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EXPLORATION AND EVALUATION ASSETS | 9 Months Ended
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Sep. 30, 2024
Extractive Industries [Abstract] |
EXPLORATION AND EVALUATION ASSETS | 4. EXPLORATION AND EVALUATION ASSETS SCHEDULE OF EXPLORATION AND EVALUATION ASSETS
|  | Botswana |  |  |  |
|  | Selebi $ |  |  | Selkirk $ |  |  | Total $ |
Balance, December 31, 2022 |  |  | 8,251,518 |  |  |  | 327,109 |  |  |  | 8,578,627 |
Additions |  |  | 483,883 |  |  |  | - |  |  |  | 483,883 |
Foreign currency translation |  |  | (449,878 | ) |  |  | (17,834 | ) |  |  | (467,712 | )
Balance, December 31, 2023 |  |  | 8,285,523 |  |  |  | 309,275 |  |  |  | 8,594,798 |
Foreign currency translation |  |  | 251,333 |  |  |  | 9,381 |  |  |  | 260,714 |
Balance, September 30, 2024 |  |  | 8,536,856 |  |  |  | 318,656 |  |  |  | 8,855,512 |
The following is a description of the Company’s exploration and evaluation assets and the related spending commitments. Botswana Assets - Selebi and Selkirk In September 2021, the Company executed the Selebi Asset Purchase Agreement (“the “Selebi APA”) with the BCL liquidator to acquire the Selebi Mines formerly operated by BCL. In January 2022, the Company closed the transaction and ownership of the Selebi Mines transferred to the Company. Pursuant to the Selebi APA, the aggregate purchase price payable to the seller for the Selebi Mines shall be the sum of $76,862,200 (USD 56,750,000), which amount shall be paid in three instalments:
● | $2,086,830 (USD 1,750,000) payable on the closing date, and payment of care and maintenance funding contributions in respect of the Selebi Mines from March 22, 2021 to the closing date of $6,164,688 (USD 5,178,747). These payments have been made.
● | $33,747,500 (USD 25,000,000) payable upon the earlier of: (a) approval by the Botswana Ministry of Mineral Resources, Green Technology and Energy Security (“MMRGTES”) of the Company’s Section 42 and Section 43 applications (for the further extension of the mining license and conversion of the mining license into an operating license, respectively), and (b) on the expiry date of the study phase, January 31, 2026, which pursuant to the Selebi APA has been extended for one year from the original expiry date of January 31, 2025. This extension follows successful completion by the Company of the work and investment milestones required by the Selebi APA.
● | $40,497,000 (USD 30,000,000) payable on the completion of mine construction and production start-up (commissioning) by the Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications.
Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2024 and 2023 (Expressed in Canadian dollars) The total acquisition cost of the Selebi Mines included the first instalment of $2,086,830 (USD 1,750,000) and the payment of the care and maintenance funding contribution of $6,164,688 (USD 5,178,747). As per the terms and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and return the Selebi Mines to the liquidator if the Company determines that the Selebi Mines are not economical. The Company also has an option to pay in advance the second and third payments if the Company determines that the Selebi Mines are economical. In addition to the Selebi APA, the purchase of the Selebi Mines is also subject to a contingent consideration agreement as well as a royalty agreement with the liquidator. The Company also negotiated a separate asset purchase agreement (the “Selkirk APA”) with the liquidator of TNMC in January 22 to acquire the Selkirk deposit and related infrastructure formerly operated by TNMC. The transaction closed in August 2022. The Selkirk APA does not provide for a purchase price or initial payment for the purchase of the assets. The acquisition cost of the Selkirk Mine of $327,109 (USD 244,954) was the care and maintenance funding contribution from April 1, 2021 to the closing date of the Selkirk APA. The Selkirk APA provides that if the Company elects to develop the Selkirk Mine first, the payment of the second Selebi instalment of $33,747,500 (USD 25,000,000) would be upon the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications (for the further extension of the Selkirk mining license and conversion of the Selkirk mining license into an operating license, respectively). For the third Selebi instalment of $40,497,000 (USD 30,000,000), if the Selkirk Mine were to be commissioned earlier than the Selebi Mines, the payment