Item 1A. RISK FACTORS
AS A SMALLER REPORTING COMPANY, WE ARE NOT
REQUIRED TO PROVIDE A STATEMENT OF RISK FACTORS. NONETHELESS, WE ARE VOLUNTARILY PROVIDING RISK FACTORS HEREIN. THIS ANNUAL REPORT CONTAINS
CERTAIN STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. YOU ARE CAUTIONED THAT SUCH STATEMENTS
ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH
STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS ANNUAL REPORT, INCLUDING THE MATTERS SET FORTH BELOW,
WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN OUR COMPANY. IF ANY OF THE
FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS FOR GROWTH WOULD LIKELY SUFFER.
AS A RESULT, YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT IN OUR COMPANY.
Risks Related to Capital Structure
The Common Stock is currently quoted on the Pink
tier of OTC Markets Group Inc., an over-the-counter quotation system, under the symbol “GTVI.” There is, however, currently
no trading market for the Common Stock and there is no assurance that a regular trading market will ever develop. The trading price of
the Company’s securities could be subject to wide fluctuations, in response to quarterly variations in its operating results, announcements
by the Company or others, developments affecting it, and other events or factors. In addition, the stock market has experienced extreme
price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies,
often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities Such risks
could have an adverse effect on the stock’s future liquidity.
If our business plan is not successful,
the Company may not be able to continue operations as a going concern and shareholders may lose their entire investment in the Company.
As discussed in the notes to the Company’s
financial statements included in this Report, as of December 31, 2022, since inception the Company has incurred cumulative losses of $7,430,676
and as of December 31, 2022, had a working capital deficiency of $177,761 which may cast significant doubt regarding the Company’s
ability to continue as a going concern. The Company does not generate material cash flows from operations and accordingly, the Company
will need to raise additional funds through future issuance of securities. Although the Company has been successful in raising funds in
the past, there can be no assurance the Company will be able to raise sufficient funds in the future, in which case the Company may be
unable to meet its obligations as they come due in the normal course of business. The Company has not determined whether any of its properties
contain mineral reserves that are economically recoverable. It is not possible to predict whether financing efforts will be successful
or if the Company will attain a profitable level of operations. Should the Company be unable to realize its assets and discharge its liabilities
in the normal course of business, the net realizable value of its assets may be materially less than the amounts on the statement of financial
position.
If the Company fails to raise sufficient capital,
it will have to explore other financing activities to provide it with the liquidity and capital resources to meet its working capital
requirements and to make capital investments in connection with ongoing operations. The Company cannot give assurance that it will be
able to secure the necessary capital when needed. The Company’s independent auditor included an explanatory paragraph on the financial
statements emphasizing to the readers of the audit report that there is substantial doubt about the Company's ability to continue as a
going concern. The Company’s ability to continue as a going concern is dependent upon it being able to generate cash flow sufficient
to fund operations and reducing operating expenses. The Company’s business plans may not be successful in addressing cash flow issues.
If the Company cannot continue as a going concern, its shareholders may lose their entire investment in it.
You may experience dilution of your ownership
interests because of the future issuance of additional shares of Common Stock or other securities that are convertible into or exercisable
for Common Stock or preferred stock.
In the future, the Company may issue authorized
but previously unissued equity securities, resulting in the dilution of the ownership interests of present stockholders. The Company
is authorized to issue an aggregate of 500,000,000 shares of Common Stock and 10,000,000 shares of preferred stock. Additional shares
of Common Stock or other securities that are convertible into or exercisable for Common Stock may be issued in connection with hiring
or retaining employees, future acquisitions, future sales of securities for capital raising purposes, or for other business purposes. The
future issuance of any such additional shares of Common Stock may create downward pressure on the trading price of Common Stock.
4
The Company does
not have a class of securities registered under Section 12 of the Exchange Act. Until it does, or the Company becomes subject to Section
15(d) of the Exchange Act, it will be a “voluntary filer.”
The Company is not currently
required under Section 13 or Section 15(d) of the Exchange Act to file periodic reports with the SEC. It has in the past voluntarily elected
to file some or all of these reports to ensure that sufficient information about it is publicly available to its stockholders and potential
investors. Until the Company becomes subject to the reporting requirements under the Exchange Act, it is a “voluntary filer”
and is currently considered a non-reporting issuer under the Exchange Act. The Company will not be required to file reports under Section
13(a) or 15(d) of the Exchange Act until the earlier to occur of: (i) the registration of a class of securities under Section 12 of the
Exchange Act, which would be required if the Company lists a class of securities on a national securities exchange or if it meets the
size requirements set forth in Section 12(g) of the Exchange Act, or which it may voluntarily elect to undertake at an earlier date; or
(ii) the effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”)
relating to Common Stock. Until the Company becomes subject to the reporting requirements under either Section 13(a) or 15(d) of the Exchange
Act, it is not subject to the SEC’s proxy rules, and large holders of its capital stock will not be subject to beneficial ownership
reporting requirements under Sections 13 or 16 of the Exchange Act and their related rules. As a result, the Company’s stockholders
and potential investors may not have available to them as much or as robust information as they may have if and when it becomes subject
to those requirements. In addition, if the Company does not register under Section 12 of the Exchange Act, and remain a “voluntary
filer”, it could cease filing annual, quarterly or current reports under the Exchange Act.
Share of Common
Stock are subject to the “penny stock” rules of the SEC, and the trading market in the Company’s securities is limited,
which makes transactions in its stock cumbersome and may reduce the value of an investment in its stock.
Rule 15g-9 under the
Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to the Company, as any equity security
that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account
for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting
forth the identity and quantity of the penny stock to be purchased.
In order to approve a
person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience
objectives of the person; and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and
the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny
stocks.
The broker or dealer
must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock
market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing
to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to
dispose of shares of Common Stock and may cause a decline in the market value of the Company’s stock.
Disclosure also has to
be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available
to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in penny stocks.
Because the Company
does not intend to pay any cash dividends on share of Common Stock, its stockholders will not be able to receive a return on their shares
unless they sell them.
The Company intends to
retain any future earnings to finance the development and expansion of its business. The Company does not anticipate paying any cash dividends
on share of Common Stock in the foreseeable future. Unless the Company pays dividends, its stockholders will not be able to receive a
return on their shares unless they sell them. The Company cannot assure its stockholders that they will be able to sell shares when they
desire to do so.
The Company’s principal stockholders
and management own a significant percentage of Common Stock and will be able to exercise significant influence over matters subject to
stockholder approval.
As of January 23,
2023, the Company’s executive officers, directors and principal stockholders, together with its other affiliates, owned approximately
85.9% of the issued and outstanding Common Stock. Accordingly, these stockholders will be
able to exert a significant degree of influence over the management and affairs of the Company and over matters requiring stockholder
approval, including the election of the directors and approval of significant corporate transactions. This concentration of ownership
could have the effect of entrenching Company management or the Board, delaying or preventing a change in control or otherwise discouraging
a potential acquirer from attempting to obtain control of the Company, which in turn could have a material and adverse effect on the fair
market value of Common Stock.
5
Risks Associated with Mining
Business
It is uncertain that the Company’s
mineral properties contain any proven or probable reserve, nor can the Company provide such assurance, but its business is highly dependent
on the existence of the mineral property.
As all the Company’s mineral properties
are in the exploration stage, there is no assurance that it can establish the existence of any mineral reserves on any of its properties
in commercially exploitable quantities. Until the Company can do so, it cannot earn any revenues from operations and if it does not do
so, it will lose all of the funds that were expended on exploration. If the Company does not discover any mineral reserves in a commercially
exploitable quantity, its business could fail.
The Company has not established that its mineral
properties contain any proven or probable reserves, nor can there be any assurance that it will be able to do so. If the Company fails
to establish any proven or probable reserve, the business could fail.
Due to the speculative characteristics of
the mine exploration business, there is substantial risk that the Company will not find sufficient commercially exploitable minerals and
fail in its business.
The Company cannot evaluate its success rate on
the CuMo Project. The search for valuable minerals as a business is perilous. The Company may not find commercially exploitable mineral
reserves or other valuable minerals in its mineral property. Exploration for minerals is a speculative venture necessarily involving substantial
risk. The expenditure to be made by the Company on exploration programs may not result in the discovery of commercial quantities of ore.
The likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays encountered in
the exploration of the mineral properties the Company plans to undertake. Issues such as unusual or unexpected formations and other conditions
are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, the Company would need help
to complete its business plan. Due to the inherent dangers involved in mineral exploration, the business may incur liability or damages.
Even if the Company does eventually discover
a mineral reserve on one or more of its properties, there can be no assurance that it will be able to develop such properties into producing
mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are
explored are ultimately developed into producing mines.
The commercial viability of an established mineral
deposit will depend on several factors, including, by way of example, the size, grade, and other attributes of the mineral deposit, the
proximity of the resource to infrastructures such as a smelter or processing facilities, power, and water, roads and a point for shipping,
available workforce, government regulation, successful permitting, proximity to markets and consumers, and market prices. Most of these
factors will be beyond the Company’s control, and any of them could increase costs and make extraction of any identified mineral
resource unprofitable.
The Company cannot provide any assurance
about financing for additional exploration. If its exploration costs are higher than anticipated, the Company may only be able to complete
the exploration program with additional financing.
The Company is proceeding with exploration on
its CuMo property. The exploration program outlines the budget for completion of the program but there is no assurance that actual costs
will not exceed the budgeted costs. Factors that could cause actual costs to exceed budgeted costs include increased prices due to competition
for personnel and supplies during the exploration season, unanticipated problems in completing the exploration program and delays due
to weather or other factors experienced in completing the exploration program. Increases in exploration costs could result in the Company
not being able to carry out its exploration program without additional financing. There is no assurance that the Company would be able
to obtain additional financing in this event.
If the Company cannot raise sufficient capital
after it establishes the existence of a mineral resource on any of its properties in a commercially exploitable quantity, it will not
be able to exploit the resource, thus the business could fail.
If the Company discovers mineral resources in
commercially exploitable quantities on any of its properties, it will then be required to expend substantial sums of money to explore
and fully establish the extent of the resources and reserves, develop processes to extract it, and develop extraction and processing facilities
and infrastructure. Although the Company may derive substantial benefits from the discovery of a significant deposit, there can be no
assurance that such a resource or reserve will be large enough to justify commercial operations, nor can there be any assurance that the
Company will be able to raise the funds required for the development on a timely basis. The business may not succeed if the Company cannot
extend the necessary capital or complete the required facilities and infrastructure.
6
Mineral exploration and development are
subject to extraordinary operating risks. The Company does not currently insure against these risks. In the event of a cave-in or similar
occurrence, its liability may exceed its resources, which would have an adverse impact on the business.
Mineral exploration, development, and production
involve many risks that even a combination of experience, knowledge and careful evaluation may be unable to overcome. The Company’s
operations will be subject to all the geological, technical, and operating hazards and risks in exploring mineral resources. If the Company
discovers a mineral resource in commercially exploitable quantity, its operations would be subject to the hazards and risks inherent in
the development and production of resources, including liability for pollution, cave-ins, or similar dangers against which it cannot fully
insure or against which it may elect not to insure. Any such event could result in work stoppages and property damage, including damage
to the environment. The Company does not currently maintain any insurance coverage against these operating hazards. The payment of any
liabilities arising from such occurrences may have a material adverse impact on the business.
