Nevada Canyon Gold Corp. - Quarter Report: 2023 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ quarterly REPORT under SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023

or

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File No. 000-55600

NEVADA CANYON GOLD CORP.

(Exact Name of Registrant as Specified in its Charter)

(888) 909-5548

Registrant’s telephone number, including area code

n/a

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated file,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 11, 2023 the number of shares outstanding of the issuer’s common stock, par value $0.0001 per share, is 11,632,950.

table of contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

Nevada Canyon Gold Corp.

Condensed Consolidated Balance Sheets

(Unaudited)

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

Nevada Canyon Gold Corp.

Condensed Consolidated Statements of Operations

(Unaudited)

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

Nevada Canyon Gold Corp.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

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

Nevada Canyon Gold Corp.

Condensed Consolidated Statements of Cash Flow

(Unaudited)

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

NEVADA CANYON GOLD CORP.

NOTES TO THE CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023

(UNAUDITED)

NOTE 1 - NATURE OF BUSINESS

Nevada Canyon Gold Corp. (the “Company”) was incorporated under the laws of the state of Nevada on February 27, 2014. On July 6, 2016, the Company changed its name from Tech Foundry Ventures, Inc. to Nevada Canyon Gold Corp. On December 15, 2021, the Company incorporated two subsidiaries, Nevada Canyon LLC and Canyon Carbon LLC. Both subsidiaries were incorporated under the laws of the state of Nevada. The Company is involved in acquiring and exploring mineral properties and royalty interests in Nevada and Idaho.

Going Concern

The Company’s condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States of America (“US GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company is in a business of acquiring and exploring mineral properties and royalty interests and has not generated or realized any revenues from these business operations. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Management intends to obtain additional funding by borrowing funds, and/or a private placement of common stock.

NOTE 2 - BASIS OF PRESENTATION

The condensed consolidated financial statements of the Company have been prepared in accordance with US GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by US GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the consolidated financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in Form 10-K, as amended. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Earnings per Share

The Company’s basic earnings per share (“EPS”) is calculated by dividing its net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period, excluding unvested portion of restricted stock with performance conditions.

The Company’s diluted EPS is calculated by dividing its net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Restricted stock with performance conditions is only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Dilutive effect of the restricted stock is determined using the treasury stock method. Shares that have been distributed but not yet vested and thus excluded from the weighted average shares calculation, were 4,003,333 and 6,005,000 at June 30, 2023 and 2022, respectively.

NOTE 4 – RELATED PARTY TRANSACTIONS

Amounts due to related parties at June 30, 2023 and December 31, 2022:

 SCHEDULE OF RELATED PARTY TRANSACTIONS

During the three- and six-month periods ended June 30, 2023 and 2022, the Company had the following transactions with its related parties:

 SCHEDULE OF TRANSACTIONS WITH ITS RELATED PARTIES

See Note 5 - Mineral Property Interests for further information on related party transactions and Note 7 - Stockholders’ Equity for further information regarding stock issued to related parties.

NOTE 5 – MINERAL PROPERTY INTERESTS

As of June 30, 2023, the Company’s mineral property interests are comprised of the Lazy Claims Property, the Loman Property, and the Agai-Pah Property located in Mineral County, Nevada, the Swales Property located in Elko County, Nevada, and the Belshazzar Property located in Quartzburg mining district, Boise County, Idaho. In addition, the Company acquired an option to acquire 100% interest of Target Minerals, Inc’s (“Target”) 1% production royalty on the Olinghouse Project, located in the Olinghouse Mining District, Washoe County, Nevada, and acquired 2% net smelter returns royalty (“NSR”) on the Palmetto Project (the “Project”), located in Esmeralda County, Nevada.

Lazy Claims Property

On August 2, 2017, the Company entered into an exploration lease agreement (the “Lazy Claims Agreement”) with Tarsis Resources US Inc. (“Tarsis”), a Nevada corporation, to lease the Lazy Claims, consisting of three claims. The term of the Lazy Claims Agreement is ten years, and is subject to extension for additional two consecutive 10-year terms. Full consideration of the Lazy Claims Agreement consists of the following: an initial cash payment of $1,000 to Tarsis, paid upon the execution of the Lazy Claims Agreement, with $2,000 payable to Tarsis on each subsequent anniversary of the effective date. The Company agreed to pay Tarsis a 2% production royalty (the “Lazy Claims Royalty”) based on the gross returns from the production and sale of minerals from the Lazy Claims. Should the Lazy Claims Royalty payments to Tarsis be in excess of $2,000 per year, the Company will not be required to pay a $2,000 annual minimum payment.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any expenses associated with the Lazy Claims.

Loman Property

In December 2019, the Company acquired 27 mining claims for a total of $10,395. The claims were acquired by the Company from a third-party.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any expenses associated with the Loman Claims.

Agai-Pah Property

On May 19, 2021, the Company entered into exploration lease with option to purchase agreement (the “Agai-Pah Property Agreement”) with MSM Resource, L.L.C., a Nevada limited liability Corporation on the Agai-Pah Property, consisting of 20 unpatented mining claims totaling 400 acres, located in sections 32 & 33, T4N, R34E, MDM, Mineral County, Nevada about 10 miles northeast of the town of Hawthorne (the “Agai-Pah Property”). Alan Day, the managing member of MSM, is the CEO, President, and director of the Company.

The term of the Agai-Pah Property Agreement commenced on May 19, 2021, and continues for ten years, subject to the Company’s right to extend the Agai-Pah Property Agreement for two additional terms of ten years each, and subject to the Company’s option to purchase the Property.

