Regulus Resources : First Quarter Report - Dec 31, 2024

Published: 2025-03-03 17:28:11 ET REG.V

(the "Company")

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED DECEMBER 31, 2024 AND 2023

(Expressed in Canadian Dollars)

(Unaudited - Prepared by Management)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim condensed consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these interim condensed consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

Regulus Resources Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

As at

December 31, 2024

September 30, 2024

ASSETS

Current

Cash and cash equivalents

12,377,452

13,347,664

Receivables

139,081

119,938

Prepaid expenses and deposits

116,473

103,532

Due from related party (Note 6)

4,312

29,727

12,637,318

13,600,861

Long-term investments

262,250

502,250

Property and equipment

578,313

581,088

Exploration and evaluation assets (Note 4)

60,014,371

54,811,319

73,492,252

69,495,518

LIABILITIES AND EQUITY

Current

Accounts payable and accrued liabilities (Notes 6)

485,071

546,135

Decommissioning liability

355,743

356,000

840,814

902,135

Equity

Capital stock (Note 5)

137,937,764

Accumulated other comprehensive loss

(1,292,500)

(5,516,450)

Share compensation reserve (Note 5)

20,749,394

20,278,315

Deficit

(84,743,220)

(84,106,246)

72,651,438

68,593,383

73,492,252

69,495,518

Nature and continuance of operations (Note 1)

Approved by the Board:

Director:

"John Black"

"Mark Wayne"

John Black

Mark Wayne

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Regulus Resources Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Three Months Ended December 31,

2024

2023

EXPENSES

Accounting and audit

79,911

81,896

Amortization

25,365

17,963

Bank charges and interest

17,911

5,383

Insurance

4,637

6,324

Investor relations and shareholder information

70,157

52,325

Legal (Note 6)

16,709

60,322

Management fees (Note 6)

195,067

197,202

Office and administration

182,231

134,034

Share-based compensation (Notes 5, 6)

471,079

286,146

Transfer agent and listing fees

11,135

8,920

Travel

34,731

14,374

(1,108,933)

(864,889)

OTHER ITEMS

Gain (loss) on foreign exchange

371,085

(103,307)

Write-off of receivables

(53,606)

(121,475)

Interest income

154,480

213,866

LOSS FOR THE PERIOD

(636,974)

(875,805)

Items that may be reclassified subsequently to

profit and loss:

Change in fair market value of long-term

investment

(240,000)

(69,000)

Items that will not be reclassified subsequently

to profit and loss:

Translation adjustment

Comprehensive income (loss) for the period

Loss per common share - basic and diluted

Weighted average number of common shares outstanding - basic and diluted

4,463,950

(1,374,971)

3,586,976

(2,319,776)

(0.01)

124,658,818

124,508,818

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Regulus Resources Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

Accumulated

Other

Number of

Capital

Comprehensive

Compensation

Stock

Loss

Reserve

Deficit

Total

Balance, September 30, 2023

124,508,818

$ 137,721,097

(5,612,177)

17,873,116

(79,894,554)

70,087,482

Share-based compensation

286,146

Fair value adjustment to long-term investment

(69,000)

Foreign exchange adjustment

(1,374,971)

Loss for the period

(875,805)

Balance, December 31, 2023

124,508,818

$ 137,721,097

(7,056,148)

18,159,262

(80,770,359)

68,053,852

Balance, September 30, 2024

124,658,818

$ 137,937,764

(5,516,450)

20,278,315

(84,106,246)

68,593,383

Share-based compensation

471,079

Fair value adjustment to long-term investment

(240,000)

Foreign exchange adjustment

4,463,950

Loss for the period

(636,974)

Balance, December 31, 2024

124,658,818

$ 137,937,764

(1,292,500)

20,749,394

(84,743,220)

72,651,438

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Regulus Resources Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Three Months Ended December 31,

2024

2023

Cash Flows from Operating Activities

Loss for the period

(636,974)

(875,805)

Items not affecting cash:

Amortization

25,365

17,963

Share-based compensation

471,079

286,146

Write-off of receivables

53,606

121,475

Unrealised foreign exchange

103,307

Changes in non-cash working capital items:

Receivables

(72,208)

(121,336)

Prepaid expenses and deposits

(12,748)

19,374

Accounts payable and accrued liabilities

(87,221)

(117,337)

Due from related party

25,415

(24,242)

Net cash and cash equivalents used in operating activities

(233,686)

(590,455)

Cash Flows from Investing Activities

Acquisition of property and equipment

(1,179)

Lease payments

(13,759)

Exploration and evaluation assets

(1,052,021)

(810,246)

Decommissioning liability payments

(129,089)

Net cash and cash equivalents used in investing activities

(1,052,021)

(954,273)

Effect of foreign exchange on cash and cash equivalents

315,495

(350,939)

Change in cash and cash equivalents for the period

(970,212)

(1,895,667)

Cash and cash equivalents, beginning

13,347,664

18,423,544

Cash and cash equivalents, ending

12,377,452

16,527,877

Supplemental disclosures with respect to cash flows (Note 7)

Regulus Resources Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Three Months Ended December 31, 2024 and 2023

Regulus Resources Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Three Months Ended December 31, 2024 and 2023

