This Quarterly Report on Form 10-Q filed by Red Metal Resources Ltd. contains
forward-looking statements. These are statements regarding financial and
operating performance and results and other statements that are not historical
facts. The words "expect," "project," "estimate," "believe," "anticipate,"
"intend," "plan," "forecast," and similar expressions are intended to identify
forward-looking statements. Certain important risks could cause results to
differ materially from those anticipated by some of the forward-looking
statements. Some, but not all, of these risks include, among other things:
·general economic conditions, because they may affect our ability to raise
·our ability to raise enough money to continue our operations;
·changes in regulatory requirements that adversely affect our business;
·changes in the prices for minerals that adversely affect our business;
·political changes in Chile, which could affect our interests there; and/or
·other uncertainties, all of which are difficult to predict and many of which
are beyond our control.
We caution you not to place undue reliance on these forward-looking statements,
which reflect our management's view only as of the date of this report. We are
not obligated to update these statements or publicly release the results of any
revisions to them to reflect events or circumstances after the date of this
report or to reflect the occurrence of unanticipated events. You should refer
to, and carefully review, the information in future documents we file with the
Securities and Exchange Commission.
You should read this discussion and analysis in conjunction with our unaudited
condensed consolidated financial statements and related notes included in this
Form 10-Q and the audited consolidated financial statements and related notes
included in our Annual Report on Form 10-K for the fiscal year ended January 31,
2021. The inclusion of supplementary analytical and related information may
require us to make estimates and assumptions to enable us to fairly present, in
all material respects, our analysis of trends and expectations with respect to
our results of operations and financial position taken as a whole. Actual
results may vary from the estimates and assumptions we make.
Uncertainty due to Global Outbreak of COVID-19
In March of 2020, the World Health Organization declared an outbreak of COVID-19
Global pandemic. The COVID-19 has impacted vast array of businesses through the
restrictions put in place by most governments internationally, including the
USA, Canadian and Chilean governments, as well as provincial and municipal
governments, regarding travel, business operations and isolation/quarantine
orders. At this time, it is unknown to what extent the impact of the COVID-19
outbreak may have on the Company as this will depend on future developments that
are highly uncertain and that cannot be predicted with confidence. These
uncertainties arise from the inability to predict the ultimate geographic spread
of the disease, and the duration of the outbreak, including the duration of
travel restrictions, business closures or disruptions, and quarantine/isolation
measures that are currently, or may be put, in place world-wide to fight the
virus. While the extent of the impact is unknown, the COVID-19 outbreak may
hinder the Company's ability to raise financing for exploration or operating
costs due to uncertain capital markets, supply chain disruptions, increased
government regulations and other unanticipated factors, all of which may also
negatively impact the Company's business and financial condition.
Red Metal Resources Ltd. was incorporated under the Nevada Business Corporations
Act on January 10, 2005, as Red Lake Exploration, Inc. On August 27, 2008, the
name of the Company was changed to Red Metal Resources Ltd. On February 10,
2021, the Company changed its corporate jurisdiction from the State of Nevada to
the Province of British Columbia by means of a process called a "conversion"
under the Nevada Revised Statutes and a "continuation" under the Business
Corporations Act (British Columbia). Upon the Company's continuation to British
Columbia, the Articles of Incorporation and Bylaws of the Company, under the
Nevada Revised Statutes, were replaced with the Articles of the Company, under
the Business Corporations Act (British Columbia). The authorized capital of the
Company was amended to an unlimited number of common shares without par value.
The Company's head office is located at 1130 West Pender Street, Suite 820,
Vancouver, British Columbia, V6E 4A4. Its registered office address is 700 - 595
Burrard Street, Vancouver, British Columbia, V7X 1S8. The Company's mailing
address is 278 Bay Street, Suite 102, Thunder Bay, Ontario, P7B 1R8.
On August 21, 2007, the Company formed Minera Polymet Limitada ("Polymet") as a
limited liability company, under the laws of the Republic of Chile. On September
28, 2015, the Company changed Polymet's incorporation from Limited Liability
Company to a Closed Stock Corporation ("SpA"). As of the date of this Quarterly
Report on Form 10-Q the Company owns 100% of Polymet, which holds its Chilean
mineral property interests.
The Company is engaged in the business of mineral exploration in Chile with the
objective to explore and, if warranted, develop mineral properties. All of the
Company's mineral concessions are located in the Candelaria iron oxide
copper-gold (IOCG) belt of the coastal cordillera, in the Carrizal Alto Mining
District, III Region of Atacama, Chile. The Company has three active copper-gold
projects on two properties, namely the Farellón and Perth Projects both located
on the Carrizal Property, and the Mateo Project located on the Mateo Property.
In addition to holding these active properties, as an exploration company, the
Company periodically stakes, purchases or options claims to allow time and
access to fully consider the geological potential of claims.
The Company's flagship project, the Farellón Project, is an early-stage
exploration property consisting of eight mining concessions totaling 1,234
Consistent with our historical practices, we continue to monitor our costs in
Chile by reviewing our mineral claims to determine whether they possess the
geological indicators to economically justify the capital to maintain or explore
them. As at the time of the filing of this Quarterly Report on Form 10-Q,
Polymet has two employees and engages independent consultants on as needed
basis. Most of the Company's support - such as vehicles, office, and equipment -
is supplied under short-term contracts. The only long-term commitments that the
Company has are for royalty payments on four of its mineral concessions -
Farellón Alto 1 - 8, Quina 1 - 56, Exeter 1 - 54, and Che. These royalties are
payable once exploitation begins. The Company is also required to pay property
taxes that are due annually on all the concessions that are included in its
The cost and timing of all planned exploration programs are subject to the
availability of qualified mining personnel, such as consulting geologists,
geo-technicians and drillers, and drilling equipment. Although Chile has a
well-trained and qualified mining workforce from which to draw and few
early-stage companies such as Red Metal are competing for the available
resources, if the Company is unable to find the personnel and equipment needed
at the prices that were budgeted for the programs, the Company might have to
revise or postpone its exploration plans.
Results of Operations
SUMMARY OF FINANCIAL CONDITION
Table 1 summarizes and compares our financial condition at July 31, 2021, to the
year ended January 31, 2021.
Table 1: Comparison of financial condition
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