Mineral prices are subject to dramatic and
unpredictable fluctuations.
The Company expects to derive revenues from the
sale of its mineral resource properties or from the extraction and sale of molybdenum, silver, copper, and rhenium, and associated minerals.
The price of those commodities has fluctuated widely in recent years. It is affected by numerous factors beyond the Company’s control,
including international, economic, and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global
or regional consumptive patterns, speculative activities, and increased production due to new extraction developments and improved extraction
and production methods. The effect of these factors on the price of base and precious metals, and therefore the economic viability of
any of the Company’s exploration properties and projects, cannot accurately be predicted.
The unpredictable inclement weather may
restrict mineral exploration and cause delay or impact on the Company’s mining progress.
Access to the mineral property may be restricted
between November and April of each year because the period between these months can sometimes feature heavy snow cover, extreme cold,
and high winds, which makes it difficult, if not impossible, to carry out exploration and other activities. Visits, tests, and explorations
of the mineral property can only be attempted when weather permits such activities. These limitations can result in significant delays
in the exploration, mining, and production of commercial minerals. Such delays can cause the business to fail.
Risks Related to Regulatory and Permitting
Requirements in the Industry the Company Operates
Mineral operations are subject to applicable
law and government regulation. Even if the Company discovers a mineral resource in a commercially exploitable quantity, applicable laws
and regulations could restrict or prohibit the exploitation of that mineral resource.
Both mineral exploration and extraction require
permits from various federal, state, provincial and local governmental authorities and are governed by laws and regulations, including
those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards, occupational health,
waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that the
Company will be able to obtain or maintain any of the permits or bonds required for the continued exploration of its mineral properties
or for the construction and operation of a mine on its properties at economically viable costs.
The Company cannot ensure that all its business
activities will continue to comply with all material laws and regulations because there may be changes to applicable laws and regulations,
and it may not be able to comply with such changes. Further, there is no assurance that the Company will be able to obtain or maintain
all permits or bonds necessary for its future operations or that it will be able to obtain them on reasonable terms. To the extent such
approvals are required and are not accepted, the Company may be delayed or prohibited from proceeding with the planned exploration or
development of its mineral properties. If the Company is prevented from exploiting any mineral resource that it discovers by a failure
to comply with applicable laws and regulations or obtain or to maintain any required permits, the business could fail.
7
Exploration development and exploitation
activities are subject to comprehensive regulation and permitting, which may cause substantial delays or require capital outlays in excess
of what is currently anticipated, causing a material adverse effect on the business.
Exploration, development, and exploitation activities
are subject to federal, provincial, state, and local laws, regulations, and policies, including laws regulating permitting, bonding, and
the removal of natural resources from the ground and the discharge of materials into the environment. Exploration, development, and exploitation
activities are also subject to federal, provincial, state, and local laws and regulations which seek to maintain health and safety standards
by regulating the design and use of drilling methods and equipment and other operational activities.
Environmental and other legal standards imposed
by federal, provincial, state, or local authorities may be changed, and any such changes may prevent the Company from conducting planned
activities or increase its costs of doing so, which could have material adverse effects on the business. Moreover, compliance with such
laws may cause substantial delays or require capital outlays in excess of those currently anticipated, thus causing a material adverse
effect on the business. Additionally, the Company may be subject to liability for pollution or other environmental damages that it may
not be able to, or elect not to, insure against due to prohibitive premium costs and other reasons. Any laws, regulations, or policies
of any government body or regulatory agency may be changed, applied, or interpreted that could materially alter and negatively affect
the Company’s ability to carry on the business.
The Company depends on its senior management
team, and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect
the business.
The Company’s success depends on the skills,
experience, and performance of its Chief Executive Officer, Steven Rudofsky, and other key employees. The effort of the Chief Executive
Officer will be important as the Company continues to develop and expand its commercial activities. The loss or incapacity of existing
members of the executive management team could negatively impact the Company’s operations if it experiences difficulties in hiring
qualified successors. Qualified employees periodically are in great demand and may be unavailable in the time frame required to satisfy
business requirements. Expansion of the business could require the Company to employ additional personnel. There can be no assurance that
the Company will be able to attract and retain sufficient numbers of skilled employees in the future. The loss of personnel or inability
to hire or retain sufficient personnel at competitive rates could impair the growth of the business.
The Company also relies on its leadership team
in the areas of finance, marketing, services, and general and administrative functions, and on sales. From time to time, there may be
changes in the executive management team resulting from the hiring or departure of executives, which could disrupt the business.
In addition, in making employment decision, job
candidates often consider the value of the equity awards they are to receive in connection with their employment. Volatility in the price
of Common Stock might, therefore, adversely affect the Company’s ability to attract or retain highly skilled personnel. Furthermore,
the requirement to expense certain stock awards might discourage the Company from granting the size or type of stock awards that job candidates
require to join. If the Company fails to attract new personnel or fail to retain and motivate its current personnel, the business and
its future growth prospects could be severely harmed.
8
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 2. PROPERTIES.
Mining Property
To determine material mining operations in accordance
with subpart 1300 of SEC Regulation S-K, management considered both quantitative and qualitative factors, assessed in the context of the
Company’s overall business and financial condition. The Company concluded that, as of the date of the filing of this Report, its
sole material mining operation is the CuMo Project. The Company will update its assessment of individually material mines on an annual
basis.
The information relating to such sole material
mining operation is contained in the technical report summary (“TRS”) relating to the CuMo Project prepared in compliance
with the Item 601(b)(96) and subpart 1300 of Regulation S-K. Reference should be made to the full text of the TRS, a copy of which is
filed as Exhibit 96.1 and incorporated herein by reference. A glossary of terms used herein can be found in the TRS.
