Nevada Canyon Gold Corp. - Quarter Report: 2023 September (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: September 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: None

Securities registered pursuant to Section 12(g) 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit 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 November 13, 2023 the number of shares outstanding of the issuer’s common stock, par value $0.0001 per share, is 24,619,854.

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

SEPTEMBER 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 the 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.

As of September 30, 2023, the Company’s management has assessed the Company’s ability to continue as a going concern. Management’s assessment is based on various factors, including historical and projected financial performance, liquidity, and other relevant circumstances. As of the date of these condensed consolidated financial statements, the Company has sufficient cash including escrowed cash to meet its working capital requirements and fund its exploration programs and general day-to-day operations for at least the next 12 months. This assessment takes into account the Company’s current cash balances as a result of the sale of the Company’s common shares under offering statement on Form 1-A (the “Offering”), and expected future cash inflows from the Offering and future financing the management is planning to undertake.

While the Company believes it has the financial resources to continue its operations for the next 12 months, it is important to note that there are inherent uncertainties in projecting future cash flows, and there can be no assurance that these projections will be realized. The Company continues to closely monitor its financial position, market conditions, and other factors that may impact its ability to continue as a going concern. Management’s assessment is based on the information available as of the date of this report. If unforeseen events, adverse market conditions, or other factors negatively affect the Company’s financial position in the future, there may be a need to adjust the going concern assessment. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. In the event that the Company’s ability to continue as a going concern becomes doubtful, adjustments to the carrying values of assets and liabilities, as well as additional disclosures, would be necessary.

In prior reporting periods, the Company concluded that substantial doubt regarding its ability to continue as a going concern existed. The cash received from sale of its common stock in the three month period ended September 30, 2023 (Note 7), alleviated the substantial doubt.

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, as amended, 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 nine months ended September 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. 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 September 30, 2023 and 2022, respectively (Note 7).

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.

NOTE 4 – RELATED PARTY TRANSACTIONS

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

 SCHEDULE OF RELATED PARTY TRANSACTIONS

During the three- and nine-month periods ended September 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 September 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 nine months ended September 30, 2023 and 2022, the Company paid $2,543 (2022 - $2,543) for its mineral property interests in Lazy Claims, of which $2,000 (2022 - $2,000) represented annual minimum payment required under the Lazy Claims Agreement and $543 (2022 - $543) was associated with the annual mining claim fees payable to the Bureau of Land Management (the “BLM”). These fees were recorded as part of the Company’s exploration expenses.

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 nine months ended September 30, 2023 and 2022, the Company paid $4,791 (2022 - $4,791) in annual mining claim fees payable to the BLM. These fees were recorded as part of the Company’s exploration expenses. 

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, made the first $20,000 anniversary payment on June 20, 2022, and made the second anniversary payment on August 10, 2023.

During the three and nine months ended September 30, 2023 and 2022, the Company paid $3,552 (2022 - $3,552) in annual mining claim fees payable to the BLM. These fees were recorded as part of the Company’s exploration expenses. 

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, made the first $20,000 anniversary payment on June 20, 2022, and made the second anniversary payment on August 10, 2023.

During the three and nine months ended September 30, 2023 and 2022, the Company paid $2,825 (2022 - $2,660) in annual mining claim fees payable to the BLM. These fees were recorded as part of the Company’s exploration expenses. 

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 Swales Property 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 nine months ended September 30, 2023 and 2022, the Company paid $7,092 (2022 - $7,092) in annual mining claim fees payable to the BLM. These fees were recorded as part of the Company’s exploration expenses

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 nine-month periods ended September 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 CEO 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 nine-month periods ended September 30, 2023 and 2022, the Company did not incur any additional expenses associated with the Palmetto Project.