2. BASIS OF PREPARATION (cont'd…) Impairment of exploration and evaluation assets

Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment losses is a subjective process involving judgment and a number of estimates and interpretations. Determining whether to test for impairment of exploration and evaluation assets requires management's judgment, and consideration of whether the period for which the Company has the right to explore in the specific area has expired or will expire in the near future, and is not expected to be renewed; substantive expenditure on further exploration and evaluation of mineral resources in a specific area is neither budgeted nor planned; exploration for and evaluation of mineral resources in a specific area have not led to the discovery of commercially viable quantities of mineral resources and the Company has decided to discontinue such activities in the specific area; or sufficient data exists to indicate that, although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

Estimates

Significant estimates, made by management, about the future and other sources of estimation uncertainty at the end of the reporting period that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made relate to, but are not limited to, the following:

Carrying value and recoverability of exploration and evaluation assets

The carrying amount of Company's exploration and evaluation assets does not necessarily represent present or future values and the Company's exploration and evaluation assets have been accounted for under the assumption that the carrying amount will be recoverable. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and upon future profitable production or disposition of the mineral properties. Additionally, there are numerous geological, economic, environmental and regulatory factors and uncertainties that could affect management's assessment of the overall viability of its properties or to the likelihood of generating future cash flows necessary to recover the carrying value of the Company's exploration and evaluation assets.

To the extent that any of management's assumptions change there could be a significant effect on the Company's future financial position, operating results and cash flows.

Fair value of stock options and warrants

Determining the fair value of warrants and stock options requires judgments related to the choice of a pricing model, the estimation of stock price volatility, the expected forfeiture rate and the expected term of the underlying instruments. Any changes in the estimates or inputs utilized to determine fair value could result in a significant effect on the Company's future operating results or on other components of shareholders' equity.

Income taxes

The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company's ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development or commercialization of mineral reserves. To the extent that management's assessment of the Company's ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets and deferred income tax provisions or recoveries could be affected.

Decommissioning costs

Upon retirement of the Company's exploration and evaluation assets, decommissioning costs will be incurred by the Company. Estimates of these costs are subject to uncertainty associated with the method, timing and extent of future decommissioning activities. The liability, the related asset and the corresponding expense are affected by estimates with respect to the costs and timing of decommissioning.

Regulus Resources Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Three Months Ended December 31, 2024 and 2023

Regulus Resources Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Three Months Ended December 31, 2024 and 2023

4. EXPLORATION AND EVALUATION ASSETS (cont'd…)

AntaKori,

Peru

Balance, September 30, 2023

51,723,583

Additions:

Sale of royalty interest

Change in estimates related to decommissioning liability

93,600

Field operations

1,782,513

Labour

1,081,407

Third party services

136,439

3,093,959

Foreign exchange movement

(6,223)

Balance, September 30, 2024

54,811,319

Additions:

Field operations

778,252

Labour

219,315

Third party services

54,454

1,052,021

Foreign exchange movement

4,151,031

Balance, December 31, 2024

60,014,371

AntaKori Project, Peru

The Company has acquired the AntaKori project through the execution of option agreements between its 100% owned subsidiary, Regulus Resources Peru S.A.C. ("Regulus Peru"), and various land owners. Option payments in the amount of US$7,460,062 were completed by the year ended September 30, 2017, with no payments remaining.

During the year ended September 30, 2017, the Company finalized the execution of a definitive agreement (the "Colquirummi DA") with Compañía Minera Colquirrumi S.A. ("Colquirrumi"), which holds mineral concessions immediately adjacent to, and inter-fingering with the Company's AntaKori project.The Colquirummi DA allowed Regulus to earn-in to a 70% interest in ground held by Colquirrumi by completing 7,500 m of drilling within 3 years from obtaining necessary permits to drill. Regulus received the drilling permits in Q4-2019. The agreement assigned certain mining concessions to the Company's Peruvian subsidiary, Anta Norte S.A.C., to allow for exploration work to be performed on those claims by the Company during the term of the agreement. Upon notification that the Company had completed 7,500 m of drilling and elected to obtain a 70% interest in the property, Colquirrumi had a one-time option (the "Claw-back Option") to claw-back to a 70% interest in the property (leaving 30% to the Company) by paying the Company the sum of US$9,000,000. During the year ended September 30, 2023, the Company notified Colquirrumi that it had completed the 7,500 m of drilling and Colquirummi decided not to exercise its Claw-back Option, leaving the Company with a 70% interest in the property. During the year ended September 30, 2024, the Company executed a further agreement with Colquirrumi (the "Second Colquirummi Agreement") to acquire the remaining 30% interest in the property in exchange for granting Colquirummi a 2% net smelter return royalty ("NSR") (the "Colquirummi NSR"), of which 0.5% can be repurchased within 10 years in exchange for US$1,000,000. The Second Colquirrumi Agreement replaced the Colquirummi DA.

In addition to the Colquirummi NSR, the Company is subject to paying NSRs ranging from 0.1875% - 2% to underlying holders of the AntaKori claims. As at September 30, 2024, accounts payable include $nil (2023 - $nil) relating to these royalties.

During the year ended September 30, 2024, the Company executed a collaboration agreement (the "Coimolache MOU") with Compañía Minera Coimolache S.A. ("Coimolache") to evaluate the viability of an integrated Coimolache Sulphides/AntaKori copper-gold project.

Disclaimer

Regulus Resources Inc. published this content on March 03, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 03, 2025 at 22:27:38.223.