# U.S. GoldMining Inc.: Form 10-Q for the period ended Aug 31, 2023

- Company: [U.S. GoldMining Inc.](/companies/usgo.md) (CIK 1947244)
- Form: 10-Q
- Filed: 2023-10-10
- Accepted by EDGAR: Oct 10, 2023, 16:40 ET
- Period: 2023-08-31
- Accession: 0001493152-23-036760
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1947244/000149315223036760/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1947244/000149315223036760/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-08-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2023-06-01 to 2023-08-31 | −$2.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2022-12-01 to 2023-08-31 | −$5.9m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2023-06-01 to 2023-08-31 | −$2.4m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2022-12-01 to 2023-08-31 | −$5.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-06-01 to 2023-08-31 | −$0.20 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2022-12-01 to 2023-08-31 | −$0.50 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-06-01 to 2023-08-31 | −$0.20 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2022-12-01 to 2023-08-31 | −$0.50 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-06-01 to 2023-08-31 | 12,393,220 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2022-12-01 to 2023-08-31 | 11,175,342 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2022-12-01 to 2023-08-31 | −$7.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2023-08-31 | $13.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-08-31 | $15.6m | us-gaap:AssetsCurrent |
| Total assets | at 2023-08-31 | $16.7m | us-gaap:Assets |
| Current liabilities | at 2023-08-31 | $448.8k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-08-31 | $824.2k | us-gaap:Liabilities |
| Shareholders' equity | at 2023-08-31 | $15.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 37,181 characters.

Unless the context otherwise requires, references to “U.S. GoldMining”, “the Company”, “we”, “us” and “our” refer to U.S. GoldMining Inc., a Nevada corporation and references to “$” or “dollars” are to United States dollars.

This management’s discussion and analysis of our financial condition and results of operations (the “MD&A”) is intended to assist you in better understanding and evaluating the financial condition and results of operations of the Company. You should read this MD&A in conjunction with our unaudited interim condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q (“Quarterly Report”), as well as our audited consolidated financial statements included in our registration statement on Form S-1 (Registration No. 333-269693) declared effective on April 19, 2023 (“Registration Statement”), copies of which are available at www.sec.gov.

### Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking statements and forward-looking information within the meaning of Canadian securities laws and the Private Securities Litigation Reform Act of 1995, collectively referred to as “forward-Looking statements”. Forward-looking statements include statements that relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs and other information that is not historical information. Forward-looking statements can often be identified by the use of terminology such as “subject to”, “believe”, “anticipate”, “plan”, “target”, “expect”, “intend”, “estimate”, “project”, “outlook”, “may”, “will”, “should”, “would”, “could”, “can”, the negatives thereof, variations thereon and similar expressions, or by discussions of strategy. In addition, any statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking. In particular, forward-looking statements include, but are not limited to, statements about:

- anticipated tonnages and grades of the mineral resources disclosed for the Whistler Project;
- our expectations regarding the continuity of mineral deposits;
- our expectations regarding raising capital and developing the Whistler Project;
- our planned exploration activities on the Whistler Project;
- expectations regarding environmental, social or political issues that may affect the exploration or development progress;
- our estimates regarding future revenue, expenses and needs for additional financing; and
- our ability to attract and retain qualified employees and key personnel.

These forward-looking statements are based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances, including that:

- the timing and ability to obtain requisite operational, environmental and other licenses, permits and approvals, including extensions thereof will occur and proceed as expected;
- current gold, silver, base metal and other commodity prices will be sustained, or will improve;
- the proposed development of the Whistler Project will be viable operationally and economically and will proceed as expected;
- any additional financing required by us will be available on reasonable terms or at all; and
- the Company will not experience any material accident, labor dispute or failure of plant or equipment.

Despite a careful process to prepare and review the forward-looking statements, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct.

Forward-looking statements are necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the risk factors described in greater detail under Item 1A. Risk Factors in our final prospectus for the IPO filed with the U.S. Securities Exchange Commission on April 20, 2023 (the “Final Prospectus”). Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements.

