Company: PRMLF
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0001641172-25-000043
Chunk: 205

Company: NexMetals Mining Corp.
Filing Date: 2025-03-20
Form: 10-K
Item: Item 1B
Chunk 205
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 in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Therefore, there
are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting for income taxes requires a
two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition
by determining if available evidence indicates it is more likely than not that the tax position will be sustainable based on its technical
merits. The second step is to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized
upon ultimate settlement. For tax positions that are 50 percent or less likely of being sustained upon audit, the Company does not recognize
any portion of that benefit in the financial statements. 

 (r) Derivative instruments

The
Company evaluates its financial instruments and other contracts to determine if those contracts, or embedded components of those contracts,
qualify as derivatives to be separately accounted for in accordance with ASC 815 – Derivatives and Hedging. The result of
this accounting treatment is that the fair value of the embedded derivative is marked-to-market at each balance sheet date and recorded
as an asset or liability and the change in fair value is recorded in net loss.

The
classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed
at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value
of the instrument on the reclassification date.

 (s) Use of Estimates

The
preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions
that can affect reported amounts of assets, liabilities, revenues and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management’s historical experience and on other assumptions believed to be reasonable
at the time of preparation of the consolidated financial statements. However, different estimates and assumptions could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The more significant areas
requiring the use of management estimates and assumptions include the recoverability of exploration and evaluation assets; asset lives
for depreciation and amortization; the Company’s ability to continue as a going concern; valuation of share-based compensation
and warrants; deferred taxes and valuation allowances; and asset retirement obligations. Management has determined that the Company has
no asset retirement obligations at December 31, 2024.

    F-14

Notes