# NexMetals Mining Corp.: Form 10-Q for the period ended Mar 31, 2024

- Company: [NexMetals Mining Corp.](/companies/nexm.md) (CIK 795800)
- Form: 10-Q
- Filed: 2024-07-12
- Accepted by EDGAR: Jul 12, 2024, 20:06 ET
- Period: 2024-03-31
- Accession: 0001104659-24-079535
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/795800/000110465924079535/pnrlf-20240331x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/795800/000110465924079535/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | −CAD 9.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | CAD 0.06 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | CAD 0.06 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 149,373,068 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | −CAD 9.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | CAD 85.1k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-03-31 | CAD 9.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | CAD 11.8m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | CAD 28.5m | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | CAD 5.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-31 | CAD 27.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-03-31 | CAD 650.9k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 53,257 characters.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the notes to those financial statements appearing elsewhere in this Report. This discussion and analysis below includes forward-looking statements that are subject to risks, uncertainties and other factors described in the “*Risk Factors”* section set forth in the 2023 Form 10-K that could cause actual results to differ materially from those anticipated in these forward-looking statements as a result of various factors. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We caution you to read the “*Cautionary Note Regarding Forward-Looking Statements”* section of this Report.

The following management’s discussion and analysis (this “**MD&A”**) should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company and accompanying notes thereto for the quarters ended March 31, 2024 and 2023 (the “**Quarterly Financial Statements”**). This MD&A is intended to assist the reader to assess material changes in the financial condition of the Company during the quarter ended March 31, 2024, and the results of operations of the Company for the three-month periods ended March 31, 2024 and March 31, 2023. The Quarterly Financial Statements and the financial information contained in this MD&A were prepared in accordance with US GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.

In this MD&A, unless the context otherwise requires, references to the Company or PNRL refer to Premium Nickel Resources Ltd. and its consolidated subsidiaries. All monetary amounts in the discussion are expressed in Canadian dollars unless otherwise indicated.

This MD&A contains forward-looking information within the meaning of applicable securities laws. All forward-looking information, including information not specifically identified herein, is made subject to cautionary language in this MD&A. Readers are cautioned to refer to the disclosure in this Report under the heading “*Cautionary Note Regarding Forward-Looking Statements”* when reading any forward-looking information.

### Company Overview

PNRL is a mineral exploration company focused on the discovery and advancement of high-quality nickel-copper-cobalt-platinum group metals (“**Ni-Cu-Co-PGM”**) resources. The principal assets of the Company are the Selebi and Selebi North nickel-copper-cobalt (“**Ni-Cu-Co”**) mines (together, the “**Selebi Mines”**) in Botswana and related infrastructure (together, the “Selebi Assets”), as well as the nickel, copper, cobalt, platinum-group elements (“**Ni-Cu-Co-PGE”**) Selkirk mine (the “**Selkirk Mine”**) in Botswana, together with associated infrastructure and four surrounding prospecting licenses (collectively, the “**Selkirk Assets”).**

PNRL’s global strategy is to identify the best Ni-Cu-Co-PGM projects and to acquire or invest in opportunities that have high prospectivity in mining friendly jurisdictions located in low-risk countries with rule-of-law, supportive foreign investment and resource acts. PNRL sources projects that fit a strict standard that comply with the Company’s values and principles which stand up against the highest acceptable industry standards. PNRL is committed to governance through transparency, accountability, and open communication within PNRL’s team and stakeholders.

The Company’s principal business activity is the exploration and evaluation of PNRL’s flagship asset, the Selebi Mines and, separately, the Company’s Selkirk Mine, each located Botswana.

The Selebi Mines and the Selkirk Mine are permitted with 10-year mining licences and benefit from significant local infrastructure. The Company’s flagship Selebi Mines includes two operational shafts, the Selebi and Selebi North shafts, and related infrastructure such as rail, power and roads.

PNRL is headquartered in Toronto, Ontario, Canada and is publicly traded on the TSX Venture Exchange under the symbol “PNRL” and on the OTCQX Best Market under the symbol “PNRLF”.

### Summary of Activities

In 2023, PNRL commenced its Phase 2 drill program undertaking a combination of resource and continued exploration drilling at the Selebi Mines to demonstrate the size potential of the Selebi Mines mineral system, with the aim of establishing a current mineral resource estimate (“**MRE”**) on the Selebi Mines that will serve as the basis for future engineering studies. The resource drilling at the Selebi Mines commenced underground from the Selebi North infrastructure in August 2023 and is currently ongoing with three drills turning. Assay results for completed holes are released as they are received and confirmed by the Company. The Company sees significant potential for expanding the 2016 historic estimate.

Currently the Company’s primary objective is to prepare current mineral resource estimates in respect of the Selebi Mines expected in late Q2 or early Q3, 2024. Concurrently, PNRL plans to continue its work at the Selkirk Mine and its surrounding prospecting licences, which is the Company’s second asset in Botswana, located approximately 75 kilometres north of the Selebi Mines. The focus of this work will be to understand the legacy work done by previous owners, which had advanced the Selkirk Mine to a bankable feasibility study for re-development as an open pit mine.

The Company plans to include drilling, geoscience and metallurgical work to support a mineral resource estimate in respect of the Selkirk Mine. In 2023, the Company completed test work to evaluate an alternative ore processing and tailings management strategy to those used in previous economic studies, the results of which are set forth in the Selkirk TRS (as defined herein).

For more information relating to the exploration and evaluation activities conducted on the Selebi Mines and Selkirk Mine, please see “*Exploration and Evaluation Activities”* below.

### Highlights and Key Developments During Q1 2024 and Subsequent Events to Date:

- On January 1, 2024, James Gowans was appointed as the Chair of the Board of Directors.
- The Company continued its Phase 2 Selebi North drilling program, which commenced August 9, 2023. In aggregate, the Company has drilled a total of 35,246 metres in 92 drill holes, at the time of the May 16, 2024 press release.
- Since January 1, 2024, the Company reported assay results from a total of 37 drill holes, pursuant to press releases issued from January 30 to May 16, 2024, see the table under “*Selebi Mines, Botswana - Exploration Activities”*, all of which are available on the Company’s website www.premiumnickel.com. The Company’s website is not incorporated in this Report.