would trigger on the Selkirk Mine’s commission date. In August 2023, the Company entered into a binding commitment letter with the liquidator of BCL, which is subject to customary final documentation, to acquire a 100% interest in two additional deposits (“Phikwe South” and the “Southeast Extension”) located adjacent to and immediately north of the Selebi North shaft. The impact is to increase the Selebi mining license area. While the remaining historic resources at Phikwe South and the Southeast Extension occur within the expanded Selebi mining license, the amended license intentionally does not include the historic mine workings and infrastructure at these previously-producing properties, and the Company has no liability for historic environmental issues at those sites. The upfront cost to the Company to acquire these additional mineral properties is $1,349,900 (USD 1,000,000). In addition, the Company agreed to additional work commitments of $6,749,500 (USD 5,000,000) in the aggregate over the next four years. As a result of the extension of the Selebi mining license, the remaining asset purchase obligations of the Company outlined in the original Selebi APA with the liquidator will each increase by 10%, or $7,424,450 (USD 5,500,000) in total, while the trigger events remain unchanged. The existing 2% net smelter royalty (“NSR”) held by the Liquidator with respect to production from the Selebi mining license will also apply to production from these additional deposits, subject to the Company’s existing buy-back right for 50% of the NSR (Note 10). The acquisition of the Phikwe South and the Southeast Extension deposits has not yet closed as at September 30, 2024. Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2024 and 2023 (Expressed in Canadian dollars) General Exploration Expenses Details of the general exploration expenses by nature are presented as follows: SCHEDULE OF GENERAL EXPLORATION EXPENSES For the nine months ended September 30, 2024:
|  | Selebi $ |  |  | Selkirk $ |  |  | Other $ |  |  | Total $ |
Site operations and administration |  |  | 706,303 |  |  |  | 38,761 |  |  |  | 128,600 |  |  |  | 873,664 |
Care and maintenance |  |  | 2,218,200 |  |  |  | - |  |  |  | - |  |  |  | 2,218,200 |
Geology |  |  | 2,391,154 |  |  |  | 335,756 |  |  |  | - |  |  |  | 2,726,910 |
Drilling |  |  | 5,209,401 |  |  |  | 163,232 |  |  |  | - |  |  |  | 5,372,633 |
Geophysics |  |  | 868,261 |  |  |  | 31,537 |  |  |  | - |  |  |  | 899,798 |
Engineering |  |  | 6,105,977 |  |  |  | 30,978 |  |  |  | - |  |  |  | 6,136,955 |
Environmental, social and governance |  |  | 125,096 |  |  |  | - |  |  |  | - |  |  |  | 125,096 |
Metallurgy and processing |  |  | 40,709 |  |  |  | 26,855 |  |  |  | - |  |  |  | 67,564 |
Technical studies |  |  | 8,322 |  |  |  | 4,600 |  |  |  | - |  |  |  | 12,922 |
Health and safety |  |  | 119,756 |  |  |  | 44 |  |  |  | - |  |  |  | 119,800 |
Mine re-development |  |  | 19,195 |  |  |  | 25,625 |  |  |  | - |  |  |  | 44,820 |
Total |  |  | 17,812,374 |  |  |  | 657,388 |  |  |  | 128,600 |  |  |  | 18,598,362 |
For the nine months ended September 30, 2023:
|  | Selebi $ |  |  | Selkirk $ |  |  | Other $ |  |  | Total $ |
Site operations and administration |  |  | 468,322 |  |  |  | 41,752 |  |  |  | 139,782 |  |  |  | 649,856 |
Care and maintenance |  |  | 2,289,013 |  |  |  | - |  |  |  | - |  |  |  | 2,289,013 |
Geology |  |  | 2,392,480 |  |  |  | 321,270 |  |  |  | - |  |  |  | 2,713,750 |
Drilling |  |  | 1,301,463 |  |  |  | 6,683 |  |  |  | - |  |  |  | 1,308,146 |
Geophysics |  |  | 1,460,507 |  |  |  | 17,792 |  |  |  | - |  |  |  | 1,478,299 |
Engineering |  |  | 3,860,973 |  |  |  | 33,284 |  |  |  | - |  |  |  | 3,894,257 |
Environmental, social and governance |  |  | 187,221 |  |  |  | - |  |  |  | - |  |  |  | 187,221 |
Metallurgy and processing |  |  | 58,632 |  |  |  | 103,050 |  |  |  | - |  |  |  | 161,682 |
Technical studies |  |  | 21,072 |  |  |  | 7,650 |  |  |  | - |  |  |  | 28,722 |
Health and safety |  |  | 319,203 |  |  |  | - |  |  |  | - |  |  |  | 319,203 |
Water treatment project |  |  | 46,102 |  |  |  | - |  |  |  | - |  |  |  | 46,102 |
Mine re-development |  |  | 176,506 |  |  |  | - |  |  |  | - |  |  |  | 176,506 |
Total |  |  | 12,581,494 |  |  |  | 531,481 |  |  |  | 139,782 |  |  |  | 13,252,757 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2024 and 2023 (Expressed in Canadian dollars)

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