NOTE 6 – INVESTMENT IN EQUITY SECURITIES

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

At September 30, 2023 and December 31, 2022, the fair value of the equity investment was $41,637 and $156,805, respectively, based on the market price of WRR Shares at September 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 September 30, 2023 the revaluation of the equity investment in WRR resulted in a $20,206 loss on the change in fair value of the equity investments (September 30, 2022 - $40,737). During the nine-month period ended September 30, 2023 the revaluation of the equity investment in WRR resulted in a $115,168 loss on the change in fair value of the equity investments (September 30, 2022 - $163,113 gain).

The Company did not sell any WRR Shares during the three- and nine-month periods ended September 30, 2023. During the three-month period ended September 30, 2022, the Company did not sell any WRR Shares. During the nine-month period ended September 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.

Units issued under offering statement on Form 1-A

During the three-month period ended September 30, 2023, the Company issued a total of 5,537,260 units of its common stock pursuant to its offering statement on Form 1-A (the “Offering”), which the Company filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 17, 2022, and which was qualified on September 27, 2022. Each unit is comprised of one common share (a “Common Share”), and one common share purchase warrant (a “Warrant”) to purchase one additional common share (a “Warrant Share”) at an exercise price of $1.20 per Warrant Share, expiring 24 months from the issuance date.

The Units were issued in three separate tranches as follows:

 SCHEDULE OF UNITS ISSUED IN THREE SEPARATE TRANCHES

The Company paid a total of $225,769 in share issuance costs of which $43,533 were associated with issuance of 55,373 agent warrants (the “Agent Warrants”). The Agent Warrants are exercisable at $1.20 and expire 5 years from the issuance date. The fair value of the Agent Warrants was determined using Black-Scholes Option Pricing Model with the following assumptions: expected life of 5 years, risk-free interest rate of 4.67%, expected dividend yield - $Nil, and expected share price volatility of 216%.

As of September 30, 2023, the Company received subscriptions for an additional 6,962,083 units for total gross proceeds of $5,569,666 (the “Final Tranches”), which were recorded as obligation to issue shares. The share issuance costs associated with the Final Tranches totaling $176,885 were recorded as deferred share issuance costs and were included in prepaid expenses. The Company agreed to issue 69,621 Agent Warrants relating to the Final Tranches, which are valued at $54,734. These Agent Warrants were issued subsequent to September 30, 2023.

During the nine-month period ended September 30, 2023, the Company issued 1,250 Common Shares for total proceeds to the Company of $1,500 on exercise of a Warrant issued as part of the Offering.

Share-based compensation

During the three- and nine-month periods ended September 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 September 30, 2023, 2,001,667 shares have vested and 4,003,333 shares are unvested. As of September 30, 2023, unvested compensation related to the Director Shares of $1,237,620 will be recognized over the next 1.25 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.

On July 5, 2023, the Company issued 333,333 shares as these shares had vested as of June 30, 2023, and on September 30, 2023, the Company issued a further 250,000 shares, which vested as of that date. As at September 30, 2023, the Company had distributed a total of 583,333 shares under the VP Agreement.

Unvested compensation related to the shares to be issued under the VP Agreement of $991,667 will be recognized over the next 1.42 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.

On July 5, 2023, the Company issued a total of 222,222 shares as these shares had vested as of June 30, 2023, and on September 30, 2023, the Company issued a further 166,667 shares, which vested as of that date. As at September 30, 2023, the Company had distributed a total of 388,889 shares under the Consulting Agreements.

Unvested compensation related to the Shares to be issued under the Consulting Agreements of $1,127,778 will be recognized over the next 2.42 years.

Warrants

The changes in the number of warrants outstanding during the nine-month periods ended September 30, 2023 and for the year ended December 31, 2022, are as follows:

 SCHEDULE OF CHANGES IN NUMBER OF WARRANTS OUTSTANDING

Details of warrants outstanding as at September 30, 2023, are as follows:

 SCHEDULE OF WARRANTS OUTSTANDING

At September 30, 2023, the weighted average life of the warrants was 1.96 years.