Pursuant to Item 1302(b)(5) of Regulation S-K
(17 C.F.R. §229.1302(b)(5)), the Company states that the TRS was prepared by Shaun M. Dykes, M. Sc. (Eng), P.Geo of Geologic Systems,
Ltd. Mr. Dykes is also serving as a director of the registrant and is also the registrant’s Director, Vice President, Exploration.
Mr. Dykes meets the qualifications specified under the definition of “qualified person” under Item 1300 of Regulation S-K.
9
The CuMo Project currently consists of one hundred
and twenty-six (126) federal unpatented lode mining claims, and six (6) patented mining claims. In total, the project comprises approximately
2,640 acres. The unpatented lode mining claims and patented claims are situated in an unorganized mining district, in Boise County, Idaho,
spanning Sections in Township 7N and 8N, Range 5E and 6E, Boise Meridian. The names of the unpatented claims, and the place of record
of the location notices thereof in the official records of the Boise County recorder, and the authorized office of the Bureau of Land
Management are as follows:
Table 1
The following table lists the unpatented mining
claims currently a part of the CuMo Project:
10
11
12
On August 24, 2021, ICUMO and Computershare Trust
Company of Canada entered into a 7.5% Secured Note Indenture under which the aggregate principal amount of notes authorized to be issued
is $15,000,00, with a maturity date of May 31, 2028. The 7.5% Secured Note Indenture is secured by all of the mining claims of ICUMO that
represent the CuMo Project, other than the patented lode mining claims located in Section 13, Township 8 North, Range 5 East, Boise Meridian,
Boise County, Idaho, as depicted on Mineral Survey 1706: (i) Blackbird; (ii) Red Flag; (iii) Enterprise; (iv) Enterprise Fraction; (v)
Commonwealth; and (vi) Baby Mine. In connection with this security interest, ICUMO and Computershare Trust Company of Canada, as Mortgagee,
signed a Real Property Mortgage under which the Mortgagee has the right upon default by the mortgagor to choose to sell the real property
constituting the unpatented claims set out above.
Table 2
The following table lists the patented mining
claims currently a part of the CuMo Project:
On October 31, 2014, as subsequently amended March
26, 2015, and January 29, 2016, ICUMO entered into a Loan Agreement with La Familia II, LLC, evidenced by a secured promissory note, in
the amount of $500,000. The promissory note accrues annual interest at 8.5%, has a maturity date of December 31, 2025, and is secured
by a first priority deed of trust over the patented mining claims listed above.
Location, Access, Climate, Infrastructure
and Topography
The CuMo Project is situated in the mountains
of south-central Idaho, in the Boise National Forest, in Boise County, Idaho, approximately 15 miles northeast of the town of Idaho City,
near the unincorporated community of Centerville, roughly 37 miles on a straight line, and 60 miles by road, from the city of Boise. Good
all-weather highways, and USFS logging roads provide access to the project from Idaho City and Centerville. The trip from Boise takes
approximately 1.5 hours. Access is limited during some winter months when significant snow cover can impede passage via the Forest Service
roads.
13
The property is accessed by road from Boise by
taking US State Highway 55 northerly for approximately 40 miles (65 km) to the town of Banks, Idaho, and then east on the Banks Lowman
Road towards the town of Garden Valley for approximately 10 miles (16 km). One mile east of Garden Valley is a secondary road heading
south across the Payette River. Following this secondary road, the western most edge of the CuMo claim block is approximately 10 miles
(16 km) from Garden Valley. Alternatively, access can be gained by traveling northeast from Boise along Highway 21 past the towns of Idaho
City and Centerville, along Grimes Creek, and then over the Grimes Pass.
The elevation of the CuMo project ranges between
5,100 feet and 7,200 feet. The project site features a mountain top which contains the bulk of the mineral deposit, deep ravines adjacent,
and is largely forested, except for sections that have been cleared by several fires which occurred in 2014 and 2016.
14
The climate is defined by summer temperatures
to a maximum of 100° F (38°C) and cold, windy winters with lows to -10° F (-23°C). Precipitation is moderately light with
an average rainfall of 30 inches (<1 meter) and an average snowfall of approximately 140 inches (3.6 m). Vegetation in the project
area consists of cedar, lodgepole pine, mountain mahogany, and juniper.
The area is serviced by the Idaho Power Company
which supplies electricity to residents of Garden Valley, Lowman and Pioneerville. The nearest rail line is the Idaho Northern & Pacific
line formerly operated by Union Pacific that runs through the town of Banks, approximately 20 road miles (32 km) to the west of the property.
Equipment, supplies, and services for exploration and mining development projects are available at Boise. There is also a trained mining-industrial
workforce available in Boise.
Exploration and mining activities at the property
can be conducted year-round, due to the established road system and its proximity to other infrastructure. The property is large enough
to accommodate exploration within the current CuMo deposit property footprint.
Geology and Mineralization
The regional tectonic setting consists of a basement
of amalgamated Archean and Paleoproterozoic crystalline terrains that were joined during the Paleoproterozoic Trans-Montana orogeny, and
are overlain discontinuously by sedimentary rocks of Mesoproterozoic, Neoproterozoic, and Paleozoic ages; and volcanic and sedimentary
rocks of Eocene and Miocene ages. Voluminous tonalite to granite bodies of the Idaho batholith and later granitic plutons of Eocene age
intrude the older rocks. Major deformational episodes superimposed on the Precambrian basement include the Cretaceous Sevier orogeny,
which mainly involved east-vergent “thin-skinned” thrusting; Eocene extensional deformation, which resulted in development
of metamorphic core complexes; and basin and range type faulting.