Assay results included:

- 30.45m of 2.88% NiEq and 9.55m of 3.94% NiEq reported on January 30, 2024;
- 102.80 Metres of 2.23% NiEq reported on February 13, 2024;
- 110.75 Metres of 2.56% NiEq reported on February 26, 2024; and
- 17.55 meters of 3.28% NiEq reported on May 16, 2024.
- On June 14 and June 21, 2024, the Company closed two tranches of a non-brokered private placement offering of units of the Company, pursuant to which the Company issued a total of 35,256,409 Units at a price of C$0.78 per Unit for gross proceeds of approximately C$27.5 million.
- On June 24, 2024, Norman MacDonald was appointed to the Board of Directors.

### Exploration and Evaluation Activities

The following table outlines the key milestones, estimated timing and costs of each of the Company’s material projects, the Selebi Mines and the Selkirk Mine, based on the Company’s reasonable expectations and intended courses of action and current assumptions and judgement, with information based as of March 31, 2024.

| ​ ​ Key Milestones for Project Selebi Mines(2) ​ | ​ Expected Timing of Completion ​ | ​ ​ | ​ ​ Anticipated Remaining Costs(1) ​ ​ | ​ ​ ​ |
| --- | --- | --- | ---: | --- |
| Ongoing drilling and assays(3) | Ongoing, costs to June 2024 | ​ | $1,140,000 | ​ |
| Care and maintenance costs | Ongoing costs to June 2024 | ​ | $600,000 | ​ |
| Engineering and development | Ongoing costs to June 2024 | ​ | $910,000 | ​ |
| Mineral resource estimate for Selebi Mines | June 2024 | ​ | $120,000 | (4)​ |
| Selkirk Mine(5) |  | ​ |  | ​ |
| Geology & Geophysics | Ongoing costs to June 2024 | ​ | $125,000 | ​ |

### Notes:

(1) As at March 31, 2024.

(2) The key milestones are to take the Selebi Mines to an updated mineral resource estimate, which would mark the completion of the Phase I work program as envisioned in the Selebi TRS (defined below) and to commence Phase 2 which will gear towards a preliminary economic assessment for the project. Please refer to the Selebi TRS, including the recommendations provided therein, for more details.

(3) The Company has completed the exploration and infill drilling (15,074 metres) as contemplated in Phase 1 of the work program in the Selebi TRS. This constitutes a Phase 2 drilling program, with the additional drilling and assays required to advance the Selebi Mines toward a current MRE. For more details, see “*Selebi Mines, Botswana – Exploration Activities”.*

(4) Total costs relating to an MRE for the Selebi Mines are approximately $150,000. Approximately $31,625 has been spent as at March 31, 2024. This represents the additional expected costs to complete an MRE for the project.

(5) The Company will be focusing its exploration and evaluation activities on the Selebi Mines until an updated mineral resource estimate is completed for the Selebi project. Expenditures contemplated for the Selkirk Mine are minimal and contingent on additional financing. The contemplated geology and geophysics work represented here is a portion of the geology and geophysics work program outlined in the Selkirk TRS which is required to advance the project towards an MRE, and meet exploration commitments on the prospecting licences.

Readers are cautioned that the above represents the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those described above.

### Mineral Properties

The information relating to the Selebi Mines is derived from, and in some instances is an extract from, the technical report summary entitled “*Technical Report Summary on the Selebi Mines, Central District, Republic of Botswana”* dated June 27, 2024 (with an effective date of May 31, 2024) prepared for the Company by SLR (as defined herein) (the “**Selebi TRS”**), prepared in compliance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K (the “**SEC Mining Rules”).**

The information relating to the Selkirk Mine is derived from, and in some instances is an extract from, the technical report summary entitled “*Technical Report Summary on the Selkirk Nickel Project, North East District, Republic of Botswana”* dated June 27, 2024 (with an effective date of May 31, 2024) prepared for the Company by SLR (the “**Selkirk TRS”**), prepared in compliance with the SEC Mining Rules.

### Selebi Mines, Botswana

The Selebi Mines are located in Botswana approximately 150 km southeast of the city of Francistown, and 410 km northeast of the national capital Gaborone. The Selebi Mines are readily accessed via paved and gravel roads from the town of Selebi-Phikwe, located just north of the mining licence. With a population of approximately 52,000, the town is accessed via a well-maintained paved road that branches due east from the major A1 highway at the town of Serule, 57 km from the Selebi Mines.

The Selebi Mines infrastructure includes two mines, currently on care and maintenance, Selebi (#2 Shaft) and Selebi North (#4 Shaft), and associated surface infrastructure.

The Selebi Mines consists of a single mining licence covering an area of 11,504 ha. The mining licence is centred approximately at 22°03’00”S and 27°47’00”E.

Mining licence 2022/1L was granted to Premium Nickel Resources Proprietary Limited, a wholly-owned subsidiary of PNRL in Botswana, on January 31, 2022 over the Selebi Mines deposits discovered under mining licence 4/72. The original licence which had been granted to BCL Limited (“**BCL”**) on March 7, 1972, covered both Selebi and Phikwe project areas, was amended several times and renewed once, and was set to expire on March 6, 2022. The new mining licence is limited to the Selebi and Selebi North deposits and their surrounding areas and expires May 26, 2032.

### Exploration

Exploration work completed at the Selebi Mines from 2021 to May 2024 consisted of the sourcing and digitization of existing historical information, confirming collar and down hole location information of selected historical holes, and drilling. PNRL also completed gyro, electromagnetic surveys (“**BHEM”**), televiewer, and downhole physical property surveys on selected high priority historical and recent exploration holes. A focused structural model over a portion of the Selebi deposit was developed by SRK Consulting Ltd. (“**SRK”**), and a 3D model of mineralization for use in targeting was created at Selebi North by SLR.