Options

During the nine-month period ended September 30, 2023 and for the year ended December 31, 2022, the Company did not have any 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 nine-month periods ended September 30, 2022, the Company recorded $396,143 and $697,535 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 – PREPAID EXPENSES

Prepaid expenses at September 30, 2023 and December 31, 2022:

 SCHEDULE OF PREPAID EXPENSES

NOTE 10 – 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 nine-month period ended September 30, 2023 the Company paid $60,000, of which $40,000 were recognized as general and administrative expenses, and $20,000 were recorded as prepaid expenses.

On April 5, 2023, the Company entered into a consulting services agreement (the “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. The Agreement is for a nine-month term, and the Company agreed to an initial budget of $115,525, of which $82,615 was paid during the nine-month period ended September 30, 2023 and was expensed during the same period as part of professional fees.

On August 18, 2023, the Company entered into a marketing agreement with i2i Marketing Group, LLC. (the “i2i Agreement”). The i2i Agreement is for an initial three-month term, continuing on a month-to-month basis thereafter. During the three month period ended September 30, 2023, the Company prepaid $300,000 pursuant to the i2i Agreement and recognized $44,925 in general and administrative expense. At September 30, 2023, the prepaid balance associated with this agreement is $255,075.

NOTE 11 – SUBSEQUENT EVENT

Subsequent to September 30, 2023, the Company issued 69,675 Common Shares for total proceeds of $83,610 on exercise of warrants issued as part of the Offering.

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 nine-month periods ended September 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 nine-month periods ended September 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 nine-month periods ended September 30, 2023, compared to the three- and nine-month periods ended September 30, 2022:

Revenues

We had no revenues for the three- and nine-month periods ended September 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 nine-month periods ended September 30, 2023 and 2022 included general and administrative, exploration, professional fees, director and officer compensation, consulting fees, and transfer agent and filing fees.

During the three-month period ended September 30, 2023, our operating expenses increased by $301,550 or 83%, to $663,100 as compared to $361,550 for the three months ended September 30, 2022. This change was associated with $424,150 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 September 30, 2022, we recorded $316,862 in director and officer compensation. Our consulting fees increased by $116,542, from $4,500 we incurred during the three-month period ended September 30, 2022, to $121,042 we incurred during the current period ended September 30, 2023, and which were associated with the vesting of shares we awarded to our consultants in March 2023; our general and administrative expenses increased by $65,685, from $4,237 we incurred during the three-month period ended September 30, 2022, to $69,922 we incurred during the three-month period ended September 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 $10,536, from $13,258 we incurred during the three-month period ended September 30, 2022, to $23,794 we incurred during the three-month period ended September 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 $1,234, from $1,935 we incurred during the three-month period ended September 30, 2022, to $3,169 we incurred during the three-month period ended September 30, 2023.

On a year-to-date basis, our operating expenses increased by $908,234 or 111%, to $1,726,574 as compared to $818,340 for the nine months ended September 30, 2022. This change was associated with $1,147,656 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 nine-month period ended September 30, 2022, we recorded $675,053 in director and officer compensation. Our consulting fees increased by $274,309, from $26,226 we incurred during the nine-month period ended September 30, 2022, to $300,535 we incurred during the current period ended September 30, 2023, and which were associated with the vesting of shares we awarded to our consultants in March 2023 for their services; our general and administrative expenses increased by $129,976, from $14,978 we incurred during the nine-month period ended September 30, 2022, to $144,954 we incurred during the nine-month period ended September 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 $30,524, from $69,590 we incurred during the nine-month period ended September 30, 2022, to $100,114 we incurred during the nine-month period ended September 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.

Other Income (Expenses)

During the three-month period ended September 30, 2023, we recognized $20,206 loss on fair value of investments in equity securities (2022 – $40,737). 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$0.16 per share at June 30, 2023, to CAD$0.11 per share at September 30, 2023, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars. In addition, during the three-month period ended September 30, 2023, we earned $8,082 in interest revenue (2022 - $4,397).

During the nine-month period ended September 30, 2023, we recognized $115,168 loss on fair value of investments in equity securities (2022 – $163,113 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$0.11 per share at September 30, 2023, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars. In addition, during the nine-month period ended September 30, 2023, we earned $21,895 in interest revenue (2022 - $5,285).

