12.RELATED-PARTY TRANSACTIONS 

Related parties include the directors, officers, key management personnel, close family members and entities controlled by these individuals. Key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the Company as a whole.

Transactions with Related Parties

During the years ended January 31, 2025, 2024, and 2023, the Company incurred the following expenses with related parties:

Amounts due to Related Parties

The following amounts were due to related parties as at:

(a)Amounts are unsecured, due on demand and bear no interest. 

(b)On July 29, 2020, Polymet entered into mining royalty agreements (the “NSR Agreements”) with the Company’s CEO, CFO, and the major shareholder (the “Purchasers”) to sell net smelter returns (the “NSR”) on its mineral concessions. NSR range from 0.3% to 1.25%, depending on the particular concession and the Purchaser. The Company’s CEO agreed to acquire the NSR for $2,173 (US$1,500), the CFO agreed to acquire the NSR for $1,448 (US$1,000), and the major shareholder agreed to acquire the NSR for $3,621 (US$2,500). 

The NSR will be paid quarterly once commercial exploitation begins and will be paid on gold, silver, copper and cobalt sales. If, within two years, the Company does not commence commercial exploitation of the mineral properties, an annual payment of $10,000 per purchaser will be paid.

Pursuant to Chilean law, the NSR agreements will come in force only when registered against the land title in Chile. The registration of the NSR Agreements has been deferred, therefore the payments made by the CEO, CFO, and the major shareholder have been recorded as advances on the books of the Company and will be applied towards the NSR Agreements, once they are fully legalized.

(c)On June 19, 2024, the Company entered into a debt settlement agreement with Da Costa Management Corp, an entity owned by the Company’s CFO, who agreed to convert a total of $50,000 owed for regular trade payables into 1,000,000 Shares at $0.05 per share. 

Notes Payable to Related Parties

Debt Restructuring

On May 9, 2024, the Company restructured a portion of its debt with related parties (the “Creditors”) in the amount of $1,911,451, whereby the Creditors agreed to forgive a total of $145,848 in interest accrued on demand notes payable up to January 31, 2024 (which was recorded as part of the equity reserves), and to restructure repayment of remaining balance of $1,765,603 plus interest accrued on the Debt up to May 9, 2024, totaling $51,651 over a five-year period (the “Restructured Loan Agreements”). Under the Restructured Loan Agreements, the remaining balance and accrued interest, totalling $1,817,255 (the “Debt”), continues to accrue interest at an annual interest rate of 8%, and must be repaid in a series of semi-annual installment payments, commencing six months from the date of the Debt restructuring, on November 9, 2024, over a period of five years.

On January 13, 2025, the Company and the Creditors amended the Restructured Loan Agreements to extend and combine the first two payments to July 15, 2025. All other terms of the Restructured Loan Agreements remained the same.

In measuring the fair value of the Restructured Loan Agreements in alignment with IFRS 9, Financial Instruments, at May 9, 2024, the Company recognized an equity component of $239,337 against the balance of the Debt relating to the below-market interest rate. The value of the equity component was determined by discounting the total expected future obligations under the Restructured Loan Agreements at a market interest rate of 13%.

During the year ended January 31, 2025, the Company recorded accretion of $38,220 on the Debt and $109,064 in interest accrued on the Debt.

A reconciliation of the balance outstanding at January 31, 2025, is as follows:

Reassignment of Certain Notes Payable with Related Parties

On May 9, 2024, the Company was notified that $450,000 owed under the notes payable with related parties were reassigned to new directors and officers of the Company, who joined the management team on May 10, 2024. This amount was converted to 9,000,000 Shares at $0.05 per Share, as part of the June 19, 2024, debt settlement transaction (Note 10).

Other Related Party Notes Payable due on Demand

The following amounts were due under the notes payable on demand:

(a)These notes payable are unsecured, due on demand and accumulate interest at a rate of 8% per annum. 

(b)On November 20, 2024, the Company entered into an unsecured line of credit agreement with the Company’s CEO and Director for up to $200,000. The outstanding balance, if any, on the revolving loan is due and payable on demand and bears interest at an annual rate of 8%. As at January 31, 2025, the Company had $132,496 drawn on the facility with $2,095 in interest accrued thereon. 

(c)On June 19, 2024, the Company entered into a debt settlement agreement with Fladgate Exploration Consulting Corporation, an entity partly owned by the Company’s director and VP of Exploration, and the Company’s director and CEO, to forgive an interest accrued on the notes payable totaling $77,362 and to convert the remaining $129,093 into 2,581,865 Shares at $0.05 per Share. The debt forgiveness associated with interest accrued on the note payable up to the date of conversion was recorded as a contribution in equity reserves (Note 10). 

Interest Expense

A reconciliation of the interest expense accrued on the outstanding notes payable for the years ended January 31, 2025, 2024, and 2023 is as follows: