NORTH PEAK RESOURCES LTD.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(EXPRESSED IN CANADIAN DOLLARS)
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying consolidated financial statements of North Peak Resources Ltd. ("the Company") were prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the consolidated financial statements. Management acknowledges responsibility for the preparation and presentation of the annual consolidated financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Corporation's circumstances. In the opinion of management, the consolidated financial statements have been prepared within acceptable limits of materiality using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances.
Management has established processes which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the 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 consolidated financial statements and (ii) the consolidated financial statements fairly present in all material respects the financial condition, financial performance and cash flows of the Corporation, as of the date of and for the periods presented by the consolidated financial statements.
The Board of Directors is responsible for reviewing and approving the consolidated financial statements together with other financial information of the Corporation 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 consolidated financial statements together with other financial information of the Corporation. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the consolidated financial statements together with other financial information of the Corporation for issuance to the shareholders.
Management recognizes its responsibility for conducting the Corporation's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of
North Peak Resources Ltd.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of North Peak Resources Ltd. (the Company or NPR), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of 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 International Financial Reporting Standards.
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 are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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.
We have determined the matter described below to be the key audit matter to be communicated in our report.
Acquisition of Prospect Mountain Property, Nevada, USA
Description of the matter
As more fully described in Note 5, on May 2, 2023, the Company through its subsidiary, North Peak Nevada Limited, acquired an effective 80% interest in the Prospect Mountain Property (the Property), from Solarljos LLC (Solarljos), by issuing 5,000,000 common shares, 340,000 warrants and making a cash payment of USD$385,000 to Solarljos. Additional cash, common share and minimum exploration expenditures, tied to anniversary dates, are required to maintain the 80% interest. Conversely, if the Company determines, in its sole discretion, not to continue with the Property, Solarljos shall transfer the initial 5,000,000 NPR common shares back to the Company.
The Company also has the right, but not the obligation, to acquire the 20% interest held by Solarljos by making a final payment of 3,000,000 common shares.
Why the matter is a key audit matter
Due to the complexity of the acquisition and relevant IFRS, significant judgement was required to access whether the Company's 80% interest in the Property constituted control, joint control or significant influence over the legal entity holding the underlying mining claims; or rather whether the series of transactions were most appropriately accounted for in accordance with IFRS 6, Exploration for and Evaluation of Mineral Resources. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence.
How the matter was addressed in the audit
The following were the primary procedures we performed to address this key audit matter:
- We reviewed agreements with regards to the transaction and evaluated the substance of the arrangement to assess the correct application of accounting treatment and policies applied by management in accordance with relevant IFRS standards;
- We reviewed management's assessment of the acquisition to determine whether the accounting treatment applied was consistent with relevant IFRS; ultimately, we concurred with management's accounting under IFRS 6, as in substance the acquisition was most reflective of a mineral property option agreement; and;
- We assessed the appropriateness and completeness of the related disclosures in the consolidated financial statements.
Information Other than the Consolidated Financial Statements and Auditor's Report Thereon Management is responsible for the other information. The other information comprises the annual management's discussion and analysis, but does not include the consolidated financial statements and our auditor's report thereon.
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 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 International Financial Reporting 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 relating 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 scepticism 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.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes 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 of 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 Pat Kenney.
Chartered Professional Accountants
Licensed Public Accountants
Mississauga, Ontario
April 29, 2024
NORTH PEAK RESOURCES LTD.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
As at December 31, | 2023 | 2022 | ||
ASSETS | ||||
Current assets | $ | 5,304,713 | ||
Cash | $ | 8,087,936 | ||
Investment | 100,000 | 100,000 | ||
Prepaid and sundry receivable | 160,239 | 120,161 | ||
$ | 5,564,952 | $ | 8,308,097 | |
Equipment | 181,611 | - | ||
Right-of-use assets (note 6) | 73,669 | 61,009 | ||
Exploration and evaluation assets (notes 5 and 12) | 8,339,169 | 95,000 | ||
Total assets | $ | 14,159,401 | $ | 8,464,106 |
LIABILITIES AND EQUITY | ||||
Current liabilities | $ | 485,847 | ||
Accounts payable and accrued liabilities (note 12) | $ | 128,139 | ||
Current portion of lease liability (note 7) | 50,886 | 59,586 | ||
$ | 536,733 | $ | 187,725 | |
Non-current portion of lease liability (note 7) | 28,053 | 4,686 | ||
Total liabilities | $ | 564,786 | $ | 192,411 |
Shareholders' equity | 38,182,019 | |||
Share capital (note 8) | 28,782,135 | |||
Shares to be issued (note 5) | 40,355 | - | ||
Contributed surplus (notes 9 and 10) | 15,414,473 | 14,142,910 | ||
Deficit | (40,042,232) | (34,653,350) | ||
Total shareholders' equity | 13,594,615 | 8,271,695 | ||
Total liabilities and shareholders' equity | $ | 14,159,401 | $ | 8,464,106 |
Nature of Operations (note 1) | ||||
Subsequent Events (note 15) | ||||
Approved on behalf of the Board of Directors: | ||||
/s/ "Brian Hinchcliffe" | /s/ "John Thomson" | |||
Brian Hinchcliffe | John Thomson | |||
Director | Director |
The accompanying notes are an integral part of these consolidated financial statements.
