Metalore Resources Limited (MET) 2023年年度報告「TSX-V」.pdf

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1、 Presidents Letter to Shareholders:Its a changing world out there,and we welcome times of change both worldwide and here at Metalore.Could we ever have imagined this time last year that we would be enjoying steady income from funds invested in GICs?Or that we are just a signature away from signing a

2、 multi-year agreement to produce natural gas from the Houghton Township wells(which have not produced in 15 years)?Although we remain ready to begin a new mineral exploration program with our Joint Venture partner,Equinox Greenstone Gold Mines,perhaps most significant to mention is the likely direct

3、ion of our Charlotteville Township natural gas assets.Big change is coming.Since the 1960s Metalore has drilled,fracked and produced natural gas in Charlotteville Township,Southwestern Ontario.With those gas reserves now depleted to their lowest levels since we first drilled in 1964,and with the pri

4、ce of gas too low to fund any new drilling,we are working with Enbridge to look at the best possible way forward.Enbridge is preparing to evaluate our natural gas assets and within a year will come to a decision whether they:(1)sell Metalore the Field Line Customers and,with it,the franchise right t

5、o distribute natural gas throughout Charlotteville Township or(2)buy Metalores pipelines,plug the gas wells,expand the infrastructure and increase their customer base.Although we believe that Enbridge is in a position to offer the Company the best value for the gas assets,we have no obligation to se

6、ll them anything.Looking back,how did we arrive at this junction?If the price of natural gas had been at least$10/GJ over several years,we would have continued drilling gas wells and expanding our production base.But a better,prolonged gas price never came.We pursued many possibilities from providin

7、g our gas to licensed cannabis facilities,to partnering in crypto currency mining,to greenhouse farming.Yet,not one of those“opportunities”ever materialized.So we did what we had to do.We produced natural gas at prices below$5/GJ for as long as we could and now welcome a new path forward.It has been

8、 a privilege to serve the Company as president since 2017.The goal will always be to add value to the Company while maintaining a tight share structure.I trust you will be rewarded for your patience.On Behalf of the Board,Armen Chilian President and CEO July 20,2023 METALORE RESOURCES LIMITEDFINANCI

9、AL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,2022METALORE RESOURCES LIMITEDINDEX TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,2022PageINDEPENDENT AUDITORS REPORT3-5FINANCIAL STATEMENTS Statements of Financial Position6Statements of Income and Loss7Statements o

10、f Comprehensive Income and Loss8Statements of Changes in Equity9Statements of Cash Flows10Notes to Financial Statements11-24CHARTERED PROFESSIONAL ACCOUNTANTSSCARROW&DONALD,CHARTERED PROFESSIONAL ACCOUNTANTS,LLP 100 Five Donald Street Winnipeg,Manitoba R3L 2T4 Business:(204)982-9800 Fax:(204)474-288

11、6 www.scarrowdonald.mb.caScarrow&Donald,Chartered Professional Accountants,LLP is a Canadian owned Limited Liability Partnership established under the laws of Manitoba.INDEPENDENT AUDITORS REPORT To the Shareholders of Metalore Resources Limited:Opinion We have audited the financial statements of Me

12、talore Resources Limited(the Company)which comprise the statements of financial position as at March 31,2023 and 2022 and the statements of income and loss,statements of comprehensive income and loss,statements of changes in equity and statements of cash flows for the year then ended,and notes to th

13、e financial statements,including a summary of significant accounting policies.In our opinion,the accompanying financial statements present fairly,in all material respects,the financial position of the Company as at March 31,2023 and 2022 and its financial performance and its cash flows for the years

14、 then ended in accordance with International Financial Reporting Standards(IFRS).Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards.Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit

15、of the Financial Statements section of our report.We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada,and we have fulfilled our other ethical responsibilities in accordance with these requirements.We belie

16、ve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Key audit matters Key audit matters are those matters that,in our professional judgment,were of most significance in our audit of the financial statements of the current period.These matters

17、were addressed in the context of our audit of the financial statements as a whole,and in forming our opinion thereon,and we do not provide a separate opinion on these matters.We have determined the matter described below to be a key audit matter to be communicated in our report.Impairment assessment

18、 of property and equipment As described in Notes 3 and 5 of the financial statements,the Companys property and equipment are tested for impairment if there is an indicator of impairment.Impairment assessments are conducted at the cash-generating unit(CGU)level,which is the smallest group of assets t

19、hat generate cash flows independent of other assets or groups of assets.Management estimated the recoverable amounts of the CGUs as the fair value less costs of disposal,using discounted estimates of future cash flows.Managements estimates included assumptions for reserves,natural gas prices and dis

20、count rates.To test the Companys impairment assessment of property and equipment,our audit procedures included,among others:Assessing the competence of the management team that prepared the impairment assessment.Evaluated the significant assumptions used by management.Reviewed the information compil

21、ed by managements expert.Assessed the qualifications of managements expert.Other information Management is responsible for the other information.The other information comprises:Managements Discussion&Analysis The information,other than the financial statements and our auditors report thereon,in the

22、Annual Report.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.In connection with our audit of the financial statements,our responsibility is to read the other information and,in doing so,consider whether the

23、other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.If,based on the work we have performed,we conclude that there is a material misstatement of this other information,we are required to repo

24、rt that fact.We have nothing to report in this regard.Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs,and for such internal control a

25、s management determines is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements,management is responsible for assessing the Companys ability to continue as a going concern,disclosing,a

26、s applicable,matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations,or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Companys financ

27、ial reporting process.Auditors Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error,and to issue an auditors report that include

28、s our opinion.Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered ma

29、terial if,individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with Canadian generally accepted auditing standards,we exercise professional judgment and maint

30、ain professional skepticism throughout the audit.We also:Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to prov

