AM Resources Corp.

Audited consolidated financial statements for the years ended December 31, 2021 and 2020 (In Canadian dollars)

Independent Auditor's Report

Raymond Chabot Grant Thornton LLP Suite 2000 National Bank Tower 600 De La Gauchetière Street West Montréal, Quebec H3B 4L8

T 514-878-2691

To the Shareholders of AM Resources Corp.

Opinion

We have audited the consolidated financial statements of AM Resources Corp. (hereafter ''the Company''), which comprise the consolidated statements of financial position as at December 31, 2021 and 2020, and the consolidated statements of loss and comprehensive loss, the consolidated statements of changes in equity and the consolidated statements of cash flows for the years then ended, and notes to consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the "Auditor's responsibilities for the audit of the consolidated financial statements" section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 2 to the consolidated financial statements, which indicates the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Information other than the consolidated financial statements and the auditor's report thereon

Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Louis Berardi.

Montréal December 19, 2022

___________________________________

1 CPA auditor, public accountancy permit no. A115879

AM Resources Corp. Consolidated statements of financial position

(In Canadian dollars)

	December 31, 2021	December 31, 2020Restated (note 27)	January 1st, 2020Restated (note 27)
	$	$	$
ASSETS
CURRENT
Cash	265,798	76,017	3,295
Receivables and other financial assets (note 5)	174,330	703,919	454,070
Prepaid expenses	6,150	28,090	127,331
	446,279	808,026	584,696
NON-CURRENT
Property, plant and equipment (note 6)	112,398	240,503	346,713
Exploration and evaluation assets (note 7)	734,302	2,950,270	2,912,455
	846,701	3,190,773	3,259,168
Total assets	1,292,979	3,998,799	3,843,864
LIABILITIES
CURRENT
Accounts payable and accrued liabilities (note 8)	189,018	1,296,775	731,438
Debentures (note 9)	-	763,920	779,280
Promissory notes and loans (note 10)	-	406,470	184,940
Current portion of the long-term debt (note 11)	-	9,738	9,208
Subscription to be reimbursed (note 26)	265,000	-	-
	454,018	2,476,903	1,704,866
NON-CURRENT
Long-term debt (note 11)	-	27,539	32,518
Promissory notes and loans (note 10)	242,305	-	-
Total liabilities	696,323	2,504,442	1,737,384
EQUITY
Share capital (note 12)	8,834,807	7,114,255	7,114,255
Warrants	551,839	-	-
Contributed surplus	663,030	403,423	403,423
Other comprehensive loss	(849,939)	(460,200)	(322,668)
Deficit	(8,872,773)	(5,834,683)	(5,361,670)
Total equity attributable to owners of the parent
company	326,964	1,222,795	1,833,342
Non-controlling interest	269,693	271,562	273,140
Total equity	596,657	1,494,357	2,106,482
Total liabilities and equity	1,292,979	3,998,799	3,843,864

The accompanying notes are an integral part of the consolidated financial statements.

AM Resources Corp. Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2021 and 2020

(In Canadian dollars)

	2021	2020Restated (note 27)
	$	$
Sales (note 13)	2,066,178	458
Cost of sales (note 14)	(2,042,315)	-
Gross margin	23,863	458
General and administrative expenses (note 15)	(975,986)	(306,397)
Share-based payments	(259,607)	-
Depreciation	(28,767)	(46,554)
Write-off of mining properties	(1,876,137)	-
Operating loss	(3,116,634)	(352,493)
Debentures and long-term debt interest	(93,282)	(165,078)
Finance fees	(8,635)	(29,963)
Loss on disposal of equipment	(2,093)	-
Gain on debt settlement (note 10)	326,588	29,693
Loss (gain) on foreign exchange	(114,505)	43,250
Net loss	(3,008,561)	(474,591)
Other Comprehensive Loss
Items that will be reclassified to profit and loss
Foreign currency translation differences	(389,739)	(137,532)
Comprehensive loss	(3,008,561)	(612,123)
Net loss attributable to:
Non-controlling interest	(1,869)	(1,576)
Owners of the parent	(3,006,692)	(473,015)
	(3,008,561)	(474,591)
Comprehensive loss attributable to :
Non-controlling interest	(1,869)	(1,576)
Owners of the parent	(3,396,431)	(610,547)
	(3,398,300)	(612,123)
Basic and diluted loss per share	(0,029)	(0,008)
Weighted average number of shares outstanding	103,129,077	61,599,642

