Condensed Interim Consolidated Financial Statements
September 30, 2023 and 2022
Unaudited
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying unaudited condensed interim consolidated financial statements of Minera Alamos Inc. ("Minera Alamos" or the "Company") are the responsibility of management and the Board of Directors.
The unaudited condensed interim consolidated financial statements have been prepared by management on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the unaudited condensed interim consolidated financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the statement of financial position date. In the opinion of management, the unaudited condensed interim consolidated financial statements have been prepared within acceptable limits of materiality and are in accordance with International Accounting Standard 34-Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances.
Management has established processes, which are in place to provide it sufficient knowledge to support management representations that it has exercised reasonable diligence that (i) the unaudited condensed interim consolidated financial statements do not contain any untrue statement of 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 is made, as of the date of, and for the periods presented by, the unaudited condensed interim consolidated financial statements and (ii) the unaudited condensed interim consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the unaudited condensed interim consolidated financial statements.
The Board of Directors is responsible for reviewing and approving the unaudited condensed interim consolidated financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the unaudited condensed interim consolidated financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the unaudited condensed interim consolidated financial statements together with other financial information of the Company for issuance to the shareholders.
Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.
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 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 interim consolidated 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 unaudited interim consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.
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Minera Alamos Inc.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
September 30, | December 31, | ||||
2023 | 2022 | ||||
Notes | |||||
$ | $ | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | 6,573,453 | 13,153,828 | |||
Restricted cash | 31,380 | 30,781 | |||
Accounts receivable | 16 | 387,766 | 424,004 | ||
Leach pad ore inventory | 7 | 6,286,929 | 6,022,716 | ||
Work-in-process inventory | 7 | 1,055,583 | 2,789,558 | ||
Supplies inventory | 7 | 349,139 | 335,051 | ||
Prepaid and other | 2,956,057 | 2,668,761 | |||
Taxes receivable | 6,073,746 | 2,155,551 | |||
Total current assets | 23,714,052 | 27,580,249 | |||
Taxes receivable | 1,268,940 | 5,707,040 | |||
Mineral Properties and Property, Plant, and Equipment | 8, 9 | 20,015,308 | 19,995,503 | ||
44,998,300 | 53,282,792 | ||||
Liabilities | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | 16 | 2,564,870 | 3,699,024 | ||
Current portion of lease payable | 10 | 88,072 | 82,920 | ||
Deferred revenue | 7 | 1,392,956 | 5,514,069 | ||
Total current liabilities | 4,045,898 | 9,296,013 | |||
Lease payable | 10 | 222,289 | 289,046 | ||
Provision for Asset Retirement Obligation | 13 | 582,320 | 491,217 | ||
4,850,507 | 10,076,276 | ||||
Shareholders' Equity | |||||
Share capital | 11 | 105,033,540 | 104,863,540 | ||
Contributed surplus | 3,769,713 | 3,769,713 | |||
Options reserve | 12 | 4,428,534 | 2,944,704 | ||
Cumulative translation adjustment | (3,447,475) | (1,094,566) | |||
Deficit | (69,636,519) | (67,276,875) | |||
40,147,793 | 43,206,516 | ||||
44,998,300 | 53,282,792 | ||||
Basis of Presentation and Going Concern (note 2) | |||||
Work-in-process inventory and deferred revenue (note 7) | |||||
Subsequent event (note 17) | |||||
Approved by the Board: | |||||
Signed: "Bruce Durham" | Signed: "Darren Koningen" | ||||
Director | Director |
Please see accompanying notes to the consolidated financial statements
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Minera Alamos Inc.
