MILLENNIUM SILVER CORP. Issued May 29, 2023
MILLENNIUM SILVER CORP.
MANAGEMENT DISCUSSION AND ANALYSIS
QUARTER ENDED MARCH 31, 2023
This Management Discussion and Analysis ("MD&A") prepared May 29, 2023, should be read in conjunction with the condensed consolidated financial statements for the quarter ended March 31, 2023.
Description of Business
Millennium Silver Corp. (the "Company" or "MSC") is a mineral exploration and development company engaged in the acquisition, exploration and development of mining properties. The Company has acquired and is exploring silver-gold properties in Nevada, USA and Newfoundland, Canada.
Forward Looking Information
The MD&A contains forward-looking statements about the Company's future plans, objectives, strategies, financial conditions, results of operations, cash flows, exploration and development activities and businesses. The MD&A is "forward-looking" because it is based on current expectations, estimates and assumptions about the Canadian, USA and world economic climates, as they relate to metals and the mining industry, the Canadian and USA economic environment, the Company's ability to explore and develop its mineral properties and to manage its assets and control its costs.
Certain information set forth in this document includes forward-looking statements. By their nature, forward looking statements are subject to numerous risks and uncertainties, some of which are beyond MSC's control, including but not limited to: risks and uncertainties relating to the interpretation and assumptions used in calculating resource estimates; the execution and outcome of current or future exploration activities; information included or implied in the various independently produced and published technical reports; anticipated drilling and resource estimation plans; differences in actual recovery rates, grades, and tonnage from those expected; the inherent uncertainty of production and cost estimates, risks and uncertainties relating to timing and amount of estimated future production, capital expenditures and cash flows; risks relating to our ability to obtain adequate financing for our planned activities and to complete further exploration programs; foreign currency fluctuations; commodity price fluctuations; risks related to governmental regulations, including environmental regulations and other general market and industry conditions, as well as those factors discussed in the section entitled "Key Information - Risk Factors" in each management discussion and analysis.
All of the forward-looking statements contained in this MD&A are qualified by these cautionary statements and by stated or inherent assumptions. The key assumptions made in connection with these forward- looking statements include the following:
- The demand for base and precious metals is volatile and could substantially affect commodity prices;
- New financings will be required to meet the Company's exploration programs and property payment requirements;
- Shareholder loans, private placements and joint venture agreements should continue to help fund property payments and exploration on certain properties;
- The risk of government regulations imposing requirements, that would significantly increase our exploration costs, is low in the Company's existing property areas; and
- Our key personnel and consultants will continue their employment with or be available to the Company.
Although we believe these assumptions are reasonable, investors should not place undue reliance on forward-looking statements or the key assumptions, which apply only as of the date of this MD&A. There can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences, or effects, on us. Except as required by law, we undertake no obligation to update or revise forward-looking statements, even if circumstances or management's estimates or opinions should change.
Selected Quarterly Information
1st Quarter | 1st Quarter | Year to Date | ||||
Fiscal 2022 | Fiscal 2023 | Fiscal 2023 | ||||
Expenditures | $ | 40,029 | $ | 47,179 | $ | 40,029 |
Loss (gain) on foreign exchange | $ | (247) | $ | 627 | $ | (247) |
Net income (loss) for the period | $ | (40,740) | $ | (48,745) | $ | (40,740) |
Foreign currency translation gain (loss) | $ | (5,340) | $ | (100,142) | $ | (5,340) |
Comprehensive income (loss) for the period | $ | (46,080) | $ | (148,887) | $ | (46,080) |
Net income (loss) per share | $ | (0.00) | $ | (0.00) | $ | (0.00) |
March 31, | December 31, | |||
2023 | 2022 | |||
Exploration and evaluation assets | $ | 6,641,255 | $ | 6,643,945 |
Total assets | $ | 6,662,419 | $ | 6,649,025 |
Total liabilities | $ | 377,365 | $ | 338,391 |
Share capital | $ | 20,476,468 | $ | 20,476,468 |
Common shares outstanding | 221,505,226 | 221,505,226 |
Summary Discussion
During the three months ended March 31, 2023, the Company recorded a net loss of $40,740 as compared to a loss of $48,745 during the comparable period in fiscal 2022. The material variances during the quarters are as follows:
- Accounting and legal fees were $19,500 in 2023 as compared to $26,037 in fiscal 2022, an increase of $6,537 largely related to lower accounting fees compared to the first quarter of fiscal 2022; and,
- Transfer agent and filing fees of $6,629 in 2023 compared to $6,028 in fiscal 2022, a slight increase due to increased transfer agent fees during the quarter, 2023;
As at March 31, 2023, the Company has working capital deficit of $356,201 (December 31, 2022 - working capital deficit of $333,311).
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COMPANY PROPERTIES
Nevada, USA Properties
Silver Peak (Nivloc) Property, Esmeralda County
In September 2007, the Company established its interest in the Silver Peak (Nivloc) Property, located in Esmerelda County, Nevada, by acquiring 9 unpatented claims for US$75,000 and 110,000 shares.
During fiscal 2011, an additional 95 contiguous claims (the "Additional Claims") were staked and recorded.
