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Item 7. Management’s Discussion and Analysis

2024-03-27 compared with 2023-03-30 · 494 added, 201 removed, 122 unchanged (85% of the section changed)

2 unchanged sentences

financial statements and the notes to those financial statements appearing elsewhere in this Annual Report.

discussion and analysis below includes forward-looking statements that are subject to risks, uncertainties and other factors described

discussion and analysis below include forward-looking statements that are subject to risks, uncertainties and other factors described

in the “Risk Factors” section that could cause actual results could differ materially from those anticipated in these forward-

looking statements as a result of various factors.

Additionally, our historical results are not

necessarily indicative of the results that may be expected for any period in the future.

We caution you to read the “Forward

Looking Statements” section of our Annual Report.

Lithium Corporation (“Atlas Lithium,” “Brazil Minerals,” the “Company,” “we,” “us,”

or “our”) is a mineral exploration and mining company with lithium projects and properties in other critical and battery

minerals to power the Green Energy Revolution - nickel, rare earths, graphite, and titanium.

Our current focus is on developing our hard-rock

lithium project located in Minas Gerais State in Brazil at a well-known, premier pegmatitic district in Brazil.

We intend to produce

and sell lithium concentrate, a key ingredient for battery supply chain.

Lithium is essential for batteries in electric vehicles and

demand is expected to outstrip supply.

are in the initial stages of planning to develop and own 100% of a lithium concentration facility capable of producing 150,000 tons of

lithium concentrate annually.

there can be no assurance that we will have the necessary capital resources to develop such facility or, if developed, that we will reach

the production capacity necessary to commercialize our products and with the quality needed to meet market demand.

of our mineral projects and properties are located in Brazil and our mineral rights portfolio for critical and battery minerals includes

approximately 75,040 acres (304 km 2 ) for lithium in 64 mineral rights, 54,950 acres for nickel (222 km 2 ) in 15

mineral rights, 30,054 acres (122 km 2 ) for rare earths in seven mineral rights, 22,050 acres (89 km 2 ) for titanium

in seven mineral rights, and 13,766 acres (56 km 2 ) for graphite in three mineral rights.

We believe that we hold the largest

portfolio of lithium mineral exploration properties in Brazil, a premier and well-established jurisdiction for hard-rock lithium.

are primarily focused on advancing and developing our hard-rock lithium project located in the state of Minas Gerais, Brazil, where some

of our high-potential mineral rights are adjacent to or near large lithium deposits that belong to Sigma Lithium Corporation (Nasdaq:

Our Minas Gerais Lithium Project is our largest project and consists of 52 mineral rights spread over 56,078 acres (227 km 2 )

and predominantly located within the Brazilian Eastern Pegmatitic Province which has been surveyed by the Brazilian Geological Survey

and is known for the presence of hard rock formations known as pegmatites which contain lithium-bearing minerals such as spodumene and

Generally, lithium derived from pegmatites is less costly to purify for uses in high technology applications than lithium obtained

Such applications include the battery supply chain for EVs, an area of expected high growth for the next several decades.

believe that we can materially increase our value by the acceleration of our exploratory work and quantification of our lithium mineralization.

Our initial commercial goal is to be able to enter production of lithium-bearing concentrate, a product which is highly sought

after in the battery supply chain for EVs.

also have 100%-ownership of early-stage projects and properties in other minerals that are needed in the battery supply chain and high

technology applications such as nickel, rare earths, graphite, and titanium.

We believe that the shift from fossil fuels to battery power

will yield long-term opportunities for us not only in lithium but also in such other minerals.

Additionally,

we have 100%-ownership of several mining concessions for gold and diamonds.

Historically, we have had revenues from mining and selling

gold, diamonds, and industrial sand.

Such endeavors have given us the critical management experience needed to take early-stage projects

in Brazil from the exploration phase through successful licensing from regulators and to revenues.

As our corporate focus became our

lithium properties and those of other critical minerals, we stopped alluvial gold and diamond exploration efforts in 2018 and the sale

of our industrial sand in 2022.

company owns 45.11% of the shares of common stock of Apollo Resources Corporation (“Apollo Resources”), a private company

currently primarily focused on the development of its initial iron mine.

company also owns approximately 28.72% of Jupiter Gold Corporation (“Jupiter Gold”), a company focused on the development

of gold projects and of a quartzite mine, and whose common stock are quoted on the OTCQB under the symbol “JUPGF.” The quartzite

mine is fully permitted and is expected to start operations mid 2023.

Resources and Jupiter Gold have not generated any revenues to date.

Additionally, our historical results are not necessarily indicative of the results

that may be expected for any period in the future.

We caution you to read the “Forward Looking Statements” section of our

Annual Report.

Lithium Corporation (“Atlas Lithium”, the “Company”, “we”, “us”, or “our”

refer to Atlas Lithium Corporation and its consolidated subsidiaries) is a mineral exploration and development company with lithium projects

and multiple lithium exploration properties.

In addition, we own exploration properties in other battery minerals, including nickel,

copper, rare earths, graphite, and titanium.

Our current focus is the development from exploration to active mining of our hard-rock

lithium project located in the state of Minas Gerais in Brazil at a well-known pegmatitic district in Brazil, which has been denominated

by the government of Minas Gerais as “Lithium Valley.” We intend to mine and then process our lithium-containing ore to produce

lithium concentrate (also known as spodumene concentrate), a key ingredient for the battery supply chain.

are building a modular plant targeted at producing 150,000 tons of lithium concentrate per annum (“tpa”) in what we describe

We plan on adding additional modules to the plant with the intent of doubling its production capacity to 300,000 tpa in Phase

However, there can be no assurance that we will have the necessary capital resources to develop such facility or, if developed, that

we will reach the production capacity necessary to commercialize our products and with the quality needed to meet market demand.

our mineral projects and properties are located in Brazil, a well-established mining jurisdiction.

Our mineral rights include approximately:

53,942 hectares (539 km 2 )

for lithium in 95 mineral rights (2 in pre-mining concession stage, 85 in exploration stage, and 8 in pre-exploration stage);

44,913 hectares (449 km 2 )

for nickel in 29 mineral rights (23 in exploration stage, and 6 in pre-exploration stage);

25,050 hectares (251 km 2 )

for copper in 13 mineral rights (12 in exploration stage, and 1 in pre-exploration stage);

12,144 hectares (121 km 2 )

for rare earths in 7 mineral rights, all in exploration stage;

6,927 hectares (69 km 2 )

for titanium in 5 mineral rights, all in exploration stage;

3,910 hectares (39 km 2 )

for graphite in 2 mineral rights, all in exploration stage;

1,030 hectares (10 km 2 )

for gold mineral rights, all in exploration stage.

In addition, we also have a few additional mineral

rights in the process of being acquired and not yet titled in our name.

We believe that we hold the largest portfolio of exploration properties

for lithium and other battery minerals in Brazil.

are primarily focused on advancing and developing our hard-rock lithium project located in the state of Minas Gerais, Brazil.

Minas Gerais Lithium Project (“MGLP”) is our largest project and consists of 85 mineral rights spread over approximately

468 km 2 and predominantly located within the Brazilian Eastern Pegmatitic Province which has been surveyed by the

Brazilian Geological Survey and is known for the presence of hard rock formations known as pegmatites which contain lithium-bearing

minerals such as spodumene and petalite.

believe that we can increase our value by continuing of our exploratory work and quantification of our lithium mineralization as well

as by expanding our exploration campaign to new, high-potential areas within our portfolio of mineral rights.

commercial goal is to be able to enter production of lithium concentrate, a product which is highly sought after in the battery

supply chain for electric vehicles.

also have 100%-ownership of early-stage projects and properties in other minerals that are needed in the battery supply chain and

high technology applications such as nickel, copper, rare earths, graphite, and titanium.

We believe that the shift from fossil

fuels to battery power may yield long-term opportunities for us not only in lithium but also in such other minerals.

addition to these projects, we own 58.71% of the shares of common stock of Apollo Resources, a private company primarily focused on the

development of its initial iron mine.

also own approximately 27.42% of the shares of common stock of Jupiter Gold, a company focused on the exploration of two gold projects

and a quartzite mine, and whose common stock are quoted on the OTCQB marketplace under the symbol “JUPGF.” The quartzite

mine started preliminary operations in June 2023.

The results of operations from both Apollo Resources and Jupiter

Gold are consolidated in our financial statements under accounting principles generally accepted in the United States (“U.S.

Gold are consolidated in our financial statements under U.S.

Exploration Campaign

ongoing drilling campaign is delineating the lithium resources of our 100%-owned Neves Project, a cluster of four lithium mineral

rights within MGLP.

Our current geological team is comprised of 16 geologists, all of whom are full-time employees.

To support the

work of our geologists we have 13 full-time field and support technicians and machinery operators, as well as 3 trainee technicians

and over 19 field assistants.

Our geological team and our exploration campaign is supervised by James Abson, a Qualified Person for

lithium as such term is defined in Subpart 1300 of Regulation S-K promulgated by the SEC (“Regulation S-K 1300”).

Abson was appointed as our Chief Geology Officer in October 2023 and has over 29 years of diverse experience in mining

and mineral exploration.

Abson’s leadership, our technical team adopted a systematic approach to exploration of additional potential

target areas within the Neves Project.

These efforts involve geological mapping, sampling of historical artisanal mining sites and exposed

pegmatites to analyze potassium-rubidium ratios, as well as soil sampling using both XRF and ICP testing for both LCT pathfinders and

Geophysical surveys, including magnetics, are used when warranted to pinpoint additional pegmatite deposits and related structures.

Deep trenching of anomalous areas is used to identify and confirm lithium-cesium-tantalum (LCT) pegmatites and estimate width, strike,

dip and mineralization prior to drilling.

Finally, scout drilling is aimed at testing the highest priority pegmatite targets that appear

widest and most mineralized.

Within Neves Project area, four confirmed pegmatite bodies with spodumene mineralization were identified

(designated as Anitta 1 through 4) with six other target areas remaining open to further exploration.

beyond the Neves Project area, our regional exploration is now centered on the other mineral rights for lithium within the broader

Minas Gerais Lithium Project (“MGLP”), a large footprint of 468 km 2 of lithium mineral claims, many of which are located in Brazil’s Lithium Valley, a well-known hard-rock lithium district.

A specialized exploration geology team has

been assembled to initiate reconnaissance work across this wider land package.

Initial efforts involve LiDAR and geological mapping

with a specific focus on historical artisanal mining sites, sampling of known and previously identified pegmatites, as well as

first-pass soil sampling lines and geophysics to identify anomalies.

This phased approach has systematically advanced regional

prospecting across our mineral rights in MGLP with a number of targets generated for further exploration by our exploration team.

have engaged SGS Canada Inc.