Early due diligence work in 2019 highlighted an off-hole BHEM anomaly in a 2010 drill hole located down-plunge of the Selebi deposit. The collection of new gyro data confirmed that the off-hole anomaly lies at the downdip edge of the modelled Selebi mineralization which was intersected by a drill hole which reported an estimated true thickness interval of 38.5 m averaging 1.58% Ni and 2.44% Cu, including 21.4 m of 2.34% Ni and 3.39% Cu. This drill hole intersection is located approximately 300 m down plunge of the existing mine workings and approximately 1,200 m below surface and provides support to the potential establishment of mineral resources at depth at the Selebi deposit.

Selebi North mineralization is also open at depth, and additional potential to establish mineral resources occurs there. Given the basin structure, it is possible that the Selebi North mineralization extends at depth and flattens to the south, while also potentially extending southward.

### Mineral Processing and Metallurgical Testing

The historical BCL operations consisted of an integrated mining, concentrating, and smelting complex which operated for over 40 years over the Selebi Phikwe project area. The smelter processed Selebi and Phikwe concentrates and toll treated nickel concentrates received from the Nkomati Nickel Mine and the Phoenix Mine. The concentrator plant and smelter were placed on care and maintenance in 2016 and are located adjacent to the Selebi Mines at the historical Phikwe Mine.

PNRL intends to use pre-concentration methods to separate the minerals from waste materials to produce a mill feed and flotation to produce a concentrate for commercial sale, or for further refining, and does not plan to restart the existing concentrator or smelter. Concentrate options will be investigated in the next phase of work and include a bulk concentrate and separate nickel and copper concentrates. In 2021, PNRL carried out due diligence work that included metallurgical sampling and testing. Metallurgical study programs were carried out by SGS Canada Inc. (“**SGS”**) in Lakefield, Ontario in 2021 and 2023 for separate copper and nickel concentrate production at a conceptual level. The conceptual process flowsheet developed by SGS includes the key unit operations of crushing, grinding, and flotation.

PNRL and DRA collaborated in the analyses of historical data collected on key flotation parameters observed in the production of separate nickel and copper concentrates, such as metal upgrade ratios and mass pull, to simulate estimated metal grades and recoveries for bulk concentrate.

### Selkirk Mine, Botswana

The Selkirk Mine is located in the northeast of Botswana approximately 28 km southeast of the city of Francistown, and 450 km northeast of the national capital Gaborone.

The Selkirk Mine is accessed year-round via paved and gravel roads from Gaborone and Francistown. The Selkirk Mine infrastructure includes relict surface infrastructure supporting the historical underground mine, and the original decline. The Selkirk Mine is quite flat, and beyond the mine footprint is covered in grassland with dispersed and clusters of trees typical of a tree savanna biome.

The Selkirk Mine consists of a single mining licence covering an area of 1,458 ha (14.58 km2) and four prospecting licences covering a total of 12,670 ha (126.7 km2). The mining licence, 2022/7L, is centred approximately at 21°19’13” S and 27°44’17” E and is held by PNGPL, a subsidiary of PNRL. The mining licence was renewed for ten years commencing on May 27, 2022, ending on May 26, 2032. The four prospecting licences (PL050/2010, PL051/2010, PL210/2010, and PL071/2011) are valid for a period of two years effective from October 1, 2022.

### Exploration

Exploration work completed by PNRL to date has consisted of the sourcing and digitization of existing historical information, confirming collar location information on selected historical holes, re-logging selected drill core, sampling mineralized drill core found untouched on surface, and submitting a number of samples for proof-of-concept metallurgical testing. PNRL has also initiated an internal study into the feasibility of the open pit concept and is exploring conceptually with limiting test information several different processing options. Work to validate the existing drill core information through field duplicate and pulp duplicate re-analysis in ongoing with the intention of reporting an updated Mineral Resource estimate at the Selkirk Mine in the future.

### Mineral Processing and Metallurgical Testing

PNRL intends to use flotation to produce a concentrate for commercial sale or for further refining. Concentrate options will be investigated in the next phase of work and include a bulk concentrate and separate nickel and copper concentrates. Metallurgical study programs were carried out by SGS in Lakefield, Ontario in 2021 and 2023 for separate copper and nickel concentrate production at a conceptual level. The conceptual process flowsheet developed by SGS includes the key unit operations of crushing, grinding, and flotation.

PNRL analyzed select SGS test results on key flotation parameters observed in the production of separate nickel and copper concentrates to simulate estimated metal grades and recoveries for bulk concentrate. Infrastructure The area is in a rural district and the available infrastructure is minimal. Strategic services (e.g., electricity and water supplies) could be provided by the Botswana Power Corporation and from existing governmental water pipelines within the Francistown Road Reserve, and potable water could be sourced on site from boreholes. A railway line crosses the western margin of the Selkirk area.

### Maniitsoq Nickel-Copper-PGM Project, Southwest Greenland

The Maniitsoq project is centred on the 75 kilometre by 15 kilometre Greenland Norite Belt which hosts numerous high-grade nickel-copper sulphide occurrences associated with mafic and ultramafic intrusions. The property is located 100 kilometres north of Nuuk, the capital of Greenland, and is accessible year-round either by helicopter or by boat from Nuuk or Maniitsoq, the latter located on the coast approximately 15 kilometres to the west. The Company acquired the Maniitsoq project in 2011 due to its potential for the discovery of significant magmatic sulfide deposits in a camp-scale belt. The Maniitsoq property consists of three exploration licences, Sulussagut No. 2011/54 and Ininngui No. 2012/28 comprising 2,689 and 296 square kilometres, respectively, and the Carbonatite property No. 2018/21 (63 square kilometres), and a prospecting licence, No. 2020/05, for West Greenland. The Greenland properties have no mineral resources or reserves.