During the comparative three-month period ended September 30, 2022, we recorded $396,143 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 September 30, 2023.

During the comparative nine-month period ended September 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 $697,535 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 nine-month period ended September 30, 2023.

Net Loss

During the three months ended September 30, 2023, we incurred net loss of $675,228, as compared to net loss of $795,671 we generated during the three-month period ended September 30, 2022. This change mainly resulted from the absence of amortization of debt discount for the three-month period ended September 30, 2023, as compared to $396,143 loss for the comparative period, as we converted October 2021 notes payable during the year ended December 31, 2022. In addition our loss on revaluation of fair value of investments in equity securities was reduced as a result of smaller price fluctuations of WRR Shares during the three-month period ended September 30, 2023.

These decreases were in part offset by increased director and officer compensation of $424,150, which increased from $316,862 for the period ended September 30, 2022, an increase in consulting fees from $4,500 for the period ended September 30, 2022, to $121,042 for the period ended September 30, 2023, and an increase in professional fees from $13,258 for the period ended September 30, 2022, to $23,794 for the period ended September 30, 2023.

During the nine months ended September 30, 2023, we incurred net loss of $1,819,847, as compared to net loss of $1,138,552 we generated during the nine-month period ended September 30, 2022. This change was mainly affected by increased director and officer compensation of $1,147,656, which increased from $675,053 for the period ended September 30, 2022, an increased consulting fees $300,535 for the period ended September 30, 2023, as compared to $26,226 for the period ended September 30, 2022, and increased professional fees of $100,114 for the period ended September 30, 2023, as compared to $69,590 for the period ended September 30, 2022. In addition, reduction in the price of WRR Shares resulted in fair value loss of $115,168, as compared to $163,113 gain we recorded during the nine-month period ended September 30, 2022. These increases were offset by absence of amortization of debt discount for the nine-month period ended September 30, 2023, as compared to $697,535 amortization of discount in the comparative period; increased interest income of $21,895 during the nine-month period ended September 30, 2023, as compared to $5,285 for the nine-month period ended September 30, 2022, and absence of interest expense during the nine-month period ended September 30, 2023, as compared to $1,623 the Company incurred for the nine-month period ended September 30, 2022.

Liquidity and Capital Resources

As of September 30, 2023, we had a cash balance of $9,983,169, of which $5,301,782 were held in escrow pending issuance of shares pursuant to the offering of up to 12,500,000 units (the “Units”) of our securities pursuant to Regulation A we filed with the US Securities and Exchange Commission in September of 2022 (the “Offering”). Our working capital was $9,183,791 and cash flows used in operations totaled $605,703 for the nine-month period ended September 30, 2023.

During the nine months ended September 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.

During the three months ended September 30, 2023, we issued 5,537,260 Units under the Offering, for net cash proceeds of $4,247,572, and had an obligation to issue a further 6,962,084 Units, for net cash proceeds of $5,301,782, which were held in escrow.

Due to the exploration rather than the production nature of our business, our operating activities do not generate cash flows, and cannot satisfy our cash requirements. However, we believe that the cash we were able to generate from the Offering will allow us to support our operations including our planned exploration programs and the general day-to-day business activities for the next 12-month period. We will continue to look for the opportunities to generate additional cash through future equity or debt financings.

Cash Flow

Net cash used in operating activities

During the nine months ended September 30, 2023, our net cash used in operating activities increased by $278,917, or 85%, to $605,703 for the nine months ended September 30, 2023, compared with $326,786 for the comparative period in 2022. During the nine months ended September 30, 2023, we used $284,801 to cover our cash operating costs, which were determined by reducing the net loss of $1,819,847 the Company incurred during the period, by non-cash items included in the net loss of $1,535,046; we used $291,651 to increase our prepaid expenses, of which $280,978 were associated with prepaid advertising and investor relation costs; we used further $17,031 to reduce amounts due to our related parties and $12,220 used to decrease our accounts payable and accrued liabilities.