(“SGS”), and, in particular, their geologist Marc-Antoine Laporte, a Qualified Person for lithium

under Regulation S-K 1300, to produce a mineral resource estimate report (the “Maiden Resource Report”) for our Neves Project

in accordance with Regulation S-K 1300.

Laporte is the author of mineral resource reports for two other companies which have hard-rock

lithium projects in Lithium Valley, the general area where our Neves Project is located, and has worked on lithium properties in Lithium

Valley since 2017.

Laporte visited our Neves Project between May 4 and May 6, 2023.

On March 19, 2024, our Board appointed Brian Talbot to serve as director on the Board, effective as of April 1, 2024.

In addition to joining the Board, Mr.

was also appointed by the Board as our Chief Operating Officer (“COO”), effective as of April 1, 2024.

In his capacity as

Talbot will be responsible for both the Company’s development of its lithium mine and processing plant as well as all of

its lithium exploration geology program.

Talbot is a qualified person for lithium as such a term is defined in Item 1300 of Regulation

Talbot has an extensive track record as a technical

and operational leader throughout his career with over 30 years of experience in mining operations.

In particular, he has extensive experience

in DMS (dense media separation) plant development and operation.

Most recently, Mr.

Talbot was employed by RTEK International DMCC (“RTEK”),

a consulting firm that advises lithium developers and producers.

From July 2022 to September 2023, Mr.

Talbot was the Chief Operating

Officer at Sigma Lithium Corporation (“Sigma Lithium”), a Canadian lithium producer with operations in Brazil.

At Sigma Lithium,

he oversaw the development of that company’s flagship Grota do Cirilo project from construction through commissioning and operations.

From 2017 to 2022, Mr.

Talbot held positions as General Manager and Head of Australian Operations at Galaxy Resources, now part of Arcadium

Lithium PLC, one of the world’s largest fully integrated lithium companies.

While at Galaxy Resources, Mr.

Talbot was instrumental

in increasing the production at Mt.

Cattlin (a hard-rock lithium mine in Ravensthorpe, Western Australia) which resulted in record production.

From 2015 to 2017, Mr.

Talbot was at Bikita Minerals in Zimbabwe, which owns and operates the longest running hard-rock lithium mine in

Talbot holds a bachelor’s degree in chemical engineering with Honors from the University of Witwatersrand, South

Please refer to Part III, Item 10, for further information on Mr.

geological soil sampling anomalies discovered at our Anitta 1 location have determined that such ore body is larger than initially

A decision was made to extend drilling of the Anitta 1 pegmatite to the east, with several drill holes already yielding

further significant and shallow additional spodumene intersects with lithium mineralization confirmed by ultraviolet light testing

while the geochemical test results are still pending.

We expect that these results will add further volume to the Anitta 1 deposit

size, and, most importantly, the lithium-bearing material appears to be relatively close to the surface to permit eventual open pit

Under Brian Talbot’s leadership as incoming Chief Operating Officer, the exploration plans for our lithium tenements

will be focused to support our early revenue strategy.

Core sample from recent drilling at Anitta

Anitta 1 sample illuminated by ultraviolet light and

showing spodumene mineralization.

As of December 31, 2023, we had drilled an aggregate

of 72,899 meters.

Early-Revenue

December 4, 2023, we announced implementing an early-revenue strategy.

With the well-delineated initial Anitta pegmatites, positive

metallurgical test work and well-advanced mining and environmental permits Atlas Lithium’s technical team opted to expedite

the production timeline for its 100%-owned Neves Project.

This early-revenue strategy targets initial “Phase I” production

of spodumene concentrate by the fourth quarter of 2024, ramping up to “Phase II” production in mid-2025.

The early-revenue Phase I

plant is expected to have a maximum capacity of 150,000 tons per annum of spodumene concentrate.

We intend to deploy compacted

modular dense media separation (DMS) technology together with contracting the crushing and mining operations.

The total capital

expenditures, including the initial production and ramp-up is estimated at $49.5 million, which includes the modular DMS plants,

tailings management module for dry stacked tailings;

engineering, procurement, construction management costs;

earthworks and civils;

site access upgrade, mining preparation and pre-strip, commissioning and ramp-up.

The fabrication of the DMS modules, tailing

management module, and associated materials handling equipment is advancing.

On February 26, 2024, we announced

that the fabrication of the DMS modules, tailing management module, and associated materials handling equipment is progressing on

schedule, with delivery to Brazil expected in Q2 2024 and first commissioning and production of high-quality, environmentally

sustainable lithium concentrate anticipated in Q4 2024.

The manufacturing orders were placed by us in December 2023.

By condensing

components into modules with significantly reduced footprint and weight versus recent DMS plants, Atlas Lithium plans to streamline

installation and commissioning.

For example, whereas fully assembled traditional DMS facilities commonly weigh 250-300 tons, the

Company’s modular plant is predicted to weigh only approximately 41 tonnes.

Modular DMS construction and preassembly are well

advanced on the primary 100 tons per hour (tph) module and the secondary 50 tph module.

We plan to carry out a full pre-assembly and

testing of these two modules before they are shipped to Brazil.

We engaged CDM Group as engineering contractor and construction

coordinator and ADP Marine & Modular for plant manufacturing, with both of these firms located in South Africa.

manufacturing facility located in South Africa has recently been visited by our technical team and photographs of parts completed

and in progress of our modular DMS lithium processing plant under construction can be seen in Figures 3-5 below.

Figures 6-8 depict

3-D model views of our planned modular DMS lithium processing plant.

Our modular DMS lithium processing plant under construction.