Full consideration of the Agai-Pah Property Agreement consists of the following: (i) an initial cash payment of $20,000 to be paid within 90 days from the execution of the Agai-Pah Property Agreement on May 19, 2021 (the “Effective Date”), and (ii) annual payments of $20,000 to be paid on the anniversary of the Effective Date while the Agai-Pah Property Agreement remains in effect. The Company has the exclusive option and right to acquire 100% ownership of the Agai-Pah Property (the “Agai-Pah Purchase Option”). To exercise the Agai-Pah Purchase Option, the Company will be required to pay $750,000 (the “Agai-Pah Purchase Price”). The Agai-Pah Purchase Price can be paid in either cash and/or equity of the Company, or a combination thereof, at the election of MSM. The annual payments paid by the Company to MSM, shall not be applied or credited against the Purchase Price.

The Company made the initial cash payment of $20,000 on November 6, 2021, pursuant to a verbal extension granted to the Company by MSM, and made the first $20,000 anniversary payment on June 20, 2022. As at June 30, 2023, the Company accrued the second $20,000 anniversary payment.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any expenses associated with the Agai-Pah Property.

Belshazzar Property

On June 4, 2021, the Company entered into exploration lease with option to purchase agreement (the “Belshazzar Property Agreement”) with Belshazzar Holdings, L.L.C., a Nevada limited liability Corporation on the Belshazzar Property, consisting of ten unpatented lode mining claims and seven unpatented placer mineral claims totaling 200 acres, within Quartzburg mining district, in Boise County, Idaho (the “Belshazzar Property”). Alan Day, the managing member of Belshazzar, is the CEO, President, and director of the Company.

The term of the Belshazzar Property Agreement commenced on June 4, 2021, and continues for ten years, subject to the Company’s right to extend the Belshazzar Property Agreement for two additional terms of ten years each, and subject to the Company’s option to purchase the Belshazzar Property.

Full consideration of the Belshazzar Property Agreement consists of the following: (i) an initial cash payment of $20,000 to be paid within 90 days from the execution of the Belshazzar Property Agreement on June 4, 2021 (the “effective date”), and (ii) annual payments of $20,000 to be paid on the anniversary of the Effective Date while the Belshazzar Property Agreement remains in effect. The Company has the exclusive option and right to acquire 100% ownership of the Belshazzar Property (the “Belshazzar Purchase Option”). To exercise the Belshazzar Purchase Option, the Company will be required to pay $800,000 (the “Belshazzar Purchase Price”). The Belshazzar Purchase Price can be paid in either cash and/or equity of the Company, or a combination thereof, at the election of BH. The annual payments paid by the Company to BH, shall not be applied or credited against the Belshazzar Purchase Price. The Belshazzar Property is subject to a 1% Gross Returns Royalty payable to the property owner, from the commencement of commercial production subject to certain terms.

The Company made the initial cash payment of $20,000 on November 6, 2021, pursuant to a verbal extension granted to the Company by BH, and made the first $20,000 anniversary payment on June 20, 2022. As at June 30, 2023, the Company accrued the second $20,000 anniversary payment.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any expenses associated with the Belshazzar Property.

Swales Property

On December 27, 2021, the Company entered into exploration lease with option to purchase agreement (the “Swales Property Agreement”) with Mr. W. Wright Parks III., (“Mr. Parks”) on the Swales Property, consisting of 40 unpatented lode mining claims totaling 800 acres, within Swales Mountain Mining District in Elko County, Nevada (the “Swales Property”).

The term of the Swales Property Agreement commenced on December 27, 2021, and continues for ten years, subject to the Company’s right to extend the Swales Property Agreement for two additional terms of ten years each, and subject to the Company’s option to purchase the Swales Property.

Full consideration of the Swales Property Agreement consists of the following: (i) an initial cash payment of $20,000 to be paid within 90 days from the execution of the Belshazzar Agreement on December 27, 2021 (the “effective date”), and (ii) annual payments of $20,000 to be paid on the anniversary of the Effective Date while the Swales Property Agreement remains in effect. The Company has the exclusive option and right to acquire 100% ownership of the Swales Property (the “Swales Purchase Option”). To exercise the Swales Purchase Option, the Company will be required to pay $750,000 (the “Swales Purchase Price”). The Swales Purchase Price can be paid in either cash and/or equity of the Company, or a combination thereof, at the election of Mr. Parks. The annual payments paid by the Company to Mr. Parks, shall not be applied or credited against the Swales Purchase Price.

The Company made the initial cash payment of $20,000 on January 15, 2022, and made the first $20,000 anniversary payment on March 14, 2023, which was initially accrued at December 31, 2022.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any expenses associated with the Swales Property.

Olinghouse Project

On December 17, 2021, the Company’s wholly-owned subsidiary, Nevada Canyon, LLC, entered into an Option to Purchase Agreement (the “Olinghouse Agreement”) with Target Minerals, Inc (“Target”), a private Nevada company, to acquire 100% interest of Target’s 1% production royalty on the Olinghouse Project, located in the Olinghouse Mining District, Washoe County, Nevada.

The Company has the exclusive right and option (the “Olinghouse Purchase Option”), exercisable at any time during the Olinghouse Option Period, as further defined below, at its sole discretion, to acquire 100% of a 1% production royalty from the net smelter returns on all minerals and products produced from certain properties comprising the Olinghouse Project.

The term of the Olinghouse Purchase Option shall be the later of one year, or 60 days after the date on which the Company delivers to Target a written notice to exercise the Olinghouse Purchase Option, subject to further extension if Target’s conditions to closing are not fully satisfied or otherwise waived by the Company. Full consideration of the Olinghouse Agreement consists of the following: (i) an initial cash option payment of $200,000 payable upon execution of the Agreement, which the Company paid on December 18, 2021, and (ii) purchase price (the “Olinghouse Purchase Price”) which shall be paid by the Company to Target in either cash or common shares of the Company, the determination of which shall be as follows:

On December 23, 2022, the Company and Target agreed to extend the Olinghouse Purchase Option for an additional one-year term, expiring on December 17, 2023, for a one-time cash payment of $40,000.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any additional expenses associated with the Olinghouse Project.