The accompanying notes are an integral part of the consolidated financial statements.

AM Resources Corp. Consolidated statements of changes in equity For the years ended December 31, 2021 and 2020

(In Canadian dollars)

	Number ofcommonshareoutstanding	Sharecapital$	Warrants$	Contributedsurplus$	Othercomprehensiveloss$	Deficit$	Total attributableto the owners ofthe parentCompany$	Noncontrollinginterest$	Total equity$
Balance as of January 1,2021,previously reported	61,599,642	7,114,255	-	403,423	(144,127)	(6,196,130)	1,177,421	292,436	1,469,857
Restatement (note 27)	-	-	-	-	(316,073)	361,447	45,374	(20,874)	24,500
Balance as restated	61,599,642	7,114,255	-	403,423	(460,200)	(5,834,683)	(1,222,795)	271,562	1,494,357
Units issued by privateplacementShares issued for debtsettlementShare issuance expenseShare-based paymentsNet loss	32,500,00018,460,184---	748,161972,390---	551,839----	---259,607-	-----	--(31,396)-(3,006,692)	1,300,000972,390(31,396)259,607(3,006,692)	----(1,869)	1,300,000972,390(31,396)259,607(3,008,561)
Other comprehensiveloss
Foreign currencytranslation differencesBalance as of December	-	-	-	-	(389,739)	-	(389,739)	-	(389,739)
31, 2021	112,559,826	8,834,807	551,839	663,030	(849,939)	(8,872,773)	326,964	269,693	596,657

The accompanying notes are an integral part of the consolidated financial statements

AM Resources Corp. Consolidated statements of changes in equity For the years ended December 31, 2021 and 2020

(In Canadian dollars)

	Number ofcommon shareoutstanding	Share capital$	Contributedsurplus$	Othercomprehensiveloss$	Deficit$	Total attributableto the owners ofthe parentCompany$	Noncontrollinginterest$	Total equity$
Balance as of January 1, 2020,previously reported	61,599,642	7,114,255	403,423	(67,256)	(5,634,802)	1,815,620	290,860	2,106,480
Restatement (note 27)	-	-	-	(255,412)	273,132	17,720	(17,720)	-
Balance as restatedNet loss	61,599,642-	7,114,255-	403,423-	(322,668)-	(5,361,670)(473,015)	1,833,342(473,015)	273,140(1,576)	2,106,480(474,591)
Other comprehensive lossForeign currency translationdifferencesBalance as of December 31, 2020	-61,599,642	-7,114,255	-403,423	(137,532)(460,200)	-(5,834,683)	(137,532)1,222,795	-271,562	(137,532)1,494,357

The accompanying notes are an integral part of the consolidated financial statements

AM Resources Corp. Consolidated statements of cash flows For the years ended December 31, 2021 and 2020 (In Canadian dollars)