View of part of our DMS lithium processing plant under construction.

View of part of our modular DMS lithium processing plant under construction.

View of 3-D model of our planned DMS lithium processing plant.

Additional view of 3-D model of our planned DMS lithium processing plant.

Additional view of 3-D Model of our planned DMS lithium processing plant.

Campaign Highlights (drill holes sorted by location)

below are the results from our ongoing Neves Project drilling campaign, which include certain results obtained after December 31, 2023.

Li2O over 9.1m from 107.4m to 116.6m

1.48% Li2O over 9.0m from 119.2m to 128.2m

Li2O over 17.9m from 141.8m to 159.7m

1.88% Li2O over 9.0m from 150.0m to 159.0m

Li2O over 15.0m from 60.5m to 65.5m

1.83% Li2O over 5.0m from 66.5m to 71.5m

Li2O over 13.1m from 74.0m to 87.1m

2.25% Li2O over 4.0m from 76.7m to 80.8m

2.00% Li2O over 3.1m from 84.0m to 87.1m

Li2O over 11.0m from 247.0m to 258.0m

1.32% Li2O over 2.1m from 261.7m to 263.8m

Li2O over 3.2m from 65.8m to 69.0m

1.46% Li2O over 14.0m from 70.0m to 84.0m

2.04% Li2O over 5.0m from 70.0m to 75.0m

Li2O over 73.85m from 210.0m to 283.8m

1.34%Li2O over 21.0m from 211.0m to 232.0m

2.18%Li20 over 17.0m from 237.0m to 254.0m

Li2O over 17.4m from 136.0 to 153.4m

1.75% Li2O over 3.8m from 139.2 to 143.0m

Li2O over 77.1m from 179.0m to 256.1m

2.71% Li2O over 14.0m from 219.1 to 233.1m

Li2O over 14.9m from 43.8m to 58.6m

1.20% Li2O over 2.4m from 78.3m to 80.7m

Li2O over 11.2m from 95.4m to 106.6m

2.26% Li2O over 2.7m from 97.9m to 100.6m

1.71% Li2O over 3.2m from 103.4m to 106.6m

1.51% Li2O over 84.0m from 113.8 to 197.8m

2.19% Li2O over 5.1m from 127.0m to 132.1m

1.95% Li2O over 13.7m from 137.3m to 151.0m

2.10% Li2O over 14.6m from 155.0m to 169.6m

2.31% Li2O over 9.1m from 176.2m to 185.3m

Li2O over 47.0m from 7.0m to 54.0m

2.12% Li2O over 7.0m from 13.0m to 20.0m

2.23% Li2O over 10.0m from 24.0m to 34.0m

1.39% Li2O over 4.0m from 40.0m to 44.0m

Li2O over 19.7m from 114.4m to 134.0m

Li2O over 25.4m from 54.2m to 79.6m

2.02% Li2O over 6.5m from 54.2m to 60.2m

4.40% Li2O over 0.6m from 60.2m to 60.7m

1.89% Li2O over 5.0m from 71.5m to 76.5m

Li2O over 9.9m from 54.2m to 64.1m

Li2O over 12.55 m from 29.15m to 47.70m

1.96% Li2O over 3.40 m from 126.60m to 130.00m

Li2O over 6.0 m from 205.4m to 211.4m

2.23% Li2O over 17.8 m from 216.1m to 233.9m

2.71% Li2O over 14.0 m from 219.1m to 233.1m

Li2O over 11.60 m from 152.60m to 164.20m

Li2O over 56.4m from 7.0m to 63.4m

2.10% Li2O over 6.2m from 8.1m to 140.3m

3.16% Li2O over 4.3m from 16.7m to 21.0m

Li2O over 10.6m from 144.25m to 154.85m

1.70% Li2O over 26.55m from 158.25m to 184.8m

2.12% Li2O over 20.0m from 159.25m to 179.25m

Li2O over 14.89m from 158.92m to 173.81m

1.49% Li2O over 4.6m from 228.7m to 233.3m

Li2O over 42.88 m from 133.12m to176.00m

1.20% Li2O over 9.65 m from 223.35m to 233.00m

Li2O over 9.72m from 201.886m to 211.6m

Li2O over 6.2m from 179.2 to 283.42

Li2O over 27.8m from 64.5m to 92.4m

1.49% Li2O over 15.0m from 192.5m to 207.5m

Li2O over 47.00 m from 59.00m to 106.00m

Li2O over 16.00 m from 114.00m to 130.00m

Li2O over 20.90 m from 82.00m to102.90m

1.70% Li2O over 9.00 m from 162.00m to 171.00m

Li2O over 18.0m from 67.56m to 85.56m

1.61% Li2O over 5.71m from 190.39m to 196.1m

Li2O over 6.30 m from 101.85m to 108.35m

Li2O over 7.63 m from 79.37m to 87.00m

drilling and sampling follow strict best practices established under industry-standard quality assurance and quality

control protocols.

All lithium samples are analyzed at SGS-Geosol, an established analytical laboratory used by mining

companies in Brazil.

Normally geochemical results are obtained from SGS-Geosol three weeks after submission of the samples for

Metallurgical

April 24, 2023, we announced the receipt of the metallurgical report (the “Metallurgical Report”) from SGS-Geosol for

studies performed over several months on a representative ore sample from our Neves Project.

The Metallurgical Report showed that a

very high grade of 7.22% was achieved for heavy liquid separation.