These factors should not be construed as exhaustive and should be read with other cautionary statements in this document. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking statements. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements, which speaks only as of the date made. The forward-looking statements contained in this document represents our expectations as of the date of this Quarterly Report (or as the date they are otherwise stated to be made) and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

### Business Overview

We are a United States domiciled exploration stage company and our sole project is currently the Whistler Project. The Whistler Project is a gold-copper exploration project located in the Yentna Mining District, approximately 150 km northwest of Anchorage, in Alaska.

We were incorporated on June 30, 2015 in Alaska as “BRI Alaska Corp.” On September 8, 2022, we redomiciled to Nevada and changed our name to “U.S. GoldMining Inc.”. We are a subsidiary of GoldMining Inc. (“GoldMining”), a company organized under the laws of Canada and listed on the Toronto Stock Exchange and NYSE American. GoldMining is a public mineral exploration company that was incorporated in 2009 and is focused on the acquisition and development of gold assets in the Americas. Our principal executive offices are located at 1188 West Georgia Street, Suite 1830, Vancouver, British Columbia, Canada V6E 4A2 and our head operating offices are located at 301 Calista Court, Suite 200, Office 203, Anchorage, Alaska, 99518. Our website address is www.us.goldmining.com. Our common shares and common share purchase warrants are listed on the Nasdaq Capital Market under the symbols “USGO” and “USGOW”, respectively.

### Initial Public Offering

On April 24, 2023, in connection with the closing of our initial public offering (the “IPO”), the Company issued 2,000,000 Units at a price of $10.00 per Unit for gross proceeds of $20,000,000. In connection with the IPO, the Company incurred securities issuance costs of $970,194, of which $650,000 represented cash fees paid to the Underwriters. After the IPO, GoldMining continued to own a controlling interest in the Company of 9,622,491 common shares and 122,490 common share purchase warrants, representing approximately 79.3% of the outstanding shares of the Company. As of August 31, 2023, GoldMining owned 79.7% of the Company.

### The Whistler Gold-Copper Project

After completing the IPO, the Company has disclosed that it intends to pursue planned exploration activities including core drilling. Permits have been received to commence these activities, starting with renovation of the Whistler camp in preparation for the summer 2023 exploration season.

The Company’s currently planned exploration program over the 2023 and 2024 field seasons consists of up to 10,000-meters of core drilling, surface exploration which may include soil geochemical sampling and geophysical surveying, processing and interpretation, and collection of mine planning and mineral processing information including metallurgical, geotechnical and hydrogeological data. Environmental baseline data collection, as well as heritage, archaeological and traditional land use studies, are also expected to be initiated in 2023. The Company will also engage in stakeholder consultation with respect to both the present and ongoing exploration activity and the potential future mine development of the Whistler Project.

On August 21, 2023, the Company announced the commencement of the 2023 Phase 1 Drilling Program at its 100% owned Whistler gold-copper project. Phase 1 of the Program, comprises up to an initial 5,000 meters of the budgeted and fully funded 10,000-meter drilling program. The drill core will be logged and sampled at the existing Whistler facility and samples will be sent to the Bureau Veritas North America Ltd. laboratory in Fairbanks, AK, for processing and assaying.

### Results of Operations

*Until the IPO, we operated as a wholly-owned subsidiary of GoldMining. Accordingly, the financial statements for the comparative three and nine month periods ended August 31, 2022 and our balance sheet data for the year ended November 30, 2022, included in our unaudited financial statements for the three and nine months ended August 31, 2023, were prepared on a “carve-out” basis to include allocations of certain assets, liabilities and expenses related to services and support functions from GoldMining, which were allocated on a pro-rata basis considered by GoldMining to be a reasonable reflection of the utilization of services provided to us for the periods presented. Management believes the assumptions and allocations underlying the financial statements are reasonable and appropriate under the circumstances. However, these financial statements are not necessarily indicative of the results that would be attained if our Company had operated as a separate legal entity during the periods presented and are not necessarily indicative of future operating results.*

#### Three months ended August 31, 2023, compared to three months ended August 31, 2022

During the three months ended August 31, 2023, we recorded a net loss of $2,435,507 ($0.20 per share) compared to a net loss of $484,071 ($0.05 per share) for the three months ended August 31, 2022.

During the three months ended August 31, 2023, the Company had exploration expenses of $1,474,372, compared to $96,517 for the three months ended August 31, 2022. Exploration expenses in the three months ended August 31, 2023 included drilling, consulting fees to vendors that provided geological and environmental work, regulatory and community stakeholder engagements and other technical services, and maintenance costs.

During the three months ended August 31, 2023, drilling expenses were $516,734 compared to $nil for the three months ended August 31, 2022 as a result of the commencement of the Company’s 2023 phase 1 drilling program at its Whistler Project in the current period. During the three months ended August 31, 2023, exploration expenses included consulting fees of $467,230, compared to $79,236 for the three months ended August 31, 2022. The increase was primarily related to consulting fees for the management of the current exploration program at the Whistler Project, overhead costs for work on the renovation of the existing Whistler Project camp, and initiation of regulator, community and other stakeholder engagements. During the three months ended August 31, 2023, transportation and travel expenses were $272,288 compared to $5,918 during the three months ended August 31, 2022, which mainly related to aircraft charter costs to bring crews, equipment and to airfreight supplies in connection with the ongoing exploration program, including mobilization of drilling equipment and major consumables. During the three months ended August 31, 2023, land fee, camp maintenance and other exploration expenses were $218,120 and primarily consisted of camp costs, including equipment maintenance and rental and fuel consumption for the ongoing exploration program, compared to $11,363 for the three months ended August 31, 2022.

General and administrative expenditures were $1,145,636 for the three months ended August 31, 2023, compared to $381,449 for the three months ended August 31, 2022. During the three months ended August 31, 2023, general and administrative expenditures included professional fees of $84,297, compared to $320,534 during the three months ended August 31, 2022. The decrease in such expenses was primarily as a result of decreased legal, audit, accounting and tax services after the Company’s completion of the IPO. General and administrative expenditures also included: (i) share-based compensation expenses of $130,739, which consisted of $5,224 related to the award of restricted shares vested during the period, $78,886 related to the fair value of stock options issued by the Company to management, directors and employees of the Company, $43,920 related to share compensation for consulting services and $2,709 from GoldMining personnel allocated for their time spent on our affairs, compared to $4,783 during the three months ended August 31, 2022; (ii) management fees, salaries and benefits of $64,234, compared to $40,609 during the three months ended August 31, 2022; (iii) consulting, corporate development and investor relations expenses of $685,428, compared to $3,667 during the three months ended August 31, 2022; (iv) filing, listing, dues and subscriptions expenses of $37,183, compared to $7,829 during the three months ended August 31, 2022; (v) office administrative, rental and insurance expenses of $133,052, compared to $2,976 during the three months ended August 31, 2022; and (vi) travel, website design and hosting expenses of $10,703, compared to $1,051 during the three months ended August 31, 2022. The increase in general and administrative costs was primarily the result of a higher level of activity after the Company’s completion of its IPO.

Accretion and depreciation expenses were $10,845 during the three months ended August 31, 2023, compared to $4,866 during the three months ended August 31, 2022.

Our loss from operations was $2,630,853 for the three months ended August 31, 2023, compared to $482,832 for the three months ended August 31, 2022. The increase in operating loss was primarily the result of an increase in general and administrative expenses and exploration expenses.

#### Nine months ended August 31, 2023, compared to the nine months ended August 31, 2022

During the nine months ended August 31, 2023, we recorded a net loss of $5,622,175 ($0.50 per share) compared to a net loss of $832,945 ($0.09 per share) for the nine months ended August 31, 2022.

During the nine months ended August 31, 2023, the Company had exploration expenses of $1,807,651, compared to $170,282 for the nine months ended August 31, 2022. Exploration expenses in the nine months ended August 31, 2023 primarily consisted of drilling, consulting fees to vendors that provided geological and environmental work, permitting, regulatory and community stakeholder engagements and other technical services, and camp costs, including equipment maintenance and rental and fuel consumption for the ongoing exploration program at the Whistler Project.

During the nine months ended August 31, 2023, exploration expenses included consulting fees of $740,477 compared to $124,375 for the nine months ended August 31, 2022. The increase was primarily related to an increase in consulting fees for the management of the ongoing exploration program, overhead costs for work on the renovation of the existing Whistler Project camp, and commencement of regulator, community and other stakeholder engagements. During the nine months ended August 31, 2023, drilling expenses were $516,734 compared to $nil for the nine months ended August 31, 2022 which related to the commencement of the Company’s 2023 phase 1 drilling program at its Whistler Project. During the nine months ended August 31, 2023, transportation and travel expenses were $279,294 compared to $12,107 during the nine months ended August 31, 2022, which mainly related to the aircraft charters costs to bring crews, equipment and supplies for the ongoing exploration program. During the nine months ended August 31, 2023, land fee, camp maintenance and other exploration expenses were $271,146 and primarily consisted of camp costs, including equipment maintenance and rental and fuel consumption for the ongoing exploration program, as well as work related to a road access study, compared to $33,800 for the nine months ended August 31, 2022.

General and administrative expenditures were $4,060,882 for the nine months ended August 31, 2023, compared to $647,169 for the nine months ended August 31, 2022. During the nine months ended August 31, 2023, general and administrative expenditures primarily consisted of professional fees of $1,613,105, compared to $505,776 during the nine months ended August 31, 2022. The increase in such expenses was primarily as a result of increased legal, audit, accounting and tax services relating to the Company’s preparation and execution of the IPO. General and administrative expenditures also included: (i) share-based compensation expenses of $347,581, which consisted of $43,590 related to the award of restricted shares vested during the period, $189,114 related to the fair value of stock options issued by the Company to management, directors and employees of the Company, $65,700 related to share compensation for consulting services, and $49,177 from GoldMining personnel allocated for their time spent on our affairs, compared to $26,611 during the nine months ended August 31, 2022; (ii) management fees, salaries and benefits of $216,679, compared to $86,256 during the nine months ended August 31, 2022; (iii) consulting, corporate development and investor relations expenses of $1,515,054 compared to $4,717 during the nine months ended August 31, 2022. The increase was mainly for building corporate brand awareness after completion of the IPO; (iv) filing, listing, dues and subscriptions expenses of $156,820, compared to $7,829 during the nine months ended August 31, 2022; (v) office administrative, rental and insurance expenses of $188,620, compared to $9,081 during the nine months ended August 31, 2022; and (vi) travel, website design and hosting expenses of $23,023, compared to $6,899 during the nine months ended August 31, 2022. The increase in general and administrative costs was primarily the result of a higher level of activity leading up to and after the Company’s IPO.

Accretion and depreciation expenses were $21,136 during the nine months ended August 31, 2023, compared to $14,279 during the nine months ended August 31, 2022.

Our loss from operations was $5,889,669 for the nine months ended August 31, 2023, compared to $831,730 for the nine months ended August 31, 2022. The increase in operating loss was primarily the result of an increase in general and administrative expenses and exploration expenses.

### Liquidity and Capital Resources

|  | As at August 31, 2023 ($) | As at November 30, 2022 ($) |
| --- | ---: | ---: |
| Cash and cash equivalents | **$13,777,663** | $54,508 |
| Working capital (deficit) | **15,133,664** | (1,057,400) |
| Total assets | **16,684,033** | 229,619 |
| Total current liabilities | **448,813** | 1,287,019 |
| Accounts payable | **172,447** | 466,127 |
| Accrued liabilities | **72,416** | 26,922 |
| Total non-current liabilities | **375,382** | 225,871 |
| Stockholders’ equity (deficit) | **15,859,838** | (1,283,271) |

Prior to the completion of our IPO, capital resources consisted primarily of cash advanced and/or contributed from GoldMining. On April 24, 2023, we completed our IPO and issued 2,000,000 Units at a price of $10.00 per Unit for net proceeds in an aggregate amount of approximately $19.1 million after deducting underwriting fees and offering costs. In May 2023, we repaid GoldMining $1,680,925, for amounts previously advanced to us by GoldMining.

As of August 31, 2023, we had cash and cash equivalents of $13,777,663, compared to $54,508 as of November 30, 2022 and restricted cash of $87,015, compared to $nil as of November 30, 2022. We had other receivables of $147,331 as of August 31, 2023, compared to $68,000 as of November 30, 2022. The increase in other receivables was mainly due to interest receivable on term deposits held by us. We had inventories of $32,047 as of August 31, 2023 compared to $nil as of November 30, 2022, which included fuels held at the Whistler Project camp site. We had prepaid expenses and deferred costs of $1,538,421 as of August 31, 2023, compared to $107,111 as of November 30, 2022. The increase was primarily for $1,069,889 cash advances to a technical consulting company for management of the exploration program for the Whistler Project, $271,941 prepaid corporate development expenses, $159,756 prepaid insurance costs and $36,835 prepaid dues and subscriptions costs for activities after completion of the IPO.

As of August 31, 2023, current liabilities were $448,813, compared to $1,287,019 as of November 30, 2022. Current liabilities as of August 31, 2023 consisted of: accounts payable of $172,447, compared to $466,127 as of November 30, 2022; accrued liabilities of $72,416, compared to $26,922 as of November 30, 2022. The decreases in current liabilities were primarily related to the repayment of advances from GoldMining.

We have not generated any revenue from operations and the only sources of financing to date have been through advances from GoldMining and the IPO. Our ability to meet our obligations and finance exploration activities depends on our ability to generate cash flow through the issuance of shares of common stock pursuant to private placements and short-term or long-term loans. Capital markets may not be receptive to offerings of new equity from treasury or debt, whether by way of private placements or public offerings. This may be further complicated by the limited liquidity for our common shares, restricting access to some institutional investors. Our growth and success is dependent on external sources of financing which may not be available on acceptable terms, or at all.

As of August 31, 2023 we did not have any off-balance sheet arrangements.

### Summary of Cash Flows

#### Operating Activities

Net cash used in operating activities during the nine months ended August 31, 2023 was $7,024,892, compared to $682,902 during the nine months ended August 31, 2022. Significant operating expenditures during the nine months ended August 31, 2023 included general and administrative expenses and exploration expenditures. The increase of net cash used in operating activities is primarily the result of increased filing, listing, legal, accounting, and investor relations expenditures for the preparation and execution of the Company’s IPO and costs associated with the Whistler Project exploration program.

#### Investing Activities

Net cash used in investing activities during the nine months ended August 31, 2023 was $942,015, compared to $nil during the nine months ended August 31, 2022, which related to the renovation of existing camp structures and construction of additional facilities for the Whistler Project.

#### Financing Activities

During the nine months ended August 31, 2023, net cash provided by financing activities was $21,777,077, which was primarily comprised of the net proceeds of $19,056,223 from the IPO, proceeds received from warrant exercises of $3,363,203, advances from GoldMining of $1,003,142, offset by $1,680,925 for repayment of advances from GoldMining. Net cash provided by financing activities during the nine months ended August 31, 2022 was $681,609, which was primarily from advances from GoldMining of $640,367, and expenses paid for by GoldMining on the Company’s behalf of $41,242.

### Commitments Required to Keep Whistler Project in Good Standing

The Company is required to make annual land payments to the Department of Natural Resources of Alaska in the amount of $224,583 in 2023 and $230,605 thereafter, to keep the Whistler Project in good standing. Additionally, we have an annual labor requirement of $106,000 for 2023 and $135,200 thereafter, for which a cash-in-lieu payment equal to the value of the annual labor requirement August be made instead. The Company has excess labor carry forwards of $273,674 expiring in 2026, of which up to $106,000 can be applied each year to the Company’s annual labor requirements. The Company notes that the excess labor expenditures above have been made and the Whistler Project is in good standing.