The three mineral exploration licences (“**MEL”**), 2011/54, 2012/28 and 2018/21, had sufficient accrued work credits to keep the property in good standing until December 2023, at which time a reduction in the size of 2011/54 and 2012/28 was required. An application for the renewal and reduction of MEL 2012/28 was approved and the licence area has been reduced and renewed to December 31, 2026. The reduction of MEL 2012/54 from 265 km2 to 110.9 km2 has no material impact on potential for discovery of an economic deposit as all known mineral prospects are retained. The application for the reduction of 2011/54 was submitted and the Company is waiting for approval from the Greenland authority. The MEL 2018/21 and prospecting licence 2020/05 are in effect until December 31, 2024.

#### Exploration Activities

No exploration work was carried out in Greenland in 2023 or in Q1 2024. Remaining targets were reviewed and prioritized in preparation for a potential field program in 2023, which was deferred. A quote was received in Q2 2023 for computer assisted target generation.

During the three months ended March 31, 2024, the Company incurred $31,354 in exploration expenditures on the Maniitsoq property, which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 licences. These expenditures were recorded as general exploration expense in the consolidated statements of comprehensive loss. No material expenditures or activities are contemplated on the Maniitsoq property at this time.

### Canadian Nickel Projects - Sudbury, Ontario

#### Post Creek Property

The Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 73 unpatented mining claim cells in two separate blocks, covering a total area of 912 hectares held by the Company. The Company acquired the property through an option agreement in April 2010, which was subsequently amended in March 2013. As at the date of this MD&A, the Company holds a 100% interest in the Post Creek property and is obligated to pay advances on a net smelter return of $10,000 per annum, which will be deducted from any payments to be made under the net smelter return.

The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall deposits and accounts for a significant portion of all ore mined in the Sudbury nickel district and, as such, represents favourable exploration targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks of the Sudbury Igneous Complex which both represent potential controls on mineralization.

No exploration work was completed in Q1 2024 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing until 2025. No material expenditures or activities are contemplated on the Post Creek property at this time.

### Halcyon Property

The Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships and consists of 63 unpatented mining cells for a total of 864 hectares. Halcyon is adjacent to the Post Creek property and is approximately 2 kilometres north of the producing Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this MD&A, the Company holds a 100% interest in the Halcyon property and is obligated to pay advances on a net smelter return of $8,000 per annum, which will be deducted from any payments to be made under the net smelter return.

No exploration work was completed on the Halcyon Property in Q1 2024. The claims are in good standing through 2025. No material expenditures or activities are contemplated on the Halcyon property at this time.

### Quetico Property

The Quetico property is located within the Thunder Bay Mining District of Ontario and consists of 99 claim cells in two blocks. Cells were acquired to assess: (a) the Quetico Sub-province corridor, which hosts intrusions with Ni-Cu-Co-PGM mineralization related to a late 2690 Ma Archean magmatic event; and (b) the Neoproterozoic (1100 Ma MCR) magmatic event and related intrusions.

No work was carried out on the Property in Q1 2024. Of the 99 claims, 46 claims expired in April 2023, with the remaining in good standing until April 2024. These claims expired on April 26, 2024.

During the three months ended March 31, 2024, the Company incurred $16,679 in acquisition and exploration related costs related to the Post Creek, Halcyon and Quetico properties. The costs were recorded as general exploration expense in the consolidated statements of comprehensive loss. No material expenditures or activities are contemplated on the Quetico property at this time.

### Financial Capability

The Company is an exploration stage entity and has not yet achieved commercial production on any of its properties or profitable operations. The business of the Company entails significant risks. The recoverability of amounts shown for mineral property costs is dependent upon several factors including environmental risk, legal and political risk, the establishment of economically recoverable mineral reserves, confirmation of the Company’s interests in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete exploration and advancement of its mineral assets and the ability of the Company to attain sufficient net cash flow from future profitable production or disposition proceeds.

As at March 31, 2024, the Company had working capital of $6,759,860 (FY 2023 – $14,999,619) and reported an accumulated deficit of $113,913,996 (FY 2023 – $104,566,816).

As at March 31, 2024, the Company had $9,366,821 in available cash (FY 2023 – $19,245,628). There are no sources of operating cash flows. Given the Company’s current financial position and the ongoing exploration and evaluation expenditures, the Company will need to raise additional capital through the issuance of equity or other available financing alternatives to continue funding its operating, exploration and evaluation activities, and re-development of the mineral properties. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.

### Selected Financial Information

The following amounts are derived from the Company’s unaudited condensed interim consolidated financial statements prepared under US GAAP.

| ​ ​ ​ In Canadian dollars, except number of shares issued and shares outstanding | ​ ​ Three months ended March 31, 2024 | ​ 2023 |
| --- | ---: | ---: |
| Net (loss) | (9,347,180) | (6,367,772) |
| Basic (loss) per share | (0.06) | (0.05) |
| Dividend declared | — | — |
| Additional paid-in capital | 116,459,585 | 84,577,438 |
| Common shares issued | 149,427,179 | 120,958,527 |
| Weighted average shares outstanding | 149,373,068 | 118,246,915 |
| Total assets | 28,458,479 | 19,367,799 |
| Investment in exploration and evaluation assets | 54,536,402 | 36,332,411 |
| Current liabilities | 5,076,555 | 12,584,564 |
| Non-current financial liabilities | 22,731,043 | 2,205,653 |

Net loss of $9,347,180 in Q1 2024 was higher by $2,979,408 compared to a loss of $6,367,772 for Q1 2023. The greater loss for Q1 2024 was largely due to increased exploration activities relating to the Botswana assets, the interest expense of the Term Loan (as defined below) and an increase in share-based payment.

### Total Assets

Total assets as at March 31, 2024 increased by a net amount of $9,090,680 from the end of Q1 2023. The change is mainly attributable to an increase in cash and spare parts of $4,052,574 and $966,806, respectively, as well as an increase in property, plant and equipment of $3,841,306.