31、ide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion,forgery,intentional omissions,misrepresentations,or the override of internal control.Obtain an understanding of internal contr

32、ol relevant to the audit in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

33、estimates and related disclosures made by management.Conclude on the appropriateness of managements use of the going concern basis of accounting and,based on the audit evidence obtained,whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Compa

34、nys ability to continue as a going concern.If we conclude that a material uncertainty exists,we are required to draw attention in our auditors report to the related disclosures in the financial statements or,if such disclosures are inadequate,to modify our opinion.Our conclusions are based on the au

35、dit evidence obtained up to the date of our auditors report.However,future events or conditions may cause the Company to cease to continue as a going concern.Evaluate the overall presentation,structure and content of the financial statements,including the disclosures,and whether the financial statem

36、ents represent the underlying transactions and events in a manner that achieves fair presentation.We communicate with those charged with governance regarding,among other matters,the planned scope and timing of the audit and significant audit findings,including any significant deficiencies in interna

37、l control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,and to communicate with them all relationships and other matters that may reasonably be thought to bear on our in

38、dependence,and where applicable,related safeguards.The engagement partner on the audit resulting in this independent auditors report is Kyle Hendin.Scarrow&Donald LLP Chartered Professional Accountants July 20,2023 Winnipeg,Canada METALORE RESOURCES LIMITEDSTATEMENTS OF FINANCIAL POSITIONAS AT MARCH

39、 31,2023 AND MARCH 31,202220232022ASSETSCurrent assetsCash$481,821$1,425,973Term deposits(Note 4)4,505,5133,005,417Marketable securities140,539232,025Accounts receivable44,921105,043Inventory34,55227,510Prepaid expenses42,51441,862Total current assets5,249,8604,837,830Non-current assetsProperty and

40、equipment(Note 5)4,138,9836,700,115Total assets$9,388,843$11,537,945LIABILITIESCurrent liabilitiesAccounts payable and accrued liabilities$71,852$68,086Income taxes payable68,92410,000140,77678,086Non-current liabilitiesDecommissioning obligations(Note 7)2,007,2881,582,464Deferred tax liabilities(No

41、te 13)52,906863,341Total non-current liabilities2,060,1942,445,805Total liabilities2,200,9702,523,891SHAREHOLDERS EQUITYShare capital(Note 8)2,468,8322,468,832Contributed surplus153,123153,123Accumulated other comprehensive loss(116,462)(24,976)Retained earnings4,682,3806,417,075Total shareholders e

42、quity7,187,8739,014,054Total liabilities and shareholders equity$9,388,843$11,537,945Commitments(Note 12)Approved on behalf of the Board:_ _ Donald W.BrysonArmen A.ChilianDirector and CFOPresident and CEOThe accompanying notes are an integral part of these financial statements.6METALORE RESOURCES LI

43、MITEDSTATEMENTS OF INCOME AND LOSSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,202220232022RevenueNatural gas sales$1,069,643$812,789Royalty income1,9062,701Less:Royalties paid(69,325)(53,226)Net revenue from natural gas sales1,002,224762,264ExpensesProduction414,009364,654Depletion and depreciati

44、on(Note 5)320,000117,000General and administrative148,166116,880Accretion(Note 7)74,40730,909Transmission tariffs3,2407,165959,822636,608Income from operations42,402125,656Other income(expenses)Impairment reversal(loss)of property and equipment(Note 5)(2,812,699)2,277,707Investment income119,37228,2

45、82Mineral property exploration expenses(Note 6)(3,723)(53,297)Sale of mineral claims(Note 14)167,500-(2,529,550)2,252,692(Loss)income before income taxes(2,487,148)2,378,348Income taxes(recovered)Current78,51410,000Deferred(Note 13)(810,435)618,914(731,921)628,914Net(loss)income$(1,755,227)$1,749,43

46、4(Loss)earnings per share(Note 9)$(0.99)$0.99Weighted average number of shares outstanding(Note 9)1,775,0351,775,035The accompanying notes are an integral part of these financial statements.7METALORE RESOURCES LIMITEDSTATEMENTS OF COMPREHENSIVE INCOME AND LOSSFOR THE YEARS ENDED MARCH 31,2023 AND MA

47、RCH 31,202220232022Net(loss)income$(1,755,227)$1,749,434Changes in comprehensive(loss)incomeReclassification for realized losses to profit and loss-89,100Realized loss on disposal of marketable securities20,532(37,587)Changes in fair value of financial assets at fair value through othercomprehensive

48、 income(91,486)(46,075)Total other comprehensive(loss)income(70,954)5,438Comprehensive(loss)income$(1,826,181)$1,754,872The accompanying notes are an integral part of these financial statements.8METALORE RESOURCES LIMITEDSTATEMENTS OF CHANGES IN EQUITYFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,2

49、02220232022Share capitalBalance,beginning of year$2,468,832$2,468,832Issued (Note 8)-Balance,end of year$2,468,832$2,468,832Contributed surplusBalance,beginning of year$153,123$153,123Share based compensation-Balance,end of year$153,123$153,123Accumulated other comprehensive lossBalance,beginning of

50、 year$(24,976)$(68,001)Total other comprehensive(loss)income(70,954)5,438Equity reserve transfer to retained earnings(20,532)37,587Balance,end of year$(116,462)$(24,976)Retained earningsBalance,beginning of year$6,417,075$4,705,228Net(loss)income(1,755,227)1,749,434Equity reserve transfer from accum

51、ulated other comprehensiveincome20,532(37,587)Balance,end of year$4,682,380$6,417,075Total shareholders equity$7,187,873$9,014,054The accompanying notes are an integral part of these financial statements.9METALORE RESOURCES LIMITEDSTATEMENTS OF CASH FLOWSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 3