Commercial-grade lithium concentrate was obtained from our

representative sample using standard dense media separation, a gravity-based approach which does not use any harmful chemicals or

The Metallurgical Report also showed final lithium concentrate grading of 6.04% Li 2 O with only 0.53%

Fe 2 O 3 , and a lithium recovery of 70%.

Our desired target was the production of concentrate grading 6.0%

Li 2 O with less than 1.0% Fe 2 O 3 , and these targets were exceeded.

Metallurgical Report will become a chapter in the Maiden Resource Report described above.

The Metallurgical Report also allows SGS-Geosol to

begin work towards a Preliminary Economic Assessment of the Neves Project which is a technical study expected to be issued after the

Maiden Resource Report.

Development Update

January 18, 2023, we announced that we had signed a non-binding, non-exclusive Memorandum of Understanding (“MOU”) with Mitsui

(“Mitsui”) with respect to Mitsui’s potential interest in acquiring the right to purchase our future

lithium concentrate production.

In November 2023, we entered into the Chengxin and Yahua agreements, described below, at which time we

ceased discussions with Mitsui regarding a potential offtake arrangement as contemplated by the MOU.

We have continued discussions with

Mitsui regarding other possible strategic opportunities and/or partnerships.

Royalty Corp.

Royalty Agreement

May 2, 2023, our 99.9% owned subsidiary, Atlas Litio Brasil Ltda.

(“Atlas Brasil”), entered into a written agreement

pursuant to which it sold a royalty interest equaling 3% of the future gross revenue from the sale of products from certain 19

mineral rights and properties owned by Atlas Brasil and located in Brazil, to Lithium Royalty Corp., a Canadian company listed on the

Toronto Stock Exchange (“LRC”), for $20,000,000 in cash.

The royalty will be calculated, and royalty payment will be made, on a quarterly basis commencing

from the first receipt of the sales proceeds with respect to the products.

Atlas Brasil also granted LRC an option to purchase

additional royalty interests with respect to certain additional Brazilian mineral rights and properties on the same terms and conditions, at a total purchase price of $5,000,000.

and Yahua Agreements

November 29, 2023, we entered into Offtake and Sales Agreements (the “Offtake Agreements”) with each of Sichuan Yahua

Industrial Group Co., Ltd.

and Sheng Wei Zhi Yuan International Limited, a subsidiary of Shenzhen Chengxin Lithium Group Co., Ltd.,

pursuant to which we agreed, for a period of five years, to sell to each of the buyers 60,000 dry metric tons of lithium concentrate

per year, subject to our ability to increase or decrease such quantity by up to ten percent (10%) each year.

The price for the

lithium concentrate is determined according to a formula as set forth in the Offtake Agreements.

Each of the buyers agreed to invest

$5 million into shares of our common stock at $29.77, and when we receive final permits, to invest an additional $20 million as

offtake pre-payment for future deliveries of the lithium concentrate after we obtain customary licenses.

Each pre-payment amount

will be used to offset the buyer’s future payment obligations under the Offtake Agreements.

of Operations

2 unchanged sentences

a decrease of 100%.

Such revenue was comprised solely of sales of industrial sand that we mine in one of our mineral rights.

Revenue in 2022 was comprised solely of sales of industrial sand that we mined in one of our mineral rights.

sand is a residual business line, as we are primarily focused on our lithium exploration program.

In December 2022, the company closed

its sand business.

of goods sold for the year ended December 31, 2022, totaled $63,548, as compared to cost of goods sold of $245,810 during the year ended

December 31, 2021, representing a decrease of 74.15%.

Cost of goods sold is primarily comprised of labor, fuel, repairs and maintenance

on our mining equipment.

As mentioned above, this costs refer to Industrial sand production which is a residual business line as we are

primarily focused on our lithium exploration program.

loss for the year ended December 31, 2022, totaled $56,783, compared to gross loss of $235,578 during the year ended December 31, 2021

representing decrease of 75.9%.

expenses for the year ended December 31, 2022, totaled $4,608,887, compared to operating expenses of $3,280,514 during the year ended

December 31, 2021 representing an increase of 40.49%.

The increase was mostly due to general and administrative expenses related to cost

of listing our common stock on Nasdaq and increased financing efforts, and non-cash stock-based compensation from issuances of stock

options to officers and directors.

Increase noted on “other operating expenses” refers to the expenses of the lithium project

drilling campaign.

expenses for the year ended December 31, 2022 totaled $155,812, compared to other expenses of $509,374 during the year ended December

In December 2022, we ceased

operations of our industrial sand business line.

of goods sold for the year ended December 31, 2023, totaled $0, as compared to cost of goods sold of $63,548 during the year ended December

31, 2022, representing a decrease of 100%.

The decrease is mainly due to interest expense on promissory notes due to amortization debt

discounts and loss on the extinguishment of debt related to common stock purchase warrants issued in a settlement with a noteholder during

the year ended December 31, 2021.

Cost of goods sold is primarily comprised of labor, fuel, repairs and maintenance on our mining

The cost of goods sold in 2022 related to industrial sand production.

loss for the year ended December 31, 2023, totaled $0, compared to gross loss of $56,783 during the year ended December 31, 2022, representing

decrease of 100%.

expenses for the year ended December 31, 2023, totaled $42,588,044, compared to operating expenses of $5,446,984 during the year

ended December 31, 2022, representing an increase of 682%.

