (56,503,895) | $ | 29,736,031 |
Private placement | 18,919,024 | 6,621,658 | 378,380 | - | - | 7,000,038 | |||||
Share issuance costs - cash | - | (698,260) | - | - | - | (698,260) | |||||
Share issuance costs - warrants | - | (17,328) | 17,328 | - | - | - | |||||
Share issuance costs - options | - | (92,823) | 92,823 | - | - | - | |||||
Share-based compensation | - | - | 965,335 | - | - | 965,335 | |||||
Loss for the period | - | - | - | - | (10,305,339) | (10,305,339) | |||||
Balance, September 30, 2023 | 166,692,636 | $ | 82,633,629 | $ | 10,590,615 | $ | 282,795 | $ | (66,809,234) | $ | 26,697,805 |
See notes to the condensed consolidated interim financial statements | 4 |
HELIOSTAR METALS LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023, AND 2022 (Presented in Canadian Dollars)
Six months ended | ||||
September 30 | ||||
2023 | 2022 | |||
Cash provided by (used in): | ||||
Operating activities | ||||
Loss for the period | $ | (10,305,339) | $ | (2,002,416) |
Items not affecting cash: | ||||
Accretion of provision for reclamation and closure | 8,456 | - | ||
Depreciation | 77,960 | 14,421 | ||
Share-based payments | 965,335 | 340,617 | ||
Fair value loss on marketable securities | - | 68,750 | ||
Loss from sale on marketable securities | 15,515 | - | ||
Unrealized foreign exchange | 5,403 | - | ||
Consideration payable revaluation | 139,650 | - | ||
Net change in non-cash working capital | ||||
Amounts receivable | (30,860) | 5,806 | ||
Prepaid amounts and advances | 639,811 | (45,422) | ||
Accounts payable and accrued liabilities | (697,466) | (1,064,058) | ||
Reclamation bond | - | 7,407 | ||
Due to related parties | (195,635) | (13,128) | ||
$ | (9,377,170) | $ | (2,688,023) | |
Investing activities | ||||
Acquisition of exploration and evaluation assets | (51,769) | (144,671) | ||
Proceeds from sale of marketable securities | 14,485 | - | ||
$ | (37,284) | $ | (144,671) | |
Financing activities | ||||
Proceeds from share issuance, net of share issue costs | 6,301,778 | 2,963,158 | ||
$ | 6,301,778 | $ | 2,963,158 | |
Change in cash | (3,112,676) | 130,464 | ||
Cash, beginning of the period | $ | 4,129,232 | $ | 1,183,046 |
Cash, end of the period | $ | 1,016,556 | $ | 1,313,510 |
Schedule of Non-cash Investing and Financing Transactions | ||||
Residual value of warrants | $ | 378,380 | $ | - |
Fair value of broker's warrants | 17,328 | 5,078 | ||
Change in estimated reclamation | 179,578 | - | ||
Cash paid during the period for interest | $ | - | $ | - |
Cash paid during the period for taxes | $ | - | $ | - |
See notes to the condensed consolidated interim financial statements | 5 |
HELIOSTAR METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023, AND 2022
(Presented in Canadian Dollars)
1. NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS
Heliostar Metals Ltd. (the "Company") is engaged in the acquisition, exploration, and development of mineral properties in North America. The Company is incorporated and domiciled in Canada under the Business Corporations Act (British Columbia), and its registered office is Suite 900, 885 West Georgia Street, Vancouver, BC, V6C 3H1. The Company is trading on the TSX Venture Exchange (TSX-V) under the trading symbol "HSTR". The Company is also trading on the OTCQX under the trading symbol "HSTXF".
These condensed consolidated interim financial statements (the "Financial Statements") have been prepared on the basis of the accounting principles applicable to a going concern, which assumes the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.
The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of exploration and evaluation expenditures is dependent upon several factors. These include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from the disposition of mineral properties.
The Company has incurred operating losses since inception, is unable to self-finance operations, and has significant cash requirements to meet its overhead and maintain its mineral interests.