52、1,202220232022Operating activitiesNet(loss)income$(1,755,227)$1,749,434Items not affecting cash:Depletion and depreciation(Note 5)320,000117,000Accretion(Note 7)74,40730,909Deferred taxes(Note 13)(810,435)618,914Impairment of property and equipment(Note 5)2,812,699(2,277,707)Sale of mineral claims(N

53、ote 14)(167,500)-473,944238,550Changes in non-cash working capital:Accounts receivable60,122(42,589)Inventory(7,042)(6,217)Prepaid expenses(652)(2,684)Accounts payable and accrued liabilities3,766(36,717)Income taxes payable58,92410,000115,118(78,207)Cash flow from operating activities589,062160,343

54、Investing activitiesProceeds on disposal of marketable securities20,532853,413Additions to property and equipment(Note 5)(53,650)(146,613)Term deposits(Note 4)(1,500,096)(2,084)Cash flow from(used by)investing activities(1,533,214)704,716Increase(decrease)in cash and cash equivalents(944,152)865,059

55、Cash and cash equivalents-beginning of year1,425,973560,914Cash and cash equivalents-end of year$481,821$1,425,973The accompanying notes are an integral part of these financial statements.10METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20221.RE

56、PORTING ENTITY Metalore Resources Limited(the Company)is a junior resource company incorporated anddomiciled in Canada dedicated to natural gas production and gold exploration in Ontario.TheCompany currently operates in one geographic region,Canada.The Companys common shares arelisted on the TSX Ven

57、ture Exchange and trade under the symbol MET.The head office,principal address,registered address and records office of the Company are locatedat 422-124 Norfolk Street North,Simcoe,Ontario,N3Y 3N8,Canada.2.BASIS OF PRESENTATION (a)Statement of complianceThe financial statements,including comparativ

58、es,have been prepared in accordance withInternational Financial Reporting Standards(IFRS)as issued by the International AccountingStandards Board(“IASB”)and the Interpretations of the International Financial ReportingInterpretations Committee(“IFRIC”).The Company has applied the same accounting poli

59、cies for allperiods reported in these financial statements.These financial statements were authorized for issue by the Board of Directors on July 20,2023.(b)Basis of measurementThe financial statements have been prepared using the historical cost basis of accounting,with theexception of share based

60、payments and financial instruments classified as fair value through othercomprehensive income which are measured at fair value.(c)Functional and presentation currencyThese financial statements are presented in Canadian dollars,which is the Companys functionalcurrency.(d)Use of estimates and judgment

61、sThe preparation of the financial statements in conformity with IFRS requires management to makeestimates and use judgment regarding the reported amounts of assets and liabilities as at the date ofthe financial statements and the reported amounts of revenues and expenses during the year.Thesejudgmen

62、ts,estimates,and assumptions are based on current trends and all relevant informationavailable to the Company at the time of preparation of the financial statements.As the effect of futureevents cannot be determined with certainty,the actual results may differ from the estimated amounts.Estimates an

63、d underlying assumptions are reviewed on an ongoing basis.Revisions to accountingestimates are recognized in the year in which the estimates are revised and in any future yearsaffected.Significant areas of estimation and assumptions made by management affecting the measurement ofbalances and transac

64、tions in the financial statements include:Critical accounting judgmentsThe following are critical judgments and significant estimates management has made in the processof applying the Companys accounting policies and that have the most significant effect on theamounts recognized in the financial sta

65、tements.(continues)11METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20222.BASIS OF PRESENTATION(continued)Cash-generating units(CGU)The Companys assets are aggregated into CGUs for the purposes of calculating depletion anddepreciation and impair

66、ment.CGUs are determined based on the smallest group of assets thatgenerate cash flows independent of other assets or groups of assets.Determination of the CGUs issubject to the Companys judgment and is based on geographical proximity,shared infrastructure,similar exposure to market risk,and materia

67、lity.ImpairmentJudgments are required to assess when impairment indicators exist and impairment testing isrequired.In determining the recoverable amount of assets,in the absence of quoted market prices,impairment tests are based on estimates of reserves,production rates,future natural gas prices,fut

68、ure costs,discount rates,market value of land,and other relevant assumptions.Significant estimatesThe following are key estimates and assumptions made by the Company affecting the measurementof balances and transactions in the financial statements.Recoverability of asset carrying valuesThe recoverab

69、ility of natural gas property carrying values is assessed at the CGU level.The keyestimates used in the determination of cash flows from natural gas reserves include the following:(i)Reserves Assumptions that are valid at the time of the reserve estimation may changesignificantly when new informatio

70、n becomes available.Changes in forward price estimates,production costs,or recovery rates may change the economic status of reserves and mayultimately result in reserves being restated.(ii)Natural gas prices Forward price estimates are used in the cash flow model.Commodityprices can fluctuate for a

71、variety of reasons including supply and demand fundamentals,inventory levels,exchange rates,weather,and economic and geopolitical factors.(iii)Discount rate The discount rate used to calculate the net present value of cash flows is basedon estimates of an approximate industry peer group weighted ave

72、rage cost of capital.Changesin the general economic environment could result in significant changes to this estimate.The key assumptions used in the impairment tests are described in note 5.Depletion and depreciationAmounts recorded for depletion and depreciation are based on estimates of total prov

73、ed andprobable natural gas reserves and future development capital.By their nature,the estimates ofreserves,including the estimates of future prices,costs,and future cash flows,are subject tomeasurement uncertainty.Accordingly,the impact on the financial statements in future periods couldbe material

74、.Decommissioning obligationsAmounts recorded for decommissioning obligations and the related accretion expense requires theuse of estimates with respect to the amount and timing of decommissioning expenditures.Actualcosts and cash outflows can differ from estimates because of changes in laws and reg