The increase was mostly due to increases in general and administrative

expenses, stock-based compensation expense and exploration expenses, as described below.

and administrative expenses increased by 278%, from $2,722,197 for the year ended December 31, 2022, to $10,303,340 for the year

ended December 31, 2023, mainly due to:

approximately

$1,030,000 in non-recurring transaction costs associated with our public offering in January 2023 in connection with the listing

of our common stock on the Nasdaq Capital Market.,

compensation costs due to the increase in employee headcount approximately of $1,940,000,

increased legal fees of approximately of

consulting expenses approximately $1,950,000.

compensation expense for the year ended December 31, 2023, was $15,609,698, compared to $2,269,566 in the prior year, an increase

The increase was primarily due to the increase in the market price of our common stock and an increase in stock-based

compensation awarded to new members of our management team.

expenses for the year ended December 31, 2023, were $16,553,830, compared to $0 for the year ended December 31, 2022.

The increase was primarily due to increased exploration activities related to the execution of the drilling program on our 100%

owned Minas Gerais Lithium Project.

Other expense (income) for the year ended

December 31, 2023, totaled a net $45,876, compared to $155,812 during the year ended December 31, 2022, representing a

decrease of other expense of 71%.

The decrease is mainly due to non-cash fair value adjustments and interest received from cash deposits

a result, we incurred a net loss attributable to our stockholders of $41,393,525, or $4.11 per share, for the year ended December 31,

2023, compared to a net loss attributable to our stockholders of $4,628,520, or $1.00 per share, during the year ended December 31, 2022.

We anticipate that our largest

expense item for the next twelve months will be drilling expense as we explore lithium targets and delineate our lithium resources.

expenses can vary depending on the number of drills employed and the number of hours per week that each drilling team works.

plan is to continue to have a robust drilling campaign throughout 2023.

However, we are dependent on a number of factors which may alter

such plans, including, among others, financial resources, availability of qualified drills and personnel to operate them, and permitting.

and Capital Resources

of December 31, 2022, we had cash and cash equivalents of $280,525 and a working capital deficit of $2,452,553, compared to cash and

cash equivalents $22,776 and a working capital deficit of $940,475 as of December 31, 2021.

cash used in operating activities totaled $1,480,530 for the year ended December 31, 2022, compared to net cash used of $1,101,680 during

the year ended December 31, 2021 representing an increase in cash used of $378,850 or 34%.

have historically incurred net operating losses and have not yet received material revenues from the sale of products or services.

a result, our primary sources of liquidity have been derived through proceeds from the (i) sales of our equity and the equity of one

of our subsidiaries, and (ii) issuance of convertible debt.

As of December 31, 2023, we had cash and cash equivalents of $29,549,927

and working capital of $24,044,931, compared to cash and cash equivalents $280,525 and a working capital deficit of $2,452,553 as of

December 31, 2022.

We believe our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for

a period of at least twelve months through March 2025.

However, our future short- and long-term capital requirements will

depend on several factors, including but not limited to, the rate of our growth, our ability to identify areas for mineral exploration

and the economic potential of such areas, the exploration and other drilling campaigns needed to verify and expand our mineral resources,

the types of processing facilities we would need to install to obtain commercial-ready products, and the ability to attract talent to

manage our different areas of endeavor.

To the extent that our current resources are insufficient to satisfy our cash requirements, we

may need to seek additional equity or debt financing.

If the needed financing is not available, or if the terms of financing are less

desirable than we expect, we may be forced to scale back our existing operations and growth plans, which could have an adverse impact

on our business and financial prospects and could raise substantial doubt about our ability to continue as a going concern.

cash used in operating activities totaled $5,029,318 for the year ended December 31, 2023, compared to net cash used of $1,480,530

during the year ended December 31, 2022, representing an increase in cash used of $3,548,788, or 240%.

The increase was primarily

due to the net loss in the period offset by proceeds from the sale of future royalties.

cash used in investing activities totaled $7,082,467 for the year ended December 31, 2023, compared to net cash used of $2,846,356 during

the year ended December 31, 2022, representing an increase in cash used of $4,236,111, or 149%.

The increase is mainly due to the mining

rights purchases completed in 2022.

The increase is mainly due to cash advances for the lithium processing plant construction during 2023.

cash provided by financing activities totaled $41,214,684 for the year ended December 31, 2023, compared to $4,502,356 during the year

ended December 31, 2022, representing an increase in cash provided of $36,712,328, or 815%.

The increase is due to net proceeds from

the sales of common stock of $31,214,660 and from the issuance of convertible debt in the amount of $10,000,024, as described below under

Financing Activities.

currently have no off-balance sheet arrangements.

have limited working capital, have historically incurred net operating losses, and have not yet received material revenues from the sale

of products or services.

primary sources of liquidity have been derived through proceeds from the (i) issuance of debt and (ii) sales of our equity and the

equity of one of our subsidiaries.

For example, On January 12, 2023, the Company completed its firm underwritten public

offering of 776,250 shares of the Company’s common stock (which includes the shares subject to the over-allotment option, exercised

by the underwriter in full), for aggregate gross proceeds of $4,657,500 (prior to deducting any underwriting discounts, commissions,

and other offering expenses).

Also, on January 30, 2023, the Company raised an aggregate of $4 million in gross proceeds from the

sale of its common stock in transaction exempt under Regulation S of the Securities Act.

We believe our cash on hand will be

sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months through March

Our future short- and long-term capital requirements will depend on several

factors, including but not limited to, the rate of our growth, our ability to identify areas for mineral exploration and the economic potential of such

areas, the exploration and other drilling campaigns needed to verify and expand our mineral resources, the types of processing facilities

we would need to install to obtain commercial-ready products, and the ability to attract talent to manage our different areas of endeavor.

