MONTERO MINING AND EXPLORATION LTD.
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2023 and 2022
Expressed in Canadian Dollars
Independent Auditor's Report
To the Shareholders of Montero Mining and Exploration Ltd.
Opinion
We have audited the consolidated financial statements of Montero Mining and Exploration Ltd. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of comprehensive loss, changes in shareholders' deficit and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").
In our opinion, the accompanying 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 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 financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 to the financial statements, which indicates that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters, that in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.
Other Information
Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.
Our opinion on the 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 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 financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. 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 Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the 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 Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 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 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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 Matthew Gosden.
DALE MATHESON CARR-HILTON LABONTE LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
April 23, 2024
MONTERO MINING AND EXPLORATION LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)
As at December 31, | As at December 31, | ||
Notes | 2023 | 2022 | |
ASSETS | $ | $ | |
Current assets | |||
Cash | 9,641 | 4,718 | |
Other receivables | 3,207 | 4,336 | |
Prepaid expenses and deposits | 29,889 | 29,086 | |
Total current assets | 42,737 | 38,140 | |
Non-current assets | |||
Plant and equipment | 4 | 431 | 624 |
Exploration and evaluation assets | 5 | 819,541 | 559,694 |
Total non-current assets | 819,972 | 560,318 | |
TOTAL ASSETS | 862,709 | 598,458 | |
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 6,10 | 1,356,969 | 702,530 |
Loans payable | 7,10 | 266,120 | 56,762 |
Total current liabilities | 1,623,089 | 759,292 | |
SHAREHOLDERS' DEFICIT | |||
Share capital | 8 | 18,116,063 | 18,116,063 |
Share based payment reserve | 8 | 8,836,549 | 8,836,549 |
Foreign currency translation reserve | 1,047,560 | 1,047,560 | |
Accumulated deficit | (28,760,552) | (28,161,006) | |
Total shareholders' deficit | (760,380) | (160,834) | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 862,709 | 598,458 | |
Note 1 - Nature and continuance of operations
Note 16 - Subsequent events
On behalf of the Board: | ||
"Antony Harwood" | "Andrew Thomson" | |
Antony Harwood, Director | Andrew Thomson, Director |
See accompanying notes to the consolidated financial statements.
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MONTERO MINING AND EXPLORATION LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Expressed in Canadian dollars)
Year ended | Year ended | ||
Note | December 31, | December 31, | |
2023 | 2022 | ||
$ | $ | ||
EXPENSES | |||
Consulting, administrative and management fee | 10 | 220,304 | 87,216 |
Depreciation | 4 | 193 | 282 |
General and administrative | 10 | 134,324 | 150,030 |
Professional fees | 73,461 | 80,532 | |
Project investigation costs | 36,215 | 12,014 | |
Shareholder and regulatory | 18,191 | 17,384 | |
OPERATING EXPENSES | (482,688) | (347,458) |
OTHER ITEMS Interest expense
Impairment of exploration and evaluation assets Gain on forgivness of debt
Foreign exchange gain (loss)
7 | (7,341) | (2,500) |
5 | (97,917) | (294,965) |
10 | - | 150,000 |
(11,600) | 1,668 |
TOTAL OTHER ITEMS | (116,858) | (145,797) | |
NET AND COMPREHENSIVE LOSS | (599,546) | (493,255) | |
Loss per share, basic and diluted | 8 | (0.02) | (0.01) |
Weighted average number of shares outstanding | 38,647,485 | 38,647,485 |
See accompanying notes to the consolidated financial statements
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MONTERO MINING AND EXPLORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT (Expressed in Canadian dollars)
Share Capital | Foreign | ||||||
Share Based | Currency | ||||||
Number of | Payment | Translation | Accumulated | ||||
shares | Amount | Warrants | Reserve | Reserve | Deficit | Total Deficit | |
$ | $ | $ | $ | $ | $ | ||
Balance, December 31, 2021 | 38,647,485 | 18,116,063 | 756,506 | 8,080,043 | 1,047,560 | (27,667,751) | 332,421 |
Expired warrants | - | - | (756,506) | 756,506 | - | - | - |
Net loss and comprehensive loss | - | - | - | - | - | (493,255) | (493,255) |
Balance, December 31, 2022 | 38,647,485 | 18,116,063 | - | 8,836,549 | 1,047,560 | (28,161,006) | (160,834) |
Net loss and comprehensive loss | - | - | - | - | - | (599,546) | (599,546) |
Balance, December 31, 2023 | 38,647,485 | 18,116,063 | - | 8,836,549 | 1,047,560 | (28,760,552) | (760,380) |
See accompanying notes to the consolidated financial statements.
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MONTERO MINING AND EXPLORATION LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars)
Year ended | Year ended | |
December 31, 2023 | December 31, 2022 | |
$ | $ | |
OPERATING ACTIVITIES | ||
Net loss for the year | (599,546) | (493,255) |
Adjustments for non-cash items: | ||
Depreciation | 193 | 282 |
Gain on forgiveness of debt | - | (150,000) |
Impairment of exploration and evaluation assets | 97,917 | 294,965 |
Interest expense | 7,358 | 2,500 |
Net changes in non-cash working capital items: | ||
Other receivables | 1,129 | 588 |
Prepaid expenses and deposits | (803) | 20,461 |
Trade and other payables | 371,429 | 152,260 |
Net cash used in operating activities | (122,323) | (172,199) |
INVESTING ACTIVITIES | ||
Expenditures on exploration and evaluation assets | (397,272) | (340,226) |
Net cash used in investing activities | (397,272) | (340,226) |
FINANCING ACTIVITIES | ||
Advance from related party | 322,518 | 275,965 |
Loans from related party | 202,000 | - |
Net cash provided by financing activities | 524,518 | 275,965 |
NET INCREASE (DECREASE) IN CASH | 4,923 | (236,460) |
CASH, BEGINNING OF THE YEAR | 4,718 | 241,178 |
CASH, END OF THE YEAR | 9,641 | 4,718 |
Note 13 - Supplemental cash flow information.
See accompanying notes to the consolidated financial statements.
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MONTERO MINING AND EXPLORATION LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023 AND 2022
(Expressed in Canadian dollars)
-
NATURE AND CONTINUANCE OF OPERATIONS
Montero Mining and Exploration Ltd ("Montero" or the "Company") was incorporated on October 5, 2006, under the laws of British Columbia, Canada. Montero is engaged in the acquisition and exploration of mineral properties.
Montero is a publicly listed company with its shares listed on the TSX Venture Exchange ("TSX-V"). The Company's registered office is located at 1040 West Georgia Street, Suite 1900, Vancouver, BC, V6E 4H3 and its head office address is 750 West Pender Street, Suite 401, Vancouver, BC V6C 2T7.
Going Concern
These consolidated financial statements have been prepared using International Financial Reporting Standards ("IFRS") applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at December 31, 2023, the Company had not advanced its exploration and evaluation assets to commercial production and is not able to finance day to day activities through operations. The Company's continuation as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. When further funds are required, they will be financed through a private placement of common shares or by debt instruments. - BASIS OF PREPARATION Statement of Compliance
These consolidated financial statements of the Company, including comparatives, have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").
The consolidated financial statements for the year ended December 31, 2023 were authorized for issue on April 23, 2024 by the Directors of the Company.
Basis of Measurement
These consolidated financial statements have been prepared on an accrual basis and are based on the historical cost basis as modified by any revaluation of financial assets measured at fair value. The consolidated financial statements are presented in Canadian dollars ("CAD"), which is also the Company's functional currency. - MATERIAL ACCOUNTING POLICY INFORMATION Basis of Consolidation
The consolidated financial statements include the accounts of Montero, the parent company, and its controlled subsidiaries, after the elimination of all intercompany balances and transactions. Control is achieved when the Company has the power to govern the financial and operating policies of an entity to obtain benefits from its activities. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceased. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
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MONTERO MINING AND EXPLORATION LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023 AND 2022
(Expressed in Canadian dollars)
3. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
The Company's controlled subsidiaries included in these consolidated financial statements are:
Name | Country of Incorporation | Ownership |
Minera Joy SpA | Chile | 100% |
Minera Joy East SpA | Chile | 100% |
Minera Joy West SpA | Chile | 100% |
Montero Mining Namibia (Proprietary) | ||
Limited | Namibia | 100% |
Soris Mining (Proprietary) Limited | Namibia | 80% |
Montero Wigu Hill (Tanzania) Limited | Tanzania | 100% |
Montero Resources Limited | Tanzania | 100% |
Lumba Exploration Limited | Tanzania | 100% |
Wigu Hill Mining Company Limited | Tanzania | 82.25% |
Lumba Mining Company Limited | Tanzania | 82.25% |
Material accounting judgements, estimates and assumptions
The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting year. Estimates and assumptions are continuously evaluated and are based on managements' experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Areas requiring a significant degree of estimation relate to the recoverability of deferred tax assets, fair value measurements of financial instruments and share-based payments.
Exploration and evaluation assets
The Company records and carries its interest in exploration and evaluation assets at cost. These capitalized costs include the direct costs of acquisition, exploration and the evaluation of the technical feasibility and commercial viability of extracting a mineral resource. Government tax credits received are recorded as a reduction of the cumulative costs incurred and capitalized on the related property. Exploration costs incurred before the Company has obtained a legal right to explore are expensed as project investigation costs.
Exploration and evaluation assets are assessed for impairment when the facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount.
The Company's criterion for testing impairment includes, but is not limited to, when:
- Exploration rights for a specific area expired or are expected to expire in the near future and these rights are not expected to be renewed;
- Substantive expenditures on further exploration for and evaluation of mineral resources in a specific area is neither budgeted nor planned;
- 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 the Company has decided to discontinue such activities in the specific area; and / or
- Sufficient data exists to indicate that, although a development in the 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.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within plant and equipment.
When an impairment test is performed and, as a result of this test, it is determined that the carrying amount of an exploration and evaluation asset exceeds its recoverable amount, a provision is made for the decline in value and charged against operations in the year.
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Montero Mining and Exploration Ltd. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 15:04:07 UTC.