75、ulations,publicexpectations,market conditions,discovery and analysis of site conditions,and changes intechnology.Other provisions are recognized in the period when it becomes probable that there will bea future cash outflow.(continues)12METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE

76、YEARS ENDED MARCH 31,2023 AND MARCH 31,20222.BASIS OF PRESENTATION(continued)Income taxesThe measurement of income taxes payable and deferred tax assets and liabilities requiremanagement to make judgements in the interpretations and application of the relevant tax laws.Theactual amount of income tax

77、es only becomes final upon filing and acceptance of the tax returns bythe relevant authorities which occur subsequent to the issuance of the financial statements.3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently by the Company to all pe

78、riodspresented in these financial statements.(a)RevenueRevenue is measured at the fair value of the consideration received or receivable.Provided it isprobable that the economic benefits will flow to the Company and the revenue and costs,ifapplicable,can be measured reliably,revenue is recognized in

79、 profit or loss as follows:Revenue from the sale of natural gas is recognized when title to the product passes to thepurchasers based on volumes delivered at contracted delivery points and prices and are recordedgross of transportation charges incurred by the Company.The costs associated with the de

80、livery,including transportation and production-based royalty expenses,are recognized in the same period inwhich the related revenue is earned and recorded.(b)Cash and cash equivalentsCash and cash equivalents are comprised of cash and term deposits that have a fixed maturity dateof less than three m

81、onths from the date of acquisition.(c)Inventory Inventory consists of pipe,fittings and processing supplies and is stated at the lower of cost and netrealizable value with the cost being determined using weighted average cost.(d)Property and equipment and exploration and evaluation assetsThe Company

82、 is involved in the exploration and evaluation of petroleum and natural gas propertiesand mineral properties.Recognition and measurementExploration and evaluation expendituresExploration and evaluation costs of natural gas properties,including the costs of acquiringundeveloped land and drilling cost

83、s,are initially capitalized until the drilling of the well is complete andthe results have been evaluated.The costs are accumulated in cost centers by well,field,orexploration area pending determination of technical feasibility and commercial viability.Exploration and evaluation costs of mineral pro

84、perties,including the cost of acquiring mining rightsand expenses directly related to the exploration and evaluation of the mining properties are expensedin the year they are incurred.The technical feasibility and commercial viability of extracting a mineral resource is considered to bedeterminable

85、when proved or probable reserves are determined to exist.If proved or probablereserves are found,the accumulated exploration and evaluation costs and associated undevelopedland are transferred to natural gas properties or mineral property interests as applicable.Theexploration and evaluation costs a

86、re reviewed for impairment prior to any such transfer.(continues)13METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20223.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Development and production costsItems of property and equipment,which in

87、clude natural gas properties,are measured at cost lessaccumulated depletion and depreciation and accumulated impairment losses.The cost ofdevelopment and production assets includes:transfers from exploration and evaluation assets,whichgenerally include the cost to drill the well and the cost of the

88、associated land upon determination oftechnical feasibility and commercial viability;the cost to complete and tie-in the well;facility costs;thecost of recognizing provisions for future restoration and decommissioning obligations;geological andgeophysical costs;and directly attributable overhead.Deve

89、lopment and production assets are grouped into CGUs for impairment testing.The Companyhas grouped its development and production assets into one CGU:(i)Norfolk,ON.When significant parts of an item of property and equipment,including natural gas properties,havedifferent useful lives,they are accounte

90、d for as separate items(major components).Gains and losses on disposal of an item of property and equipment,including natural gas properties,are determined by comparing the proceeds from disposal with the carrying amount of property andequipment and are recognized in profit or loss.The carrying amou

91、nt of any replaced or disposed itemof property and equipment is derecognized.Subsequent costsCosts incurred subsequent to the determination of technical feasibility and commercial viability andthe costs of replacing parts of natural gas properties are recognized as property and equipment onlywhen th

92、ey increase the future economic benefits embodied in the specific asset to which they relate.Capitalized property and equipment generally represent costs incurred in developing proved orprobable reserves and bringing in or enhancing production from such reserves and are accumulatedon a field or geot

93、echnical area basis.The costs of the day-to-day servicing of property and equipmentare recognized in production expenses as incurred.Depletion and depreciationThe net carrying value of natural gas properties is depleted using the unit of production method byreference to the ratio of production in th

94、e period to the related proved plus probable reserves,takinginto account the estimated future development costs necessary to bring those reserves intoproduction and the estimated salvage value of the assets at the end of their useful lives.Futuredevelopment costs are estimated taking into account th

95、e level of development required to producethe reserves.Proved plus probable reserves are estimated at least annually by independent qualified reserveevaluators and represent the estimated quantities of natural gas which geological,geophysical,andengineering data demonstrate with a specified degree o

96、f certainty to be recoverable in future yearsfrom known reservoirs and which are considered commercially producible.The Company has determined the estimated useful lives for gas pipelines and compression facilitiesto be consistent with the reserve lives of the areas for which they serve.As such,the

97、Companyincludes the cost of these assets within their associated CGU for the purpose of depletion using theunit of production method.(continues)14METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20223.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(con

98、tinued)(e)ImpairmentFinancial assetsA financial asset is assessed at each reporting date to determine whether there is any objectiveevidence that it is impaired.A financial asset is considered to be impaired if objective evidenceindicates that one or more events have had a negative effect on the est

99、imated future cash flows ofthat asset.An impairment loss in respect of a financial asset measured at amortized cost iscalculated as the difference between its carrying amount and the present value of the estimatedfuture cash flows discounted at the original effective interest rate.Individually signi