### Future Commitments

We acquired rights to the Whistler Project and associated equipment in August 2015 pursuant to an asset purchase agreement by and among us, GoldMining, Kiska Metals Corporation (“Kiska”) and Geoinformatics Alaska Exploration Inc (“Geoinformatics”). Pursuant to such agreement, we assumed an obligation on the Whistler Project pursuant to a royalty purchase agreement between Kiska, Geoinformatics, and MF2, LLC (“MF2”), dated December 16, 2014. This agreement granted MF2 a 2.75% NSR royalty over all 304 claims, and, extending outside the current claims, over an area of interest defined by the maximum historical extent of claims held on the project.

In June 2023, the Company entered into an agreement with Equity Geoscience, Ltd. for the management of an exploration program for the Whistler Project. The agreement includes an approved work order totaling $5,255,500, for the period of June 1, 2023 to February 29, 2024 which may be paused, postponed or terminated by either party with 30 days written notice. As at August 31, 2023, the Company has paid $3,406,170 towards the approved work order.

### Transactions with Related Parties

During the periods presented, we shared personnel, including key management personnel, office space, equipment, and various administrative services with other companies, including GoldMining. Costs incurred by GoldMining were allocated between its related subsidiaries based on an estimate of time incurred and use of services and are charged at cost. During the three and nine months ended August 31, 2023, the allocated costs from GoldMining to the Company were $7,583 and $84,611, respectively ($21,323 and $67,853 for the three and nine months ended August 31, 2022, respectively). Out of the allocated costs, $2,709 and $49,177 for the three and nine months ended August 31, 2023, respectively, were noncash share-based compensation costs ($4,783 and $26,611 for the three and nine months ended August 31, 2022, respectively). The allocated costs from GoldMining were treated as a capital contribution, as there is no obligation or intent regarding the repayment of such amounts by the Company.

For the three and nine months ended August 31, 2023, the amounts advanced to us and paid on our behalf by GoldMining totaled $nil and $1,003,142, respectively ($349,960 and $640,367 for the three and nine months ended August 31, 2022, respectively). In May 2023, the Company repaid GoldMining $1,680,925, for amounts previously advanced to the Company. The amount paid represented the full amount of the outstanding loan from GoldMining at the time.

During the three and nine months ended August 31, 2023, we incurred $100,800 and $133,287, respectively, and during the three and nine months ended August 31, 2022, $1,052 and $6,899, respectively, in general and administrative costs, paid to Blender Media Inc., a company controlled by a direct family member of the co-chairman and a director of GoldMining, for various services, including information technology, corporate branding, sponsorships and advertising, media, website design, maintenance and hosting, provided by Blender to the Company. As at August 31, 2023, prepaid expenses and deferred costs included service fees prepaid to Blender in the amount of $269,274 (November 30, 2022: $Nil).

During the three and nine months ended August 31, 2023, share-based compensation costs included $3,343 and $27,820, respectively (2022, $Nil), in amounts incurred for the co-chairman and a director of GoldMining for performance based restricted shares granted in September 2022.

GoldMining acquired 122,490 Units in the IPO at a price of $10 per Unit for a total consideration of $1,224,900.

Related party transactions are based on the amounts agreed to by the parties. During the quarters ended August 31, 2023 and 2022, we did not enter into any contracts or undertake any commitment or obligation with any related parties other than as described herein.

### Outstanding Securities

As of the date hereof, the Company has 12,398,709 common shares outstanding. In addition, we had stock options outstanding representing 82,500 shares at a weighted-average exercise price of $10 per share, and share purchase warrants outstanding representing 1,741,292 shares at a weighted-average exercise price of $13 per share. The exercise of stock options and warrants is at the discretion of their respective holders and, accordingly, there is no assurance that any of the stock options or warrants will be exercised in the future.