In February 2011, and amended May 22, 2012, the Company executed an Option and Joint Venture Agreement, with Silver Reserve Corp. ("SRC"), pursuant to which the Company acquired the right to purchase up to an 85% interest in 18 unpatented lode claims (the "NL Extension Claims") contiguous with and surrounding the Company's existing Silver Peak (Nivloc) Property.
The Company acquired the interest in the NL Extension Claims by making cash payments of US$350,000 and by issuing 1,925,000 shares over a period of five years as follows:
Cash | Common | |
(US$) | shares | |
Upon execution of Letter of Intent (paid) | 5,000 | - |
Upon execution of Agreement (paid 2011) | 5,000 | - |
Upon receipt of TSX Venture approval (paid and issued) | 15,000 | 275,000 |
On or before September 15, 2011 (paid and issued) | 35,000 | 300,000 |
On or before September 15, 2012 (paid and issued) | 50,000 | 300,000 |
On or before September 15, 2013 (paid and issued) | 70,000 | 350,000 |
On or before September 15, 2014 (paid and issued) | 70,000 | 350,000 |
On or before September 15, 2015 (paid and issued) | 100,000 | 350,000 |
350,000 | 1,925,000 |
On October 14, 2015, the Company made the final payment of US$100,000 to SRC, thereby acquiring an 85% undivided interest in the Silver Peak (Nivloc) Property. The Company registered this 85% undivided interest in the Silver Peak (Nivloc) Property with the US Bureau of Land Management (the "US BLM") and Esmeralda County, Nevada.
Following the Company's completion of a positive feasibility study, the Silver Peak (Nivloc) Property was developed on a joint venture basis where SRC had the right to contribute to the development of the 122 claim Silver Peak (Nivloc) Property and retained a 15% interest therein.
On January 7, 2016, the Company executed a Sale and Purchase Agreement, including an Option to Purchase Royalty Interest (the "Agreement"), to acquire SRC's remaining interests in the Silver Peak (Nivloc) Property (the "Transaction"). These interests include the following:
- All rights, titles and interests owned by SRC in and to the remaining undivided 15% interest in and to the NL Extension Claims, and any and all licenses and permits pertaining thereto; and
- The sole and exclusive right and option to acquire a 15% interest in the 104 claims held by the Company (the "IMMI Claims").
Pursuant to the Agreement, the Company paid SRC US$120,000 for the Silver Peak (Nivloc) Property interests detailed above (the "Silver Peak (Nivloc) Property Interests"), and SRC retained a royalty interest of 2% of Net Smelter Returns ("NSR") from the NL Claims and the IMMI Claims (the "Royalty Interest").
On December 22, 2016, the Company paid SRC US$120,000 to acquire the 2% Royalty Interest, funded by Capital Mineral Resource Investments Limited ("CMRI"). As a condition of the funding the Company received from CMRI to purchase the Royalty Interest, 1% NSR of the Silver Peak (Nivloc) Property (the "1% Royalty Interest") was transferred to CMRI. CMRI granted to the Company an exclusive option to purchase 100% of CMRI's right, title and interest in the 1% Royalty Interest for $2,000,000 for a period of ten years from December 24, 2016 (or any portion or portions thereof on a pro rata purchase price) at any time and from time to time on or before December 24, 2026.
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In April 2017, the Company staked 42 lode claims, contiguous to the Silver Peak (Nivloc) Property, and acquired 8 unpatented lode claims contiguous thereto, all located in Esmeralda County, Nevada. The total cost was US$62,700 and the issuance of 100,000 common shares of the Company.
In October 2017 (and amended on March 16, 2018), the Company executed Option Agreements with Silver Saddle Resources LLC ("Silver Saddle") and Consent to Assignment Agreements between the Company, Silver Saddle and two underlying property owners (the "Silver Saddle Agreements"), to acquire 25 unpatented lode mineral claims located contiguous with the Company's Silver Peak (Nivloc) Property (the "Silver Saddle Claims") in Esmeralda County, Nevada.
Pursuant to the Silver Saddle Agreements, the Company acquired a 100% interest in the Silver Saddle Claims, subject to various net smelter return ("NSR") royalties by making cash payments of US$115,000 (paid) and by issuing 1,000,000 shares (issued).
The NSR royalties vary from 1.5% on eight of the claims, of which 1.25% NSR can be purchased for US$190,000; 2.5% on seven of the claims, of which 1.25% NSR can be purchased for US$110,000; and, 1.5% on ten of the claims, of which 0.5% NSR can be purchased for US$500,000.
In November 2017, the Company staked an additional 14 claims contiguous to the Company's Silver Peak (Nivloc) Property claims for US$11,484.
The Company's total land holdings in the Silver Peak (Nivloc) Property area include 211 claims covering in excess of 4,000 acres (1,600 hectares).
Simon Property, Mineral County
Pursuant to an Option Agreement executed in December 2004, and a Settlement Agreement, with the Estate of Nadean Bedford, announced in November 2010, the Company acquired, and holds in good standing, a 100% interest in the Simon Property, consisting of 20 patented and 3 unpatented contiguous claims. The Company also acquired by staking, and holds, a further 34 contiguous unpatented mining claims, which are in good standing. The monthly payments are US$2,000. There are no underlying royalties.