Palmetto Project

On January 27, 2022, Nevada Canyon, LLC entered into a Royalty Purchase Agreement with Smooth Rock Ventures, LLC, a wholly-owned subsidiary of Smooth Rock Ventures Corp. (“Smooth Rock”), to acquire a 2% net smelter returns royalty on the Palmetto Project. Alan Day, the Company’s CEO, President, and director, is also a director and Vice-President of Smooth Rock.

To acquire the 2% NSR on the Palmetto Project, Nevada Canyon agreed to pay Smooth Rock a one-time cash payment of $350,000, which was paid on February 7, 2022.

During the three- and six-month periods ended June 30, 2023 and 2022, the Company did not incur any additional expenses associated with the Palmetto Project.

NOTE 6 – EQUITY INVESTMENT

As at June 30, 2023 and December 31, 2022, the Company’s equity investments consist of 511,750 common shares of Walker River Resources Corp. (“WRR”).

At June 30, 2023 and December 31, 2022, the fair value of the equity investment was $61,843 and $156,805, respectively, based on the market price of WRR Shares at June 30, 2023 and December 31, 2022, respectively. Fair value is measured using Level 1 inputs in the fair value hierarchy. During the three-month period ended June 30, 2023 the revaluation of the equity investment in WRR resulted in a $6,224 loss on the change in fair value of the equity investments (June 30, 2022 - $163,284). During the six-month period ended June 30, 2023 the revaluation of the equity investment in WRR resulted in a $94,962 loss on the change in fair value of the equity investments (June 30, 2022 - $203,850 gain).

The Company did not sell any WRR Shares during the three- and six-month periods ended June 30, 2023. During the three-month period ended June 30, 2022, the Company sold 500,000 WRR Shares for net proceeds of $219,763. The Company recorded a net realized loss of $56,325 on the sale of WRR Shares. During the six-month period ended June 30, 2022, the Company sold 1,171,083 WRR Shares for net proceeds of $614,658. The Company recorded a net realized gain of $211,530 on the sale of WRR Shares.

NOTE 7 – STOCKHOLDERS’ EQUITY

The Company was formed with one class of common stock, $0.0001 par value and is authorized to issue 100,000,000 common shares and one class of preferred stock, $0.0001 par value and is authorized to issue 10,000,000 preferred shares. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the directors of the Company.

Equity transactions during the three- and six-month periods ended June 30, 2023:

During the three- and six-month periods ended June 30, 2023 and 2022, the Company recognized share-based compensation as follows:

 SCHEDULE OF RECOGNIZED SHARE-BASED COMPENSATION

Directors:

On December 30, 2021, the Company distributed a total of 6,005,000 shares of common stock to the Company’s directors (the “Director Shares”). The Director Shares are subject to the terms and conditions included in 3-year lock-up and vesting agreements (the “Lock-up Agreements”), which contemplate that the Director Shares will vest in equal annual installments over a 3-year term during which term the shareholders agreed not to sell, directly or indirectly, or enter into any other transactions involving the Company’s common shares regardless if the shares have vested or not.

The fair value of the shares was determined to be approximately $2,924,796 or $0.4938 per share based on the trading price of the Company’s common stock on the issue date adjusted for the restrictions under the Lock-up Agreements. The shares vest over a three-year time period.

As stated above, the Company distributed all of the awarded shares prior to vesting. As at June 30, 2023, 2,001,667 shares have vested and 4,003,333 shares are unvested. As of June 30, 2023, unvested compensation related to the Director Shares of $1,486,769 will be recognized over the next 1.5 years.

Officer – VP of Operations:

On February 24, 2023, the Company entered into a consulting agreement with the Company’s newly appointed Vice President of Operations (the “VP Agreement”). The Company agreed to issue 2,000,000 shares of its common stock for the services. The shares vest ratably over a two-year period, beginning March 1, 2023, and vested shares are distributed quarterly. The fair value of the shares was $1,400,000 or $0.70 per share based on the trading price of the Company’s common stock on the date the service period began.

As of June 30, 2023, the shares vested under the VP Agreement but not yet distributed totaled 333,333. These shares were issued on July 5, 2023. Unvested compensation related to the Shares to be issued under the VP Agreement of $1,166,667 will be recognized over the next 1.67 years.

Consultants:

On February 24, 2023, the Company entered into two separate consulting agreements with consultants (the “Consulting Agreements”) in exchange for a total of 2,000,000 shares of its common stock. All shares vest ratably over a three-year period, beginning March 1, 2023, and vested shares are distributed quarterly. The fair value of the shares was $1,400,000 or $0.70 per share based on the trading price of the Company’s common stock on the date the service period began.

As of June 30, 2023, the shares vested under the Consulting Agreements but not yet distributed totaled 222,222. These shares were issued on July 5, 2023. Unvested compensation related to the Shares to be issued under the Consulting Agreements of $1,244,444 will be recognized over the next 2.67 years.

Warrants and Options

During the six-month period ended June 30, 2023 and for the year ended December 31, 2022, the Company did not have any warrants or options issued and exercisable.

NOTE 8 – CONVERTIBLE NOTES PAYABLE

During the year ended December 31, 2021, the Company received $980,000 in cash proceeds under the convertible promissory notes financing, in addition, the Company’s existing debt holder agreed to convert $15,064 the Company owed on account of unsecured, non-interest-bearing note payable due on demand into a convertible promissory note for a total of $20,000. The convertible promissory notes (the “Notes”) were due in twelve months after their issuances (the “Maturity Date”) and accrued interest at a rate of 15% per annum. During the three- and six-month periods ended June 30, 2022, the Company recorded $174,830 and $301,392 in amortization of debt discount on the Notes, respectively. The balance of the Notes at December 31, 2022 was $Nil as all of the notes were paid or converted into shares of the Company’s common stock during the year ended December 31, 2022.

