Exhibit 99.1
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
(Unaudited – Prepared by Management)
December 31, 2023
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)
(Unaudited – Prepared by Management)
For the nine months ended December 31, 2023
Note |
As at December 31, 2023 |
As at March 31, 2023 |
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ASSETS |
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Current assets |
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Cash |
$ | $ | ||||||||||
GST receivable |
||||||||||||
Prepaid expenses and deposits |
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Net investment in sublease |
4 | |||||||||||
Total current assets |
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Non-current assets |
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Prepaid expenses and deposits |
||||||||||||
Long-term investment |
||||||||||||
Exploration and evaluation assets |
5 | |||||||||||
Total assets |
$ | $ | ||||||||||
LIABILITIES AND EQUITY |
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Current liabilities |
||||||||||||
Accounts payable and accrued liabilities |
6, 10 | $ | $ | |||||||||
Short-term loans payable |
7 | |||||||||||
Lease obligation |
4 | |||||||||||
Loan payable |
8 | |||||||||||
Total current liabilities |
||||||||||||
Non-current liabilities |
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Derivative liability |
9 | |||||||||||
Total liabilities |
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Equity |
||||||||||||
Capital stock |
9 | |||||||||||
Reserves |
9 | |||||||||||
Deficit |
( |
) | ( |
) | ||||||||
Total equity |
||||||||||||
Total liabilities and equity |
$ | $ |
Nature and continuance of operations (Note 1)
Approved and authorized on behalf of the Board on February 13, 2024: |
|||
“Jason Barnard” |
Director |
“Andrew Lyons” |
Director |
Jason Barnard |
Andrew Lyons |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Expressed in Canadian dollars)
(Unaudited – Prepared by Management)
For the nine months ended December 31, 2023
For the three-month period ended December 31, |
For the nine-month period ended December 31, |
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Note |
2023 |
2022 |
2023 |
2022 |
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EXPENSES |
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General and administration |
4,7,9,10 | $ | $ | $ | $ | |||||||||||||||
Sales and marketing |
||||||||||||||||||||
Share-based payments |
9,10 | |||||||||||||||||||
Loss before other items |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
OTHER ITEMS |
||||||||||||||||||||
Finance income on sublease |
4 | |||||||||||||||||||
Foreign exchange gain (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||
Gain on sublease |
4 | |||||||||||||||||||
Gain on derivative liabilities |
9 | |||||||||||||||||||
Gain on sale of property |
5 | |||||||||||||||||||
Interest expense |
7 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Other income |
8 | |||||||||||||||||||
Recovery of flow-through premium liability |
||||||||||||||||||||
Realized loss on marketable securities |
( |
) | ||||||||||||||||||
Unrealized gain (loss) on marketable securities |
( |
) | ||||||||||||||||||
Write-off of prepaid |
( |
) | ||||||||||||||||||
Income (loss) and comprehensive income (loss) for the period |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||
Basic income (loss) per common share |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||
Diluted income (loss) per common share |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||
Weighted average number of common shares outstanding - basic |
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Dilutive effect - options |
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Dilutive effect - warrants |
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Weighted average number of common shares outstanding - diluted |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited – Prepared by Management)
For the nine months ended December 31, 2023
For the nine months ended December 31, 2023 | For the nine months ended December 31, 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Income (loss) and comprehensive income (loss) for the period | $ | ( | ) | $ | ||||
Items not involving cash: | ||||||||
Finance income on sublease | ( | ) | ( | ) | ||||
Forgiveness of debt | ( | ) | ||||||
Gain on derivative liabilities | ( | ) | ||||||
Gain on sale of property | ( | ) | ||||||
Interest expense | ||||||||
Recovery of flow-through premium liability | ( | ) | ||||||
Share-based payments | ||||||||
Share for services | ||||||||
