UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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For the quarterly period ended
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Securities registered pursuant to Section 12(b) of the Act: None
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Lion Copper and Gold Corp.
Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2024 and 2023
(Expressed in thousands of U.S. Dollars except for shares and per share amounts)
(Unaudited)
| Lion Copper and Gold Corp. Condensed Interim Consolidated Balance Sheets As at September 30, 2024, and December 31, 2023 (Unaudited - In thousands of U.S. Dollars) |
| Note | September 30, 2024 |
December 31, 2023 |
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| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | $ | |||||||
| Other receivables | |||||||||
| Prepaid and deposit | |||||||||
| Other receivables | |||||||||
| Mineral properties | 4,12 | ||||||||
| Reclamation bonds | |||||||||
| Investment in associate | 5 | ||||||||
| Right of use asset | |||||||||
| Total assets | $ | $ | |||||||
| LIABILITIES | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||
| Rio Tinto deposit | 4 | ||||||||
| Derivative liabilities | 7 | ||||||||
| Convertible debentures | 7,8,11 | ||||||||
| Lease liabilities - current | |||||||||
| Lease liabilities | |||||||||
| Total liabilities | |||||||||
| Stockholders' equity | |||||||||
| Share capital, |
9 | ||||||||
| Additional paid-in capital | 10 | ||||||||
| Deficit | ( |
) | ( |
) | |||||
| Non-controlling interest | 6 | ||||||||
| Total stockholders' equity | |||||||||
| Total liabilities and stockholders' equity | $ | $ |
NATURE OF OPERATIONS AND GOING CONCERN (Note 1)
COMMITMENTS (Note 13)
CONTINGENCIES (Note 14)
SUBSEQUENT EVENT (Note 16)
Approved on behalf of the Board of Directors on November 14, 2024:
| /s/ "Thomas Patton" | /s/ "Tony Alford" | ||
| Director | Director |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
2 | Page
| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Operations and Comprehensive Loss For the three and nine months ended September 30, 2024, and 2023 (Unaudited - In thousands of U.S. Dollars, except for shares and per share amounts) |
| Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
| Note | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Operating expenses | |||||||||||||||
| Exploration expenditures | 4 | $ | $ | $ | |||||||||||
| General office | |||||||||||||||
| Interest | |||||||||||||||
| Insurance | |||||||||||||||
| Investor relations and corporate development | |||||||||||||||
| Professional fees | |||||||||||||||
| Rent | |||||||||||||||
| Salaries and benefits | 11 | ||||||||||||||
| Share-based payments | 10,11 | ||||||||||||||
| Transfer agent and regulatory | |||||||||||||||
| Travel | |||||||||||||||
| Rio Tinto Deposit | 4 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||
| Operating loss | ( |
) | ( |
) | ( |
) | ( |
) | |||||||
| Non-operating Income/(expenses) | |||||||||||||||
| Fair value gain on derivative liabilities | 7 | ||||||||||||||
| Foreign exchange loss | ( |
) | ( |
) | |||||||||||
| Accretion expense | 8 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||
| Gain on transfer of shares | 5 | ||||||||||||||
| Loss on revaluation of SAFE notes | ( |
) | |||||||||||||
| Share of income (loss) in associate | 5 | ( |
) | ( |
) | ( |
) | ||||||||
| Interest and other income | |||||||||||||||
| Impairment of mineral properties | 4 | ( |
) | ||||||||||||
| Loss on conversion | 8 | ( |
) | ||||||||||||
| Loss on repayment of convertible debentures | 8 | ( |
) | ||||||||||||
| Loss on extinguishment of convertible debentures | 8 | ( |
) | ||||||||||||
| ( |
) | ( |
) | ( |
) | ||||||||||
| Net loss and comprehensive loss for the period | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Net loss and comprehensive loss attributed to: | |||||||||||||||
| Stockholders of the Company | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Non-controlling interest | 6 | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||
| Loss per share, basic and diluted | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Weighted average number of shares outstanding - basic and diluted | |||||||||||||||
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
3 | Page
| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Changes in Equity For the three and nine months ended September 30, 2024 and 2023 (Unaudited - In thousands of U.S. Dollars, except for shares) |
| Notes | Common shares | Share capital | Additional paid-in capital |
Deficit | Non-controlling interest |
Total stockholders' equity |
|||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Share-based payments | 10 | - | - | - | - | ||||||||||||||
| Exercise of options | ( |
) | - | - | |||||||||||||||
| Issuance of common shares of FCC | 6 | - | - | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at September 30, 2023 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Private placement | - | - | - | ||||||||||||||||