### Critical Accounting Estimates and Judgments

The preparation of these financial statements in conformity with U.S. GAAP requires management to make judgments and estimates and form assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the year. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, income 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 under different assumptions and conditions.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is as follows:

#### Asset retirement obligation

An asset retirement obligation represents the present value of estimated future costs for the rehabilitation of our mineral property. These estimates include assumptions as to the future activities, cost of services, timing of the rehabilitation work to be performed, inflation rates, exchange rates and interest rates. The actual cost to rehabilitate a mineral property may vary from the estimated amounts because there are uncertainties in factors used to estimate the cost and potential changes in regulations or laws governing the rehabilitation of a mineral property. Management periodically reviews the rehabilitation requirements and adjusts the liability as new information becomes available and will assess the impact of new regulations and laws as they are enacted.

#### Allocation of expenses from GoldMining.

For the three and nine months ended August 31, 2023, certain general administrative expenses, including employment related expenditures for services and support functions provided by GoldMining, were allocated on a pro-rata basis considered by GoldMining to be a reasonable reflection of the utilization of services provided to us.

#### Allocation of carve-out expenses from GoldMining.

The balance sheet as of November 30, 2022 and comparative financial statements for the three and nine months ended August 31, 2022 have been prepared on a “carve-out” basis to include allocations of certain assets, liabilities and expenses related to services and support functions from GoldMining, which were allocated on a pro-rata basis considered by GoldMining to be a reasonable reflection of the utilization of services provided to us for the quarters presented. These expenses, assets, and liabilities have been allocated to the Company on the basis of direct usage when identifiable, with others allocated based on relevant data criteria as follows:

- General and administrative expenses- allocated all direct expenses and corporate expenses were allocated based on an estimate of time incurred to reflect the utilization of those services by the Company including:

|  |  |
| --- | --- |
| ◌ | Office space, equipment and administrative services. |
| ◌ | Employment related expenses, including share-based compensation which was calculated using the Black-Scholes model. |

- Accounts payable and accrued expenses, prepaid expenses and deposits, due to GoldMining, allocated all amounts directly related to the Company.

Management believes the assumptions and allocations underlying the financial statements are reasonable and appropriate under the circumstances. Therefore, these financial statements are not necessarily indicative of the results that would be attained if we had operated as a separate legal entity during the periods presented and are not necessarily indicative of future operating results.

#### Restricted Shares

The fair value of the restricted shares is measured at grant date and recognized over the period during which the restricted shares vest. When restricted shares are conditional upon the achievement of a performance condition, the Company estimates the length of the expected vesting period at grant date, based on the most likely outcome of the performance condition. The fair value of the restricted shares is determined based on the fair value of the common shares on the grant date, adjusted for lack of marketability discount, minority shareholder discount, and other applicable factors that are generally recognized by market participants.

#### Stock Options

The Company grants stock options to certain directors, officers, employees and consultants of the Company. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock options. The fair value of stock options granted to employees is recognized as an expense over the vesting period with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes, provides services that could be provided by a direct employee, or has authority and responsibility for planning, directing and controlling the activities of the Company, including non-executive directors. The fair value is measured at grant date and recognized over the period during which the options vest. Forfeitures are accounted for as they occur.

### Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 209-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard is effective for the fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Management has assessed and concluded there is no material impact on the Company’s financial statements.

### JOBS Act

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We continue the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation, providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the completion of our IPO; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

## Market risk

As filed, 144 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

## Controls and procedures

As filed, 1,351 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our internal controls over financial reporting and disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) and, as of the end of the period covered by this Quarterly Report, our Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals.

### Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended August 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 483 characters.

In addition to the information contained in this Quarterly Report on Form 10-Q, you should carefully consider the risks discussed under “Risk Factors” in our Final Prospectus. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. As of the date hereof, there have been no material changes in the risk factors discussed in our Final Prospectus.

Filed Oct 10, 2023.
Source: SEC EDGAR, the filing index for accession 0001493152-23-036760. Last ingested by Listed: Nov 3, 2026, 20:31 ET. No prices; not investment advice.