The Company's ability to continue as a going concern is dependent on the Company's ability to obtain additional debt or equity financing to successfully advance the exploration and development of mineral property interests in its exploration portfolio and to be able to derive material proceeds from the sale or divestiture of those properties and/or other assets, such as sale proceeds, royalty rights and equity interests. These Financial Statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. These material uncertainties may cast significant doubt about the Company's ability to continue as a going concern.
Rounded to 000's | September 30, 2023 | March 31, 2023 | ||
Working capital | $ | 2,440,000 | $ | 5,278,000 |
Accumulated deficit | $ | (66,902,000) | $ | (56,504,000) |
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HELIOSTAR METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023, AND 2022
(Presented in Canadian Dollars)
2. BASIS OF PREPARATION - STATEMENT OF COMPLIANCE
These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting and related IFRS Interpretations Committee ("IFRICs"), as issued by the International Accounting Standards Board ("IASB"). The Financial Statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss and fair value through other comprehensive income, which are stated at their fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting except for cash flow information.
Basis of consolidation
These financial statements incorporate the financial statements of the Company and the entities controlled by the Company, which consist of:
Proportion of | Proportion of | |||
ownership | ||||
ownership | ||||
Name of the company | Place of incorporation | interest | Principal activity | |
interest | ||||
March 31, | ||||
June 30, 2023 | ||||
2023 | ||||
Heliostar Metals USA Inc. | Nevada, USA | 100% | 100% | Mineral exploration |
Heliostar Metals Alaska Inc. | Alaska, USA | 100% | 100% | Mineral exploration |
Heliodor Metals Limited | British Columbia, Canada | 100% | 100% | Holding company |
Heliodor Metals Mexico S.A. de C.V. | Chihuahua, Mexico | 100% | 100% | Mineral exploration |
Aurea Mining Inc. | British Columbia, Canada | 100% | 0% | Holding company |
Minera Aurea S.A. de C.V. | Guerrero, Mexico | 100% | 0% | Mineral exploration |
Heliostar Metals S.A. de C.V. | Chihuahua, Mexico | 100% | 0% | Mineral exploration |
Since these Financial Statements do not include all disclosures required by IFRS for annual consolidated financial statements, they should be read in conjunction with the Company's audited annual consolidated financial statements for the year ended March 31, 2023.
The preparation of Financial Statements in accordance with IAS 1 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.
The preparation of the Financial Statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, profit and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.
7
HELIOSTAR METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023, AND 2022
(Presented in Canadian Dollars)
3. MATERIAL ACCOUNTING POLICIES DISCLOSURE INFORMATION
The accounting policies and methods of computation followed in preparing these Financial Statements are the same as those followed in preparing the most recent audited annual consolidated financial statements. For a complete summary of significant accounting policies, please refer to the Company's audited annual consolidated financial statements for the year ended March 31, 2023. Certain comparative figures may have been reclassified to conform to the current period's presentation.
The following are the critical judgments and areas involving estimates, that management have made in the process of applying the Company's accounting policies and that have the most significant effect on the amount recognized in the Financial Statements.
-
Key sources of estimation uncertainty
Share-based payments
The fair value of stock options granted is measured using the Black-Scholes option pricing model, which was created for use in estimating the fair value of freely tradable, fully transferable options. The Company's stock options have characteristics significantly different from those of traded options, and changes in the highly subjective input assumptions can materially affect the calculated values. The fair value of stock options granted using the Black-Scholes option pricing model do not necessarily provide a reliable measure of the fair value of the Company's stock option awards.
Income taxes
Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by tax authorities. Where the outcome of these tax- related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such a determination is made.
Estimated useful lives and depreciation of equipment
Depreciation of equipment is dependent upon estimates of useful lives based on management's judgment.
Reclamation and closure cost provisions
The Company's provisions for reclamation and closure costs represent management's best estimate of the present value of the future cash outflows required to settle the liabilities, which reflects estimates of future costs, inflation, movements in foreign exchange rates, and assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting the future cash outflows. Changes in the above estimates and assumptions can result in changes to the provisions recognized by the Company.