| Private placement - share issuance cost | - | ( |
) | - | - | - | ( |
) | |||||||||||
| Conversion of convertible debentures - original | 8 | - | - | - | |||||||||||||||
| Conversion of convertible debentures - induced | 8 | - | - | - | |||||||||||||||
| Issuance of warrants | 8 | - | - | - | - | ||||||||||||||
| Exercise of options | 10 | ( |
) | - | - | ||||||||||||||
| Share-based payments | 10 | - | - | - | - | ||||||||||||||
| Issuance of common shares of FCC | 6 | - | - | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( |
) | $ | $ |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
4 | Page
| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Changes in Equity For the three and nine months ended September 30, 2024 and 2023 (Unaudited - In thousands of U.S. Dollars, except for shares) |
| Notes | Common shares | Share capital | Additional paid-in capital |
Deficit | Non-controlling interest |
Total stockholders' equity |
|||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Share-based payments | 10 | - | - | - | - | ||||||||||||||
| Exercise of options | ( |
) | - | - | |||||||||||||||
| Issuance of common shares of FCC | 6 | - | - | - | - | - | - | ||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at September 30, 2023 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( |
) | $ | $ | ||||||||||||
| Issuance of warrants | 8 | - | - | - | - | ||||||||||||||
| Share-based payments | 10 | - | - | - | - | ||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( |
) | $ | $ |
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
5 | Page
| Lion Copper and Gold Corp. Condensed Interim Consolidated Statements of Cash Flow For the nine months ended September 30, 2024, and 2023 (Unaudited - In thousands of U.S. Dollars) |
| For the nine months ended September 30, | ||||||
| 2024 | 2023 | |||||
| Cash flows provided by operating activities | ||||||
| Loss for the period | $ | ( |
) | $ | ( |
) |
| Non-cash transactions: | ||||||
| Interest expense | ||||||
| Accretion expense | ||||||
| Fair value gain on derivative liabilities | ( |
) | ( |
) | ||
| Gain on transfer of investment shares | ( |
) | ||||
| Share of loss of investment in associate | ||||||
| Wages settled through transfer of investment shares | ||||||
| Share-based payments | ||||||
| Loss on revaluation of SAFE notes | ||||||
| Impairment of mineral properties | ||||||
| Loss on conversion of convertible debentures | ||||||
| Loss on repayment of convertible debentures | ||||||
| Loss on extinguishment of convertible debentures | ||||||
| Amortization of ROU asset | ||||||
| Changes in operating assets and liabilities: | ||||||
| Other receivables | ( |
) | ||||
| Accounts payable and accrued liabilities | ( |
) | ||||
| Prepaid and deposit | ( |
) | ( |
) | ||
| Rio Tinto deposit | ||||||
| Lease liabilities | ( |
) | ||||
| Net cash provided by operating activities | ||||||
| Cash flows used in investing activities | ||||||
| Capitalized expenditures on mineral properties | ( |
) | ( |
) | ||
| Reclamation bond | ||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||
| Cash flows provided by financing activities | ||||||
| Proceeds from convertible debentures | ||||||
| Proceeds from FCC SAFE notes | ||||||
| Proceeds for issuance of common shares of FCC | ||||||
| Proceeds from private placement | ||||||
| Share issuance costs | ( |
) | ||||
| Repayment of convertible debentures | ( |
) | ||||
| Exercise of options | ||||||
| Net cash provided by financing activities | ||||||
| Increase in cash and cash equivalents | ||||||
| Cash and cash equivalents, beginning of period | ||||||
| Cash and cash equivalents, end of period | $ | $ | ||||
| Supplemental cash flow information | ||||||
| Shares issued for conversion of SAFE notes | ||||||
| Shares issued for convertible debentures | ||||||
The accompanying notes form an integral part of these condensed interim consolidated financial statements.
6 | Page
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Lion Copper and Gold Corp. For the three and nine months ended September 30, 2024 and 2023 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
1. NATURE OF OPERATIONS AND GOING CONCERN
Lion Copper and Gold Corp. (together with its subsidiaries, "Lion CG" or the "Company") is a Canadian-based Company advancing its flagship copper assets at Yerington, Nevada through an option to earn-in agreement with Nuton LLC, a Rio Tinto venture. The Company was incorporated in British Columbia, Canada on May 11, 1993. Its registered and records offices are located at 1200 - 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T8. On November 22, 2021, the Company changed its name from Quaterra Resources Inc. with a new trading symbol "LEO". On September 19, 2024, the Company voluntarily delisted its common shares from the TSX Venture Exchange ("TSXV") and were subsequently listed on the Canadian Securities Exchange ("CSE") under the same symbol "LEO" and continues to trade on the OTCQB Market under the symbol "LCGMF".