100、ficant financial assets are tested for impairment on an individual basis,with theexception of equity instruments where an election has been made to irrevocably designate as fairvalue through other comprehensive income without subsequent reclassification to net loss.Theremaining financial assets are

101、assessed collectively in groups that share similar credit riskcharacteristics.All impairment losses are recognized in profit or loss.An impairment loss is reversedif the reversal can be related objectively to an event occurring after the impairment loss wasrecognized.For financial assets measured at

102、 amortized cost,the reversal is recognized in profit orloss.Non-financial assetsThe carrying amounts of the Companys non-financial assets,other than exploration and evaluationassets,are reviewed at each reporting date to determine whether there is any indication ofimpairment.If any such indication e

103、xists,then the assets recoverable amount is estimated.Exploration and evaluation assets are assessed for impairment when they are transferred to propertyand equipment or if facts and circumstances suggest that the carrying amount exceeds therecoverable amount.For the purpose of impairment testing,as

104、sets are grouped together into the smallest group of assetsthat generate cash inflows from continuing use that are largely independent of the cash inflows ofother assets or groups of assets(CGU).The recoverable amount of an asset or a CGU is the greaterof its value in use and its fair value less cos

105、ts of disposal.Fair value less costs of disposal is determined as the amount that would be obtained from the sale ofa CGU in an arms length transaction between knowledgeable and willing parties.The fair value lesscosts of disposal of natural gas properties is generally determined as the net present

106、value of theestimated future cash flows expected to arise from the continued use of the CGU,including anyexpansion projects and its eventual disposal,using assumptions that an independent marketparticipant may take into account.These cash flows are discounted using an appropriate discountrate which

107、would be applied by such a market participant to arrive at a net present value of the CGU.Consideration is given to acquisition metrics of recent transactions completed on similar assets tothose contained within the relevant CGU.Value in use is determined as the net present value of the estimated fu

108、ture cash flows expected toarise from the continued use of the asset in its present form and its eventual disposal.Value in use isdetermined by applying assumptions specific to the Companys continued use and can only take intoaccount approved future development costs.Estimates of future cash flows u

109、sed in the evaluation ofimpairment of assets are made using managements forecasts of commodity prices and expectedproduction volumes.The latter takes into account assessments of field reservoir performance andincludes expectations about proved and unproved volumes,which are risk-weighted using geolo

110、gical,production,recovery,and economic projections.(continues)15METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20223.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)An impairment loss is recognized if the carrying amount of a CGU exceeds it

111、s estimated recoverableamount.Impairment losses are recognized in profit or loss.Impairment losses recognized in respectof CGUs are allocated to the assets in the CGUs on a pro rata basis.Impairment losses recognizedin prior periods are assessed each reporting date if facts or circumstances indicate

112、 that the loss hasdecreased or no longer exists.An impairment loss is reversed if there has been a change in theestimates used to determine the recoverable amount.An impairment loss is reversed only to theextent that the assets carrying amount does not exceed the carrying amount that would have been

113、determined,net of depletion and depreciation,if no impairment loss had been recognized.(f)ProvisionsA provision is recognized if,as a result of a past event,the Company has a present legal orconstructive obligation that can be estimated reliably,and it is probable that an outflow of economicbenefits

114、 will be required to settle the obligation.Provisions are determined by discounting theexpected future cash flows at a pre-tax rate that reflects current market assessments of the timevalue of money and the risks specific to the liability.Provisions are not recognized for future operatinglosses.Deco

115、mmissioning obligationsThe Companys activities give rise to dismantling,decommissioning,and site disturbanceremediation activities.A provision is made for the estimated cost of abandonment and site restorationand capitalized in the relevant asset category.The capitalized amount is depreciated on a u

116、nit ofproduction basis over the life of the associated proved plus probable reserves.Decommissioningobligations are measured at the present value of managements best estimate of the expenditurerequired to settle the present obligation at the reporting date.Subsequent to the initial measurement,the o

117、bligation is adjusted at the end of each period to reflect the passage of time,changes in theestimated future cash flows underlying the obligation,and changes in the risk-free rate.The increasein the provision due to the passage of time is recognized as accretion whereas increases ordecreases due to

118、 changes in the estimated future cash flows or changes in the discount rate arecapitalized.Actual costs incurred upon settlement of the decommissioning obligations are chargedagainst the provision to the extent the provision was established.(g)Current and deferred income taxesIncome tax expense comp

119、rises current and deferred tax.Income tax expense is recognized in thestatements of income and comprehensive income except to the extent that it relates to itemsrecognized directly in equity or other comprehensive income.Current income tax is recognized and measured at the amount expected to be reco

120、vered from orpayable to the taxation authorities based on the income tax rates enacted or substantively enacted atthe end of the reporting period and includes any adjustment to taxes payable in respect of previousyear.Deferred income tax is recognized on any temporary differences between the carryin

121、g amounts ofassets and liabilities in the financial statements and the corresponding tax bases used in theconsumption of taxable earnings.Deferred tax assets and liabilities are measured at the tax ratesthat are expected to apply in the period when the asset is realized,and the liability is settled.