Condensed Interim Consolidated Statements of Income and Comprehensive Income (Expressed in Canadian dollars)
For the three months | For the nine months ended | ||||
ended September 30, | September 30, | ||||
Notes | 2023 | 2022 | 2023 | 2022 | |
$ | $ | $ | $ | ||
Revenues | 4c | 1,790,245 | 9,094,324 | 11,654,580 | 21,523,592 |
Cost of sales: | |||||
Mining, processing, royalties | 1,902,114 | 4,437,463 | 9,240,925 | 9,951,559 | |
Depletion | 161,445 | - | 269,243 | - | |
2,063,559 | 4,437,463 | 9,510,168 | 9,951,559 | ||
(Loss) income from mine operations | (273,313) | 4,656,861 | 2,144,413 | 11,572,033 | |
Expenses | |||||
Depreciation | 37,329 | 26,138 | 103,501 | 65,579 | |
Accretion | 13 | 13,141 | - | 37,978 | - |
Exploration and evaluation | 8 | 2,775,423 | 1,492,271 | 3,750,597 | 2,047,652 |
Insurance | 24,854 | 20,795 | 75,083 | 62,822 | |
Interest on lease liability | 6,505 | 8,159 | 20,547 | 25,329 | |
Investor relations | 108,251 | 116,839 | 281,164 | 279,881 | |
Office and administration | 395,772 | 174,566 | 765,820 | 493,565 | |
Professional fees | 242,627 | 116,533 | 694,444 | 433,930 | |
Salaries and compensation | 16 | 396,917 | 376,100 | 1,217,033 | 951,872 |
Share-based compensation | 12, 16 | 561,282 | 295,477 | 1,483,830 | 886,431 |
Transfer agent regulatory fees | 12,030 | 10,561 | 84,111 | 107,511 | |
Travel | 51,747 | 38,761 | 146,684 | 129,550 | |
4,625,878 | 2,676,180 | 8,660,792 | 5,484,122 | ||
(Loss) income from operations | (4,899,192) | 1,980,681 | (6,516,380) | 6,087,911 | |
Other Items | |||||
FVTPL adjustment on marketable securities | 6 | - | - | - | 280,250 |
Foreign exchange loss (gain) | 430,421 | (994,702) | (3,735,315) | (964,758) | |
Other income | (356,127) | (64,193) | (421,420) | (65,228) | |
74,293 | (1,058,893) | (4,156,736) | (749,736) | ||
Net (loss) income for the period | (4,973,485) | 3,039,574 | (2,359,644) | 6,837,647 | |
Foreign currency translation | 441,481 | - | (2,352,909) | - | |
Net (loss) income and comprehensive (loss) | |||||
income for the period | (4,532,004) | 3,039,574 | (4,712,553) | 6,837,647 | |
Net Income per share: | |||||
Basic and diluted | (0.011) | 0.007 | (0.005) | 0.015 | |
Weighted average number of common shares | |||||
outstanding: | |||||
Basic and diluted | 462,242,549 | 455,938,201 | 462,005,177 | 450,633,853 |
Please see accompanying notes to the consolidated financial statements
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Minera Alamos Inc.
Condensed Interim Consolidated
Statement of Changes in Equity
(Expressed in Canadian Dollars)
Share capital | ||||||||||||||
Contributed | Options | Cummulative | Total | |||||||||||
Note | Number of shares | Amount | translation | Deficit | ||||||||||
surplus | reserve | equity | ||||||||||||
reserve | ||||||||||||||
Balance, January 1, 2022 | 446,196,353 | $ | 98,183,612 | $ | 3,711,913 | $ | 3,243,475 | $ | - | (72,886,268) | 32,252,732 | |||
Shares issued for mineral property | 11 | 500,000 | 242,500 | - | - | - | - | 242,500 | ||||||
Shares issued | 7,950,000 | 4,372,500 | - | - | - | - | 4,372,500 | |||||||
Share issue cost | - | (38,072) | - | - | - | - | (38,072) | |||||||
Options issued | 12 | - | .. | - | 886,431 | - | - | 886,431 | ||||||
Options exercised | 11, 12 | 3,037,500 | 801,000 | - | (381,000) | - | - | 420,000 | ||||||
Net income for the period | - | - | - | - | - | 6,837,647 | 6,837,647 | |||||||
Balance, September 30, 2022 | 449,733,853 | $ | 103,561,540 | $ | 3,711,913 | $ | 3,748,906 | $ | - | $ | (66,048,621) | $ | 44,973,738 | |
Balance, January 1, 2023 | 461,883,853 | $ | 104,863,540 | $ | 3,769,713 | $ | 2,944,704 | $ | (1,094,566) | $ | (67,276,875) | 43,206,516 | ||
Shares issued for mineral property | 11 | 500,000 | 170,000 | - | - | - | 170,000 | |||||||
Options issued | 12 | - | - | - | 1,483,830 | - | 1,483,830 | |||||||
Net income for the period | - | - | - | - | (2,352,909) | (2,359,644) | (4,712,553) | |||||||
Balance, September 30, 2023 | 461,883,853 | $ | 105,033,540 | $ | 3,769,713 | $ | 4,428,534 | $ | (3,447,475) | $ | (69,636,519) | $ | 40,147,793 |
Please see accompanying notes to the consolidated financial statements
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Minera Alamos Inc.
Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian dollars)
For the nine months ended September 30,
Notes | 2023 | 2022 |
$ | $ |
Cash flows from operating activities
Net income for the period | |
Adjustments to reconcile net loss to net cash flows: | |
Non-cash adjustments: | |
Shares issued for property acquisition | 8 |
Depreciation | 9 |
Accretion | 13 |
Depletion | |
Interest on lease liability | |
Share-based compensation | |
FVTPL adjustment on marketable securities | 6 |
Unrealized foreign exchange gain | |
Changes in non-cash operating adjustments: | |
Accounts receivable | |
Prepaid expenses | |
Inventory | |
Taxes receivable | |
Accounts payable and accrued liabilities | |
Deferred revenue | |
Net cash (used in) provided from operating activities | |
Cash flows from investing activities | |
Acquisition of property plant and equipment | 9 |
Proceeds on sale of marketable securities
Restricted cash
Net cash (used in) provided from investing activities
Cash flows from financing activities
(2,359,644) 6,837,647
170,000 | 242,500 |
103,501 | 132,029 |
37,798 | - |
269,243 | - |
20,547 | 25,329 |
1,483,830 | 886,431 |
- 280,250
(4,477,395)-
(4,751,941) 8,404,186
36,238 (79,818)
(287,296) (543,667)
1,455,674 (2,182,757)
519,905 (2,654,314)
(1,134,153) 210,295
(4,121,113)
(8,282,686) 3,944,032
(350,235) (2,997,816)
-
2,056,150
59975
(349,636) (941,591)
Issuance of common shares | - | 4,372,500 | |
Share issue costs | (82,152) | (38,072) | |
Lease payments | 10 | - | (74,480) |
Exercise of options | 12 | - | 420,000 |
Net cash (used in) provided from financing activities | (82,152) | 4,679,948 | |
Effect of changes in foreign exchange | 2,134,099 | - | |
Net (decrease) / increase in cash and cash equivalents | (6,580,375) | 7,682,389 | |
Cash and cash equivalents, beginning of period | 13,153,828 | 7,042,790 | |
Cash and cash equivalents, end of period | 6,573,453 | 14,725,179 |
Please see accompanying notes to the consolidated financial statements
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Minera Alamos Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the periods ended September 30, 2023 and 2022
1. GENERAL INFORMATION
Minera Alamos Inc. (the "Company") is a junior mining and exploration company engaged directly and indirectly through its subsidiaries in the acquisition, exploration, and development of mineral properties located in Mexico.
These consolidated financial statements include the accounts of the Company, its Mexican subsidiaries Minera Alamos de Sonora S.A. de C.V., Molibdeno Los Verdes S.A. de C.V., Cobre 4H S.A. de C.V., Minera Mirlos, S. de R.L. de C.V., and Corex Global S de RL de SV. The Company's head office is located at 55 York Street East, Suite 402, Toronto, Ontario, Canada, M5J 1R7.
2. BASIS OF PRESENTATION AND GOING CONCERN
The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current development and exploration programs will result in profitable mining operations. This is dependent upon the discovery of economically recoverable reserves, the ability of the Company to raise financing, the achievement of profitable operations or, alternatively, upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write-downs of the carrying values.
These condensed interim consolidated financial statements have been prepared on a basis which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. The Company's ability to continue to do so is dependent on the ability of the Company to raise equity financing and the attainment of profitable operations. There are no assurances that the Company will be successful in achieving these goals.
There is no guarantee that the Company won't incur further losses going forward as the Company pursues its ramp up of operations and exploration activities on its other properties. These material uncertainties may cast significant doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.
3. STATEMENT OF COMPLIANCE
These condensed interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Accounting Standard 34 (IAS 34) Interim Financial Reporting. These condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022.
The policies applied in these condensed interim consolidated financial statements are based on IFRS issued and outstanding as of November 29, 2023, the date the Board of Directors approved these condensed interim consolidated financial statements.
The accounting policies applied in these condensed interim consolidated financial statements are consistent with those applied in the preparation of the Company's annual consolidated financial statements for the year ended December 31, 2022.