To the extent that our current resources

are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing.

If the needed financing is

not available, or if the terms of financing are less desirable than we expect, we may be forced to scale back our existing operations

and growth plans, which could have an adverse impact on our business and financial prospects and could raise substantial doubt about our

ability to continue as a going concern.

On January 12, 2023, we completed our firm underwritten public offering of 776,250 shares of our common stock (which includes the

shares subject to the over-allotment option, exercised by the underwriter in full), for aggregate gross proceeds of $4,657,500

(prior to deducting any underwriting discounts, commissions, and other offering expenses).

On January 30, 2023, we raised an aggregate of $4 million in gross proceeds from the sale of 640,000 shares of its common stock in transaction

exempt under Regulation S of the Securities Act.

On July 18, 2023, we consummated a transaction with four investors, pursuant to which we agreed to issue and sell to the investors in a

Regulation S private placement an aggregate of 526,317 restricted shares of our common stock.

The purchase price for

the shares was $19.00 per share, for total gross proceeds of $10,000,023.

On November 7, 2023, we

issued convertible promissory notes with an aggregate total principal amount of $20,000,000, accruing interest at a rate of 6.5% per

annum, in a private placement in reliance upon the exemption from registration provided by Regulation D under the Securities

The notes are convertible into shares of our

common stock at the option of the holders at any time up until the maturity date at a conversion price of $28.224 per share.

notes will mature on November 24, 2026.

On November 29, 2023, we

entered into two securities purchase agreements with certain accredited investors pursuant to which we agreed to sell and issue 167,954

shares of its common stock, to each of the investors in a registered direct offering at a purchase price of $29.77 per share.

gross proceeds from the registered offering were $10,000,000.

Additionally, during the

2023, we sold an aggregate of 192,817 shares of common stock to Triton Funds, LP for total gross proceeds of

$1,675,797 pursuant to a Common Stock Purchase Agreement (the “CSPA”) entered into between us and Triton

Funds, LP, dated February 26, 2021.

operate primarily in Brazil, which exposes us to currency risks.

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to keep the foreign subsidiaries’ balance sheets in agreement.

Accounting Policies and Estimates

financial instruments consist of cash and cash equivalents and accrued expenses.

The carrying amount of these financial instruments approximates

fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in

our financial statements.

If our estimate of the fair value is incorrect at December 31, 2022, it could negatively affect our financial

position and liquidity and could result in our having understated our net loss.

Accounting Polices and Estimates

discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been

prepared in accordance with the accounting principles generally accepted in the United States of American (“U.S.

Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,

revenue, and expenses.

These estimates and assumptions are affected by management’s application of accounting policies.

that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements

is critical to an understanding of our financial statements.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

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Actual results may differ from those estimates.

Value of Financial Instruments

follow the guidance of Accounting Standards Codification (“ASC”) Topic 820 – Fair Value Measurement and Disclosure.

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants as of the measurement date.

The guidance also establishes a hierarchy for inputs used

in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the

most observable inputs be used when available.

Observable inputs are inputs market participants would use in valuing the asset or liability

and are developed based on market data obtained from sources independent of us.

Unobservable inputs are inputs that reflect our assumptions

about the factors market participants would use in valuing the asset or liability.

The guidance establishes three levels of inputs that

may be used to measure fair value:

Observable inputs such as quoted prices in active markets;

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

of December 31, 2022 and 2021, our derivative liabilities were considered a level 2 liability.

We do not have any level 3 assets or liabilities.

financial instruments consist of cash and cash equivalents, accounts receivable, taxes receivable, prepaid expenses, deposits and other

assets, accounts payable, accrued expenses and convertible notes payable.

The carrying amount of these financial instruments approximates

fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in

these consolidated financial statements.

Stage Company

accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to accounting

and reporting by exploration stage companies.

An exploration stage company is one in which planned principal operations have not commenced

or if its operations have commenced, there has been no significant revenues there from.

and Equipment

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any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.

diamond and gold processing plant and other machinery are depreciated over an estimated useful life of ten years;

vehicles are depreciated

over an estimated life of four years;

and computer and other office equipment over an estimated useful life of three years.

processing plant and other machinery are depreciated over an estimated useful life of ten years;

vehicles are depreciated over an estimated

life of five years;

and computer and other office equipment over an estimated useful life of five years.

of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred.

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are reported at the lower of the carrying amount or the fair value less costs to sell.

evaluate and account for conversion options embedded in convertible instruments in accordance with ASC 470-20, “Debt with Conversion

and Other Options”.

GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative

financial instruments according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and

risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at

fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same

terms as the embedded derivative instrument would be considered a derivative instrument.

account for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their

host instruments) by recording, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded

in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note

transaction and the effective conversion price embedded in the note.

Debt discounts under these arrangements are amortized over the term

of the related debt to their stated date of redemption.

Interest Entities

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we account for the investment under the equity method or cost method in accordance with the applicable GAAP.

have concluded that Apollo Resources, Jupiter Gold and their subsidiaries are VIEs in accordance with applicable accounting

standards and guidance;

and although the operations of Apollo Resources and Jupiter Gold are independent of ours, because our chief

executive officer, Marc Fogassa, is also the controlling shareholder of both Apollo Resources and Jupiter Gold, we may be considered

to have power to direct the activities that are most significant to Apollo Resources and Jupiter Gold.

Therefore, we concluded that

we are the primary beneficiary of both Apollo Resources and Jupiter Gold.

record stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation.