NOTE 9 – CONTRACTUAL AGREEMENTS

On February 3, 2023, the Company entered into a public relations services agreement (the “Agreement”) with Think Ink Marketing Data & Email Services, Inc. (“Think Ink”) to develop an investor outreach program. The Agreement is for a six-month term. During the six-month period ended June 30, 2023 the Company paid $40,000, which were recognized as general and administrative expenses for the quarter ended June 30, 2023. Subsequent to June 30, 2023, the Company paid an additional $20,000 to Think Ink to continue its services.

On April 5, 2023, the Company entered into a consulting services agreement (the “Warm Springs Agreement”) with Warm Springs Consulting LLC. (“Warm Springs”) to develop registry-verified carbon credits for voluntary and compliance markets in the State of Nevada and the Western United States. The Warm Springs Agreement is for a nine-month term, and the Company agreed to an initial budget of $115,525, of which $65,820 was paid during the quarter ended June 30, 2023, and was expensed during the same period as part of professional fees.

NOTE 10 – SUBSEQUENT EVENT

Subsequent to June 30, 2023, the Company received $323,911 in net subscriptions to 432,914 units of the Company’s common stock under the offering of up to 12,500,000 units (the “Units”) of the Company’s securities pursuant to Regulation A, which was made effective on September 27, 2022. The Unit consists of one share of the Company’s common stock and a warrant to purchase a share of common stock at an exercise price of $1.20 over the next two years.

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report include forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (collectively, the “Reform Act”). The Reform Act provides a safe harbor for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, other than statements of historical fact that we make in this Quarterly Report on Form 10-Q are forward-looking. The words “anticipates,” “believes,” “expects,” “intends,” “will continue,” “estimates,” “plans,” “projects,” the negative of these terms and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean the statement is not forward-looking.

Forward-looking statements involve risks, uncertainties or other factors which may cause actual results to differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Certain risks, uncertainties or other important factors are detailed in this Quarterly Report on Form 10-Q and may be detailed from time to time in other reports we file with the Securities and Exchange Commission, including on Forms 8-K and 10-K.

Examples of forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our expectations regarding our ability to generate operating cash flows and to fund our working capital and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our future products, the timing and cost of capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include:

Actual results and developments may materially differ from those expressed in, or implied by, such statements due to a number of factors, including:

We operate in an extremely competitive environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. We believe these forward-looking statements are reasonable. However, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to update publicly any of them in light of new information or future events.

The following is management’s discussion and analysis of financial condition and results of operations and is provided as a supplement to the accompanying unaudited condensed consolidated financial statements and notes to help provide an understanding of our financial condition, results of operations and cash flows during the periods included in the accompanying unaudited condensed consolidated financial statements.

In this Quarterly Report on Form 10-Q, “Company,” “the Company,” “us,” and “our” refer to Nevada Canyon Gold Corp. and its wholly-owned subsidiaries, Nevada Canyon LLC and Canyon Carbon LLC, incorporated in Nevada, unless the context requires otherwise.

We intend the following discussion to assist in the understanding of our financial position and our results of operations for the three- and six-month periods ended June 30, 2023 and 2022. You should refer to the Financial Statements and related Notes in conjunction with this discussion.

General

We were incorporated under the laws of the state of Nevada on February 27, 2014. On December 15, 2021, we incorporated two subsidiaries, Nevada Canyon LLC and Canyon Carbon LLC. Both subsidiaries were incorporated under the laws of the state of Nevada.

We are a US-based natural resource company headquartered in Reno, Nevada. The Company has a large, strategic land position and royalties, in multiple projects, within some of Nevada’s highest-grade historical mining districts. As of the date of the filing of this Quarterly report on Form 10-Q our mineral property interests are comprised of the Lazy Claims Property, the Loman Property, and the Agai-Pah Property located in Mineral County, Nevada, the Swales Property located in Elko County, Nevada, and the Belshazzar Property located in Quartzburg mining district, Boise County, Idaho. In addition, we acquired a 2% net smelter returns royalty (“NSR”) on the Palmetto Project, located in Esmeralda County, Nevada, and have an option to acquire 100% interest of Target Minerals, Inc’s (“Target”) 1% production royalty on the Olinghouse Project, located in the Olinghouse Mining District, Washoe County, Nevada.

Critical Accounting Policies and Estimates

Our consolidated financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States of America (“GAAP”) and are presented in US dollars. GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our consolidated financial statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements for the three- and six-month periods ended June 30, 2023 and 2022, together with notes thereto, which are included in this Quarterly Report on Form 10-Q, as well as our most recent audited consolidated financial statements on Form 10-K, as amended, for the year ended December 31, 2022.

Results of Operations

Three- and six-month periods ended June 30, 2023, compared to the three- and six-month periods ended June 30, 2022:

Revenues

We had no revenues for the three- and six-month periods ended June 30, 2023 and 2022. Due to the exploration rather than the production nature of our business, we do not expect to have significant operating revenue in the foreseeable future.

Operating Expenses

Our operating expenses for the three- and six-month periods ended June 30, 2023 and 2022 included general and administrative expenses, professional fees, director and officer compensation, consulting fees, and transfer agent and filing fees.

During the three-month period ended June 30, 2023, our operating expenses increased by $293,201 or 78%, to $670,646 as compared to $377,445 for the three months ended June 30, 2022. This change was associated with $421,440 in director and officer compensation we recorded on the shares that we distributed to our three directors on December 30, 2021, and with the vesting of share awards we granted to our VP of Operations on February 24, 2023. During comparative three-month period ended June 30, 2022, we recorded $313,417 in director and officer compensation. Our consulting fees increased by $116,570, from $7,597 we incurred during the three-month period ended June 30, 2022, to $124,167 we incurred during the current period ended June 30, 2023, and which were associated with the vesting of shares awarded to consultants for their services in March 2023; our general and administrative expenses increased by $44,975, from $5,876 we incurred during the three-month period ended June 30, 2022, to $50,851 we incurred during the three-month period ended June 30, 2023. This increase was associated with the investor outreach program we started in the second quarter of our Fiscal 2023. Our professional fees increased by $22,310, from $48,010 we incurred during the three-month period ended June 30, 2022, to $70,320 we incurred during the three-month period ended June 30, 2023. The professional fees increased as a result of a consulting agreement with Warm Springs Consulting LLC. (“Warm Springs”) to develop registry-verified carbon credits for voluntary and compliance markets in the State of Nevada and the Western United States. Our transfer agent and filing fees increased by $1,323, from $2,545 we incurred during the three-month period ended June 30, 2022, to $3,868 we incurred during the three-month period ended June 30, 2023.

On a year-to-date basis, our operating expenses increased by $606,684 or 133%, to $1,063,474 as compared to $456,790 for the six months ended June 30, 2022. This change was associated with $723,506 in director and officer compensation we recorded on the shares that we distributed to our three directors on December 30, 2021, and with the vesting of share awards we granted to our VP of Operations on February 24, 2023. During comparative six-month period ended June 30, 2022, we recorded $358,191 in director and officer compensation. Our consulting fees increased by $157,767, from $21,726 we incurred during the six-month period ended June 30, 2022, to $179,493 we incurred during the current period ended June 30, 2023, and which were associated with the vesting of shares awarded to consultants for their services in March 2023; our general and administrative expenses increased by $64,824, from $10,741 we incurred during the six-month period ended June 30, 2022, to $75,565 we incurred during the six-month period ended June 30, 2023. This increase was associated with the investor outreach program we started in the second quarter of our Fiscal 2023. Our professional fees increased by $19,988, from $56,332 we incurred during the six-month period ended June 30, 2022, to $76,320 we incurred during the six-month period ended June 30, 2023. The professional fees increased as a result of the consulting agreement with Warm Springs to develop registry-verified carbon credits for voluntary and compliance markets in the State of Nevada and the Western United States. The above increases were in part offset by the transfer agent and filing fees, which decreased by $1,210, from $9,800 we incurred during the six-month period ended June 30, 2022, to $8,590 we incurred during the six-month period ended June 30, 2023.

Other Income (Expenses)

During the three-month period ended June 30, 2023, we recognized $6,224 loss on fair value of investments in equity securities (2022 – $163,284). The loss resulted from revaluation of Walker River Resources Corp. (“WRR”) Shares and was caused mainly by decreased market price of WRR’s Shares from CAD$0.18 per share at March 31, 2023, to CAD$0.16 per share at June 30, 2023, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars. We earned $7,321 in interest revenue (2022 - $827) and recorded $4 gain (2022 - $8,211 loss) on foreign exchange associated with the funds held in Canadian dollars.

During the six-month period ended June 30, 2023, we recognized $94,962 loss on fair value of investments in equity securities (2022 – $203,850 gain). The loss resulted from revaluation of WRR Shares and was caused mainly by decreased market price of WRR’s Shares from CAD$0.415 per share at December 31, 2022, to CAD$0.16 per share at June 30, 2023, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars. We earned $13,813 in interest revenue (2022 - $888) and recorded $4 gain (2022 - $967 loss) on foreign exchange associated with the funds held in Canadian dollars.

During the comparative three-month period ended June 30, 2022, we recorded $56,325 loss on investments in equity securities which was associated with the sale of 500,000 WRR Shares for net proceeds of $219,763. In addition, we recorded $174,830 amortization of debt discount associated with the beneficial conversion we recognized on the convertible notes payable we issued in October of 2021. We did not have similar transactions during the three-month period ended June 30, 2023.

During the comparative six-month period ended June 30, 2022 we recorded $211,530 gain on equity investments which was associated with the sale of 1,171,083 WRR Shares for net proceeds of $614,658. In addition, we recorded $301,392 amortization of debt discount associated with the beneficial conversion we recognized on the convertible notes payable we issued in October of 2021. We did not have similar transactions during the six-month period ended June 30, 2023.

Net Loss

During the three months ended June 30, 2023, we incurred net loss of $669,545, as compared to net loss of $779,268 we generated during the three-month period ended June 30, 2022. This change mainly resulted from absence of sales of WRR Shares resulting in no realized loss or gain recorded on equity investments, as compared to $56,325 realized loss for the three-month period ended June 30, 2023, and reduced fluctuation of WRR Share price which resulted in fair value loss of $6,224, as compared to $163,284 loss we recorded during the comparative period. In addition, since we converted October 2021 notes payable during the year ended December 31, 2022, there was no amortization of debt discount for the three-month period ended June 30, 2023, as compared to $174,830 loss in the comparative period. These decreases were in part offset by increased director and officer compensation of $421,440, which increased from $313,417 for the period ended June 30, 2022, an increase in consulting fees from $7,597 for the period ended June 30, 2022, to $124,167 for the period ended June 30, 2023, and an increase in professional fees from $48,010 for the period ended June 30, 2022, to $70,320 for the period ended June 30, 2023.