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NORTH PEAK RESOURCES LTD.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
For the Years Ended December 31, | 2023 | 2022 | ||
Expenses | $ | 25,422 | ||
Contractor fees | $ | 25,017 | ||
Travel | 276,819 | 202,991 | ||
Office and general (note 12) | 1,130,500 | 767,208 | ||
Professional fees (note 12) | 255,158 | 180,794 | ||
Marketing | 34,865 | 1,984 | ||
Exploration and evaluation expenses (note 13) | 3,110,443 | 2,097,914 | ||
Loss on disposition of exploration and evaluation assets | - | 679,440 | ||
Stock-based compensation (notes 10 and 12) | 920,236 | 658,942 | ||
Interest income | (364,562) | (141,842) | ||
Net loss and comprehensive loss for the year | $ | (5,388,882) | $ | (4,472,448) |
Basic and diluted net loss per share (note 11) | $ | (0.21) | $ | (0.19) |
Weighted average number of common shares | ||||
outstanding, basic and diluted (note 11) | 25,881,296 | 23,179,907 |
The accompanying notes are an integral part of these consolidated financial statements.
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NORTH PEAK RESOURCES LTD.
Consolidated Statements of Changes in Shareholders' Equity
(Expressed in Canadian Dollars)
Share Capital | Shares to be | Contributed | |||||||||
Number | Amount | Issued | Surplus | Deficit | Total | ||||||
Balance, December 31, 2021 | 21,334,455 | $ | 27,674,324 | $ | - | $ | 11,340,951 | $ (30,180,902) | $ | 8,834,373 | |
Issued on private placement | 2,499,996 | 5,750,000 | - | - | - | 5,750,000 | |||||
Costs of issue | - | (249,172) | - | - | - | (249,172) | |||||
Warrants issued | - | (2,143,017) | - | 2,143,017 | - | - | |||||
Stock-based compensation | - | - | - | 658,942 | - | 658,942 | |||||
Shares returned to treasury on termination of property | |||||||||||
agreement (note 4) | (1,250,000) | (2,250,000) | - | - | - | (2,250,000) | |||||
Net loss for the year | - | - | - | - | (4,472,448) | (4,472,448) | |||||
Balance, December 31, 2022 | 22,584,451 | 28,782,135 | - | 14,142,910 | (34,653,350) | 8,271,695 | |||||
Issued on private placement | 2,272,727 | 2,000,000 | - | - | - | 2,000,000 | |||||
Costs of issue | - | (107,571) | - | - | - | (107,571) | |||||
Shares issued for exploration and evaluation assets (note 5) | 5,000,000 | 7,250,000 | - | - | - | 7,250,000 | |||||
Warrants issued for exploration and evaluation assets (note 5) | - | - | - | 472,532 | - | 472,532 | |||||
Issued on exercise of stock options | 275,000 | 257,455 | 40,355 | (121,205) | - | 176,605 | |||||
Stock-based compensation | - | - | - | 920,236 | - | 920,236 | |||||
Net loss for the year | - | - | - | - | (5,388,882) | (5,388,882) | |||||
Balance, December 31, 2023 | 30,132,178 | $ | 38,182,019 | $ | 40,355 | $ | 15,414,473 | $ (40,042,232) | $ | 13,594,615 |
The accompanying notes are an integral part of these consolidated financial statements.
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NORTH PEAK RESOURCES LTD.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
For the Years Ended December 31, | 2023 | 2022 | ||
Operating activities | $ | (5,388,882) | ||
Net loss for the year | $ | (4,472,448) | ||
Stock-based compensation | 920,236 | 658,942 | ||
Loss on disposition of exploration and evaluation assets | - | 679,440 | ||
Depreciation of right-of-use assets | 74,468 | 51,623 | ||
Depreciation of equipment | 28,545 | - | ||
Accretion of lease liability | 9,328 | 8,339 | ||
Non-cash working capital items: | (40,078) | |||
Prepaid and sundry receivable | (5,260) | |||
Accounts payable and accrued liabilities | 398,063 | (19,556) | ||
(3,998,320) | (3,098,920) | |||
Investing activities | (210,156) | |||
Acquisition of equipment | - | |||
Proceeds received on disposition of mining claims | - | 656,950 | ||
Property acquisition costs | (521,637) | (29,597) | ||
(731,793) | 627,353 | |||
Financing activities | 1,892,430 | |||
Private placement, net of fees | 5,500,827 | |||
Proceeds received on exercise of options | 136,250 | - | ||
Repayment of lease obligations | (81,790) | (56,698) | ||
1,946,890 | 5,444,129 | |||
Net change in cash | (2,783,223) | 2,972,562 | ||
Cash, beginning of the year | 8,087,936 | 5,115,374 | ||
Cash, end of the year | $ | 5,304,713 | $ | 8,087,936 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||||
Shares returned to treasury upon termination of property agreement (note 4) | $ | - | $ | 2,250,000 |
Shares issued on property acquisition (Note 4) | $ | 7,250,000 | $ | - |
The accompanying notes are an integral part of these consolidated financial statements.
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North Peak Resources Ltd. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 12:11:15 UTC.