Pursuant to the terms of a binding letter agreement, dated June 15, 2022 (the "Altair Letter Agreement"), between the Company and Altair Resources Inc. ("Altair"), a British Columbia company that is publicly traded on the TSX Venture Exchange (the "TSX-V"), which agreement replaced a non-binding Letter of Intent dated May 7, 2021 (the "Altair LOI"), between the Company and Altair, and an addendum to the Altair LOI dated July 6, 2021, the Company has granted Altair an option to earn 65% interest in the Simon Property in exchange for reimbursement of the monthly option payments of US$2,000 to the original property owner, plus share payments and exploration expenditures set out below, subject to TSX-V acceptance. The Altair Letter Agreement shall be replaced by an Earn-In Option Agreement following TSX-V acceptance (the "Altair Agreement").
Common Exploration
shares Expenditures ($)
Upon receipt of TSX-V approval, issue: | 500,000 | - |
Six (6) months following receipt of TSX-V approval, issue: | 200,000 | - |
On the second anniversary of the Altair Agreement, issue: | 300,000 | - |
On the third anniversary of the Altair Agreement, issue: | 400,000 | - |
On the fourth anniversary of the Altair Agreement, issue: | 500,000 | - |
On the fifth anniversary of the Altair Agreement, issue: | 600,000 | - |
On or before December 31, 2022, complete exploration expenditures: | 200,000 | |
On or before December 31, 2023, complete exploration expenditures: | 200,000 | |
On or before December 31, 2024, complete exploration expenditures: | 400,000 | |
On or before December 31, 2025, complete exploration expenditures: | 500,000 | |
On or before December 31, 2026, complete exploration expenditures: | 500,000 | |
Between the fifth and sixth anniversary of the Altair Agreement, complete | 400,000 | |
exploration expenditures: |
(1)
(2)
(2)
(2)
(2)
2,500,000 $2,200,000
- of which at least 60% to be spent on core drilling.
- of which at least 75% to be spent on core drilling.
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Newfoundland, Canada Properties
Notre Dame Property
On February 23, 2021, the Company entered into an option agreement whereby it can earn the sole and exclusive right and option to purchase 100% right, title, and interest in 96 mineral claims situated in the province of Newfoundland and Labrador, for $6,240 (paid) and the issuance of 300,000 common shares of the Company (issued) within 10 business days of TSX-V approval. The optionor is entitled to receive a 0.25% NSR Royalty, which can be purchased by the Company for $50,000. At February 23, 2023, the Company forfeited the Notre Dame claims.
Pynns Brook Property
On July 22, 2021, and as amended on July 27, 2021, the Company entered into an option agreement whereby it can earn the right and option to purchase 100% interest in 135 mineral claims situated in five claim groups in Deer Lake, Newfoundland and Labrador for $6,825 (paid) and the issuance of 1,000,000 common shares of the Company, of which 500,000 common shares are due within 10 business days of TSX-V approval (issued) and 500,000 common shares are issuable by January 22, 2022 (issued). The claims are subject to a 1.5% NSR Royalty, of which 0.5% of the NSR Royalty can be purchased by the Company for $500,000.
EXPLORATION PROGRAMS
Silver Peak (Nivloc) Property
In 2011, the Company initiated a drilling program on the Silver Peak (Nivloc) Property. Thirty-seven (37) drill holes, totaling approximately 10,500 metres were completed by April 5, 2012. Thereafter, as a result of poor financial markets the Company did not carry out any exploration work, until it carried out prospecting and geological mapping programs in mid-2017 and at the end of 2017. Upon receipt of the next material financing, the Company is planning to carry out the next phase of its drilling program and geological modelling, which will be followed by a second phase drilling program, based on the results of the first phase program, pursuant to the Company's NI43-101 Technical Report dated April 15, 2019, which can be found at www.sedar.comor on the Company's website www.millenniumsilver.ca.
Selected Financial Data by Quarter
( $ ) | Q1-23 | Q4-22 | Q3-22 | Q2-22 | Q1-22 | Q4-21 | Q3-21 | Q2-21 |
Revenue | Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil |
Expenses | 40,029 | 100,900(1) | 20,441 | 24,024 | 47,179 | 42,196 | 31,261 | 193,439 |
Net loss for the | ||||||||
period | (40,740) | (101,108) | (20,441) | (24,998) | (48,745) | (43,135) | (32,203) | (201,327) |
Basic loss per | ||||||||
share | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Cash | 19,212 | 3,431 | 610 | 1,426 | 18,852 | 13,277 | 11,776 | 80,858 |
Current assets | 21,164 | 5,080 | 5,474 | 10,744 | 24,591 | 18,933 | 16,814 | 89,732 |
Working capital | ||||||||
(deficiency) | (356,201) | (333,311) | (307,326) | (210,563) | (197,859) | (116,334) | (62,234) | 41,599 |
- Includes impairment of exploration and evaluation assets.
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Disclaimer
Millennium Silver Corp. published this content on 29 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2023 07:19:07 UTC.