The Company acquires its mineral properties through option or lease agreements and capitalizes acquisition costs related to the properties but expense exploration and evaluation costs unless a proven or probable reserve can be established. The underlying value of the amounts recorded as mineral properties does not reflect current or future values. The Company's continued existence depends on discovering economically recoverable mineral reserves and obtaining the necessary funding to advance these properties.
These Condensed Interim Consolidated Financial Statements ("Interim Financial Statements") are 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 for at least twelve months from the reporting date. As of September 30, 2024, the Company had cash and cash equivalents of $
The Company has no source of revenue and has significant requirements to maintain its mineral property interests and meet its obligations as they come due. Although the Company has raised funds in the past through debt, equity and strategic investors, there is no assurance that such financing will be available. If adequate financing is not available or cannot be obtained on a timely basis, the Company may be required to delay, reduce the scope of, or eliminate one or more of its exploration programs, or relinquish its rights under the existing option and acquisition agreements. The above factors represent material uncertainties that cast substantial doubt on the Company's ability to continue as a going concern.
If the going concern assumptions were not appropriate for these Interim Financial Statements, adjustments would be necessary to the carrying values of assets, liabilities, the reported expenses, and the consolidated balance sheet classifications used. Such adjustments could be material.
2. BASIS OF PRESENTATION
Statement of compliance
The Interim Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") including the accounts of the Company and its subsidiaries. All intercompany accounts and transactions were eliminated upon consolidation.
These Interim Financial Statements have been prepared on a historical cost and accrual basis except for certain financial instruments measured at fair value and the cash flow, respectively.
The Company consolidates an entity when it has power over that entity, is exposed, or has rights, to variable returns from its involvement with that entity and can affect those returns through its control over that entity.
The Interim Financial Statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2023. The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
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Lion Copper and Gold Corp. For the three and nine months ended September 30, 2024 and 2023 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
These Interim Financial Statements include the financial statements of Lion CG and its subsidiaries:
| Lion Copper and Gold Corp (Reporting BC & Alberta) |
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| Quaterra Alaska Inc. (Alaska, Nevada) - |
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| Singates Peak Services LLC (Nevada) - |
Falcon Copper Corp (formerly BCRC) (Wyoming) - |
Blue Copper Royalties LLC (Wyoming) - |
|||||||||
| Falcon Copper Services LLC (Wyoming) |
Blue Copper LLC (Montana) - |
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On October 4, 2021, Blue Copper LLC was incorporated in Montana, USA and acquired Blue Copper Prospect in Powell County and Lewis & Clark County in Montana.
On April 5, 2022, Quaterra Alaska sold its two options to acquire the Butte Valley property to Falcon Butte Minerals Corp. ("Falcon Butte"), formerly 1301666 B.C. Ltd., for $500 cash and 16,049,444 shares in Falcon Butte represented 25.54% of shares outstanding (Note 5).
On December 13, 2022, Quaterra Alaska transferred its 100% interest in Blue Copper LLC, a 90% interest in the Groundhog property in Alaska, a 5% net profit interest associated with the Nieves silver property in Mexico, and Butte Valley royalty to Falcon Copper Corp., ("FCC") formerly, Blue Copper Resources Corp. in exchange for 57,513,764 common shares of FCC, represented 79.3% of the FCC's then-issued and outstanding shares (Note 6).
On August 25, 2023, Blue Copper Royalties LLC was incorporated in Wyoming and on September 6, 2023, FCC transferred the Butte Valley royalty and interest in Nieves to Blue Copper Royalties.
3. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these Interim Financial Statements are consistent with the accounting policies disclosed in Note 3 of the Company's audited consolidated financial statements for the year ended December 31, 2023.
In preparing these Interim Financial Statements, management has made judgements, estimates and assumptions that affect the applicability of the Company's accounting policies. In preparing these Interim Financial Statements, the significant estimates and critical judgments were the same as those applied to the audited consolidated financial statements as at and for the year ended December 31, 2023.
During the year ended December 31, 2023 and the nine months ended September 30, 2024, the Company's ownership in FCC dropped below
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Lion Copper and Gold Corp. For the three and nine months ended September 30, 2024 and 2023 (Unaudited - In thousands of U.S. Dollars except for shares and per share amounts) |
4. MINERAL PROPERTIES
Total mineral property acquisition costs are listed in the table below:
| Singatse Peak Services ("SPS") | Lion CG ("LCG") | Falcon Copper Corp. ("FCC") | |||||||||||||||||||||||||
| (In thousands of U.S dollars) | MacArthur | Yerington | Bear | Wassuk | Copper Canyon | Chaco Bear & Ashton |
Blue Copper | Muncy | Total | ||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance December 31, 2022 | |||||||||||||||||||||||||||