Fair value of assets and liabilities acquired
The cost of acquiring exploration and evaluation assets is capitalized and represents their fair value at the date of acquisition. The carrying values of Aurea Mining acquired by the Company are subject to estimates relating to the fair value of other assets and liabilities of Aurea Mining at the acquisition date.
Contingent consideration
The Company's accounting policy for contingent consideration involves making estimates and assumptions regarding future events or circumstances. These include assessing probabilities and timing of payments and applying discount rates to cash flows. These estimates are subject to change with new information.
8
HELIOSTAR METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023, AND 2022
(Presented in Canadian Dollars)
3. MATERIAL ACCOUNTING POLICIES DISCLOSURE INFORMATION (Continued)
-
Key sources of judgment uncertainty
Going concern evaluation
As discussed on note 1, these Financial Statements have been prepared under the assumptions applicable to a going concern. If the going concern assumption were not appropriate for these Financial Statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the statement of financial position classifications used, and such adjustments could be material.
The Company reviews the going concern assessment at the end of each reporting period. There were no material changes to the assessment as at September 30, 2023.
Determination of functional currency
In accordance with IAS 21, The Effects of Changes in Foreign Exchange Rates, management determined that the functional currency of the Company and its wholly owned subsidiaries is the Canadian dollar. Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.
Exploration and evaluation assets
Management reviews the carrying value of the Company's exploration and evaluation assets on a quarterly basis or when there are indications that the carrying amount may not be recovered. The assessment of potential impairment involves judgment and considers various factors such as the Company's market capitalization, fluctuations in metal prices, property plans, and the results of exploration activities conducted so far. This evaluation also considers changes in the market or business environment, events that have affected the asset, and information obtained from internal reporting to determine if any indications of impairment exist.
Impairment
The Company's tangible and intangible assets are reviewed for an indication of impairment at each statement of financial position date. If an indication of impairment exists, the asset's recoverable amount is estimated.
An impairment loss is recognized when the carrying amount of an asset, or its cash-generating unit ("CGU"), exceeds its recoverable amount. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Impairment losses are recognized in profit and loss for the period.
The recoverable amount is the greater of the asset's fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined by the CGU to which the asset belongs.
Non-monetary assets are tested for impairment when events or changes in circumstance indicate that the carrying amount may not be recoverable. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset). An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The Company evaluates impairment losses for potential reversals when events or circumstances warrant such consideration.
9
HELIOSTAR METALS LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023, AND 2022
(Presented in Canadian Dollars)
3. MATERIAL ACCOUNTING POLICIES DISCLOSURE INFORMATION (Continued)
-
Key sources of judgment uncertainty (Continued)
Reversal of impairment
An impairment loss is reversed if there is an indication that there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. An impairment loss with respect to goodwill is never reversed.
Acquisitions
On acquisition of a set of assets and liabilities, management applies judgment in determining whether the set acquired includes the inputs and processes applied to those inputs necessary to constitute a business as defined in IFRS 3 - Business Combinations. Transactions accounted for as business combinations may result in goodwill, or a bargain purchase gain, and transaction costs are expensed. Transactions accounted for as asset acquisitions do not result in goodwill, or a bargain purchase gain, and transaction costs are capitalized as part of the assets acquired.
Based on an assessment of the relevant facts and circumstances, the Company concluded that the acquisition of Aurea Mining Inc. (Note 4) met the criteria for accounting as an asset. - New accounting pronouncements
In the current year, the Company has applied the below amendments to IFRS Standards and interpretations issued by the IASB that were effective for annual periods that begin on or after January 1, 2023. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgments- Disclosure of Accounting Policies
The amendments change the requirements in IAS 1 regarding disclosure of accounting policies. The amendments replace all instances of the term "significant accounting policies" with "material accounting policy information." Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make based on those financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events, or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material. The International Accounting Standards Board ("IASB") has also developed guidance and examples to explain and demonstrate the application of the 'four-step materiality process' described in IFRS Practice Statement 2.
The amendments were applied effective April 1, 2023, and did not have a material impact on the Company's consolidated financial statements.
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Heliostar Metals Ltd. published this content on 22 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2023 03:20:21 UTC.