Management's Discussion and Analysis
Three Months Ended January 31, 2022
Contact Information :
Copper Lake Resources Ltd.
1 King Street West, Suite 4800
Toronto, Ontario, Canada M5H 1A1
Contact Person: Mr. Terrence MacDonald, CEO
Email: info@copperlakeresources.com
COPPER LAKE RESOURCES LTD.
Management's Discussion and Analysis January 31, 2022
MANAGEMENT'S DISCUSSION AND ANLYSIS YEAR ENDED JANUARY 31, 2021
The following Management Discussion and Analysis ("MD&A") of the financial condition and results of operations of Copper Lake Resources Ltd. ("Copper Lake" or the "Company") was prepared by management as at April 1, 2022 and was reviewed and approved by the Board of Directors. The following discussion of performance, financial condition and future prospects should be read in conjunction with the condensed financial statements for the three months ended January 31, 2022 and the audited annual financial statements of Copper Lake Resources Ltd. and notes thereto for the year ended October 31, 2021. The information provided herein supplements but does not form part of the financial statements. All amounts are stated in Canadian dollars unless otherwise indicated. Additional information related to the Company is available for view on SEDAR at www.sedar.com.
CAUTION REGARDING FORWARD LOOKING STATEMENTS
This report includes certain statements that may be deemed "forward looking statements" within the meaning of applicable securities legislation. All statements, other than statements of historical facts, that address such matters as future exploration, drilling, exploration activities, potential mineralization and resources and events or developments that the Company expects, are forward looking statements and, as such, are subject to risks, uncertainties and other factors of which are beyond the reasonable control of the Company. Such statements are not guarantees of future performance and actual results or developments may differ materially from those expressed in, or implied by, this forward looking information. With respect to forward looking statements and information contained herein, the Company has made numerous assumptions, including among other things, assumptions about the price and future prices of ores and/or mineralization that are being explored for by the Company, anticipated costs and expenditures and the Company's ability to achieve its goals. Although management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward looking statement or information herein will prove to be accurate. Forward looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements or information. These factors include, but are not limited to such matters as market prices, exploitation and exploration results, continued availability of capital and financing, and general economic, market or business conditions. Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward looking statements or information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward looking statements or information. Any forward looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date and the Company does not undertake any obligation to update publicly or to revise any of the forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
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COPPER LAKE RESOURCES LTD.
Management's Discussion and Analysis January 31, 2022
COMPANY OVERVIEW AND GOING CONCERN
Copper Lake is engaged in the exploration, evaluation and development of mineral properties in Canada. The Company's primary focus is the continued exploration and development of its properties in Ontario, the Marshall Lake property, the Norton Lake property and the Centrefire Redhat property. The registered address of the Company is 1 King Street West, Suite 4800, Toronto, Ontario M5H 1A1. The Company trades on the TSX Venture Exchange ("TSX-V") under the symbol "CPL". The Company also trades on the Frankfurt Exchange under the symbol "W0I", and on the OTC under the symbol "WTCZF".
The Company's properties are located in Canada where the legal and economic frameworks are favorable to the mining industry.
The Company has no source of revenue and finances its operations through the sale of equity or the issuance of debt. The value of any mineral property is dependent upon the existence or potential existence of economically recoverable mineral reserves.
The Company has a NI 43-101 compliant resource estimate on its Norton Lake property and has historical resources estimates (not NI 43-101 compliant) on the Marshall Lake property.
Despite the current market uncertainty and volatility, the longer-term fundamentals and outlook for copper, zinc, silver, nickel, cobalt and palladium demand remain positive. The demand for copper is forecasted to increase, driven by population growth, emerging economies, green initiatives and infrastructure requirements. If the copper demand materializes as forecasted and the structural issues facing the copper industry have not been resolved, the long-term sustainable copper supply could be materially impacted. The absence of new large copper discoveries, despite increased exploration expenditures, combined with the historically low number of copper projects in the exploration and development pipeline, foreshadows an impending significant supply deficit within the copper industry.