### Investment in Exploration and Evaluation Assets

Investment in exploration and evaluation assets in Q1 2024 and Q1 2023 is related to the exploration and evaluation of the Selebi Mines and the Selkirk Mine, the costs of which are expensed. As at March 31, 2024, the recorded amount of investment in the Company’s exploration and evaluation assets, including capitalized and expensed, totaled $54,536,402 compared to $36,332,411 as at March 31, 2023. Principal factors contributing to this change were increased exploration and evaluation activities on the Botswana assets in Q1 2024 relative to Q1 2023.

### Current and Non-Current Liabilities

Current liabilities as at March 31, 2024 decreased by $7,508,009 from Q1 2023 due to the repayment of a promissory note to Pinnacle Island. Non-current liabilities as at March 31, 2024 increased by $20,525,390 from Q1 2023 as a result of the Term Loan as well as the NSR option payment liability.

### Overall Performance and Results of Operations

As at the date of this Report, the Company has not earned revenue nor proved the economic viability of its projects. The Company’s expenses are not subject to seasonal fluctuations or general trends other than factors affecting costs such as inflation and input prices. The Company’s expenses and cash requirements will fluctuate from period to period depending on the level of activity at the projects based on factors related to raising capital to fund expenditures. Comparisons of activity made between periods should be viewed with this in mind. The Company’s quarterly results may be affected by many factors such as timing of exploration activity, share-based payment costs, capital raised, marketing activities and other factors that affect the Company’s exploration, evaluation and re-development activities.

The following table summarizes the Company’s Statement of Comprehensive Loss for the three-month periods ended March 31, 2024 and March 31, 2023.

| ​ ​ ​ EXPENSES | ​ ​ | ​ Three months ended March 31, 2024 ​ | ​ ​ | ​ March 31, 2023 ​ |
| --- | --- | ---: | --- | ---: |
| General and administration expenses |  | 1,865,253 |  | 1,857,412 |
| Depreciation |  | 364,228 |  | 45,762 |
| General exploration expenses |  | 5,731,998 |  | 4,015,841 |
| Interest and bank charges |  | 94,617 |  | 49,939 |
| Share-based payment |  | 389,612 |  | — |
| Deferred share units granted |  | 281,249 |  | 173,292 |
| Fair value movement of deferred shares units |  | (226,602) |  | (16,000) |
| Net foreign exchange loss |  | 66,013 |  | 30,416 |
| **Operating loss** |  | **8,566,368** |  | **6,156,662** |
| ​ | ​ | ​ | ​ | ​ |
| Interest expenses (income) |  | 20,702 |  | (9,677) |
| Interest expense on Term Loan |  | 519,206 |  | 220,787 |
| Accretion and transaction fee of Term Loan |  | 240,904 |  | — |
| **LOSS BEFORE TAX** |  | **9,347,180** |  | **6,367,772** |
| **​** | ​ | ​ | ​ | ​ |
| **OTHER COMPREHENSIVE LOSS** |  |  |  |  |
| Exchange differences on translation of foreign operations |  | 137,237 |  | 272,337 |
| **TOTAL COMPREHENSIVE LOSS FOR THE PERIOD** |  | **9,484,417** |  | **6,640,109** |

### Three Months Ended March 31, 2024 and March 31, 2023

The Company incurred a net loss of $9,347,180 in Q1 2024, higher by $2,979,408 compared to a net loss of $6,367,772 for Q1 2023.

The following higher expenditures in Q1 2024 compared to Q1 2023 contributed to the higher net loss in Q1 2024:

- Depreciation expense was $364,228 in Q1 2024 and was higher by $318,466 compared to $45,762 in Q1 2023 due to an increase in property, plant and equipment towards the end of 2023 which started to depreciate in Q1 2024.
- General exploration expenses were $5,731,998 during Q1 2024 and were higher by $1,716,157 compared to $4,015,841 in Q1 2023. The exploration and evaluation expenditures on the Botswana assets were increased in Q1 2024 with increased activities at the operating sites during the quarter.
- Bank charges net of interest earned on bank deposits was $94,617 in Q1 2024 and was higher by $44,678 compared to $49,939 in Q1 2023.
- Share-based payment in Q1 2024 was $389,612 compared to nil in Q1 2023.
- Foreign exchange loss totaled $66,013 in Q1 2024 and was higher by $35,598 compared to $30,416 in Q1 2023. The loss in Q1 2024 was due to an overall weakening of the Botswana Pula against the Canadian dollar and the Canadian dollar weakening against United States dollar.
- Interest and financing costs were $780,812 in Q1 2024 and were higher by $560,025 compared to $211,110 in Q1 2023. The higher interest costs related to the Term Loan as well as the interest charged on the lease liabilities associated with the acquisition of the Syringa Lodge and the purchase of drilling equipment.

Deferred share unit (“**DSU”**) compensation (net of fair value movement) was $54,647 during Q1 2024 and was lower by $102,645 compared to $157,292 in Q1 2023. The total value of DSUs granted in Q1 2024 was higher than in Q1 2023, due to an increase in the number of directors on the Board of Directors, with the increase offset by the drop in the fair value of outstanding DSUs due to a decrease in the Company’s share price.

### Cash Flows

The following table summarizes the cash flows:

| ​ ​ ​ ​ Cash flows ​ | ​ ​ Three months ended March 31, 2024 ($) ​ ​ | ​ 2023 ($) ​ |
| --- | ---: | ---: |
| Operations | (8,174,687) | (5,867,112) |
| Working capital items | (1,374,768) | (94,036) |
| **Operating activities** | (9,522,455) | (5,961,148) |
| **Investing activities** | (85,096) | (1,000,000) |
| **Financing activities** | (316,120) | 7,238,615 |
| Increase (decrease) in cash before effects of currency translation for foreign operations | (9,923,671) | 277,467 |
| Effects of currency translation on cash | 44,864 | (126,211) |
| **Increase (decrease) in cash** | (9,878,807) | 151,256 |
| **Cash – beginning of period** | 19,245,628 | 5,162,991 |
| **Cash – end of period** | **9,366,821** | **5,314,247** |

#### Operating Activities

Net cash used in operating activities was $9,522,455 in Q1 2024 compared to $5,961,148 in Q1 2023. The cash used in operations increased by $3,561,307, mainly driven by an increase in cash operating costs as a result of increasing operational activities in Botswana and a higher change in working capital compared to Q1 2023.

