Western Copper and Gold(WRN) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, the company reported a loss of $637,066, a significant decrease from the loss of $1,607,351 in the same period of 2024, resulting in a loss per share of $0.00 compared to $0.01[76]. - Cash and cash equivalents totaled $10,145,713 as of March 31, 2025, down from $14,202,317 at the end of 2024, while total cash, cash equivalents, and short-term investments were $62,911,262[80]. - Exploration and evaluation assets increased by $5,431,797 during the three months ended March 31, 2025, primarily due to permitting-related expenditures[70]. - The company recognized interest income of $666,364 for the three months ended March 31, 2025, an increase of $325,489 compared to the same period in 2024[77]. - Share-based payments totaled $641,804 for the three months ended March 31, 2025, remaining consistent with $642,961 in the same period of 2024[76]. - The company incurred cash used in operating activities of $2,221,381 for the three months ended March 31, 2025, compared to $1,036,294 in the same period of 2024[80]. - The company recorded a gain on marketable securities of $775,000 for the three months ended March 31, 2025, compared to a gain of $277,520 in the same period of 2024[76]. - Key management compensation for Q1 2025 totaled $1,185,545, slightly up from $1,183,435 in Q1 2024, with salaries and director fees at $540,308 and share-based payments at $645,237[91]. - A bonus accrual of $181,501 was recorded in Q1 2025, while no bonus accrual was recognized in Q1 2024[92]. Project Development - The company plans to submit the Environmental and Socio-economic Effects Statement for the Casino Mine Project in or around July 2025, updated from the previous estimate of the second half of 2024[25]. - The 2023 drilling program consisted of seven holes for 2,244 meters, targeting a range of grades and mineralogy, with a focus on the Core Zone[30]. - The metallurgical program achieved significantly higher recoveries for molybdenum, producing a high gold grade copper concentrate and a separate molybdenum concentrate[34]. - The company received conditional approval for $40 million in funding from Natural Resources Canada for the B.C.-Yukon Grid Connect Project, which is crucial for the Casino Project's infrastructure[26]. - The company is collaborating with the Yukon government on the Yukon Resource Gateway Project, which has expanded to include Arctic security and regional connectivity[27]. - The company has completed an updated transportation study for shipping concentrate from the Casino Project to the Port of Skagway, identifying several promising transportation alternatives[28]. - The Casino Project's Feasibility Study indicates a pre-tax NPV of CAD 5.768 billion at a 5% discount rate and CAD 4.059 billion after-tax[39]. - The total initial capital investment for the Casino Project is estimated at CAD 3.62 billion, with a total life of mine capital cost of CAD 4.369 billion[42]. - Average annual pre-tax cash flow during the first four years is projected to be CAD 1.033 billion, decreasing to CAD 662 million over the life of the mine[41]. - The project anticipates processing 1.43 billion tonnes of mineral reserves, with a nominal throughput of 120,000 tonnes per day for the concentrator and 25,000 tonnes per day for the heap leach[37][47]. - The average annual metal production during the first four years includes 241 million pounds of copper and 333,000 ounces of gold[47]. - The estimated copper cash cost on a co-product basis is CAD 1.92 per pound, while the gold cash cost is CAD 908.53 per ounce[39]. - The payback period for the project is estimated at 3.3 years[39]. - The mineral reserve estimate includes 1.217 billion tonnes of proven and probable reserves, with an average copper grade of 0.19% and gold grade of 0.22 g/t[50]. - The total operating costs for milling are calculated at CAD 6.88 per tonne, while heap leach operating costs are CAD 6.73 per tonne[44][45]. - The company is focusing on advancing permitting and engineering activities to support the submission of the ESE Statement in 2025[54]. Ownership and Financing - The company reported gross proceeds of $46.0 million from a bought deal public offering of 24,210,526 common shares at a price of $1.90 per share on April 30, 2024[9]. - On February 25, 2025, 1,500,000 warrants were exercised at an exercise price of $0.85 for gross proceeds of $1,275,000[7]. - Rio Tinto's ownership in the company increased from 7.8% to approximately 9.7% after purchasing 3,468,208 common shares at a price of $1.73 per share for gross proceeds of $6.0 million on December 12, 2023[15]. - Mitsubishi Materials Corporation's equity ownership in the company is expected to return to approximately 5% following the acquisition of 2 million common shares through open market purchases[11]. - The company completed a bought deal public offering and private placements for gross proceeds of $46.0 million and $4.9 million, respectively, during the three months ended June 30, 2024[74]. - The company expects to incur remaining permitting and engineering expenditures over the next 12 months, with actual use of proceeds for permitting activities at $12,713,553 against an expected $28,000,000[84]. Risk Factors - Western faces various risks including history of losses, negative operating cash flow, and dependence on a single project[112]. - Risks include fluctuations in commodity prices, operational risks, and potential delays in exploration or development programs[112]. - There are risks related to environmental laws, regulatory compliance, and potential natural disasters impacting operations[112]. - The company emphasizes the need for additional financing to develop its properties, with uncertainty regarding future financing terms[112]. - Western's history of not paying dividends and risks related to shareholder activism are noted[112]. - Forward-looking statements may prove inaccurate due to unforeseen events, and readers are advised not to place undue reliance on them[113]. - The company does not undertake any obligation to publicly revise forward-looking statements unless required by securities law[113]. Compliance and Internal Controls - The company has assessed its internal control over financial reporting and found it effective as of December 31, 2024[101]. - There were no indications of impairment identified during the asset review[95]. - Management is currently assessing the impact of new IFRS amendments effective from January 1, 2026, and January 1, 2027, on financial statements[98][99]. - The company closely monitors liquidity risk and has invested some cash in highly liquid redeemable GICs[106]. - Credit risk is managed by holding cash and short-term investments with reputable financial institutions, exceeding government-insured limits[107]. - The company is exposed to market risk due to fluctuations in the values of publicly traded marketable securities, which are adjusted to fair value at each balance sheet date[108]. - The MD&A is prepared under Canadian securities laws, which differ from U.S. disclosure requirements, particularly regarding mineral reserves[115]. - The definitions of mineral reserves and resources used by Western may not be comparable to those defined by the U.S. SEC[116].