RECENT DEVELOPMENTS
-
On February 15, 2022 the Company an update on the Marshall Lake drill program and reported encouraging initial assay results from the first hole. The initial drill hole completed in the current program, Mar-21-01, tested the Billiton deposit (historic resource of 2.2 MT at 4.2% zinc, 1.3% copper and 2.5 opt Ag1) between two widely spaced shallow historic drill holes. The deposit was intersected at a vertical depth of approximately 70 metres, yielding an intercept of 5.26% zinc, 1.17% copper, 0.12% lead, 59.65 g/t silver and 0.03 g/t gold (8.69% ZnEQ) over a core length of 4.90 metres. This intercept confirms both the tenor and width of base and precious-metal mineralization, obtained in the historical drilling, testing the Billiton deposit.
Deeper in the hole, at a vertical depth of 170 metres, a second parallel zone of significant base-metal mineralization was intersected yielding 6.54% zinc, 0.40% copper, 0.08% lead, 41.50 g/t silver and 1.06 g/t gold (8.03% ZnEQ) over a core length of 3.00 metres.
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COPPER LAKE RESOURCES LTD.
Management's Discussion and Analysis January 31, 2022
MINERAL PROPERTY INTERESTS Realization of assets
The investment in and expenditures on mineral property interests comprise a significant portion of the Company's assets. Realization of the Company's investment in these assets is dependent upon the establishment of legal ownership, the attainment of successful production from the properties or from the proceeds of their disposal. Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore.
Environmental
The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation. Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company's operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of the exploration and development on an exploration and evaluation assets, the potential for production on the property may be diminished or negated.
Title to mineral property assets
Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many exploration and evaluation assets. The Company has investigated title to all of its exploration and evaluation assets and, to the best of its knowledge, title to all of its properties are in good standing. However, such properties may be subject to prior agreements or transfer and title may be affected by undetected defects.
The Company has entered into agreements to acquire, explore and develop certain exploration and evaluation assets located in certain regions of Canada. Several aboriginal groups are claiming inextinguishable aboriginal title to the lands and resources in various regions of Canada, which may include one or more of the mineral claims beneficially owned by the Company. The extent to which any successful aboriginal claim would materially affect the ability of the Company to exploit its exploration and evaluation assets is not determinable at this time.
Exploration and Evaluation Expenses
Amounts invested in mineral property assets and capitalized in accordance with the Company's accounting policy on exploration and evaluation expenses are as follows:
Balance, January 31, 2022 and October 31, 2021
| Marshall Lake | Centrefire | Total |
| Redhat |
| $ 2,548,862 | $ 16,500 | $ 2,565,362 |
Norton Lake
-
Acquisition costs for the Norton Lake property in the amount of $400,000 were impaired during the year ended October 31, 2015.
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COPPER LAKE RESOURCES LTD.
Management's Discussion and Analysis January 31, 2022
Details of the Company's exploration and evaluation expenditures which have been cumulatively expensed in the statement of loss and comprehensive loss are as follows:
For the three months ended January 31, 2022
Marshall LakeNorton LakeCentrefire Redhat
Property
Property
Property
Total
Drilling Equipment rental
229,098 - - 35,503
71,179 - - 7,340
Exploration office and management Field exploration camp
27,029 75,172
199,568 176,710
Geological and geophysical Geotechnical
34,790 - - 166,758
3,800 - - 31,041
Line cutting Roads and access Storage
24,837 - - 44,640
35,960 - - 27,008
900 - - 5,850
Travel
2,193 2,326
Expenditures for the year
629,354
720 - 630,074
Cumulative balance - October 31, 2021
Balance, January 31, 2022
4,944,466 $ 5,573,820
844,619
- 5,789,085
$
845,339
-6,419,159
For the three months ended January 31, 2021
Marshall LakeNorton Lake
Property
PropertyCentrefire Redhat PropertyTotal
Assays
19,592 - - 19,592
Coreshack and logging Storage
8,309 - - 8,309
1,350 - - 1,350
Expenditures for the period Cumulative balance, October 31, 2020
Balance, January 31, 2021
29,251 4,305,478 $ 4,334,279
- 840,784
-
29,251
$
840,784
-$ 5,175,513
The cumulative balance for the Marshall Lake Property at October 31, 2021 and 2020 is net of cumulative JEAP grants of in the amount of $172,642 received in previous years.
A summary of the Company's current exploration programs is set out below, however, for additional information and details regarding such matters, reference is made to the Company's news releases and related filings that can be viewed on www.sedar.com.
The technical information regarding the Company's currently active projects referred to herein has been reviewed and approved by Donald Hoy, M.Sc., P. Geo., who is acting as the Company's Qualified Person in accordance with regulations under NI 43-101.
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