Realized loss on marketable securities | ||||||||
Unrealized loss (gain) on marketable securities | ( | ) | ||||||
Write-off of prepaid | ||||||||
Changes in non-cash working capital items: | ||||||||
GST receivable | ( | ) | ||||||
Accounts receivable | ( | ) | ||||||
Prepaid expenses and deposits | ( | ) | ||||||
Accounts payable and accrued liabilities | ( | ) | ||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Exploration and evaluation acquisition costs | ( | ) | ||||||
Exploration and evaluation expenditures | ( | ) | ( | ) | ||||
Exploration and evaluation recoveries | ||||||||
Receipt of sublease payments | ||||||||
Sale of property | ||||||||
Sale proceeds from investment | ||||||||
Net cash provided by (used in) investing activities | ( | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Private placement | ||||||||
Share issue costs | ( | ) | ( | ) | ||||
Exercise of warrants | ||||||||
Exercise of options | ||||||||
Short-term loan received (repayment) | ( | ) | ||||||
Loan interest repayment | ( | ) | ||||||
Receipt of sublease payments | ||||||||
Repayment of lease obligation | ( | ) | ( | ) | ||||
Net cash provided by financing activities | ||||||||
Change in cash for the period | ||||||||
Cash, beginning of the period | ||||||||
Cash, end of period | $ | $ | ||||||
Cash paid during the period for interest and taxes | $ | $ |
Supplemental disclosures with respect to cash flow (Note 11)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in Canadian dollars)
(Unaudited – Prepared by Management)
For the nine months ended December 31, 2023
Capital stock |
||||||||||||||||||||
Shares |
Amount |
Reserves |
Deficit |
Total equity |
||||||||||||||||
Balance, March 31, 2022 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Private placements |
||||||||||||||||||||
Acquisition of exploration and evaluation assets |
||||||||||||||||||||
Flow-through premium |
- | ( |
) | ( |
) | |||||||||||||||
Share issuance costs |
- | ( |
) | ( |
) | |||||||||||||||
Share issued – warrants exercised |
||||||||||||||||||||
Share issued – options exercised |
( |
) | ||||||||||||||||||
Share issued – PSU redeemed |
( |
) | ||||||||||||||||||
Share issuance costs – warrants |
- | ( |
) | |||||||||||||||||
Shares-based payments |
- | |||||||||||||||||||
Options cancelled |
- | ( |
) | |||||||||||||||||
PSU cancelled |
- | ( |
) | |||||||||||||||||
Income for the period |
- | |||||||||||||||||||
Balance, December 31, 2022 |
( |
) | ||||||||||||||||||
Flow-through premium |
- | ( |
) | ( |
) | |||||||||||||||
Shares issued – options exercised |
||||||||||||||||||||
Shares issued – warrants exercised |
||||||||||||||||||||
Share issued – PSU redeemed |
( |
) | ||||||||||||||||||
Share-based payments |
- | ( |
) | ( |
) | |||||||||||||||
Options expired/forfeited |
- | ( |
) | |||||||||||||||||
PSU cancelled |
- | ( |
) | |||||||||||||||||
Income for the period |
- | |||||||||||||||||||
Balance, March 31, 2023 |
( |
) | ||||||||||||||||||
Private placements |
||||||||||||||||||||
Share issuance costs |
- | ( |
) | ( |
) | |||||||||||||||
Derivative liability |
- | ( |
) | ( |
) | |||||||||||||||
Shares issued – options exercised |
( |
) | ||||||||||||||||||
Share issued for services |
||||||||||||||||||||
Acquisition of exploration and evaluation assets |
29,900 | |||||||||||||||||||
Share-based payments |
- | |||||||||||||||||||
Options expired/forfeited |
- | ( |
) | |||||||||||||||||
Loss for the period |
- | ( |
) | ( |
) | |||||||||||||||
Balance, December 31, 2023 |
$ | $ | $ | ( |
) | $ |
* all shares are on a post consolidated basis (Note 1)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
1. | NATURE AND CONTINUANCE OF OPERATIONS |
Foremost Lithium Resource & Technology Ltd. (the “Company”), which is incorporated under the laws of the Province of British Columbia, is a public company listed on the Canadian Securities Exchange (the “CSE”) and trades under the symbol FAT. The Company’s head office is located at Suite 250, 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T7. The Company’s registered and records office is located at Royal Centre, 1055 West Georgia Street, Suite 1500, PO Box 11117, Vancouver, British Columbia, Canada, V6E 4N7.
On January 4, 2022, the Company changed its name to Foremost Lithium Resource & Technology Ltd.
On February 14, 2022, the Company began trading on the OTCQB Venture Market in the United States under the symbol FRRSF.
On July 5, 2023, the Company consolidated its common shares on the basis of 50 pre-consolidation common shares for one post-consolidation common share. All shares, warrants and stock options in these condensed interim consolidated financial statements are on post-consolidated basis.