ASC 718 requires companies to measure

compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s

requisite service period.

Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of

the stock of similar companies.

The expected life assumption is primarily based on historical exercise patterns and employee post-vesting

termination behavior.

The risk-free interest rate for the expected term of the option is based on the U.S.

Treasury yield curve in effect

at the time of grant.

utilize the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options.

Option-pricing models

require the input of highly complex and subjective variables including the expected life of options granted and the expected volatility

of our stock price over a period equal to or greater than the expected life of the options.

Because changes in the subjective assumptions

can materially affect the estimated value of our employee stock options, it is management’s opinion that the Black-Scholes option-pricing

model may not provide an accurate measure of the fair value of our employee stock options.

Although the fair value of employee stock

options is determined in accordance with ASC Topic 718 using an option-pricing model, that value may not be indicative of the fair value

observed in a willing buyer/willing seller market transaction.

June 20, 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods

and services.

Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based

payments granted to employees.

Equity classified share-based payments for employees was fixed at the time of grant.

Equity-classified

nonemployee share-based payment awards are measured at the grant date of the award which is the same as share-based payments for employees.

We adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance.

have concluded that Apollo Resources, Jupiter Gold and their subsidiaries are VIEs in accordance with applicable accounting standards

and guidance;

and although the operations of Apollo Resources and Jupiter Gold are independent of ours, because our chief executive officer,

Marc Fogassa, is also the controlling shareholder of both Apollo Resources and Jupiter Gold, we may be considered to have power to direct

the activities that are most significant to Apollo Resources and Jupiter Gold.

Therefore, we concluded that we are the primary beneficiary

of both Apollo Resources and Jupiter Gold.

and records stock-based compensation expense in accordance with ASC Topic 718 for share-based payments related to stock options,

restricted stock, and performance-based awards granted to certain directors, employees and consultants.

ASC 718 requires companies

to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over

the employee’s requisite service period.

Under ASC 718, volatility is based on the historical volatility of our stock or the

expected volatility of the stock of similar companies.

The expected life assumption is primarily based on historical exercise

patterns and employee post-vesting termination behavior.

The risk-free interest rate for the expected term of the option is based on

Treasury yield curve in effect at the time of grant.

fair value of stock options and performance awards without a market condition is estimated at the date of grant using the Black-Scholes

option-pricing model.

The fair value of restricted stock awards and stock options with a market condition is estimated at the date of

grant, using the Monte Carlo Simulation model.

The fair value of restricted stock awards with a required lock-up period without a market

condition is estimated at the date of grant, using the Hull-White Lattice (binomial) model.

The Black-Scholes, Monte Carlo Simulation,

and Hull-White Lattice valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards,

a risk-free interest rate, illiquidity discount, and dividend yield.

In valuing our stock options, significant judgment is required in

determining the expected volatility of our common stock and the expected life that individuals will hold their stock options prior to

Expected volatility for stock options is based on the historical and implied volatility of our common stock

while the volatility for restricted stock awards with a market condition is based on the historical volatility of our

own stock and the stock of companies within our defined peer group.

Because changes in the subjective assumptions can materially affect the

estimated value of our employee stock options, it is management’s opinion that the valuation models may not provide an accurate

measure of the fair value of our stock options, restricted stock and performance-based awards.

Although the fair value of stock options

and restricted stock awards is determined in accordance with ASC Topic 718, that value may not be indicative of the fair value observed

in a willing buyer/willing seller market transaction.

foreign subsidiaries use a local currency as the functional currency.

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Accounting Pronouncements

consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles.

Our significant accounting

policies are described in Note 1 of the financial statements.

We have reviewed all recent accounting pronouncements issued to the date

of the issuance of these financial statements, and we do not believe any of these pronouncements will have a material impact on us.

Standards Updates Adopted

March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04

(“ASU 2020-04”), Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting,

which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused

by reference rate reform.

In January 2021, ASU 2021-01, Reference Rate Reform (Topic 848):

Scope was issued which broadened the scope

of ASU 2020-04 to include certain derivative instruments.

In December 2022, ASU 2022-06, Reference Rate Reform (Topic 848):

of the Sunset Date of Topic 848, was issued which deferred the sunset date of ASU 2020-04.

The guidance is effective for all entities

as of March 12, 2020, through December 31, 2024.

The guidance may be adopted over time as reference rate reform activities occur and should

be applied on a prospective basis.

has been no significant effect that may impact its financial statements and does not believe that there are any other new pronouncements

that have been issued that might have a material impact on its financial position or results of operations.

Standards Updates to Become Effective in Future Period

August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial

Measurement, which clarifies the business combination accounting for joint venture formations.

The amendments in the ASU seek to reduce

diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures

in separate financial statements.

The amendments also seek to clarify the initial measurement of joint venture net assets, including

businesses contributed to a joint venture.

The guidance is applicable to all entities involved in the formation of a joint venture.

amendments are effective for all joint venture formations with a formation date on or after January 1, 2025.

Early adoption and retrospective

application of the amendments are permitted.

We do not expect adoption of the new guidance to have a material impact on our consolidated

financial statements and disclosures.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, amending reportable

segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis.

Among the disclosure

enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker

and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each

reported measure of segment profit or loss.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15,

2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively.

Early adoption

is permitted.

We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, amending income tax disclosure

requirements for the effective tax rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal

years beginning after December 15, 2024, and are applied prospectively.

Early adoption and retrospective application of the amendments

are permitted.

We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis