Highbank Resources : FS 2024 - 3Q

HIGHBANK RESOURCES LTD.

Condensed Interim Financial Statements For the period ended September 30, 2024 Unaudited - Expressed in Canadian Dollars

NOTICE TO READER

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

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

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

HIGHBANK RESOURCES LTD.

Condensed Interim Statements of Financial Position (Unaudited - Expressed in Canadian dollars)

		September 30,	December 31,
	Notes		2024		2023
ASSETS
Current assets
Cash		$	2,543	$	11,022
Accounts receivable			213		270
Due from related parties	10		1,704		1,704
Prepaid expenses			7,307		5,932
			11,767		18,928
Non-current assets
Equipment			517		571
Reclamation bond	5		189,500		189,500
Exploration and evaluation assets	4		170,485		167,985
			360,502		358,056
TOTAL ASSETS		$	372,269	$	376,984
LIABILITIES
Current liabilities
Trade payables and accrued liabilities	6	$	3,687,377	$	3,530,530
Promissory notes	9		3,550,639		3,363,776
Due to related parties	10		757,983		654,984
Production loan	9		900,000		900,000
Convertible debentures	9		4,000,000		4,000,000
			12,895,999		12,449,290
Non-current liabilities
Reclamation obligation	5		94,750		94,750
			94,750		94,750
TOTAL LIABILITIES			12,990,749		12,544,040
SHAREHOLDERS' DEFICIT
Share capital	7		17,575,045		17,572,545
Contributed surplus	8		1,575,152		1,575,152
Deficit			(31,762,027)		(31,308,103)
TOTAL SHAREHOLDERS' DEFICIT			(12,618,480)		(12,167,056)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT		$	372,269	$	376,984

Nature and continuance of operations (Note 1)

Commitments (Notes 4, 5, and 10)

Contingency (Note 4)

Approved on behalf of the Board:

"Gary Musil"			"Mark Luchinski"
Director			Director
	See accompanying notes to the financial statements

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HIGHBANK RESOURCES LTD.

Condensed Interim Statements of Comprehensive Loss (Unaudited - Expressed in Canadian dollars)

		Three months ended September 30,	Nine months ended September 30,
	Notes		2024		2023		2024		2023
Expenses
Depreciation		$	18	$	21	$	55	$	64
Consulting fees	10		7,500		7,500		22,500		22,500
Interest and bank charges			66,388		53,514		167,771		149,617
Management fees	10		15,000		15,000		45,000		45,000
Office and miscellaneous			(358)		1,368		4,136		5,280
Professional fees			3,000		10,000		7,691		44,248
Regulatory and transfer agent			3,213		8,113		11,802		16,530
Rent			2,433		2,340		7,301		7,020
Shareholder information			-		2,530		700		2,860
Travel and promotion			-		211		105		443
			97,194		100,597		267,061		293,562
Other items
Interest on promissory notes, convertible
debentures, and production loan	9		62,288		319,000		186,863		916,345
Net and comprehensive loss for the period		$	159,482	$	419,597	$	453,924	$	1,209,907
Weighted average number of common
shares outstanding (basic and diluted)			23,412,381		22,548,251		23,167,816		22,434,300
Basic and diluted net loss per share		$	(0.01)	$	(0.02)	$	(0.02)	$	(0.05)

See accompanying notes to the financial statements

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HIGHBANK RESOURCES LTD.

Condensed Interim Statements of Changes in Shareholders' Deficit (Unaudited - Expressed in Canadian dollars)

	Share capital
							Equity
					Share	component of
	Number of			subscription	convertible	Contributed
	shares		Amount		receivable	debenture		Surplus	Deficit	Total
Balance at January 1, 2023	21,917,826	$	17,538,795	$	(6,650)	$	1,207,205	$	1,575,152	$ (30,844,893)	$ (10,530,391)
Loss for the period	-		-		-		-		-	(1,209,907)	(1,209,907)
Shares issued for exploration and evaluation asset	1,000,000		30,000		-				-	-	30,000
Balance at September 30, 2023	22,917,826	$	17,568,795	$	(6,650)	$	1,207,205	$	1,575,152	$ (32,054,800)	$ (11,710,298)
Balance at January 1, 2024	23,167,816	$	17,572,545	$	(6,650)	$	-	$	1,575,152	$ (31,308,103)	$ (12,167,056)
Loss for the period	-		-		-		-		-	(453,924)	(453,924)
Shares issued for exploration and evaluation asset	250,000		2,500		-		-		-	-	2,500
Balance at September 30, 2024	23,417,816	$	17,575,045	$	(6,650)	$	-	$	1,575,152	$ (31,762,027)	$ (12,618,480)

See accompanying notes to the financial statements

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HIGHBANK RESOURCES LTD.

Condensed Interim Statements of Cash Flows (Unaudited - Expressed in Canadian dollars)

	Nine months ended September 30,
		2024		2023
Operating activities
Loss for the period	$	(453,924)	$	(1,209,907)
Adjustments for non-cash items:
Depreciation		55		64
Accrued interest and accretion		186,863		766,344
Changes in non-cash working capital items:
Accounts receivable		57		72
Prepaid expenses		(1,375)		(1,461)
Trade payables and accrued liabilities		156,846		248,168
Net cash flows used in operating activities		(111,478)		(196,720)
Financing activities
Advances from (repayment to) related parties		100,499		69,075
Net cash flows provided by financing activities		102,999		69,075
(Decrease) increase in cash		(8,479)		(127,645)
Cash, beginning		11,022		146,358
Cash, ending	$	2,543	$	18,713

See accompanying notes to the financial statements

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HIGHBANK RESOURCES LTD.

Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian dollars)

For the period ended September 30, 2024

1. Nature and continuance of operations
   Highbank Resources Ltd. (the "Company") is incorporated under the laws of the Province of British Columbia, Canada, and its principal activity is the acquisition and exploration of mineral properties in
   Canada. The Company's shares are traded on the TSX Venture Exchange ("TSX-V") under the symbol "HBK".
   The corporate office and principal place of business of the Company is 800 West Pender Street, Suite 615, Vancouver, British Columbia, Canada, V6C 2V6.
   These financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at September 30, 2024, the Company has a working capital deficiency of $12,884,234, a deficit of $31,765,027, has not advanced its property to commercial production, and is not able to finance day to day activities through operations. This material uncertainty raises significant doubt regarding the
   Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent upon the successful results from its mineral property exploration and development activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management intends to finance operating costs over the next twelve months with loans from directors and from companies controlled by directors, loans from non-related parties, and/or private placement of common shares.
   The Company's business financial condition and results of operations may be further negatively affected by economic and other consequences from military action against Ukraine and the sanctions imposed in response. While the Company expects any direct impacts, of the pandemic and the war in the Ukraine, to the business to be limited, the indirect impacts on the economy and on the mining industry and other industries in general could negatively affect the business and may make it more difficult for it to raise equity or debt financing. There can be no assurance that the Company will not be impacted by adverse consequences that may be brought about on its business, results of operations, financial position and cash flows in the future.
2. Material accounting policies and basis of preparation
   The financial statements were authorized for issue on November 29, 2024 by the directors of the Company.
   Statement of compliance to International Financial Reporting Standards
   The financial statements of the Company have been prepared in accordance with IFRS Accounting
   Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and IFRIC Interpretations of the IFRS Interpretations Committee ("IFRIC"). Therefore, these financial statements comply with International Accounting Standard ("IAS") 34 "Interim Reporting".
   Basis of preparation
   The financial statements of the Company have been prepared on an accrual basis, except for cash flow information, and are based on historical costs, except for financial instruments measured at fair value. The financial statements are presented in Canadian dollars unless otherwise noted.

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HIGHBANK RESOURCES LTD.

Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian dollars)

For the period ended September 30, 2024

2. Material accounting policies and basis of preparation (cont'd)

Significant accounting judgments, estimates and assumptions

The preparation of the Company's financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Significant estimates made in the preparation of these financial statements include the valuation of the reclamation obligation. Significant judgments include assessment of going concern assumption and assessment of any impairment indicators for its exploration and evaluation assets in accordance with IFRS 6.

Foreign currency translation

The financial statements are presented in Canadian dollars which is the Company's functional and presentation currency.

Exploration and evaluation expenditures

The Company is in the exploration stage in respect to its exploration and evaluation assets. Pre-exploration costs are expensed in the year in which they are incurred.

Once the legal right to explore a property has been acquired, costs directly related to exploration and evaluation expenditures are recognized and capitalized, in addition to the acquisition costs. These direct expenditures include costs such as materials used, geological and geophysical evaluation, surveying costs, drilling costs, payments made to contractors and depreciation on property and equipment during the exploration phase. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year in which they occur.

Where the Company has entered into option agreements for the acquisition of an interest in exploration and evaluation assets which provided for periodic payments, such amounts unpaid are not recorded as a liability when they are payable entirely at the Company's discretion. Although the Company has taken steps to verify title to the exploration and evaluation assets in which it has an interest, these procedures do not guarantee the Company's title. The exploration and evaluation assets may be subject to prior undetected agreements or transfers and title may be affected by such defects. Once the technical feasibility and commercial viability of extracting the mineral resource has been determined, the property is considered to be a mine under development and is classified as "property and equipment". Exploration and evaluation assets are also tested for impairment before the assets are transferred to development properties.

When a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries, are written-off to profit or loss.

The Company assesses exploration and evaluation assets for impairment at each reporting date.

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HIGHBANK RESOURCES LTD.

Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian dollars)

For the period ended September 30, 2024

2. Material accounting policies and basis of preparation (cont'd)

Provision for environmental rehabilitation

The Company recognizes liabilities for legal or constructive obligations associated with the retirement of exploration and evaluation assets, property and equipment. The net present value of future rehabilitation costs is capitalized to the related asset along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value.

The Company's estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to the related assets with a corresponding entry to the rehabilitation provision.

The increase in the provision due to the passage of time is recognized as interest expense.

Share-based payment

The Company operates an employee stock option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share- based payment to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the contributed surplus. The fair value of options is determined using a Black-Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. All equity-settled share-based payment is reflected in contributed surplus, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital, adjusted for any consideration paid. If the options expire unexercised, the related amount remains in contributed surplus.

Where the terms and conditions of options are modified before they vest, the changes in fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Financial instruments

i. Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

The Company has designated its cash as FVTPL which is measured at fair value. Due from related parties and reclamation bond are classified as and measured at amortized cost. Trade payables and accrued liabilities, promissory notes, production loan, convertible debenture, and amounts due to related parties are classified as and measured at amortized cost.

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HIGHBANK RESOURCES LTD.

Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian dollars)

For the period ended September 30, 2024

2. Material accounting policies and basis of preparation (cont'd)

Financial instruments (cont'd)

ii. Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss in the statements of comprehensive income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the statements of comprehensive income (loss) in the period in which they arise.

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in profit or loss in the statements of comprehensive income (loss), as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

1. Derecognition Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss in the statements of comprehensive income (loss).

Compound financial instruments

Compound financial instruments issued by the Company comprise convertible debentures that can be converted into shares of the Company at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognized initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition. Interest, dividends, losses and gains relating to the financial liability are recognized in profit or loss. If the conversion option is exercised, the carrying amount of the liability and the equity component of the compound financial instrument is transferred to share capital.

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