Austin Gold (AUST) - 2024 Q3 - Quarterly Report

Financial Statements Condensed Interim Consolidated Statements of Financial Position The Company's financial position as of September 30, 2024, shows a decrease in total assets and working capital compared to December 31, 2023, primarily driven by reductions in cash and short-term investments, alongside a significant increase in accumulated deficit | Metric | September 30, 2024 | December 31, 2023 | Change (2024 vs 2023) | | :-------------------------------- | :------------------- | :------------------ | :-------------------- | | Total assets | $9,956,783 | $12,005,240 | -$2,048,457 | | Current assets | $6,173,682 | $9,716,501 | -$3,542,819 | | Cash and cash equivalents | $555,712 | $907,551 | -$351,839 | | Short-term investments | $5,165,001 | $8,618,386 | -$3,453,385 | | Exploration and evaluation ("E&E") assets | $3,762,497 | $2,280,490 | +$1,482,007 | | Total liabilities | $111,196 | $676,605 | -$565,409 | | Current liabilities | $111,196 | $676,605 | -$565,409 | | Total shareholders' equity | $9,845,587 | $11,328,635 | -$1,483,048 | | Accumulated deficit | $(9,359,360) | $(7,020,522) | -$2,338,838 | - Working capital (current assets less current liabilities) decreased from $9,039,896 as of December 31, 2023, to $6,062,486 as of September 30, 2024[2][9] Condensed Interim Consolidated Statements of Loss and Comprehensive Loss The Company reported an increased net loss for both the three and nine months ended September 30, 2024, compared to the prior year, primarily due to higher administrative expenses, particularly in investor relations and share-based compensation | Metric | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss for the period | $(948,043) | $(292,112) | $(2,338,838) | $(2,297,717) | | Operating loss | $(1,017,414) | $(420,417) | $(2,616,971) | $(1,433,701) | | Loss per share - basic and diluted | $(0.07) | $(0.02) | $(0.18) | $(0.17) | | Investor relations and marketing | $548,200 | $37,695 | $821,669 | $104,100 | | Share-based compensation | $184,026 | $39,875 | $749,389 | $179,762 | | Management salaries and consulting fees | $156,839 | $154,476 | $478,607 | $427,232 | - For the nine months ended September 30, 2024, the net loss increased slightly to $2,338,838 from $2,297,717 in the same period of 2023[3][9] - Operating loss for the nine months ended September 30, 2024, significantly increased to $2,616,971 from $1,433,701 in the prior year, driven by higher administrative expenses[3] Condensed Interim Consolidated Statements of Cash Flows The Company experienced a significant increase in cash used in operating activities for the nine months ended September 30, 2024, while cash generated by investing activities decreased, leading to an overall decrease in cash and cash equivalents | Metric | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(1,040,590) | $(322,639) | $(2,187,708) | $(1,259,503) | | Net cash generated by investing activities | $387,986 | $1,843,736 | $1,837,738 | $3,792,960 | | (Decrease) increase in cash and cash equivalents for the period | $(652,604) | $1,521,097 | $(349,970) | $2,533,457 | | Cash and cash equivalents, end of period | $555,712 | $3,164,187 | $555,712 | $3,164,187 | - Cash used in operating activities for the nine months ended September 30, 2024, increased by approximately 73.7% to $2,187,708 from $1,259,503 in the same period of 2023[4] - Net cash generated by investing activities for the nine months ended September 30, 2024, decreased by approximately 51.5% to $1,837,738 from $3,792,960 in the prior year[4] Condensed Interim Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity decreased from $11,328,635 at December 31, 2023, to $9,845,587 at September 30, 2024, primarily due to the net loss incurred during the period, partially offset by an increase in other reserves from vested share options and warrants | Metric | December 31, 2023 | September 30, 2024 | | :-------------------------------- | :------------------ | :------------------- | | Total Shareholders' Equity | $11,328,635 | $9,845,587 | | Share capital | $16,568,175 | $16,568,175 | | Other reserves | $2,355,931 | $3,211,721 | | Accumulated other comprehensive income (loss) | $(574,949) | $(574,949) | | Deficit | $(7,020,522) | $(9,359,360) | - The accumulated deficit increased by $2,338,838 for the nine months ended September 30, 2024, reflecting the loss for the period[5] - Value assigned to share options and warrants vested contributed $855,790 to other reserves during the nine months ended September 30, 2024[5] Notes to the Unaudited Condensed Interim Consolidated Financial Statements 1. Nature of Operations and Going Concern Austin Gold Corp. is focused on the acquisition, exploration, and evaluation of mineral resource properties primarily in the western USA. The Company's ability to continue as a going concern is dependent on securing financing and discovering economically recoverable reserves, as it has incurred ongoing losses and expects further losses - The Company's primary business is the acquisition, exploration, and evaluation of mineral resource properties, mainly in the western USA[7] - For the nine months ended September 30, 2024, the Company incurred a net loss of $2,338,838 and used $2,187,708 in operating cash[9] - As of September 30, 2024, the Company had cash and cash equivalents of $555,712 and an accumulated deficit of $9,359,360[9] - Management estimates current working capital will be sufficient to fund activities for at least the next twelve months[11] 2. Material Accounting Policy Information The financial statements are prepared in accordance with IAS 34 and IFRS Accounting Standards, with the USD as the functional and presentation currency. Significant accounting judgments include the going concern assessment and impairment of E&E assets. The Company is assessing the impact of IFRS 18, effective January 1, 2027 - Unaudited condensed interim consolidated financial statements are prepared in accordance with IAS 34, Interim Financial Reporting, using IFRS Accounting Standards[12] - The functional and presentation currency of the Company is the United States dollar (USD)[14] - Significant accounting judgments include the assessment of the Company's ability to continue as a going concern and the application of the impairment policy for E&E assets[18] - IFRS 18 – Presentation and Disclosure in Financial Statements, effective January 1, 2027, will replace IAS 1 and focuses on updates to the statement of profit or loss; the Company is assessing its impact[17] 3. Cash and Cash Equivalents As of September 30, 2024, the Company's cash and cash equivalents totaled $555,712, a decrease from $907,551 at December 31, 2023 | Metric | September 30, 2024 | December 31, 2023 | | :------------------------ | :------------------- | :------------------ | | Cash and cash equivalents | $555,712 | $907,551 | 4. Short-Term Investments Short-term investments decreased to $5,165,001 as of September 30, 2024, from $8,618,386 at December 31, 2023, consisting of term deposits and redeemable short-term investment certificates (RSTICs) with maturities extending to June and July 2025 | Investment Type | September 30, 2024 | December 31, 2023 | | :----------------------------------- | :------------------- | :------------------ | | Term deposits | $4,409,046 | $7,084,482 | | Redeemable short-term investment certificates ("RSTICs") | $755,955 | $1,533,904 | | Total Short-term investments | $5,165,001 | $8,618,386 | | Term deposits maturity | Nov 12, 2024 - Jun 9, 2025 | N/A | | RSTICs maturity | Jul 22, 2025 | N/A | 5. Receivables and Other Receivables and other current assets increased to $452,969 at September 30, 2024, from $190,564 at December 31, 2023, primarily due to a rise in prepaid expenses and deposits | Category | September 30, 2024 | December 31, 2023 | | :----------------------- | :------------------- | :------------------ | | Prepaid expenses and deposits | $439,637 | $156,234 | | Tax receivables | $13,332 | $34,330 | | Total Receivables and other | $452,969 | $190,564 | 6. E&E Assets Total Exploration and Evaluation (E&E) assets increased to $3,762,497 as of September 30, 2024, from $2,280,490 at December 31, 2023, with significant expenditures on drilling, consulting, and government payments across the Kelly Creek, Lone Mountain, and Stockade Mountain projects. Project agreements include specific expenditure commitments and royalty payments | Metric | September 30, 2024 | December 31, 2023 | | :------------------- | :------------------- | :------------------ | | Total E&E assets | $3,762,497 | $2,280,490 | | Total E&E expenditures (9 months) | $1,482,007 | N/A | | Drilling expenditures (9 months) | $543,613 | N/A | | Consulting expenditures (9 months) | $258,955 | N/A | | Government payments (9 months) | $239,058 | N/A | - For the Kelly Creek Project, the Company can earn a 51% interest by incurring C$2,500,000 in E&E expenditures by June 30, 2027, and an additional 19% by incurring another C$2,500,000[23][24] - The Lone Mountain Property requires minimum E&E expenditures totaling $1,800,000 by September 1, 2029, with $150,000 completed by September 1, 2024[28] - For the Stockade Mountain Project, the Company executed an amendment eliminating the requirement of 2,000 meters of drilling by May 16, 2024[30] 7. Property and Equipment The net book value of property and equipment increased to $10,357 at September 30, 2024, from $827 at December 31, 2023, primarily due to $11,000 in additions, offset by depreciation | Metric | Amount | | :-------------------------- | :------- | | Net book value - Dec 31, 2023 | $827 | | Additions | $11,000 | | Depreciation | $(1,470) | | Net book value - Sep 30, 2024 | $10,357 | - Property and equipment consists of exploration equipment and information technology hardware[32] 8. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities significantly decreased to $111,196 at September 30, 2024, from $676,605 at December 31, 2023, driven by a reduction in trade payables | Category | September 30, 2024 | December 31, 2023 | | :----------------------------- | :------------------- | :------------------ | | Trade payables | $97,862 | $638,671 | | Accrued liabilities | $13,334 | $37,934 | | Total Accounts payable and accrued liabilities | $111,196 | $676,605 | 9. Share Capital and Other Reserves The Company's share capital remained unchanged, while other reserves increased due to vested share options and warrants. Share options outstanding increased, and share-based compensation expense for the nine months ended September 30, 2024, was $852,264 - The authorized share capital consists of an unlimited number of common and preferred shares without par value[34] | Category | September 30, 2024 | December 31, 2023 | | :----------------------- | :------------------- | :------------------ | | Other reserve - Share options | $3,148,493 | $2,296,229 | | Other reserve - Warrants | $63,228 | $59,702 | | Total Other reserves | $3,211,721 | $2,355,931 | | Share Options Activity (9 months) | 2024 | 2023 | | :-------------------------------- | :--------- | :--------- | | Outstanding, January 1 | 3,463,333 | 1,093,333 | | Granted | 225,000 | — | | Expired | (66,667) | — | | Outstanding, September 30 | 3,621,666 | 1,093,333 | | Weighted average exercise price (Sep 30) | $1.03 | $1.67 | | Share-based compensation expense (9 months) | $852,264 | $179,379 | - As of September 30, 2024, 1,619,166 share options were exercisable with a weighted average exercise price of $1.32[37] - The weighted average exercise price for outstanding warrants at September 30, 2024, was $0.81, with a remaining life of 1.09 years[39] 10. Related Party Transactions and Balances Key management compensation, including share-based compensation, management salaries, consulting fees, and directors' fees, significantly increased for the nine months ended September 30, 2024. The Company also engaged in transactions with P2 Gold Inc. and URZ (formerly NGE), including a CFO shared-services agreement and equipment purchases | Compensation Type | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Share-based compensation | $824,555 | $149,483 | | Management salaries and consulting fees | $525,071 | $365,125 | | Directors' fees | $55,418 | $54,648 | | Total Key Management Compensation | $1,405,044 | $569,256 | - The Company incurred $50,762 with P2 Gold Inc. for CFO shared-services during the nine months ended September 30, 2024[42] - Accounts payable and accrued liabilities included $52,532 owed to related parties as of September 30, 2024[43] - The Company purchased $11,000 of exploration equipment from URZ (formerly NGE) during the nine months ended September 30, 2024, and has directors serving on both companies' boards[44] 11. Financial Risk Management The Company is exposed to market risk (currency and interest rate), credit risk, and liquidity risk. It does not use hedging instruments for currency risk, and interest rate risk impact is nominal. Credit risk is mitigated by investing with Canadian Tier 1 financial institutions. Liquidity risk is managed by monitoring cash flows, with contractual obligations primarily short-term. Financial instruments are fair valued using a hierarchy, with marketable securities valued at Level 1 - The Company is exposed to market risk (currency and interest rate), credit risk, and liquidity risk[45] | Financial Instrument (CAD) | Impact of 10% increase in USD:CAD | Impact of 10% decrease in USD:CAD | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents | $3,500 | $(3,500) | | Receivables and other | $1,704 | $(1,704) | | Marketable securities | $1,025 | $(1,025) | | Accounts payable and accrued liabilities | $(3,965) | $3,965 | - The impact of a 1% change in variable interest rates on pre-tax loss would be nominal[50] | Financial Asset | September 30, 2024 | December 31, 2023 | | :------------------------ | :------------------- | :------------------ | | Cash and cash equivalents | $555,712 | $907,551 | | Short-term investments | $5,165,001 | $8,618,386 | | Maximum Credit Exposure | $5,720,713 | $9,525,937 | - Marketable securities are fair valued at each reporting period using quoted prices in active markets (Level 1)[56][58] 12. Commitments The Company has an introductory agent agreement with BMR, which outlines agent fees payable upon mineral property acquisition and a net smelter return royalty if commercial production is achieved. As of September 30, 2024, this agreement is not in effect for any of the Company's current mineral projects | Payment Schedule (BMR Agreement) | Amount | | :--------------------------------------- | :------- | | Within 15 days of acquisition | $5,000 | | 6 months after acquisition | $5,000 | | 12 months after acquisition | $5,000 | | 18 months after acquisition | $5,000 | | 24 months after acquisition | $7,500 | | 30 months after acquisition | $7,500 | | 36 months after acquisition | $10,000 | | 42 months after acquisition | $10,000 | | 48 months after acquisition and every six months thereafter | $15,000 | - If commercial production is achieved on a BMR-recommended property, the Company will pay a 0.5% net smelter return royalty, reducible to 0.25% after $1,000,000 in payments[59] - As of September 30, 2024, the BMR Agreement is not in effect for any of the Company's mineral projects[60] 13. Segmented Information The Company operates as a single business segment, focusing on the exploration and development of mineral projects, all of which are located in the USA - Exploration and development of mineral projects is considered the Company's single business segment[61] - All of the Company's Exploration and Evaluation (E&E) assets are located in the USA[61]