On August 22, 2023, the Company began trading on the Nasdaq Capital Market (“NASDAQ”) under the symbols FMST and FMSTW.
The Company is an exploration company focused on the identification and development of high potential mineral opportunities in stable jurisdictions.
Going concern of operations
These condensed interim consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As at December 31, 2023, the Company has had significant losses resulting in a deficit of $
The Company’s business financial condition and results of operations may be further negatively affected by economic and other consequences from Russia’s military action against Ukraine and the sanctions imposed in response to that action in late February 2022. While the Company expects any direct impacts of the war in the Ukraine to its business to be limited, the indirect impacts on the economy and on the mining industry and other industries in general could negatively affect the Company’s business and may make it more difficult for it to raise equity or debt financing. There can be no assurance that the Company will not be impacted by adverse consequences that may be brought about on its business, results of operations, financial position and cash flows in the future.
In order to continue as a going concern and to meet its corporate objectives, the Company will require additional financing through debt or equity issuances or other available means. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
2. | BASIS OF PREPARATION |
Statement of compliance
These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”), and interpretations issued by the IFRS Interpretations Committee (“IFRIC”). Accordingly, they do not include all of the information required for full annual financial statements by International Financial Reporting Standards (“IFRS”) for complete financial statements for year-end reporting purposes. These condensed interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended March 31, 2023, which have been prepared in accordance with IFRS as issued by IASB and IFRIC. These condensed interim financial statements are presented in Canadian dollars, which is also the Company’s functional currency.
Basis of measurement
These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss which are stated at their fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information.
Basis of consolidation
These condensed interim consolidated financial statements include the financial statements of Foremost Lithium Resource & Technology Ltd. and its subsidiaries, Sierra Gold & Silver Ltd. and Sequoia Gold & Silver Ltd.
Name of Subsidiary | Country of Incorporation | Principal Activity | Proportion of Ownership Interest | |
December 31, 2023 | March 31, 2023 | |||
Sierra Gold & Silver Ltd. | USA | Holding Company | | |
Sequoia Gold & Silver Ltd. | Canada | Holding Company | | |
All intercompany balances and transactions have been eliminated.
3. | SIGNIFICANT ACCOUNTING POLICIES |
The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited consolidated financial statements as at March 31, 2023. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended March 31, 2023.
Use of estimates and judgments
The preparation of these condensed interim consolidated financial statements in conformity with IFRS requires management to make judgments and estimates and form assumptions that affect each of the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, revenue and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
3. | SIGNIFICANT ACCOUNTING POLICIES (cont’d...) |
Significant accounting judgments and critical accounting estimates
Significant accounting judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the condensed interim consolidated financial statements include, but are not limited to, the following:
1. | assessment of any indicators of impairment of the carrying value of the Company’s exploration and evaluation assets; | |
2. | the ability of the Company to continue as a going concern; and | |
3. | contingencies which, by their nature, will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. The Company is involved in certain claims, and the likelihood or outcomes of these claims involves the exercise of significant judgement. |
Foreign currency translation
The functional currency for the Company and its subsidiaries is the currency of the primary economic environment in which the entity operates. Transactions in foreign currencies are translated to the functional currency of the entity at the exchange rate in existence at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated at the period end date exchange rates.
The functional currency of the Company and its subsidiaries is the Canadian dollar, which is also the presentation currency of these condensed interim consolidated financial statements.
Financial instruments
IFRS 9 uses a single approach to determine whether a financial asset is classified and measured at amortized cost or fair value. The approach in IFRS 9 is based on how an entity manages its financial instruments and the contractual cash flow characteristics of the financial asset.
The classification of debt instruments is driven by the business model for managing the financial assets, liabilities and their contractual cash flow characteristics. Debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest.
If the business model is not to hold the debt instrument, it is classified as fair value through profit or loss (“FVTPL”). Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest.
The Company classifies its financial assets into one of the categories described below, depending on the purpose for which the asset was acquired. Management determines the classification of its financial assets at initial recognition.
Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL, and on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at fair value through other comprehensive income (“FVTOCI”).
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
3. | SIGNIFICANT ACCOUNTING POLICIES (cont’d...) |
Financial instruments (cont’d…)
FVTPL – Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of income (loss) and comprehensive income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the statement of income (loss) and comprehensive income (loss) in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.
FVTOCI - Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Financial assets at amortized cost - A financial asset is measured at amortized cost using the effective interest method if the objective of the business model is to hold the financial asset for the collection of contractual cash flows and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date and are initially recognized at fair value and subsequently carried at amortized cost less any impairment.
Financial liabilities other than derivative liabilities are recognized initially at fair value and are subsequently stated at amortized cost. Transaction costs on financial assets and liabilities other than those classified at FVTPL are treated as part of the carrying value of the asset or liability. Transaction costs for assets and liabilities at FVTPL are expensed as incurred.
The following table shows the classification and measurement of the Company’s financial instruments under IFRS 9:
Financial assets/liabilities | Classification and measurement | |
Cash | at amortized cost | |
Long-term investment | at FVTPL | |
Net investment in sublease | at amortized cost | |
Accounts payable and accrued liabilities | at amortized cost | |
Lease obligation | at amortized cost | |
Short-term loans payable | at amortized cost | |
Derivative liability | at FVTPL |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
3. | SIGNIFICANT ACCOUNTING POLICIES (cont’d...) |
New accounting standards issued and effective
A number of new standards, and amendments to standards and interpretations, are not effective and have not been early adopted in preparing these condensed interim consolidated financial statements. The following accounting standards and amendments are effective for reporting periods beginning on or after January 1, 2024:
Classification of Liabilities as Current or Non-current (Amendments to IAS 1) - The amendments to IAS1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date.
The adoption of this new accounting standard is not expected to have a material impact on the Company’s condensed interim consolidated financial statements.
4. | LEASES |
For the period ending December 31, 2023, interest expense on our lease obligation was $
Lease obligation, March 31, 2022 | $ | |||
Interest expense | ||||
Payments made | ( | ) | ||
Lease obligation, March 31, 2023 | ||||
Interest expense | ||||
Payments made | ( | ) | ||
Lease obligation, December 31, 2023 | ||||
Current portion | ||||
Non-current portion | $ |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
4. | LEASES (cont’d...) |
The weighted average incremental borrowing rate applied to the lease liabilities on April 1, 2019 was
During the period ended December 31, 2023, the Company recognized a gain on sublease of $
For the period ended December 31, 2023, finance income of the net investment in sublease was $
Net investment in sublease, March 31, 2022 | $ | |||
Finance income | ||||
Payments received | ( | ) | ||
Net investment in sublease, March 31, 2023 | ||||
Finance income | ||||
Payments received | ( | ) | ||
Net investment in sublease, December 31, 2023 | ||||
Current portion | ||||
Non-current portion | $ |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS |
During the period ended December 31, 2023, the following exploration expenditures were incurred on the exploration and evaluation of the Company’s assets:
Zoro Property | Grass River Property | Winston Property | Peg North Property | Jean Lake Property | Jol Lithium Property | Lac Simard Property | Total | |||||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Cash | ||||||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||||||
Balance, December 31, 2023 | ||||||||||||||||||||||||||||||||
Exploration costs | ||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | ||||||||||||||||||||||||||||||||
Assay | ||||||||||||||||||||||||||||||||
Geological, consulting and other | ||||||||||||||||||||||||||||||||
Exploration cost recovery | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Balance, December 31, 2023 | ||||||||||||||||||||||||||||||||
Total Balance, December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | $ |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS (cont’d…) |
During the year ended March 31, 2023, the following exploration expenditures were incurred on the exploration and evaluation of the Company’s assets:
Zoro Property | Grass River Property | Winston Property | Peg North Property | Jean Lake Property | Jol Lithium Property | Total | ||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Cash | ||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||
Balance, March 31, 2023 | ||||||||||||||||||||||||||||
Exploration costs | ||||||||||||||||||||||||||||
Balance, March 31, 2022 | ||||||||||||||||||||||||||||
Assay | ||||||||||||||||||||||||||||
Drilling | ||||||||||||||||||||||||||||
Geological, consulting and other | ||||||||||||||||||||||||||||
Helicopter | ||||||||||||||||||||||||||||
Exploration cost recovery | ( | ) | ( | ) | ||||||||||||||||||||||||
Balance, March 31, 2023 | ||||||||||||||||||||||||||||
Total Balance, March 31, 2023 | $ | $ | $ | $ | $ | $ | $ |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS (cont’d…) |
Zoro Property
Zoro I
The Company earned a
In addition, during the year ended March 31, 2017, the Company issued
Zoro North
The Company earned a
The Company can acquire an undivided
During the option period, the Company will be solely responsible for carrying out and administering all exploration, development and mining work on the property and for maintaining the property in good standing.
Green Bay Claims
The Company earned a
The property is subject to a
During the option period, the Company is responsible for carrying out and administering all exploration, development and mining work on the property and for maintaining the property in good standing.
Grass River Property
During the year ended March 31, 2022, the Company staked claims on the Grass River Property in the Snow Lake area of Manitoba for $
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS (cont’d…) |
Peg North Property
During the year ended March 31, 2023, the Company entered into an option agreement to acquire a
(a) | cash payments of $ |
(i) | a cash payment of $ | |
(ii) | a cash payment of $ | |
(iii) | a cash payment of $ | |
(iv) | a cash payment of $ | |
(v) | a cash payment of $ | |
(vi) | a cash payment of $ |
(b) | the issuance of $ |
(i) | the issuance of $ | |
(ii) | the issuance of $ | |
(iii) | the issuance of $ | |
(iv) | the issuance of $ | |
(v) | the issuance of $ | |
(vi) | the issuance of $ |
(c) | incurring exploration expenditures totaling $ |
The property is subject to a
Winston Property
Ivanhoe/Emporia claims
In accordance with the terms and condition of the underlying purchase agreement, in order to complete the acquisition of the Ivanhoe/Emporia claims, the Company is required to pay the original owner of the claims the remaining purchase price of
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS (cont’d…) |
Winston Property (cont’d...)
Little Granite Claims
During the year ended March 31, 2023, the Company amended the terms of its option agreement and acquired a
Prior to acquiring the
During the year ended March 31, 2015, the Company entered into an option agreement with Redline Minerals Inc., Redline Mining Corporation and Southwest Land & Exploration Inc. (collectively, the “Optionors”) to acquire up to an
During the years ended March 31, 2016 and 2017, the Company amended the option agreement with the Optionors to acquire an initial
(a) | the cash payment of non-refundable deposits of $ | |
(b) | cash payments of $ | |
(c) | the cash payment of $ | |
(d) | the issuance of | |
(e) | cash payments of $ |
(i) | the cash payment of $ | |
(ii) | the cash payment of $ | |
(iii) | the cash payment of $ |
(f) | the issuance of |
(i) | | |
(ii) | | |
(iii) | | |
(iv) | | |
(v) | |
(g) | incurring exploration expenditures totaling $ |
The agreement was also amended to include a further option to acquire up to an additional
In exchange for the amendment of the option agreement, the Company issued
During the year ended March 31, 2017, the Company made a $
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS (cont’d…) |
Winston Property (cont’d...)
During the year ended March 31, 2018, the Company’s wholly-owned subsidiary offered to acquire a
(a) | a cash payment of $ | |
(b) | the issuance of | |
(c) | the issuance of a $ |
In accordance with the terms and condition of the underlying purchase agreement in order to complete the acquisition of the Little Granite claims, the Company is required to make the following payments:
(a) | cash payments of US $ | |
(b) | cash payments of US $ | |
(c) | cash payments of US $ | |
(d) | cash payments of US $ | |
(e) | cash payments of US $ | |
(f) | cash payments of US $ | |
(g) | cash payments of US $ | |
(h) | cash payments of US $ |
Jean Lake Property
On July 30, 2021, the Company entered into an option agreement with Mount Morgan Resources Ltd. to acquire a
The option agreement provides that in order for the Company to earn a
(a) | pay $ | |
(b) | pay $ | |
(c) | pay $ | |
(d) | pay $ | |
(e) | pay $ |
Once the Company earns the interest, the Company will grant a
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
5. | EXPLORATION AND EVALUATION ASSETS (cont’d…) |
During the year ended March 31, 2022, the Company entered into an agreement with the Manitoba Government to receive a grant of $
During the year ended March 31, 2023, the Company entered into an agreement with the Manitoba Government to receive a grant of $