The CuMo deposit is situated within the Idaho
batholith and is part of a regional scale belt of porphyry and related deposits identified as the Idaho-Montana Porphyry Belt. Igneous
complexes in this belt are interpreted to be related to an Eocene, intra-arc rift, and are characterized by alkalic rocks in the northeast,
mixed alkalic and calc-alkalic rocks in the middle, and calc-alkaline rocks in the southwest. The CuMo deposit is located at the southwestern
end of this belt and is associated with a calc-alkalic monzogranite, reported as 45-52Ma age that intrudes Cretaceous equigranular intrusive
rocks of the Atlanta Lobe of the Idaho Batholith. The CuMo area is underlain by biotite granodiorite, the most common rock type of the
Atlanta lobe of the Idaho batholith. All of the felsic intrusive phases contain molybdenite (MoS2) mineralization.
The CuMo deposit is located in an historic gold
mining camp. Gold was discovered in the Boise Basin in 1862 and lode mining began within a year. As of 1940, total gold production amounted
2.8 million ounces of which 74% was from placer operations. More gold has been produced from the Boise Basin than any other mining locality
in Idaho. Although they are primarily gold deposits, considerable silver and minor copper, lead and zinc were produced as byproducts from
the lodes.
The area features two separate mineralizing events
that are referred to as early Tertiary and early Miocene. The first event consists of gold-quartz veins containing minor sulfide minerals
that occur within the Idaho batholith and are associated with weak wall rock alteration. Associated sulfide minerals include pyrite, arsenopyrite,
sphalerite, tetrahedrite, chalcopyrite, galena, and stibnite. The second mineralizing event occurs within porphyry dikes and stocks as
well as in the batholith, and is characterized by relatively abundant sulfide mineralization, subordinate quartz and widespread wall rock
alteration. Base metal mineralization consists of pyrite, sphalerite, galena, tetrahedrite, chalcopyrite, minor quartz, and siderite with
local occurrences of pyrrhotite and enargite.
15
Molybdenum mineralization was discovered at CuMo
in 1963. Mineralization on the property occurs in veins and veinlets developed within various intrusive bodies. Molybdenite (MoS2) occurs
within quartz veins, veinlets, and vein stockworks. Individual veinlets vary in size from tiny fractures to veinlets five centimeters
in width, with an overall thickness averaging 0.3- 0.4 cm. Pyrite and/or chalcopyrite are commonly associated with molybdenite although
molybdenite can occur alone without other metallic mineralization.
The CuMo deposit has been classified as a porphyry
copper molybdenum deposit. But more specifically, it is a stockwork-type deposit where the principal mineralization, as described immediately
above, is found in thin veins and veinlets, whereas a typical porphyry deposit features disseminated mineralized areas throughout the
orebody.
The CuMo deposit is typical of large, dispersed,
lower grade copper-molybdenum deposits that are associated with hybrid magmas typified by fluorine-poor, differentiated monzogranite igneous
complexes. Due to their large size, the total contained economic molybdenum in these types of deposits can be equivalent to or exceed
that of high-grade molybdenum deposits.
History of CuMo Project Exploration
The Boise Basin was first explored following the
discovery of placer gold deposits in 1862. Several lode gold deposits were discovered and developed immediately following the initial
alluvial gold rush, with significant production occurring in the late 1800’s and early 1900’s. No production has occurred
on the CuMo Project itself.
The first interest in the CuMo property was shown
during aerial reconnaissance by Amax Exploration (“Amax”) in 1963. Follow-up geochemical rock and soil sampling indicated
anomalous molybdenum and copper values. Forty claims were then staked, and three previously existing claims were optioned. A 2.5 mile
(4 km) rough access road was constructed in 1964 to facilitate collection of rock samples and geological mapping. Amax completed detailed
bedrock mapping on the CuMo property between 1964 and 1981. Earlier periods of mapping outlined five general rock types, including quartz
monzonite of the Idaho Batholith, rhyolite porphyry, lamprophyre, dacite and diabase dykes. The property was subsequently relinquished
due to the combination of contemporary economic conditions and initial sample grades.
In 1968, Curwood Mining Company staked 12 claims
and undertook detailed mapping and geochemical rock sampling. This work indicated roughly coincident anomalies in copper, molybdenum,
and silver. Several trenches were excavated, and one line of dipole-dipole array induced polarization (“IP”) geophysical
survey was conducted.
In 1969, Midwest Oil Corp. optioned the property
and conducted exploration drilling through 1972 (four short rotary holes (less than 100 ft) initially, which were later deepened using
diamond drilling, followed by six cored holes). Midwest also performed an IP survey in 1971 and an airborne magnetic survey in 1973. The
IP survey indicated a pyrite halo on the north side of the deposit, although an alternative interpretation concluded that the combined
IP data may indicate a halo effect but more probably shows an east-west trend to the rock types and mineralization. The CuMo deposit did
not have a strong magnetic signature, being somewhat of a plateau with surrounding highs.
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In 1973, Midwest formed a joint venture with Amax
and then subsequently Midwest was merged with Amoco Minerals Company (“AMOCO”) resulting in an Amax-AMOCO joint venture
with AMOCO as operator. During the period 1973 to 1981, the Amax-AMOCO joint venture completed 30,822 ft of drilling, surface geological
mapping, re-logging of the core, road construction, an aerial topographic survey, and age dating. In 1980, Amax Exploration Inc. transferred
its interest to Climax Molybdenum Company (“Climax”), also a subsidiary of Amax Inc. In 1982, Climax collected more
than 300 soil geochemical samples from three different grids.
A total of twenty-three (23) diamond holes and
three RC holes were drilled on the property during this timeframe. Most RC holes were pre-collars to diamond drill holes with only the
diamond drill component of the holes being used for resource modelling and sampling. The historic holes were sampled mostly at a 20ft
sample interval. A Skelton core representation of the historic drill holes (one four-inch piece of core for each 10-foot interval), and
all the sample rejects were delivered directly from Climax’s secure facility in Colorado and are stored in the project secure warehouse
facility for use by the project.
The drilling efforts from 1969 to 1982 were the
only actual drilling done on the property until ICUMO in 2006, who under option from American CuMo completed one diamond drillhole and
partially completed another before relinquishing the project back to American CuMo in late 2006. Thereafter, American CuMo between 2006
and 2012 drilled a total of 25,486.82m in forty-two (42) holes. All American CuMo drilling programs were directly supervised by onsite
geology staff located in Garden Valley, Idaho. Drilling consisted of both HQ and NQ diameter core with holes being started with HQ diameter
and then reducing at a major fault intersection or at 1000ft which ever was less. Core recoveries were monitored and were excellent (90%+).
All holes were surveyed down-the-hole at regular intervals (100 feet) using a Reflex survey instrument. All core was collected at the
drill site by the diamond drillers under supervision of onsite geology staff and delivered to a secure warehouse facility in Garden Valley
where they were logged, analyzed and samples collected. All drill sites were surveyed using a total field station in order to accurately
locate the holes.
The 2006 through 2012 results confirmed the extent
and grade of mineralization on the property as indicated by previous drilling and demonstrated continuity of mineralization between the
original wide-spaced holes.
American CuMo’s work resulted in the interpretation
and modelling of three distinct mineralized zones within the deposit. These zones were previously interpreted by Amax as distinct shells
that were produced by separate intrusions. Re-interpretation of down-hole histograms for copper (Cu), silver (Ag) and molybdenite (MoS2)
suggests the mineralized zones are part of a single, large, concentrically zoned system with an upper copper-silver zone, underlain by
a transitional copper-molybdenum zone, in turn underlain by a lower molybdenum-rich zone. Three-dimensional modeling of the above zonation
indicates the current area being drilled is located on the north side of a large system extending 4.5km (15,000ft) in diameter, of which
1.5km (3,000ft) has been drilled.
Resource Reports and Preliminary Economic Assessments
A geologically inferred historic resource of 1.36
billion tonnes at 0.092% MoS2 (non-compliant with Canadian National Instrument 43-101 or US Regulation SK-1300) was calculated by block
modeling in 1983 by Climax.
In 2008, an initial Resource Estimate compliant
with Canadian National Instrument 43-101 was commissioned by American CuMo under its former name, Mosquito Consolidated Gold Mines Ltd.
This estimate was based on information from 31 diamond drillholes completed through 2007. The deposit was subdivided into three mineral
domains based on the drill hole data: a Cu-Ag zone, a Cu-Mo zone, and a Mo zone. Within each mineral domain 20 ft. composites were formed.
Blocks 50 x 50 x 50 ft. were estimated for MoS2, Cu, Ag and W by ordinary kriging. At a 0.10 % Cu cutoff there was reported 293 million
tons averaging 0.016 % MoS2 and 0.14 % Cu classified as inferred. Within the Cu-Mo and Mo Zones at a 0.04 % MoS2 cutoff there were 1.72
billion tons averaging 0.091 % MoS2 and 0.075 % Cu classified as inferred.
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In May 2009, the authors of the 2008 report provided
an updated Resource Estimate based on a total of 42 diamond drill holes totaling 76,436 ft, including 11 completed during 2008. Using
a Recoverable Metal Value (the “RCV”) cutoff at various US dollar values per ton, and at certain assumed metal recoveries
and metal prices, the authors presented tonnages, metal grades, and contained metal for indicated and inferred resource calculations in
all 3 mineralized zones.
In November 2009, Ausenco Canada Inc. (“Ausenco”),
an independent, third-party engineering firm employed by American CuMo, published a NI 43-101 compliant Preliminary Economic Assessment,
throughput Scoping Study Report based on the same 42 diamond drillholes. In a manner similar to the May 2009 report, Ausenco reported
tonnages, metal grades and contained metal for indicated and inferred resource calculations in all 3 mineralized zones. Ausenco went further
and proposed a mining and processing operational design at various mining rates, from 50,000 to 200,000 tons per day of ore to mill throughput.
This firm also included provisions and estimated capital and operating costs for a conceptual open pit mine, waste dumps, tailings storage
facility, plant/concentrator, molybdenum roaster, and ancillary facilities. Initial capital costs ranged from $1.6 to $3.4 billion (in
2009 dollars). Based on this data, Ausenco was able to perform a Preliminary Economic Analysis (PEA) of the CuMo project, at various throughput
rates, which yielded numeric results for Net Present Value, Internal Rate of Return, Payback, and cash operating costs per pound of molybdenum
equivalent. They concluded that higher throughputs yield a higher NPV and higher IRR, although at a greater capital cost.
In 2011, a new technical study for a NI 43-101
compliant Resource update was commissioned with Snowden Mining Consultants. The resource estimate update was based on a total of 54 diamond
drillholes totaling 99,404 ft. Of these, 12 diamond drillholes were completed in 2009 and 2010. Again, using assumed metal recoveries
and selected RCV cut-off grades, Snowden reported updated global Indicated Resources of over 2 billion tons, and global Inferred Resources
of over 5 billion tons. Snowden adopted most of the other design parameters and assumptions offered by Ausenco.