During the six months ended June 30, 2023, we incurred net loss of $1,144,619, as compared to net loss of $342,881 we generated during the six-month period ended June 30, 2022. This change mainly resulted from absence of sales of WRR Shares resulting in no realized loss or gain recorded on equity investments to date in 2023, as compared to $211,530 realized gain for the six-month period ended June 30, 2022, and reduced fluctuation of WRR Share price which resulted in fair value loss of $94,962, as compared to $203,850 gain we recorded during the comparative period. In addition, since we converted October 2021 notes payable during the year ended December 31, 2022, there was no amortization of debt discount for the six-month period ended June 30, 2023, as compared to $301,392 expense in the comparative period. These decreases were offset by increased director and officer compensation of $723,506, which increased from $358,191 for the period ended June 30, 2022, an increase in consulting fees from $21,726 for the period ended June 30, 2022, to $179,493 for the period ended June 30, 2023, and an increase in professional fees from $56,332 for the period ended June 30, 2022, to $76,320 for the period ended June 30, 2023.

Liquidity and Capital Resources

As of June 30, 2023, we had a cash balance of $779,198 and working capital deficit of $520,742 with cash flows used in operations totaling $207,820 for the period then ended. During the six months ended June 30, 2023, our operations were funded with cash on hand, which was generated by selling our investment in WRR Shares during the year ended December 31, 2022, and from the issuance of convertible notes payable in October 2021. Our operating activities did not generate sufficient cash flows to satisfy our cash requirements for the six-month period ended June 30, 2023. Due to the exploration rather than the production nature of our business, there is no assurance that we will be able to generate sufficient cash from our operations. If we are unable to generate sufficient cash flow from our operations to repay the amounts owing when due, we may be required to continue selling our equity investments in WRR or raise additional financing by borrowing funds or issuing our equity. There can be no assurance that we will be successful in our efforts to raise additional capital.

Cash Flow

Net cash used in operating activities

During the six months ended June 30, 2023, our net cash used in operating activities increased by $6,918, or 3%, to $207,820 for the six months ended June 30, 2023, compared with $200,902 for the comparative period in 2022. During the six months ended June 30, 2023, we used $170,595 to cover our cash operating costs, which were determined by reducing the net loss of $1,144,619 the Company incurred during the period, by non-cash items included in the net loss of $974,024; we used $5,027 to increase our prepaid expenses, and $17,031 to reduce amounts due to our related parties. These uses of cash were further increased by $15,167 decrease in accounts payable and accrued liabilities.

During the six months ended June 30, 2022, our net cash used in operating activities increased by $149,363, or 290%, to $200,902, compared with $51,539 for the comparative period in 2021. During the six months ended June 30, 2022, we used $97,711 to cover our cash operating costs, which were determined by reducing the net loss of $342,881 the Company incurred during the period, by non-cash items included in the net loss of $245,170; we used $12,104 to decrease our accounts payable and accrued liabilities, $27,000 to decrease amounts due to our related parties, and $21,182 to increase our prepaid expenses, of which $39,250 were associated with prepaid share issuance costs related to our offering of up to 12,500,000 units (the “Units”) of our securities pursuant to Regulation A. In additional $42,905 were used to pay interest accrued on a convertible note payable.

Adjustments to reconcile net loss to net cash used in operating activities

During the six months ended June 30, 2023, we recognized $94,962 loss on revaluation of fair value of our investments in WRR Shares. In addition, we recognized $490,173 in director compensation associated with the par-value shares we distributed to our directors on December 30, 2021, $233,333 and $155,556 we recorded as the vesting of shares awarded to our VP of Operations and to our consultants, respectively, in accordance with the consulting agreements we executed in February of 2023.

During the six months ended June 30, 2022, we recognized $203,850 gain on revaluation of fair value of equity investments associated with WRR Shares and recorded $211,530 gain on sale of 1,171,083 WRR Shares for net proceeds of $614,658 (CAD$769,400). In addition, we recognized $967 loss on foreign exchange fluctuations associated with cash we held in high-interest savings account at a major Canadian bank, and recorded $301,392 in amortization of debt discount associated with the convertible notes payable we issued in October 2021. In addition, we recorded $358,191 in director compensation associated with the par-value shares we distributed to our directors on December 30, 2021.

Net cash provided by (used in) investing activities

During the six-month period ended June 30, 2023, we used $20,000 to make an option payment on our Swales Property, which we accrued in December of 2022.

During the six-month period ended June 30, 2022, we generated $614,658 on the sale of 1,171,083 WRR Shares. During the same period, we used $410,000 to acquire our mineral property interests.

Net cash provided by financing activities

During the six-month period ended June 30, 2023, we did not generate any funds from our financing activities.

During the six-month period ended June 30, 2022, we received $400 from the sale of 4,000,000 par-value shares to two of our directors, which shares were considered distributed on December 30, 2021, however, we received cash payment from the directors subsequent to December 31, 2021.

Going Concern

At June 30, 2023, we had a working capital deficit of $520,742 and cash on hand of $779,198, which is sufficient enough to support our current plan of operations for the next 12-month period. Our investments in equity securities include 511,750 WRR Shares valued at $61,843. We have been using WRR Shares and may continue using them as a source of additional cash inflow. Subsequent to June 30, 2023, we have received $323,911 in net subscriptions to 432,914 units of our common stock under the offering of up to 12,500,000 units (the “Units”) of our securities pursuant to Regulation A. To support our operations beyond the 12-month period we may require additional funds; therefore, we continue to actively pursue other means of financing our operations through equity and/or debt financing. There can be no assurance that we will be able to procure funds sufficient to support our day-to-day operations and exploration programs. If operating difficulties or other factors (many of which are beyond our control) delay our realization of revenues or cash flows from operations, we may be limited in our ability to pursue our business plan. Moreover, if our resources from obtaining additional capital or cash flows from operations, once we commence them, do not satisfy our operational needs or if unexpected expenses arise due to unanticipated pressures or if we decide to expand our business plan beyond its currently anticipated level or otherwise, we will require additional financing to fund our operations, in addition to anticipated cash generated from our operations. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly limited. In a worst-case scenario, we might not be able to fund our operations or to remain in business, which could result in a total loss of our stockholders’ investment. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these newly issued securities might have rights, preferences or privileges senior to those of existing stockholders.

Impact of Inflation

We believe that inflation has had a negligible effect on operations over the past fiscal quarter.

Capital Expenditures

During the six months ended June 30, 2023, we used $20,000 to make an annual option payment on Swales Property.

During the six months ended June 30, 2022, we used $20,000 to make an initial cash payment to acquire Swales Property, $20,000 to make the first anniversary payment on Agai-Pah Property, and further $20,000 to make the first anniversary payment on Belshazzar Property. In addition, we made a $350,000 one-time cash payment to acquire 2% NSR on Palmetto Project.

Unproved Mineral Properties

As of the date of this Quarterly report on Form 10-Q, our mineral property interests are comprised of the Lazy Claims Property, the Loman Property, and the Agai-Pah Property located in Mineral County, Nevada, the Swales Property located in Elko County, Nevada, and the Belshazzar Property located in Quartzburg mining district, Boise County, Idaho. In addition, we acquired a 2% net smelter returns royalty on the Palmetto Project, located in Esmeralda County, Nevada, and have an option to acquire 100% interest of Target Minerals, Inc’s (“Target”) 1% production royalty on the Olinghouse Project, located in the Olinghouse Mining District, Washoe County, Nevada.

Lazy Claims Property

We acquired the Lazy Claims Property through an exploration lease agreement with Tarsis Resources US Inc. (“Tarsis”), a Nevada corporation, dated for reference August 2, 2017 (the “Lazy Claims Agreement”). The Lazy Claims Agreement grants us a right to conduct exploratory work for minerals on three Lazy Claims totaling 60 acres located in Mineral County, Nevada about 18 miles southeast of the town of Hawthorne (the “Lazy Claims”).

The term of the Lazy Claims Agreement is ten years and is subject to extension for an additional two consecutive 10-year terms. Full consideration for the Lazy Claims Agreement consists of the following: an initial cash payment of $1,000 to Tarsis, which we paid upon the execution of the Lazy Claims Agreement, with $2,000 payable to Tarsis on each subsequent anniversary of the effective date. We agreed to pay Tarsis a 2% production royalty (the “Lazy Claims Royalty”) based on the gross returns from the production and sale of minerals from the Lazy Claims Property. Should the Lazy Claims Royalty payments to Tarsis be in excess of $2,000 per year, we will not be required to pay a $2,000 annual minimum payment.

Loman Property

In December 2019 we acquired 27 unpatented mining claims for a total of $10,395 from a third-party (the “Loman Property”). The claims comprising Loman Property were transferred and re-registered into the Company’s name in the fiscal 2021.

Agai-Pah Property

On May 19, 2021, we entered into exploration lease with option to purchase agreement (the “Agai-Pah Agreement”) with MSM Resource, L.L.C., (“MSM”) a Nevada limited liability Corporation on the Agai-Pah Property, consisting of 20 unpatented mining claims totaling 400 acres, located in sections 32 & 33, T4N, R34E, MDM, Mineral County, Nevada about 10 miles northeast of the town of Hawthorne (the “Agai-Pah Property”). Alan Day, the managing member of MSM, is also our CEO, President, and director.

The term of the Agai-Pah Agreement commenced on May 19, 2021, and continues for ten years, subject to our right to extend the Agai-Pah Agreement for two additional terms of ten years each, and subject to the Company’s option to purchase the Agai-Pah Property.

Full consideration of the Agai-Pah Agreement consists of the following: (i) an initial cash payment of $20,000 to be paid within 90 days from the execution of the Agai-Pah Agreement on May 19, 2021 (the “Effective Date”), and (ii) annual payments of $20,000 to be paid on the anniversary of the Effective Date while the Agai-Pah Agreement remains in effect. We retain the exclusive option and right to acquire 100% ownership of the Agai-Pah Property (the “Agai-Pah Purchase Option”). To exercise the Agai-Pah Purchase Option, we will be required to pay $750,000 (the “Agai-Pah Purchase Price”). The Agai-Pah Purchase Price can be paid in either cash and/or equity, or a combination thereof, at the election of MSM. The annual payments paid by us, shall not be applied or credited against the Purchase Price.

We made the initial cash payment of $20,000 on November 6, 2021, and made the first $20,000 anniversary payment on June 20, 2022. The second $20,000 anniversary payment was accrued as at June 30, 2023.

Belshazzar Property

On June 4, 2021, we entered into exploration lease with option to purchase agreement (the “Belshazzar Agreement”) with Belshazzar Holdings, L.L.C., (“BH”) a Nevada limited liability Corporation on the Belshazzar Property, consisting of ten unpatented lode mining claims and seven unpatented placer mineral claim totaling 200 acres, within Quartzburg mining district, in Boise County, Idaho (the “Belshazzar Property”). Alan Day, the managing member of BH, is also our CEO, President, and director.

The term of the Belshazzar Agreement commenced on June 4, 2021, and continues for ten years, subject to our right to extend the Belshazzar Agreement for two additional terms of ten years each, and subject to our option to purchase the Belshazzar Property.

Full consideration of the Belshazzar Agreement consists of the following: (i) an initial cash payment of $20,000 to be paid within 90 days from the execution of the Belshazzar Agreement on June 4, 2021 (the “effective date”), and (ii) annual payments of $20,000 to be paid on the anniversary of the Effective Date while the Belshazzar Agreement remains in effect. We retain the exclusive option and right to acquire 100% ownership of the Belshazzar Property (the “Belshazzar Purchase Option”). To exercise the Belshazzar Purchase Option, we will be required to pay $800,000 (the “Belshazzar Purchase Price”). The Belshazzar Purchase Price can be paid in either cash and/or equity, or a combination thereof, at the election of BH. The annual payments paid by us to BH, shall not be applied or credited against the Belshazzar Purchase Price. The Belshazzar Property is subject to a 1% Gross Returns Royalty payable to the property owner, from the commencement of commercial production subject to certain terms.

We made the initial cash payment of $20,000 on November 6, 2021, and made the first $20,000 anniversary payment on June 20, 2022. The second $20,000 anniversary payment was accrued as at June 30, 2023.

Swales Property

On December 27, 2021, we entered into an exploration lease with option to purchase agreement (the “Swales Property Agreement”) with Mr. W. Wright Parks III., (“Mr. Parks”) on the Swales Property, consisting of 40 unpatented lode mining claims totaling 800 acres (the “Swales Property”).

The term of the Agreement commenced on December 27, 2021, and continues for ten years, subject to the Company’s right to extend the Swales Property Agreement for two additional terms of ten years each, and subject to the Company’s option to purchase the Swales Property.

Full consideration of the Swales Property Agreement consists of the following: (i) an initial cash payment of $20,000 to be paid within 90 days from the execution of the Belshazzar Agreement on December 27, 2021 (the “effective date”), and (ii) annual payments of $20,000 to be paid on the anniversary of the Effective Date while the Swales Property Agreement remains in effect.

The Company has the exclusive option and right to acquire 100% ownership of the Swales Property (the “Swales Purchase Option”). To exercise the Swales Purchase Option, the Company will be required to pay $750,000 (the “Swales Purchase Price”). The Swales Purchase Price can be paid in either cash and/or equity of the Company, or a combination thereof, at the election of Mr. Parks. The annual payments paid by the Company to Mr. Parks, shall not be applied or credited against the Swales Purchase Price.

We made the initial cash payment of $20,000 on January 15, 2022, and made the first anniversary payment on March 14, 2023.

Olinghouse Project

On December 17, 2021, our wholly-owned subsidiary, Nevada Canyon, LLC, entered into an Option to Purchase Agreement (the “Olinghouse Agreement”) with Target Minerals, Inc (“Target”), to acquire 100% interest of Target’s 1% production royalty on the Olinghouse Project.

The Company has the exclusive right and option (the “Olinghouse Purchase Option”), exercisable at any time during the Olinghouse Option Period, as further defined below, at its sole discretion, to acquire 100% of a 1% production royalty from the net smelter returns on all minerals and products produced from certain properties comprising the Olinghouse Project.

The term of the Olinghouse Purchase Option shall be the later of one year, or 60 days after the date on which the Company delivers to Target a written notice to exercise the Olinghouse Purchase Option, subject to further extension if Target’s conditions to closing are not fully satisfied or otherwise waived by the Company. Full consideration of the Olinghouse Agreement consists of the following: (i) an initial cash option payment of $200,000 payable upon execution of the Agreement, which we paid on December 18, 2021, and (ii) purchase price (the “Olinghouse Purchase Price”) which shall be paid by the Company to Target in either cash or common shares of the Company, the determination of which shall be as follows:

On December 23, 2022, Target agreed to extend the Olinghouse Purchase Option for an additional one-year term, expiring on December 17, 2023, for a one-time cash payment of $40,000.

Palmetto Project

On January 27, 2022, our wholly-owned subsidiary, Nevada Canyon, LLC, entered into a Royalty Purchase Agreement (the “Royalty Agreement”) with Smooth Rock Ventures, LLC, a wholly-owned subsidiary of Smooth Rock Ventures Corp. (“Smooth Rock”), to acquire a 2% net smelter returns royalty (“NSR”) on the Palmetto Project (the “Palmetto Project”), located in Esmeralda County, Nevada. Alan Day, our CEO, President, and director, is also a director and Vice-President of Smooth Rock.

To acquire the 2% NSR on the Palmetto Project, Nevada Canyon agreed to pay Smooth Rock a one-time cash payment of $350,000, which was paid on February 7, 2022.

Off-Balance Sheet Arrangements

None.

Use of Estimates

Areas where significant estimation judgments are made and where actual results could differ materially from these estimates are the carrying value of certain assets and liabilities which are not readily apparent from other sources and the classification of net operating loss and tax credit carry forwards.

We evaluate impairment of our long-lived assets whenever there is an indication that carrying value of the long-lived asset may not be recoverable. We have not recognized any impairment charge on our long-lived assets during the quarter ended June 30, 2023.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures, as of the end of the fiscal quarter covered by this quarterly report on Form 10-Q, were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

(b) Changes in Internal Controls over Financial Reporting

During the quarter ended June 30, 2023, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

We incorporate by reference the Risk Factors included as Item 1A of our Annual Report on Form 10-K we filed with the Securities and Exchange Commission on March 27, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

On February 3, 2023, the Company entered into a public relations services agreement (the “Agreement”) with Think Ink Marketing Data & Email Services, Inc. (“Think Ink”) to develop an investor outreach program. The Agreement is for a six-month term. During the six-month period ended June 30, 2023 the Company paid $40,000, which were recognized as general and administrative expenses for the quarter ended June 30, 2023. Subsequent to June 30, 2023, the Company paid an additional $20,000 to Think Ink to continue its services.

On April 5, 2023, the Company entered into a consulting services agreement (the “Warm Springs Agreement”) with Warm Springs Consulting LLC. (“Warm Springs”) to develop registry-verified carbon credits for voluntary and compliance markets in the State of Nevada and the Western United States. The Warm Springs Agreement is for a nine-month term, and the Company agreed to an initial budget of $115,525, of which $65,820 was paid during the quarter ended June 30, 2023, and was expensed during the same period as part of professional fees.

Item 6. Exhibits

SignatureS

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.