Marimaca Copper Corp.
Consolidated Financial Statements December 31, 2023 and 2022
(Expressed in thousands of U.S. dollars, except where indicated)
Independent auditor's report
To the Shareholders of Marimaca Copper Corp.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Marimaca Copper Corp. and its subsidiaries (together, the Company) as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).
What we have audited
The Company's consolidated financial statements comprise:
the consolidated statements of financial position as at December 31, 2023 and 2022;
the consolidated statements of loss and comprehensive loss for the years then ended;
the consolidated statements of shareholders' equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, comprising material accounting policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.
PricewaterhouseCoopers LLP
PwC Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7
T.: +1 604 806 7000, F.: +1 604 806 7806, Fax to mail:ca_vancouver_main_fax@pwc.com
"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Assessment of impairment indicators of exploration and evaluation assets
Refer to note 2 - Material accounting policy information, note 3 - Significant judgments, estimates and assumptions and note 6 - Exploration and evaluation assets to the consolidated financial statements.
The total book value of exploration and evaluation assets amounted to $71.5 million as at December 31, 2023. At each reporting period, management applies judgment in assessing whether there are any indicators of impairment relating to exploration and evaluation assets. If there are indicators of impairment, the recoverable amount of the asset is estimated in order to determine the extent of any impairment. Indicators of impairment may include (i) the period during which the entity has the right to explore in the specific area has expired during the year or will expire in the near future and is not expected to be renewed, (ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned, (iii) exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources, and (iv) sufficient data exists to indicate that the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. No impairment indicators were identified by management as at December 31, 2023.
How our audit addressed the key audit matter Our approach to addressing the matter included the following procedures, among others:
Assessed the judgment made by management in determining the impairment indicators which included the following:
- Obtained, for a sample of claims, by reference to government registries, evidence to support (i) the right to explore the area and (ii) claim expiration dates.
- Read minutes of Board of Directors meetings and obtained budget approvals to evidence continued and planned exploration expenditure for 2024, which included evaluating results of work programs.
- Assessed whether there is any evidence that extracting the resources will not be technically feasible or commercially viable, or if other facts and circumstances suggest that the carrying amount exceeds the recoverable amount, based on evidence obtained in other areas of the audit.
Key audit matter
How our audit addressed the key audit matter
We considered this a key audit matter due to (i) the significance of the exploration and evaluation assets balance and (ii) the judgments made by management in its assessment of indicators of impairment related to exploration and evaluation assets, which have resulted in a high degree of subjectivity in performing audit procedures related to these judgments applied by management.
Other information
Management is responsible for the other information. The other information comprises the Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Dean Larocque.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Vancouver, British Columbia
March 22, 2024
Marimaca Copper Corp.
Consolidated Statements of Financial Position As at December 31, 2023 and 2022.
(Expressed in thousands of U.S. dollars, except where indicated)
As at
December 31, 2023
As at
December 31, 2022
Assets Current assets
Cash
Amounts receivable and prepaid expenses (Note 5(c,d))
Non-current assets
Amounts receivable
Property, plant and equipment Exploration and evaluation assets (Note 6)
$
16,692 $ 14,636 6,974 4,830 23,666 19,466
237 3,936 172 21
71,524 61,402
Total assets
$
95,599
$ 84,825
Liabilities Current liabilities
Accounts payable and accrued liabilities (Note 7) Lease liabilities
$
1,076 85 1,161
$ 561 - 561
Non-current liabilities
Lease liabilities Total liabilities
43 1,204
-
561
Shareholders' equity (Note 8)
Common shares
Contributed surplus
Accumulated other comprehensive income ("AOCI")
206,306 192,800
34,338 30,553
65 112
Deficit
(146,314) (139,201)
Total equity
94,395 84,264
Total liabilities and equity
$
95,599
$ 84,825
Nature of Operations and Liquidity Risk (Note 1)
Subsequent Event (Note 10)
Approved and authorized on behalf of the board:
"Hayden Locke" Director & CEO
"Mike Haworth" Director
The accompanying notes are an integral part of these consolidated financial statements.