In August 2015, Gary Giroux of Giroux Consultants
Ltd. (one of the authors of the 2008 and 2009 Reports) was employed by American CuMo to publish a NI 43-101 compliant, updated resource
estimate. This update was based on a total of 65 diamond drill holes totaling 120,685 feet (36,784.9 meters). Nine (9) of the sixty-five
(65) diamond drill holes were completed in 2012 since the previous resource calculation. Using low, medium, and high metal price assumptions,
and different cutoff grades for RCV, Giroux calculated Measured, Indicated, and Inferred mineral resource numbers for ore contained within
a conceptual pit shell. The maximum case reported here was a combined Measured, Indicated, and Inferred resource of over 6 billion tons.
Finally, in 2020 SRK authored a NI 43-101 compliant
Preliminary Economic Assessment and Technical Report for the CuMo project. This document, relying on the previously published 2015 resource
estimate, proposed an open pit mine and concentrator combination at a milling rate of 150,000 tons per day, and an initial mine life of
30 years. It also incorporated particle-based ore sorting technology to remove 28% of the mining waste from the ore stream, prior to entering
the concentrator. SRK projected that operations would produce (yearly Life of Mine average) of 43 million pounds of molybdenum, 84 million
pounds of copper, and 3.7 million ounces of silver. The capital cost estimate prepared by SRK was $3.1 billion, with a cash cost per pound
of molybdenum (after by-product credits) of $4.67, a post-tax Net Present Value (at 5% discount) of $1.7 billion, and an Internal Rate
of Return of 9%.
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The mineral resource estimates contained in the
TRS are based on drilling completed through 2012. As no additional drilling has been completed since the 2015 resource was estimated,
the mineral resource estimates are considered current and have not been updated since that time. The mineral resource was classified
on the basis of the quality and uncertainty of the sample data and sample spacing, in accordance with the definitions of “inferred
mineral resource,” “indicated mineral resource” and “measured mineral resource” under the SEC Mining Rules.
For a detailed summary of mineral resource estimates
current as of ICUMO’s most recent fiscal year, including tabular disclosure of measured, indicated, and inferred resources, please
refer to Section 1.5 of the attached TRS.
The mineral resource estimates contained in the
TRS were estimated in conformity with Committee for Mineral Reserves International Reporting Standards (CRIRSCO) “International
Reporting Template for the public reporting of Exploration Targets, Exploration Results, Mineral Resources and Mineral Reserves”
as adopted by the International Council on Mining & Metals November 2019. The mineral resources are reported in in accordance with
§§229.1300 through 229.1305 (subpart 229.1300 of Regulation S-K).
The resource estimate was based on a total of
65 diamond drill holes totaling 36,166 m (118,654 ft). Note that the three reverse circulation holes were not used in the resource estimate.
Nine of the 65 diamond drill holes were completed in 2012.
Internal Controls and Data Verification
Shaun M. Dykes (the “Qualified Person”)
has reviewed the procedures used by ICUMO and produced a description and an analysis of the results as contained in Section 8 of the TRS.
These are standard data verifications with no limitations.
All assay results used in the verification process
by the Qualified Person were obtained from fully certified analytical laboratories with signed assay certificates.
The Qualified Person has reviewed the data collection
and verification procedures followed by ICUMO and by third parties on behalf of ICUMO, and believes these procedures are consistent with
industry best practices and acceptable for use in geological and resource modelling.
These procedures have also been verified by several
independent qualified people over the years.
For more information about quality control/quality
assurance and data verification, see Section 8 and Section 9 of the TRS.
The mineral resources estimated may ultimately
be affected by a broad range of environmental, permitting, socio-economic (as discussed in Section 17 of the TRS), legal, title (as discussed
in Section 3 of the TRS), marketing and political factors (as discussed in Section 22 of the TRS). At this time the authors are unaware
of any of these factors that could materially affect the mineral resource estimate. Of course, going forward, relevant factors that could
influence the resource estimate include changes to the geological, geotechnical or geometallurgical models, infill drilling to convert
mineral resources to a higher classification, drilling to test for extensions to known resources, collection of additional bulk density
data and significant changes to commodity prices. It should be noted that all these factors pose potential risk and opportunities to the
current mineral resource.
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Current Planned Working Programs
Ore Sorting and Updated Preliminary Economic Assessment
ICUMO presently is investigating the potential
to utilize additional ore sorting scanning technologies to optimize the separation of waste from ore post-mining and increase the head
grade of ICUMO ore being fed to a concentrator. The thin-veined, stockwork nature of the CuMo deposit lends itself nicely to ore sorting,
as noted above, since these darker colored veins largely carry the metals of interest and are much different from waste in appearance.
A visual scanning exercise of all of the core recovered from the drilling activities described herein shows that on average, 84% of the
waste mined can be theoretically separated through application of ore sorting, versus the 28% waste removal that SRK Consulting (Canada)
Inc. (“SRK”) conservatively used in its 2020 Preliminary Economic Assessment (“PEA”). There are
over 90 active mines in the world today which utilize some form of ore sorting.
In September 2022, ICUMO signed an agreement to
test CuMo material with MineSense, Technologies Ltd., using their ShovelSense scanning systems, which employ X-ray fluorescence (the “XRF”)
surface scanning technology. These systems are installed directly on shovel buckets and scan the blasted material as the shovel scoops
it up, allowing the mine operator to begin to differentiate ore from waste at the mining face. ShovelSense is currently being used successfully
by at least three large producing copper open pit mines (Highland Valley BC, Copper Mountain BC, and Carmen de Andacollo Chile). Contemporaneously
with this test work, the Company plans to scan all of the existing drill cores with portable XRF scanners. The all-in cost of this exercise
is anticipated to be less than $200,000, and the Company believes that the ShovelSense results can be attained by Q1 2023.