122、Theeffect of a change in the enacted or substantively enacted tax rates is recognized in net income andcomprehensive income or in equity depending on the item to which the adjustment relates.A deferred tax asset is recognized to the extent that it is probable that future taxable profits will beavail

123、able against which the temporary difference can be utilized.Deferred tax assets are reviewed ateach reporting date and are reduced to the extent that it is no longer probable that the related taxbenefit will be realized.(continues)16METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEAR

124、S ENDED MARCH 31,2023 AND MARCH 31,20223.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)(h)Share based compensationThe Company has a share based compensation plan.The Company uses the fair value method forvaluing share based compensation.Under this method,the compensation cost attributed to st

125、ockoptions is measured at fair value at the grant date and expensed over the vesting period with acorresponding increase to contributed surplus.A forfeiture rate is estimated on the grant date and isadjusted to reflect the actual number of options that vest.Upon the settlement of the stock options,t

126、he previously recognized value in contributed surplus is recorded as an increase to share capital.(i)Earnings per shareBasic earnings per common share is calculated by dividing the net income or loss attributable tocommon shareholders of the Company by the weighted average number of common sharesout

127、standing during the period.Diluted earnings per common share reflects the maximum possibledilution from the potential exercise of stock options,if dilutive.(j)General and administrative costsGeneral and administrative overhead directly associated with the exploration or development of theproperty is

128、 capitalized to the related property in the period incurred.Overhead costs that do notqualify for capitalization are expensed to operations in the period incurred.(k)Financial instrumentsMeasurement after initial recognition depends on the classification of the financial instrument.TheCompany has cl

129、assified its financial instruments in the following categories depending on thepurpose for which the instruments were acquired and their characteristics.Financial assetsDebt instrumentsInvestments in debt instruments are subsequently measured at amortized cost when the asset is heldwithin a business

130、 model whose objective is to hold assets in order to collect contractual cash flowsand when the contractual terms of the financial asset give rise on specified dates to cash flows thatare solely payments of principal and interest on the principal amount outstanding.Investments in debt instruments ar

131、e subsequently measured at fair value when they do not qualify formeasurement at amortized cost.Financial instruments subsequently measured at fair value can becarried at fair value with changes in fair value recorded in net income or loss unless they are heldwithin a business model whose objective

132、is to hold assets in order to collect contractual cash flows orsell the assets and when the contractual terms of the financial asset give rise on specified dates tocash flows that are solely payments of principal and interest on the principal amount outstanding,inwhich case unrealized gains and loss

133、es are initially recognized in other comprehensive income forsubsequent reclassification to net income or loss through amortization of premiums and discounts,impairment or derecognition.Equity instrumentsInvestments in equity instruments are subsequently measured at fair value with changes recorded

134、innet income.Equity instruments that are not held for trading can be irrevocably designated as fairvalue through other comprehensive income on initial recognition without subsequent reclassificationto net income.Cumulative gains and losses are transferred from accumulated other comprehensiveincome t

135、o retained earnings upon derecognition of the investment.Dividend income on equity instruments measured at fair value through other comprehensive incomeis recognized in the statement of income.(continues)17METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND M

136、ARCH 31,20223.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Financial liabilitiesFinancial liabilities are subsequently measured at amortized cost using the effective interest method,except for financial liabilities at fair value through profit or loss.Such liabilities,including derivativesth

137、at are liabilities,shall be subsequently measured at fair value.The Company has classified its financial instruments as follows:CategoryFinancial instrumentFinancial assets at amortized costCash Term depositsAccounts receivableFinancial assets at fair value throughMarketable securitiesother comprehe

138、nsive incomeFinancial liabilities at amortized costAccounts payable and accrued liabilities(l)Comprehensive incomeComprehensive income is defined as the change in equity from transactions,events,andcircumstances from non-owner sources.Other comprehensive income refers to items recognized incomprehen

139、sive income that are not included in net income,such as unrealized gains or losses onequity instruments.4.TERM DEPOSITS At March 31,2023,guaranteed investment certificates valued at$4,505,513(March 31,2022$3,005,417)including accrued interest are held with a Canadian chartered bank and bear interest

140、 at4.90%(March 31,2022 0.65%)with maturity dates of less than one year.18METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20225.PROPERTY AND EQUIPMENT Natural gaspropertiesLandTotalCostBalance,March 31,2021$17,993,956$130,000$18,123,956Additions14

141、6,613-146,613Changes to decommissioning obligation estimates7,930-7,930Balance,March 31,202218,148,499130,00018,278,499Additions221,150-221,150Changes to decommissioning obligation estimates350,417-350,417Balance,March 31,2023$18,720,066$130,000$18,850,066Accumulated Depletion,Depreciation andImpair

142、mentBalance,March 31,2021$13,739,091$-$13,739,091Depletion and depreciation117,000-117,000Impairment reversal(2,277,707)-(2,277,707)Balance,March 31,202211,578,384-11,578,384Depletion and depreciation320,000-320,000Impairment2,812,699-2,812,699Balance,March 31,2023$14,711,083$-$14,711,083Net Book Va

143、lueMarch 31,2022$6,570,115$130,000$6,700,115March 31,2023$4,008,983$130,000$4,138,983The Company owns and/or controls approximately 40,000 acres of petroleum,natural gas andmineral leases in Charlotteville,Walsingham and Houghton townships in Norfolk County,Ontario.Additions during the year ended Ma

144、rch 31,2023 include a non-cash transaction of$167,500 toacquire an interest in four natural gas properties in Houghton Township,Ontario(see note 14).Depletion and depreciationThe calculation of depletion and depreciation expense for the year ended March 31,2023 included anestimated$806,000(March 31,

145、2022$717,000)for future development costs associated withproved plus probable undeveloped reserves.ImpairmentsAt March 31,2023 and March 31,2022 the Company assessed its natural gas properties forimpairment indicators and concluded indicators exist.As a result,the Company performed animpairment test

146、 at March 31,2023 and March 31,2022.The recoverable amount was measuredbased on the fair value less costs of disposal of the natural gas properties,determined by theapplication of a discounted cash flow model,using reserves volumes and forecasted natural gasprices as provided by an independent,third

147、 party oil and gas reserves evaluator.In computing the recoverable amount,expected future cash flows were adjusted for risks specific tothe natural gas properties using a pre-tax discount rate of 7.5%(March 31,2022 7.5%).At March31,2023 an impairment loss was recorded of$2,812,699(March 31,2022 impa