Lac Simard South Property
During the period ended December 31, 2023, the Company entered into an agreement, and earned a
Jol Lithium Property
During the year ended March 31, 2023, the Company entered into an agreement and acquired a
6. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
Accounts payables and accrued liabilities for the Company are broken down as follows:
Note | December 31, 2023 | March 31, 2023 | ||||||||||
Trade payables | $ | $ | ||||||||||
Advance royalty payable | ||||||||||||
Accrued liabilities | ||||||||||||
Due to related parties | 10 | |||||||||||
Total | $ | $ |
During the year ended March 31, 2023, the Company wrote-off $
7. | SHORT-TERM LOANS PAYABLE |
December 31, 2023 | March 31, 2023 | |||||||
Loan payable on demand, unsecured with % interest per annum and no fixed term | $ | $ | ||||||
Loan payable on May 10, 2024, secured, with % interest per annum | ||||||||
US $ promissory note (Note 5), repaid during the current period (Note 5) | ||||||||
$ | $ |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
7. | SHORT-TERM LOANS PAYABLE (cont’d...) |
During the year ended March 31, 2023, the Company entered into a loan agreement with a related party to borrow $
8. | LOANS PAYABLE |
During the year ended March 31, 2021, the Company received a loan of $
9. | CAPITAL STOCK AND RESERVE |
a) | Authorized capital stock: |
As at December 31, 2023, the authorized capital stock of the Company was:
(a) | an unlimited number of common shares without par value; and | |
(b) | all issued shares are fully paid. |
b) | Issued capital stock: |
During the period ended December 31, 2023, the Company:
(a) | closed an underwritten public offering in the United States (the “Offering”). The Company sold | |
(b) | issued | |
(c) | issued |
9. | CAPITAL STOCK AND RESERVE (cont’d…) |
(d) | issued | |
(e) | issued |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
(f) | issued |
c) | Stock options: |
The Company’s Stock Option plan allows for the Board to grant stock options to Executives Officers, Directors, employees and consultants up to
During the period ended December 31, 2023, the Company:
(a) | granted a stock options for | |
(b) | granted stock options for an aggregate of | |
(c) | granted stock options for an aggregate of | |
(d) | granted a stock option for | |
(e) | granted a stock option for |
During the year ended March 31, 2023, the Company:
(a) | granted a stock option for | |
(b) | granted a stock option for | |
(c) | granted a stock option for | |
(d) | granted stock options for | |
(e) | had |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
9. | CAPITAL STOCK AND RESERVE (cont’d…) |
c) | Stock options: (cont’d…) |
Stock option transactions for the period ended December 31, 2023 are summarized as follows:
Expiry Date | Exercise Price | Balance March 31, 2023 | Granted | Exercised | Forfeited/ Expired | Balance December 31, 2023 | Exercisable | |||||||||||||||||||||
March 1, 2024 | $ | |||||||||||||||||||||||||||
November 14, 2024 | $ | ( | ) | |||||||||||||||||||||||||
March 8, 2025 | $ | |||||||||||||||||||||||||||
September 2, 2025 | $ | |||||||||||||||||||||||||||
September 6, 2025 | $ | |||||||||||||||||||||||||||
November 20, 2025 | $ | |||||||||||||||||||||||||||
December 2, 2025 | $ | |||||||||||||||||||||||||||
December 13, 2025 | $ | ( | ) | |||||||||||||||||||||||||
January 15, 2026 | $ | |||||||||||||||||||||||||||
August 25, 2026 | $ | |||||||||||||||||||||||||||
September 6, 2026 | $ | |||||||||||||||||||||||||||
November 1, 2026 | $ | |||||||||||||||||||||||||||
December 4, 2026 | $ | |||||||||||||||||||||||||||
February 16, 2027 | $ | ( | ) | |||||||||||||||||||||||||
September 6, 2028 | $ | |||||||||||||||||||||||||||
Total | ( | ) | ( | ) | ||||||||||||||||||||||||
Weighted average exercise price | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average remaining life (years) |
The fair value of stock options was calculated using the Black-Scholes option pricing model with the following weighted average assumptions.