ICUMO’s sorting examination is designed
to not just rely on a single sorting pass, but to possibly integrate multiple sorting technologies, such as combining surface XRF scanning
at the face with downstream penetrative prompt gamma neutron activation analysis (PGNAA) or pulsed fast thermal neutron activation (PFTNA)
scanners installed on the material conveyors, and potentially particle scanners to finish. The potential combination of different ore
sorting technologies and equipment is intended to enable the Company to optimize the separation of ore from waste, substantially increasing
the head grade of mill feed, and thereby reducing the size of the concentrator which then will only be concerned with the processing of
ore. Consequently, this will in theory allow the Company to design and build a smaller concentrator, significantly reducing capital and
operating costs. As an example, the Company believes that if ore sorting can remove 75% of waste pre-mill feed, this result will reduce
the size of the mill to around 30,000 tons per day to produce the same amount of metal as the SRK 2020 PEA mill design of 150,000 tons
per day, and thereby save over $1.5 billion in projected capital expenditures. The Company has just commenced initial discussions with
consultants, and mining equipment providers who design and fabricate penetrative scanning systems for testing of CuMo material.
At the conclusion of all of ICUMO’s ore
sorting investigations, the Company intends to contract with an independent third-party engineering firm to publish an updated PEA, utilizing
ore sorting results to revise the technical and economic sections of the document. The expected budget for this work is roughly $750,000.
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Additional Exploration and Metallurgical Studies; Pre-Feasibility
Study
Following completion of the updated PEA, and pending
issuance of a new FONSI by the USFS relating to the “2018 Supplemental Redline Environmental Assessment CuMo Exploration Project”
issued by the USFS (the “2018 SREA”), the Company intends to resume its plans for additional exploration including
infill, expansion, and geotechnical pit wall drilling. The infill work is intended to enable the Company to reclassify resources currently
labeled as Inferred, to the level of Indicated, or Measured and Indicated. The expansion drilling should allow the Company to add more
resources to at least the Inferred category. The Company has tentatively budgeted $8 million for this drilling work.
The Company also plans to initiate additional
metallurgical studies to (1) determine the optimal concentrator design for both copper-silver, and molybdenum concentrate circuits, and
(2) investigate the potential to recover copper and molybdenum via heap leaching of lower grade ore that is stockpiled and not immediately
processed at the concentrator. The Company has identified a number of outside consultants that can be engaged for both of these studies.
In total, the Company expects that these studies will cost approximately $1,000,000 and will take on the order of four (4) months to complete.
These undertakings are part of the Company’s
plan to develop an independent, third-party Pre-Feasibility Study (PFS) for the CuMo Project. In addition to the exploration and metallurgical
work, explained above, the PFS will include expenditures for infrastructure and road improvements, environmental and permitting work,
preliminary engineering, community, and public/governmental relations work, and potentially costs for expansion of the current land position.
All-in, the Company has budgeted a range of $25 to $30 million to reach the PFS stage and estimates that the PFS can be completed within
two years of the release of the updated PEA.
Competitive Position in the Industry
The mineral exploration, development, and production
industry are largely un-integrated. The Company competes with other exploration companies looking to acquire and obtain financing for
the exploration and development of mineral resource properties. While the Company competes with other exploration companies to locate
and acquire mineral resource properties, it may also compete with them for the removal or sales of mineral products from its properties
if it should eventually discover their presence in quantities sufficient to make production economically feasible. Readily available markets
for the sale of mineral products only sometimes exist for all mineral commodities; however, the principal CuMo Project commodities of
copper, silver and molybdenum are traded on international exchanges and therefore, at a minimum a terminal market exists for which these
commodities can be delivered and sold.
Competition
ICUMO’s competition includes large, established
mining companies with substantial capabilities and more significant financial and technical resources than it. As a result of this competition,
it may have to compete for financing and may need help to acquire the funding on terms it considers acceptable. ICUMO may also have to
compete with other mining companies to recruit and retain qualified managerial and technical employees. If ICUMO cannot compete successfully
for financing or qualified employees, its exploration programs may be slowed down or suspended, which may cause it to cease operations
as a company.
Employees
As of the date of this Report, other than certain
executives, ICUMO has no employees. ICUMO does not have or maintain any employee benefit plans or similar plans under any applicable laws.
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Item 3. LEGAL PROCEEDINGS.
We have no knowledge of any material, active,
pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in
any material proceeding or pending litigation. There has, however, been a legal challenge made against governmental approval of certain
operational plans proposed by the Company for the CuMo Project property, as further described below.
Permitting for Drilling and Exploration Activities; Legal Challenges
Exploration on federal lands requires a permit
to conduct exploration except for sampling of rocks and soils by hand and other activities that create no land disturbance. There are
three levels of permits reflecting increasing disturbance:
ICUMO’s predecessor, Mosquito Mining Corporation,
submitted an exploration plan of operations (the “POO”) in 2007 to the USFS for exploration activities which would
result in about twenty (20) miles of drill road, of which 4.7 miles were existing unauthorized drill roads from previous operators and
13.3 miles of new temporary roads. An environmental assessment for these activities was prepared by the USFS. On June 14, 2010, the Environmental
Assessment was completed and submitted for public review and hearing during a mandated 90-day period. On February 14, 2011, a Finding
of No Significant Impact (“FONSI”) was delivered by the USFS. During the mandated 45-day appeal period, an environmental
group, the Idaho Conservation League (the “ICL”) submitted an appeal of the USFS decision.
On May 17, 2011, the USFS denied the appeal allowing
American CuMo to begin work under the new exploration permit following a mandatory fifteen (15) day stay period which ended on June 7,
2011. The ICL filed a challenge to this denial in United States District Court for the District of Idaho on December 15, 2011. ICL and
other non-governmental organizations sought summary judgment reversing and remanding the Forest Service’s February 2011 issuance