148、irment reversal of$2,277,707).Had a discount rate of 10%been used to measure the recoverable amount at March 31,2023,the Companys natural gas properties would have been$773,467 lower than the amountdetermined using a discount rate of 7.5%.19METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR

149、THE YEARS ENDED MARCH 31,2023 AND MARCH 31,20226.MINERAL PROPERTIES BrookbankThe Company holds a 1%net smelter return on 18 claims in the Brookbank and Beardmore area ofOntario.and a 21-26%participating interest in over 600 contiguous claims in Sandra,Irwin,Walters,Leduc,and LeGault townships in Nor

150、thwestern Ontario the majority of which are subject to a workingoption agreement with Greenstone Gold Mines LP,a 60/40 joint venture parternship betweenEquinox Gold Corp.and Orion Mine Finance Group.During the year ended March 31,2023,theCompany incurred exploration expenditures related to the Brook

151、bank gold property of$3,723(March31,2022$48,364).At March 31,2023,the cumulative exploration expenditures related to theBrookbank gold property were$1,717,300.7.DECOMMISSIONING OBLIGATIONS The Companys decommissioning obligations result from its ownership interest in petroleum andnatural gas assets

152、including well sites and gathering systems.The total decommissioning obligationis estimated based on the Companys net ownership interest in all wells and facilities,estimated coststo abandon and reclaim the wells and facilities,and the estimated timing of the costs to be incurred infuture periods.Th

153、e total undiscounted amount of the estimated cash flows(adjusted for inflation at4.4%at March 31,2023 and 6.8%at March 31,2022)required to settle the decommissioningobligations at March 31,2023 is approximately$4,033,471(March 31,2022$10,512,386)which isestimated to be incurred over the next 43 year

154、s(March 31,2022 44 years).At March 31,2023,arisk-free rate of 1.75%(March 31,2022 4.7%)was used to calculate the net present value of thedecommissioning obligations.20232022Balance,beginning of year$1,582,464$1,543,625Accretion74,40730,909Revisions of estimates350,4177,930Balance,end of year$2,007,2

155、88$1,582,4648.SHARE CAPITAL The Company is authorized to issue 4,000,000 common shares without par or nominal value.AtMarch 31,2023 and March 31,2022 there were 1,775,035 common shares issued and outstanding.The Company did not issue,redeem or repurchase any shares during the years ended March 31,20

156、22 or March 31,2023.9.(LOSS)EARNINGS PER SHARE 20232022Net(loss)income$(1,755,227)$1,749,434Weighted average number of shares outstanding-basicand diluted1,775,0351,775,035(Loss)earnings per share-basic and diluted$(0.99)$0.9920METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS END

157、ED MARCH 31,2023 AND MARCH 31,202210.CREDIT FACILITY The Company has available a revolving credit facility with a Canadian chartered bank in the amountof$500,000 bearing interest at RBC prime plus 0.5%that is secured by land and a general securityagreement.There was no balance outstanding on this fa

158、cility at the end of March 31,2023 or March31,2022.11.CAPITAL MANAGEMENT The Companys objectives when managing capital are to protect the Companys ability to continue asa going concern so that it can continue to provide an appropriate return to shareholders relative to therisk of the Companys minera

159、l exploration and evaluation assets,natural gas properties andmarketable securities.The Company considers its capital structure to include shareholders equity and its revolving creditfacility(note 10).The Company manages its capital structure and makes adjustments to it in light ofchanges in economi

160、c conditions and the risk characteristics of the underlying assets noted above.Inorder to maintain or adjust the capital structure,the Company may issue new shares,seek externalfinancing or adjust its capital expenditures and other investment programs.The Company does not have any externally imposed

161、 capital requirements.The Companys mainobjective is to ensure sufficiency of working capital to fund operations and investment activities.Working capital is defined as current assets less current liabilities.12.COMMITMENTS The Company is party to natural gas and mining lease commitments requiring on

162、going annualcompensation payments in the amount of$10,000(March 31,2022$10,000).The leases allow forthe surrender of the agreement and termination of payment at the option of the lessee.In addition tothe lease commitments there are royalty amounts ultimately payable pursuant to these agreementswhich

163、 are dependent on production and development,making it impracticable to disclose the amountof contractual commitments.The Company has an outstanding letter of guarantee in the amount of$70,000(March 31,2022$70,000)that is required under the Regulations prescribed by the Ministry of Natural Resources

164、 forthe future abandonment of gas wells.21METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,202213.INCOME TAXES The provision for income taxes recorded in the financial statements reflects an effective tax ratewhich differs from the expected statut

165、ory tax rate of 26.50%(March 31,2022 26.50%).Thedifferences were accounted for as follows:20232022(Loss)income before income taxes$(2,487,148)$2,378,348Expected income tax expense at statutory income tax rate$(659,094)$630,262Increase(decrease)in income taxes resulting from:Non-capital loss carried

166、forward-(1,936)Other(72,827)588Income tax expense$(731,921)$628,914The following table summarizes the components of deferred tax:20232022 Deferred tax assetsResource-related tax pool balances$310,105$286,795Decommissioning obligations531,931419,353Other22,32110,199 Deferred tax liabilitiesProperty a

167、nd equipment(917,263)(1,579,688)Net deferred tax liabilities$(52,906)$(863,341)Deferred tax assets and liabilities have been offset where they relate to income taxes levied by thesame taxation authority and the Company has the legal right and intent to offset.Unrecognized deferred tax assetsDeferred

168、 taxes are provided as a result of temporary differences that arise due to the differencesbetween the tax values and the carrying amount of assets and liabilities.Deferred tax assets havenot been recognized in respect of the following deductible temporary differences:Capital losses carried forward$5