#### Investing Activities

Key investing activities relate to the acquisition of property, plant and equipment. During Q1 2024, investing activities totaled $85,096 compared to $1,000,000 in Q1 2023. The higher spending in Q1 2023 was related to the purchase of tooling and diamond tips for the three leased drills.

#### Financing Activities

Cash flows used in financing activities amounted to $316,120 in Q1 2024 compared to a positive cash flow of $7,238,615 generated from financing activities in Q1 2023. The decrease in cash flows in Q1 2024 compared to Q1 2023 was due to an equity private placement completed in February 2023 for a total of $7.7 million while no financing transactions were completed in Q1 2024. See “*Financing”* for more details. Cash flows used for financing activities in Q1 2024 were mainly due to the interest payment on the Term Loan.

### Financial Position

The following information regarding the financial position of the Company as at March 31, 2024 and December 31, 2023 is derived from the Company’s unaudited condensed interim consolidated financial statements for the three months ended March 31, 2024 and the audited consolidated financial statements for the year ended December 31, 2023.

| ​ ​ ​ ASSETS | ​ ​ | ​ As at March 31, 2024 ​ | ​ ​ | ​ As at December 31, 2023 ​ |
| --- | --- | ---: | --- | ---: |
| Cash |  | 9,366,821 |  | 19,245,628 |
| Other current assets |  | 2,469,594 |  | 1,645,280 |
| Exploration and evaluation assets |  | 8,495,730 |  | 8,594,798 |
| Property, plant and equipment |  | 8,126,334 |  | 8,488,499 |
| **TOTAL ASSETS** |  | **28,458,479** |  | **37,974,205** |
| ​ | ​ | ​ | ​ | ​ |
| **LIABILITIES** |  |  |  |  |
| Trade payables and accrued liabilities |  | 3,756,692 |  | 4,280,146 |
| Lease liabilities |  | 1,319,863 |  | 1,611,143 |
| Vehicle financing |  | 211,284 |  | 236,124 |
| Provision for leave and severance |  | 633,304 |  | 510,202 |
| Term Loan |  | 18,197,327 |  | 17,956,423 |
| Deferred share units liability |  | 939,128 |  | 884,481 |
| NSR option liability |  | 2,750,000 |  | 2,750,000 |
| **TOTAL LIABILITIES** |  | **27,807,598** |  | **28,228,519** |
| **​** | ​ | ​ | ​ | ​ |
| **SHAREHOLDERS’ EQUITY** |  |  |  |  |
| Preferred shares |  | 31,516 |  | 31,516 |
| Additional paid-in capital |  | 116,459,585 |  | 116,069,973 |
| Deficit |  | (113,913,996) |  | (104,566,816) |
| Foreign currency translation reserve |  | (1,926,224) |  | (1,788,987) |
| **TOTAL SHAREHOLDERS’ EQUITY** |  | **650,881** |  | **9,745,686** |
| **TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY** |  | **28,458,479** |  | **37,974,205** |

The Company’s cash balance on March 31, 2024 decreased from the amount on December 31, 2023, primarily due to the increased exploration activities on the Company’s properties as well as increased corporate activities as described in the “*Cash Flows”* section and the “*Liquidity”* section under “*Financing”.*

Other current assets increased by $824,314 and trade payables and accrued liabilities decreased by $523,454 as at March 31, 2024 compared to the amounts as at December 31, 2023.

The slight decrease in exploration and evaluation assets was primarily due to foreign currency exchange fluctuation. Property, plant and equipment decreased by $362,165 as of March 31, 2024 compared to the amount of $8,488,499 as at December 31, 2023 as a result of deprecation.

The Company’s lease liabilities were $1,319,863 as at March 31, 2024, lower by $291,280 compared to $1,611,143 as at December 31, 2023 due to a lease payment made in Q1 2024.

The increase in the Term Loan by $240,904 was attributed to the accretion of the value of the warrants granted associated with the Term Loan. The increase in paid-in capital by $389,612 is mainly due to options exercised during Q1 2024.

### Liquidity

### Capital Resources

For the three months ended March 31, 2024, the Company incurred a loss of $9,347,180 and reported an accumulated deficit of $113,913,996 as at March 31, 2024 (FY 2023 – $104,566,816). At the end of Q1 2024, the Company required additional funds to continue its planned operations and meet its future obligations, commitments and forecasted expenditures through March 31, 2025. Management is aware, in making its assessment, of material uncertainties related to events and conditions that may cast a substantial doubt upon the Company’s ability to continue as a going concern, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The accompanying Financial Statements do not reflect the adjustments to the carrying values of assets and liabilities, expenses and financial position classifications that would be necessary if the going concern assumption was not appropriate. These adjustments could be material. In assessing whether a going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period.

#### Going Concern

As at March 31, 2024, the Company had $9,366,821 in available cash (FY 2023 – $19,245,628). There are no sources of operating cash flows. Given the Company’s current financial position and the ongoing exploration and evaluation expenditures, the Company will need to raise additional capital through the issuance of equity or other available financing alternatives to continue funding its operating, exploration and evaluation activities, and re-development of the mineral properties. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.

### Financings

There were no financing transactions during the three months ended March 31, 2024.

