Core Viewpoint - Bonterra Resources Inc. is undergoing a tax audit by the Canada Revenue Agency regarding the renunciation of Canadian exploration expenses related to private placements of flow-through shares, which raised approximately C$16.96 million [1][2]. Group 1: Tax Audit and Proposed Adjustments - The CRA intends to reclassify approximately C$11.05 million of previously renounced Canadian exploration expenses, claiming they do not meet the definition for tax purposes [2]. - Bonterra disputes the CRA's assumption that the Moroy Deposit is an extension of the Bachelor Mine and plans to vigorously defend its position against the proposed tax adjustments [2][3]. Group 2: Impact on Subscribers - The CRA will notify subscribers of the Flow-Through Financings regarding reassessments of deductions claimed for the related Canadian exploration expenses, starting with the December 2019 financing [3]. - The company has agreed to indemnify subscribers for taxes related to disallowed renunciations of Canadian exploration expenses, inviting affected subscribers to contact the company for further information [4]. Group 3: Financial Implications - The maximum estimated exposure for the company regarding indemnification obligations, including interest and penalties, is approximately C$9.5 million, with an initial liability expected to be around C$3 million [5]. - The company plans to account for this liability in its financial statements for the year ending December 31, 2025 [5].