Weighted Average for the period ended December 31, 2023 | Weighted Average for the year ended March 31, 2023 | |||||||
Fair value per option | $ | $ | ||||||
Exercise price | $ | $ | ||||||
Expected life (years) | ||||||||
Interest rate | % | % | ||||||
Annualized volatility (based on historical volatility) | % | % | ||||||
Dividend yield | % | % |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
9. | CAPITAL STOCK AND RESERVE (cont’d…) |
c) | Stock options: (cont’d…) |
Stock option transactions for the year ended March 31, 2023 are summarized as follows:
Expiry Date | Exercise Price | Balance March 31, 2022 | Granted | Exercised | Forfeited/ Expired | Balance March 31, 2023 | Exercisable | |||||||||||||||||||||
January 4, 2023 | $ | ( | ) | |||||||||||||||||||||||||
March 1, 2024 | $ | |||||||||||||||||||||||||||
March 8, 2025 | $ | |||||||||||||||||||||||||||
September 2, 2025 | $ | |||||||||||||||||||||||||||
September 6, 2025 | $ | |||||||||||||||||||||||||||
November 20, 2025 | $ | ( | ) | |||||||||||||||||||||||||
December 2, 2025 | $ | |||||||||||||||||||||||||||
December 13, 2025 | $ | |||||||||||||||||||||||||||
January 15, 2026 | $ | ( | ) | |||||||||||||||||||||||||
October 21, 2026 | $ | ( | ) | |||||||||||||||||||||||||
November 1, 2026 | $ | |||||||||||||||||||||||||||
December 3, 2026 | $ | ( | ) | |||||||||||||||||||||||||
January 17, 2027 | $ | ( | ) | |||||||||||||||||||||||||
February 16, 2027 | $ | |||||||||||||||||||||||||||
Total | ( | ) | ( | ) | ||||||||||||||||||||||||
Weighted average exercise price | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average remaining life (years) |
d) | Performance Stock Options: |
During the year ended March 31, 2022, the Company granted a performance-based stock option for
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
9. | CAPITAL STOCK AND RESERVE (cont’d…) |
d) | Performance Stock Options: (cont’d…) |
Expiry Date | Exercise Price | Balance March 31, 2023 | Granted | Exercised | Forfeited/ Expired | Balance December 31, 2023 | Exercisable | |||||||||||||||||||||
March 31, 2024 | $ | |||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Weighted average exercise price | $ | - | - | $ | - | |||||||||||||||||||||||
Weighted average remaining life (years) |
Expiry Date | Exercise Price | Balance March 31, 2022 | Granted | Exercised | Forfeited/ Expired | Balance March 31, 2023 | Exercisable | |||||||||||||||||||||
March 31, 2024 | $ | |||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Weighted average exercise price | $ | - | - | $ | - | |||||||||||||||||||||||
Weighted average remaining life (years) |
e) | Warrants: |
A continuity of the warrants granted is as follows:
Expiry Date | Exercise Price | Balance March 31, 2023 | Granted | Exercised | Cancelled/ Expired | Balance December 31, 2023 | ||||||||||||||||||
December 2, 2023 | $ | ( | ) | |||||||||||||||||||||
August 24, 2028 |
| |||||||||||||||||||||||
Total | ( | ) | ||||||||||||||||||||||
Weighted average exercise price | $ |
| $ |
| ||||||||||||||||||||
Weighted average remaining life (years) |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
9. | CAPITAL STOCK AND RESERVE (cont’d…) |
e) | Warrants: (cont’d…) |
A continuity of the warrants granted is as follows for the year ended March 31, 2023:
Expiry Date | Exercise Price | Balance March 31, 2022 | Granted | Exercised | Cancelled/ Expired | Balance March 31, 2023 | ||||||||||||||||||
August 28, 2022 | $ | ( | ) | |||||||||||||||||||||
August 28, 2022 | $ | ( | ) | |||||||||||||||||||||
October 29, 2022 | $ | ( | ) | ( | ) | |||||||||||||||||||
December 15, 2022 | $ | ( | ) | ( | ) | |||||||||||||||||||
December 2, 2023 | $ | ( | ) | |||||||||||||||||||||
Total | ( | ) | ( | ) | ||||||||||||||||||||
Weighted average exercise price | $ | $ | $ | $ | ||||||||||||||||||||
Weighted average remaining life (years) |
f) | Agent warrants: |
During the period ended December 31, 2023, the Company issued
Expiry Date | Exercise Price | Balance March 31, 2023 | Granted | Exercised | Cancelled/ Expired | Balance December 31, 2023 | ||||||||||||||||||
July 19, 2024 | $ | |||||||||||||||||||||||
August 21, 2028 |
| |||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Weighted average exercise price | $ |
| ||||||||||||||||||||||
Weighted average remaining life (years) |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
9. | CAPITAL STOCK AND RESERVE (cont’d…) |
f) | Agent warrants: (cont’d…) |
During the year ended March 31, 2023, the Company issued
Expiry Date | Exercise Price | Balance March 31, 2022 | Granted | Exercised | Cancelled/ Expired | Balance March 31, 2023 | ||||||||||||||||||
July 19, 2024 | $ | |||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Weighted average exercise price | $ | $ | ||||||||||||||||||||||
Weighted average remaining life (years) |
The fair value of agent warrants was calculated using the Black-Scholes option pricing model with the following weighted average assumptions:
For the period ended December 31, 2023 | For the year ended March 31, 2023 | |||||||
Fair value per agents warrant | $ | $ | ||||||
Exercise price |
| $ | ||||||
Expected life (years) | ||||||||
Interest rate | % | % | ||||||
Annualized volatility (based on historical volatility) | % | % |
10. | RELATED PARTY TRANSACTIONS |
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers and companies controlled by them. The remuneration of directors and other members of key management personnel during the periods ended December 31, 2023 and 2022 was as follows:
For the period ended December 31, 2023 Paid or accrued to: | Management fees | Consulting fees | Share-based payments | Total | ||||||||||||
Key management personnel: | ||||||||||||||||
Current and former directors, officers and companies controlled by them | $ | $ | $ | $ |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
10. | RELATED PARTY TRANSACTIONS (cont’d…) |
For the period ended December 31, 2022 Paid or accrued to: | Management fees | Investor relation fees | Share-based payments | Total | ||||||||||||
Key management personnel: | ||||||||||||||||
Current and former directors, officers and companies controlled by them | $ | $ | $ | $ |
Additionally, please refer to Note 7 on the short-term related party Loan payable.
The amounts due to related parties included in accounts payable and accrued liabilities are unsecured, non-interest bearing, and have no specific terms of repayment, and are as follows:
As at December 31, 2023 | As at March 31, 2023 | |||||||
Current and former directors, officers and companies controlled by them | $ | $ |
11. | SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS |
During the period ended December 31, 2023, significant non-cash investing and financing transactions included:
(a) | included in accounts payable and accrued liabilities was $ | |
(b) | issued | |
(c) | issued | |
(d) | issued |
During the period ended December 31, 2022, significant non-cash investing and financing transactions included:
(a) | included in accounts payable and accrued liabilities was $ | |
(b) | included in short-term loans payable $ | |
(c) | issued |
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
12. | SEGMENTED INFORMATION |
The Company primarily operates in
December 31, 2023 | March 31, 2023 | |||||||
Exploration and evaluation assets | ||||||||
Canada | $ | $ | ||||||
United States | ||||||||
$ | $ |
13. | FINANCIAL RISK MANAGEMENT |
Capital management
The Company’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern. In the management of capital, the Company monitors its adjusted capital which comprises all components of equity (i.e., capital stock, reserves and deficit).
The Company sets the amount of capital in proportion to risk. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue common shares through private placements. The Company is not exposed to any externally imposed capital requirements. The Company’s overall strategy remains unchanged from fiscal year 2024.
Fair value
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
13. | FINANCIAL RISK MANAGEMENT (cont’d…) |
Fair value (cont’d…)
Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 – Inputs that are not based on observable market data.
The fair value of the Company’s long-term investment and derivative liability were calculated using Level 1 inputs.
The carrying value of cash, accounts payable and accrued liabilities, the current portion of net investment in sublease, lease obligations and short-term loans payable approximate their fair value because of the short-term nature of these instruments.
Financial risk factors
The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:
Credit risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to a significant concentration of credit risk consists primarily of cash. The Company limits its exposure to credit loss by placing its cash with major Canadian financial institutions and monitors the incoming sublease monthly payments to ensure they are current.
Liquidity risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2023, the Company had a cash balance of $
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.
Interest rate risk
The Company has cash balances and no variable interest-bearing debt. The Company’s cash does not have significant exposure to interest rate risk.
FOREMOST LITHIUM RESOURCE & TECHNOLOGY LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) (Unaudited – Prepared by Management) For the nine months ended December 31, 2023 |
13. | FINANCIAL RISK MANAGEMENT (cont’d…) |
Financial risk factors (cont’d…)
Foreign currency risk
The Company is exposed to foreign currency risk on fluctuations related to cash, accounts payable and accrued liabilities, and option agreement payments that are denominated in a foreign currency. There is a risk in the exchange rate of the Canadian dollar relative to the US dollar and a significant change in this rate could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations.
Price risk
The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices of gold and lithium, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.