During the nine months ended September 30, 2022, our net cash used in operating activities increased by $269,019, or 466%, to $326,786 for the nine months ended September 30, 2022, compared with $57,767 for the nine months ended September 30, 2021. During the nine months ended September 30, 2022, we used $139,625 to cover our cash operating costs, which were determined by reducing the net loss of $1,138,552 the Company incurred during the period, by non-cash items included in the net loss of $998,927; we used $26,122 to decrease our accounts payable and accrued liabilities, $27,000 to decrease amounts due to our related parties, and $70,566 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 addition, we used $65,096 cash to pay interest accrued on a convertible note payable, which was in part offset by $1,623 in interest expense on the convertible notes that had reached their maturity.

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

During the nine months ended September 30, 2023, we recognized $115,168 loss on revaluation of fair value of our investments in WRR Shares. In addition, we recognized $739,322 in director and officer compensation associated with the par-value shares we distributed to our directors and CEO on December 30, 2021, $408,333 and $272,223 we recorded on 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 nine months ended September 30, 2022, we recognized $163,113 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 $982 loss on foreign exchange fluctuations associated with cash we held in high-interest savings account at a major Canadian bank, recorded $697,535 in amortization of debt discount associated with the convertible notes payable we issued in September and October 2021. In addition, we recorded $675,053 in stock-based compensation associated with the par-value shares we issued to our directors on December 30, 2021.

Net cash provided by (used in) investing activities

During the nine-month period ended September 30, 2023, we used $60,000 to make option payments on our Swales Property, Agai-Pah Property, and Belshazzar Property.

During the nine-month period ended September 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 nine-month period ended September 30, 2023, we received $4,429,808 on issuance of a total of 5,537,260 Units of our common stock at $0.80 per Unit pursuant to our Offering of up to 12,500,000 Units of our securities pursuant to Regulation A we filed with the SEC on June 17, 2022, and which was qualified on September 27, 2022. Each Unit is comprised of one common share (a “Common Share”), and one common share purchase warrant (a “Warrant”) to purchase one additional common share (a “Warrant Share”) at an exercise price of $1.20 per Warrant Share, expiring 24 months from the issuance date. We paid $182,236 in share issuance costs associated with the issuance of the Units. In addition, a further $5,569,667 in subscriptions to the Units were received under the same Regulation A Offering through September 27, 2023, termination date of the Regulation A Offering, and were placed in Escrow waiting the release. We paid $176,885 in deferred share issuance costs associated with the obligation to issue the Units.

During the nine-month period ended September 30, 2023, we issued 1,250 shares for total proceeds to the Company of $1,500 on exercise of a warrant issued as part of the Offering.

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

Going Concern

At September 30, 2023, we had a working capital surplus of $9,183,791 cash on hand of $4,681,387 and cash in escrow of $5,301,782, which is sufficient enough to support our current plan of operations including exploration programs for the next 12-month period. Our investments in equity securities include 511,750 WRR Shares valued at $41,637. Prior to receiving the funds from the Offering, we were using WRR Shares as a source of additional cash inflow.

To support our operations beyond the 12-month period, we are planning to continue actively pursuing other means of financing our operations including equity and/or debt financing. However, given the current market and industry conditions, we cannot be sure that we will be able to procure additional funding. 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 nine months ended September 30, 2023, we used $60,000 to make annual option payments on Swales Property, Agai-Pah Property, and Belshazzar Property, at $20,000 for each property.

During the nine months ended September 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.

During the three and nine months ended September 30, 2023 and 2022, we paid $2,543 (2022 - $2,543) for our mineral property interests in Lazy Claims, of which $2,000 (2022 - $2,000) represented annual minimum payment required under the Lazy Claims Agreement and $543 (2022 - $543) was associated with the annual mining claim fees payable to the Bureau of Land Management (the “BLM”). These fees were recorded as part of our exploration expenses.

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. During the three and nine months ended September 30, 2023 and 2022, we paid $4,791 (2022 - $4,791) in annual mining claim fees payable to the BLM. These fees were recorded as part of our exploration expenses.

During the quarter ended September 30, 2023, we began Phase I exploration program on Loman Property. The Loman Property Phase I exploration program is designed to expand and provide confirmation of previous regional geological mapping and sampling programs by our geologists. The Loman Property covers several past producing small-scale high-grade mines, altered and mineralized zones previously discovered by geological compilations and mapping of historical workings. Previous sampling on the project has revealed the presence of copper, bismuth, and antimony as well as pervasive lower grade gold mineralization, cut by vein structures (some previously mined) of higher-grade gold. Previous Geophysical surveys also denoted the presence of significant coincident I.P. and Mag anomalies.

The initial Phase I exploration program is expected to last for three to four weeks. If the initial exploration program is successful in obtaining positive results, it will provide accurate modern data to assist in the planning of a Phase II follow up exploration programs.

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, pursuant to a verbal extension granted to the Company by MSM, made the first $20,000 anniversary payment on June 20, 2022, and made the second anniversary payment on August 10, 2023.

During the three and nine months ended September 30, 2023 and 2022, we paid $3,552 (2022 - $3,552) in annual mining claim fees payable to the BLM. These fees were recorded as part of our exploration expenses. 

During the quarter ended September 30, 2023, we began Phase I exploration program on the Agai-Pah Property. The Agai-Pah Phase I exploration program is designed to expand and provide confirmation of the previous regional geological mapping and sampling program by MSM that yielded significant results. A historical sample taken from exposed mineralized vein on an outcrop yielded over 600 Ag oz.

These initial Phase I exploration program is expected to last for three to four weeks. If the initial exploration programs are successful in obtaining positive results, these will provide accurate modern data to assist in the planning of a Phase II follow up exploration programs.

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, pursuant to a verbal extension granted to us by BH, made the first $20,000 anniversary payment on June 20, 2022, and made the second anniversary payment on August 10, 2023.

During the three and nine months ended September 30, 2023 and 2022, we paid $2,825 (2022 - $2,660) in annual mining claim fees payable to the BLM. These fees were recorded as part of our exploration expenses.

During the quarter ended September 30, 2023, we completed the planning of the Phase I exploration program on the Belshazzar Property, which is scheduled to begin during the fourth fiscal quarter of 2023. The program is expected to consist of reconnaissance prospecting, geological mapping, surface trenching, sampling of old workings, mine dumps and the mapping relocation of historical workings on the property. This initial Phase I exploration program is expected to provide accurate modern data to assist in the planning of the Phase II exploration program.

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 Swales 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 $20,000 anniversary payment on March 14, 2023, which was initially accrued at December 31, 2022.

During the three and nine months ended September 30, 2023 and 2022, we paid $7,092 (2022 - $7,092) in annual mining claim fees payable to the BLM. These fees were recorded as part of our exploration expenses.

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.

During the three- and nine-month periods ended September 30, 2023 and 2022, we did not incur any additional expenses associated with the Olinghouse Project.

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.

During the three- and nine-month periods ended September 30, 2023 and 2022, we did not incur any additional expenses associated with the Palmetto Project.

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 September 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 September 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

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

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 nine-month period ended September 30, 2023 the Company paid $60,000, of which $40,000 were recognized as general and administrative expenses. At September 30, 2023, the prepaid balance associated with this agreement is $20,000. 

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 $82,615 was paid during the quarter ended September 30, 2023, and was expensed during the same period as part of professional fees.

On August 16, 2023, we entered into an agreement (the “i2i Agreement”) with i2i Marketing Group, LLC. for marketing services including content creation, media distribution and market awareness campaigns. During the three-month period ended September 30, 2023, we prepaid $300,000 pursuant to the i2i Agreement and recognized $44,925 in general and administrative expense. At September 30, 2023, the prepaid balance associated with this agreement is $255,075.

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.