169、49,932$570,464Deferred tax assets have not been recognized in respect of these items because it is not probablethat they will be available in the future to be utilized against future taxable profit.22METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 3

170、1,202214.RELATED PARTY TRANSACTIONS The Company paid$58,416 to a private company controlled by the Chief Executive Officer forservices rendered(March 31,2022$58,416).The Company paid$36,250 to a private companyrelated to the Chief Financial Officer for services rendered(March 31,2022$25,000).Thecomp

171、ensation paid to other directors of the Company was$2,197(March 31,2022$1,905).During the year ended March 31,2023,the Company acquired an interest in four natural gasproperties in Houghton Township,Ontario from Southern Ontario Natural Gas Limited(SONG),anentity controlled by the family of the Chie

172、f Executive Officer in exchange for a mineral propertylocated in Greenstone,Ontario.The non-cash transaction was valued at$167,500,being the fairmarket value of the mineral claims sold,and resulted in an income inclusion of$167,500.SONG hasagreed to pay the Company$167,500 for the mineral property s

173、hould an agreement not be signed byDecember 31,2023 to produce one or more of the wells at the Houghton Township,Ontario naturalgas properties.15.FINANCIAL RISK MANAGEMENT The Companys activities expose it to a variety of financial risks that arise as a result of itsexploration,development,productio

174、n,and financing activities.The Company employs riskmanagement strategies and policies to ensure that any exposure to risk is in compliance with theCompanys business objectives and risk tolerance levels.Risk management is ultimately establishedby the Board of Directors and is implemented by managemen

175、t.There have been no significantchanges in the nature or concentration of the risk exposure from the prior year unless otherwisenoted.Market riskMarket risk is the risk that the fair value of future cash flows of a financial instrument will fluctuatebecause of changes in market prices.Market risk is

176、 comprised of foreign currency risk,interest raterisk,and other price risk,such as commodity price risk.The objective of market risk management isto manage and control market price exposures within acceptable limits,while maximizing returns.The Company may use physical delivery sales contracts to ma

177、nage market risks.All suchtransactions are conducted within risk management tolerances that are reviewed by the Board ofDirectors.Foreign exchange riskThe prices received by the Company for the production of natural gas are primarily determined inreference to US dollars,but are settled with the Comp

178、any in Canadian dollars.The Companys cashflow from commodity sales will therefore be impacted by fluctuations in foreign exchange rates.Interest rate riskThe Company is exposed to interest rate risk primarily through its floating interest rate credit facility(note 10).As at March 31,2023 the Company

179、 has not drawn on this credit facility and therefore theCompany is not exposed to interest rate risk.Commodity price riskNatural gas prices are impacted by not only the relationship between the Canadian and US dollar butalso by world economic events that dictate the levels of supply and demand.The C

180、ompanys cashflow from natural gas sales will therefore be impacted by fluctuations in commodity prices.In order tomitigate commodity price risk,the Company enters into forward strip contracts for a certain numberof months in advance.(continues)23METALORE RESOURCES LIMITEDNOTES TO FINANCIAL STATEMENT

181、SFOR THE YEARS ENDED MARCH 31,2023 AND MARCH 31,202215.FINANCIAL RISK MANAGEMENT(continued)Credit riskCredit risk represents the financial loss that the Company would suffer if the Companyscounterparties to a financial asset fail to meet or discharge their obligation to the Company.Substantially all

182、 of the Companys accounts receivable are with customers in the natural gas industryand are subject to normal industry credit risks.The Company generally grants unsecured credit butroutinely assesses the financial strength of its customers.The amount of accounts receivable subjectto this risk at Marc

183、h 31,2023 was$44,921(March 31,2022$105,043).The Company sells the majority of its production to three petroleum and natural gas marketers andtherefore is subject to concentration risk.Historically,the Company has not experienced anycollection issues with its petroleum and natural gas marketers.The C

184、ompany does not typicallyobtain collateral from petroleum and natural gas marketers.Liquidity riskLiquidity risk is the risk that the Company will not be able to meet its financial obligations as theybecome due.The Companys processes for managing liquidity risk include ensuring,to the extentpossible

185、,that it will have sufficient liquidity to meet its liabilities when they become due.TheCompany prepares annual,quarterly,and monthly capital expenditure budgets,which are monitoredand updated as required,and requires authorizations for expenditures on projects to assist with themanagement of capita

186、l.In managing liquidity risk,the Company ensures that it maintains sufficientlevels of working capital.At March 31,2023,the Companys working capital was$5,109,084(March31,2022$4,759,744).Other price riskThe Companys marketable securities,comprising of investments in Canadian publicly-tradedequities,

187、are exposed to other price risk as they are affected by changes in market prices.16.FAIR VALUE OF FINANCIAL INSTRUMENTS Cash and cash equivalents,marketable securities,accounts receivable,accounts payable andaccrued liabilitiesThe fair value of cash,term deposits,marketable securities,accounts recei

188、vable,and accountspayable and accrued liabilities at March 31,2023 approximated their carrying value due to their shortterm to maturity.The Company classified the fair value of its financial instruments at fair value according to thefollowing hierarchy based on the amount of observable inputs used t

189、o value the instrument:Level 1 observable inputs,such as quoted market prices in active marketsLevel 2 inputs,other than the quoted market prices in active markets,which are observable,either directly or indirectlyLevel 3 unobservable inputs for the asset or liability in which little or no market da

190、ta exists,therefore requiring an entity to develop its own assumptionsThe fair values of cash,term deposits,and marketable securities as shown in the statement offinancial position as at March 31,2023 are measured using level 1.During the year ended March 31,2023,there were no transfers between level 1,level 2,and level 3 classified assets and liabilities.24