On December 14, 2023, the Company closed a financing (the December Financing, comprised of a brokered private placement of units (the “**Private Placement”**) and an amended Term Loan. The Private Placement was completed in accordance with the terms of an agency agreement dated December 14, 2023 and entered into by the Company with Cormark Securities Inc. and BMO Capital Markets, as co-lead agents, and Canaccord Genuity Corp., Fort Capital Securities Ltd. and Paradigm Capital Inc. Pursuant to the Private Placement, the Company issued an aggregate of 13,133,367 common shares of the Company (“**Common Shares”**) at a price of $1.20 per Common Share for aggregate gross proceeds of $15,760,040. The principal amount of the Term Loan has been increased by $5,882,353 (the “**Additional Principal Amount”**) from $15,000,000 to $20,882,353. The Additional Principal Amount was subject to an original issue discount of approximately 15% and was advanced by Cymbria Corporation (“**Cymbria”**) to the Company as a single advance of $5,000,000. The net proceeds from the December Financing were $19,743,845 after fees and expenses, which are being used to advance the exploration and evaluation of the Selebi Mines and the Selkirk Mine and for general corporate and working capital purposes. A more detailed breakdown of the proposed use of proceeds of the Private Placement conducted under the Listed Issuer Financing Exemption is as outlined in the offering document dated December 3, 2023. As at March 31, 2024, approximately $10.6 million of the net proceeds of the December Financing had been expended.

### Use of Proceeds

The following table provides a summary of the principal use of proceeds of the December Financing.

| ​ ​ ​ Principal Purpose December Financing | ​ ​ ​ ​ | ​ ​ Estimated Amount $’000 ​ | ​ ​ ​ ​ | ​ Amounts Expended as at March 31, 2024 $’000 |
| --- | --- | ---: | --- | ---: |
| Activities relating to the Selebi Mines | ​ | 11,520 | (1)​ | 6,380 |
| Activities relating to the Selkirk Mine | ​ | 400 | (2)​ | 37 |
| General corporate and working capital | ​ | 7,839 | (3)​ | 4,153 |
| ​ | **​** | **19,759** | **​** | **10,570** |

### Notes:

(1) Represents approximately (i) $8,325,000 for the advancement of the Selebi Mines towards a mineral resource estimate; (ii) $1,400,000 for mining licence extension payment; and (iii) $1,795,000 in local management, consulting, accounting, finance, human resources and health/safety/environmental/security.

(2) Represents certain geophysics and geology costs, care and maintenance and prospecting licences.

(3) Represents approximately (i) $2,080,000 allocated to the payment of interest on the Term Loan; and (ii) $5,759,000 allocated to general corporate expenses.

### Working Capital

As at March 31, 2024, the Company had a positive working capital of $6,759,860 (December 31, 2023 – $14,999,619), calculated as total current assets less total current liabilities. The decrease in working capital is mainly due to a decrease in cash, an increase in accounts payable and accrued liabilities, offset by an increase in other current assets and a decrease in lease liabilities. See “*Liquidity”* for more details.

### Contractual Obligations and Contingencies

#### Selebi Assets

As per the Selebi asset purchase agreement (the “**Selebi APA”**), the aggregate purchase price payable to the seller for the Selebi Assets is the sum of US$56,750,000 which amount shall be paid in three instalments:

- US$1,750,000 payable on the closing date. This payment has been made.
- US$25,000,000 upon the earlier of: (a) approval by the Ministry of Mineral Resources, Green Technology and Energy Security (“**MMRGTES”**) of the Company’s Section 42 and Section 43 applications (further extension of the mining licence and conversion of the mining licence into an operating licence, respectively); and (b) on the expiry date of the study phase, January 31, 2025, which can be extended for one year.
- The third instalment of US$30,000,000 is payable on the completion of mine construction and production start-up by the Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications.
- Payment of care and maintenance funding contribution in respect of the Selebi Assets for a total of US$5,178,747 from March 22, 2021 to the closing date. This payment has been made.

As per the terms and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and give back the Selebi Assets to the liquidator in the event the Company determines that the Selebi Assets are not economical. The Company also has an option to pay in advance the second and third payments in the event the Company determines that the Selebi Assets are economical. The Company’s accounting policy, as permitted by ASC 450 - *Contingencies*, is to measure and record contingent consideration when the conditions associated with the contingency are met. As of March 31, 2024, none of the conditions of the second and third instalment are met. Hence, these amounts are not accrued in the Financial Statements.

In addition to the Selebi APA, the purchase of the Selebi Assets is also subject to a contingent compensation agreement as well as a royalty agreement with the liquidator.

#### Phikwe South and the Southeast Extension

On August 16, 2023, the Company announced that it had entered into a binding commitment letter with the Liquidator of BCL to acquire a 100% interest in two additional deposits, Phikwe South the Southeast Extension, located adjacent to and immediately north of the Selebi North historical workings. The acquisition of the Phikwe South and the Southeast Extension deposits has not closed as at the date of this MD&A.

The upfront cost to the Company to acquire these additional mineral properties is US$1,000,000. In addition, the Company has agreed to additional work commitments of US$5,000,000 in the aggregate over the next four years. As a result of the extension of the Selebi mining licence, the remaining asset purchase obligations of the Company outlined in the Selebi APA will each increase by 10%, US$5,500,000 in total, while the trigger events remain unchanged.

#### Selkirk Mine

In regard to the Selkirk Assets, the purchase agreement does not provide for a purchase price or initial payment for the purchase of the assets. The Selkirk purchase agreement provides that if the Company elects to develop Selkirk first, the payment of the second Selebi instalment of US$25 million would be upon the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications (further extension of the Selkirk mining licence and conversion of the Selkirk mining licence into an operating licence, respectively). For the third Selebi instalment of US$30 million, if Selkirk were commissioned earlier than Selebi, the payment would trigger on Selkirk’s commission date.

#### Right-of-Use Assets

On July 9, 2022, the Company executed a sales agreement with Tuli Tourism Pty Ltd. (“**Tuli”**) for the Syringa Lodge in Botswana and obtained possession of the property in August 2022. Pursuant to the sales agreement, the aggregate purchase price payable to the seller is $3,213,404. A deposit of $482,011 was paid on August 17, 2022. The balance is payable in two instalments of $1,365,697 on each of August 1, 2023 and August 1, 2024. The first instalment has been made. In addition to the above purchase price, the Company will pay to Tuli agreed interest in twelve equal monthly instalments of $13,657 each, followed by twelve equal monthly instalments of $6,828.