Marimaca Copper Corp.
Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2023 and 2022
(Expressed in thousands of U.S. dollars, except where indicated)
Year ended December 31, 2023 2022
Expenses
Depreciation and amortization
Legal and filing fees
Other corporate costs
Salaries and management fees
Share-based compensation (Note 8(c))
$
54 $ 46
259 257
1,317 886
2,124 1,693
2,139 3,938
Operating loss
Finance income
Change in fair value of derivative (Note 5(c,d)) Foreign exchange gain
Other non-operating income
(5,893)
(6,820)
597 217
(2,068) 779
49 976
Loss from continuing operations
$
202 (7,113) $
- (4,848)
Discontinued operations
Income from discontinued operations (Note 5(a))
Net loss
$
- (7,113) $
2,687 (2,161)
Other comprehensive loss
Items that may be reclassified subsequently to net income:
Foreign currency translation adjustment
(47)
(824)
Comprehensive loss
$
(7,160) $ (2,985)
Loss per share from continuing operations Basic and dilulted loss per share
$
(0.08)
$ (0.06)
Income per share from discontinued operations Basic and diluted loss per share
Loss per share
Basic and diluted loss per share
Weighted average number of shares outstanding (000's)
Basic
$
- $ 0.03
$
(0.08) $ (0.03)
Diluted
90,485 88,185 90,485 88,185
The accompanying notes are an integral part of these consolidated financial statements.
Marimaca Copper Corp.
Consolidated Statements of Shareholders' Equity
For the years ended December 31, 2023 and 2022
(Expressed in thousands of U.S. dollars, except where indicated)
The accompanying notes are an integral part of these consolidated financial statements.
Marimaca Copper Corp.
Consolidated Statements of Cash Flows For the years ended December 31, 2023 and 2022
(Expressed in thousands of U.S. dollars, except where indicated)
Year ended December 31, 2023
2022
Cash flows from operating activities Net loss from continuing operations
Items not affecting cash
Depreciation and amortization Unrealized foreign exchange
Change in fair value of derivative (Note 5(c,d)) Share-based compensation (Notes 8(c)) Accretion on debt
(7,113)
(4,848)
54 46
23 (621)
2,068 (779)
2,139 3,938
- 38
Change in non-cash operating working capital
(Decrease) increase in amounts receivable and prepaid expenses
Increase (decrease) in accounts payable and accruals
(2,829)
(2,226)
(513)
244
214
(849)
Cash used in operating actvities of continuing operations
$
(3,128)
$ (2,831)Income (loss) from discontinued operations - 2,687
Accretion on restoration obligation - 13
Gain on sale of Rayrock (Note 5)
Change in non-cash operating working capital
-
(2,860)Increase in amounts receivable and prepaid expenses - (7)
Decrease in accounts payable and accrued liabilities - (8)
Cash used in operating actvities of discontinued operations Net cash used in operating activities
- (175)
$
(3,128)
$
(3,006)
Cash flows from financing activities
Issuance of common shares and units (Note 8(b))
Cash received upon issuance of shares via stock options exercised Repayment of loan
Lease payments
15,014
133 -
- -
(3,000)
Cash provided (used) in financing activities
$
15,095
(52)
$
(36) (3,036)
Cash flows from investing activities
Proceeds from the sale of Rayrock Property, plant and equipment Proceeds from sale of royalty
Exploration and evaluation assets - property option payments Exploration and evaluation assets - capitalized expenditures
- 500
(31) (26)
- 15,500
(2,000) (5,645)
(7,815) (16,104)
Cash used in investing activities
$
(9,846)
$ (5,775)
Effect of exchange rate changes on cash
(65)
(333)
Increase (decrease) in cash
2,056 (12,150)
Cash: beginning of the period
Cash: end of the period
$
14,636 26,786 16,692 $ 14,636
The accompanying notes are an integral part of these consolidated financial statements.
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Marimaca Copper Corp. published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 March 2024 12:47:26 UTC.