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Minera Alamos Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the periods ended September 30, 2023 and 2022
4. SIGNIFICANT ACCOUNTING POLICIES
- Basis of measurement
These consolidated financial statements are presented in Canadian dollars and are prepared on the historical cost basis, modified by the measurement at fair value of certain financial instruments.
b) Adoption of New Accounting Policy and Restated Comparative Information
During the first quarter of 2022, the Company adopted Amendments to International Accounting Standard ("IAS") 16, Property, Plant & Equipment, Proceeds Before Intended Use ("IAS 16"). The amended standard prohibits the Company from deducting any proceeds from selling items produced from the cost of building an item of mineral interest, plant, and equipment, while bringing that asset to be capable of operating in the manner intended by management. The Company adopted the accounting policy retrospectively with respect to applicable transactions occurring on or after the earliest period presented herein, being January 1, 2021. With the adoption of the amended standard, pre-commercial production sales of gold and silver produced and sold, and related costs while bringing a mine into a condition necessary for it to be capable of operating in the manner intended by management, are recognized in profit or loss in accordance with applicable standards to the extent those sales occurred on or after January 1, 2021. The entity measures the cost of those items applying the measurement requirements of IAS 2, Inventories ("IAS 2"). Prior to adoption of this amendment, all costs and proceeds from sale were capitalized to mineral properties and property, plant, and equipment.
c) Revenue recognition
The Company earns revenue primarily from the sale of gold. Other metals, such as silver, produced as part of the extraction process are considered to be by-products arising from the production of gold. Revenue relating to the sale of metals is recognized when control of the metal is transferred to the customer in an amount that reflects the consideration the Company expects to receive in exchange for the metal.
When considering whether the Company has satisfied its performance obligation, it considers performance indicators of the transfer of control, which include, but are not limited to, whether the Company has a present right to payment; the customer has legal title to the metal; the Company has transferred physical possession of the metal to the customer; and the customer has the significant risks and rewards of ownership of the metal.
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Minera Alamos Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the periods ended September 30, 2023 and 2022
4. SIGNIFICANT ACCOUNTING POLICIES (Continued)
- Inventory
The Company predominantly produces gold. The recovery of gold from the ore is achieved through a heap leach process. Costs are added to leach pad inventory based on current mining costs, including applicable overhead, depletion, and depreciation relating to mining operations. Costs are removed from leach pad inventory as ounces are recovered, based on the average cost per ounce of recoverable gold stacked and are carried as work-in-process inventory as the recovered gold undergoes the final stages of refinement. The costs of extracting the gold from the ore on the leach pads and refining the recovered gold are included in work-in-process inventory.
The value of all production inventories includes direct production costs and attributable overhead incurred to bring the materials to their current point in the processing cycle. All inventories are valued at the lower of cost and net realizable value, with net realizable value determined with reference to market prices, less estimated future production costs to convert inventories into saleable form. If carrying value exceeds net realizable value, a write-down is recognized. The write-down may be reversed in a subsequent period if the circumstances which caused the write-down no longer exists.
Quantities of gold ore are assessed primarily through surveys and assays. Certain estimates, including expected metal recoveries, are calculated using available industry, engineering, and scientific data, and are periodically reassessed, taking into account technical analysis and historical performance.
e) Accounting standards and interpretations effective in future periods
IAS 1, Presentation of Financial Statements ("IAS 1") and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors ("IAS 8") were amended in January 2020 to refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The amendments are effective for annual reporting periods beginning on or after November 1, 2023. Earlier adoption is permitted.
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Minera Alamos Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the periods ended September 30, 2023 and 2022
4. SIGNIFICANT ACCOUNTING POLICIES (Continued)
f) Property, Plant, and Equipment
Property, Plant, and Equipment is carried at cost, less accumulated depreciation and accumulated impairment losses. The cost of an item of equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. An item of property, plant, or equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in the consolidated statement of income (loss) and comprehensive income (loss).
Where an item of property, plant, and equipment comprises major components with different useful lives, the components are accounted for as separate items of equipment. Expenditures incurred to replace a component of an item of equipment that is accounted for separately, are capitalized. The Company provides for depreciation of its equipment at the following annual rates:
Mineral property and project costs | - Units of production based on mineral resource estimate |
Mining equipment | - 5 to 10 years straight line basis |
Office equipment | - 20% to 45% declining balance and 10 years straight line basis |
Vehicles | - 30% declining balance and 4 years straight line basis |
Leasehold improvements | - Lesser of 5 years or lease term, straight line basis |
Right-of-use assets | - Lesser of expected useful life or the lease term (including |
expected renewal periods), straight line basis |
g) Mineral properties and exploration and evaluation costs
The Company expenses all costs relating to the acquisition of, exploration for, and development of mineral properties in the exploration stage. Such costs include, but are not limited to, geological, geophysical studies, exploratory drilling, and sampling. Once a project has been established as commercially viable and technically feasible, related development expenditures are capitalized; this includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs that give rise to a future benefit. During the prior year, the Company changed its judgment of the stage of the project and prospectively, began to capitalize expenditures incurred on the Santana project.
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Minera Alamos Inc. published this content on 29 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2023 03:46:14 UTC.