On March 14, 2023, the Company entered into a drilling equipment supply agreement with Forage Fusion Drilling Ltd. (“**Forage”**) of Hawkesbury, Ontario to purchase specific drilling equipment on a “rent to own” basis with the purchase price to be paid in monthly payments. Pursuant to the agreement, the aggregate purchase price payable to Forage is $2,942,000. A deposit of $1,700,000 was paid in March 2023. The balance is payable in twelve equal monthly instalments of $103,500. The equipment arrived at the site in July 2023.

#### Post Creek

Commencing August 1, 2015, the Company is obligated to pay advances on a net smelter return of $10,000 per annum. During each of FY 2022 and YTD 2023, the Company paid $10,000, which will be deducted from any payments to be made under the net smelter return.

#### Halcyon

Commencing August 1, 2015, the Company is obligated to pay advances on a net smelter return of $8,000 per annum. During each of FY 2022 and FY 2023, the Company paid $8,000, which will be deducted from any payments to be made under the net smelter return.

### Related Party Transactions

Related party transactions are summarized below and include transactions with the following individuals or entities:

Key management (defined as members of the Board and senior officers) compensation was related to the following:

| ​ ​ ​ | ​ ​ March 31, 2024 | ​ March 31, 2023 |
| --- | ---: | ---: |
| Management fees | 777,809 | 802,074 |
| Corporate and administration expenses | 110,400 | 59,182 |
| ​ | **888,209** | **861,256** |

As a result of the financing closed on June 28, 2023 with Cymbria and EdgePoint Investment Group Inc., as portfolio manager on behalf of certain mutual funds managed by it (“**EdgePoint”**), and the increase of the Term Loan by the Additional Principal Amount on December 14, 2023 (the “**EdgePoint Transactions”**), Cymbria and certain other funds managed by EdgePoint (the “**Financing Parties”**) have acquired a total of 16,037,800 Common Shares, representing approximately 10.7% of the Company’s issued and outstanding shares. The Financing Parties also acquired on closing an aggregate of 6,024,000 warrants with a three-year term and an exercise price of $1.4375 which, if exercised, together with the shares acquired at closing would result in the Financing Parties holding approximately 14.2% of the shares in the aggregate (calculated on a partially diluted basis). As the result of the EdgePoint Transactions, the Financing Parties are related parties of PNRL. During the three months ended March 31, 2024, the Company paid interest of $519,206 to the Financing Parties (March 31, 2023 – nil).

### Contingent Liabilities

There are no environmental liabilities associated with the Selebi Assets and the Selkirk Mine as at the acquisition dates as all liabilities prior to the acquisitions are the responsibility of the sellers. The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of March 31, 2024, management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.

The Company’s exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions in which the Company operates. It is not possible to estimate the future contingent liabilities and the impact on the Company’s operating results due to future changes in the Company’s re-development of its projects or future changes in such laws and environmental regulations.

### Segmented Disclosure

The Company operates in one reportable operating segment being that of the acquisition, exploration and evaluation of mineral properties in three geographic segments being Botswana, Barbados and Canada. The Company’s geographic segments are as follows:

| ​ ​ ​ Current assets | ​ ​ March 31, 2024 | ​ December 31, 2023 |
| --- | ---: | ---: |
| Canada | 7,706,418 | 15,894,177 |
| Barbados | 2,090,445 | 104,024 |
| Botswana | 2,039,552 | 4,892,707 |
| **Total** | **11,836,415** | **20,890,908** |

| ​ ​ ​ Property, plant and equipment | ​ ​ March 31, 2024 | ​ December 31, 2023 |
| --- | ---: | ---: |
| Canada | 8,291 | 8,726 |
| Botswana | 8,118,043 | 8,479,773 |
| **Total** | **8,126,334** | **8,488,499** |

| ​ ​ ​ Exploration and evaluation assets | ​ ​ March 31, 2024 | ​ December 31, 2023 |
| --- | ---: | ---: |
| Botswana | 8,495,730 | 8,594,798 |

45

### Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at March 31, 2024.

### Share Capital Information

As of the date of this MD&A, the fully diluted share capital of the Company, including Common Shares issuable upon exercise of securities of the Company exercisable for Common Shares, is as follows:

| ​ ​ Securities | ​ Common shares |
| --- | ---: |
| Common shares | 185,708,588 |
| Preferred shares (1) | 13,131 |
| Deferred shares | 1,393,676 |
| Warrants | 42,822,508 |
| Stock options | 13,059,821 |
| **Fully diluted share capital** | **242,997,724** |

*(1) : The 118,186 outstanding preferred shares are convertible into Common Shares at a 9:1 ratio.*

## Market risk

As filed, 243 characters.

The information set forth in response to Item 1.01 above is incorporated by reference herein. The Units were sold in reliance upon the exemptions from registration provided by Regulation S and Regulation D promulgated under the Securities Act.

## Controls and procedures

As filed, 2,728 characters.

### Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “**Exchange Act”**) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2024. Based on the evaluation of these disclosure controls and procedures, management concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2024 due to the material weaknesses in internal control over financial reporting that were disclosed in our 2023 Form 10-K, namely: lack of controls and process over significant estimates and judgements applied in assessing complex accounting transactions; lack of segregation of duties over posting and reviewing complex accounting transactions; and lack of communication between legal consultants and management related to SEC filing requirements.

#### Remediation of Previously Identified Material Weaknesses

The Company’s management, under the oversight of the Audit Committee, is in the process of designing and implementing corrective actions to remediate the control deficiencies that contributed to the material weaknesses, including obtaining specific resources to address the identified weaknesses. As we continue to evaluate and enhance our internal control over financial reporting, we may determine that additional measures to address the material weaknesses or adjustments to the remediation plan may be required. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

### Changes in Internal Control over Financial Reporting

Except as noted above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Filed Jul 12, 2024.
Source: SEC EDGAR, the filing index for accession 0001104659-24-079535. Last ingested by Listed: Oct 24, 2026, 14:57 ET. No prices; not investment advice.