	2021	2020Restated (note 27)
	$	$
OPERATING ACTIVITIESNet loss	(3,008,561)	(474,591)
Depreciation of property, plant and equipment	28,767	46,722
Loss (gain) on foreign exchange	37,421	(43,250)
Accretion on promissory note	30,434	-
Loss on disposal of equipment	2,093	-
Gain on debt settlement	(326,588)	(29,693)
Write-off of mining assets	1,876,137	-
Share-based payment	259,607	-
Net change in working capital items (note 19)	(83,089)	496,842
Cash flows from operating activities	(1,183,780)	(3,970)
INVESTING ACTIVITIES
Acquisition of exploration and evaluation assets	(90,636)	(191,438)
Advances to companies owned by a shareholder with a significant influence	-	(310,948)
Proceeds of advances to companies owned by a shareholder with a significant influence	28,861	-
Advances to a company owned by the President of the Company	(60,000)	-
Proceeds of advance to a private company	-	(10,000)
Disposal of property plant and equipment	61,343	37,093
Cash flows from investing activities	(60,432)	(475,292)
FINANCING ACTIVITIES
Advance from companies owned by a shareholder with significant influence	-	309,867
Repayment of advance from companies owned by a shareholder with a significant influence	(23,671)	-
Issuance of units under private placement	1,300,000	-
Due to related parties	-	-
Promissory note	(31,830)	244,178
Share issuance expenses	(31,396)	-
Long term loan payment	(37,277)	(2,061)
Subscription to be reimbursed	265,000	-

Cash flows from financing activities	1,440,827	551,984
Foreign currency translation differences	(6,834)	-
Net change in cash	196,615	72,722
Cash, beginning of the period	76,017	3,295
Cash, end of the period	265,798	76,017

The accompanying notes are an integral part of the condensed financial statements.

1. NATURE OF OPERATIONS

AM Resources Corp. (collectively with its subsidiaries, the ''Company'') was incorporated on October 24, 2007 under the Canada Business Corporations Act.

AM Resources Corp. is trading on the TSX Venture Exchange under symbol AMR.

The principal address and records office of the Company is located at 410 St-Nicolas, suite 236, Montreal, Qc, H2Y 2P5.

The Company specializes in exploration of coal, hydrocarbons and gold mining sites located in Colombia.

The consolidated financial statements for the reporting year ended December 31, 2021 were approved and authorized for issue by the Board of Directors on November x, 2022.

2. GOING CONCERN ASSUMPTION

The consolidated financial statements have been prepared on the basis of the going concern assumption, meaning the Company will be able to realize its assets and discharge its liabilities in the normal course of business.

As at December 31, 2021, the Company has not yet determined whether its mineral properties contain mineral deposits that are economically recoverable. The Company has a deficit of $ 8,238,996 ($ 5,834,683 at December 31, 2020) and a negative working capital of $ 7,739 (negative working capital of $ 1,668,877 at December 31, 2020), which is not sufficient to meet the Company's operating activities. These material uncertainties cast a significant doubt regarding the Company's ability to continue as a going concern.

The Company's ability to continue its operations is dependent upon obtaining additional financing necessary to continue the exploration of its mineral properties, to pay for general and administrative expenses and to continue to have the support from its suppliers and creditors. Although the Company has managed to do so in the past, there is no guarantee that it will manage to obtain additional financing in the future.

The consolidated financial statements do not include any adjustment to the carrying amounts of assets and liabilities, the revenues and expenses disclosed, and the classification used in the statement of financial position that would be necessary if the going concern assumption was not appropriate.

3. STATEMENT OF COMPLIANCE WITH IFRS

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

AM Resources Corp. is the ultimate parent of the Company.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Overall considerations and Basis of evaluation

These consolidated financial statements are prepared using the historical cost method.

4.2 Accounting standard issued but not yet adopted

At the date of authorization of these financial statements, several new, but yet not effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB but are not yet effective. None of these Standards or amendments to existing Standards have been adopted early by the Company.

Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the Company's consolidated financial statements.

4.3 Basis of consolidation

The Company's consolidated financial statements include the accounts of the parent company and all of its subsidiaries. The parent company controls a subsidiary if it is exposed or has rights to variable returns from its involvement with the subsidiary and whether it has the ability to affect those returns through power it holds over the subsidiary. All subsidiaries have a reporting date of December 31, 2021.

All transactions and balances between companies are eliminated upon consolidation, including unrealized gains and losses on transactions between group companies. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Company.

Subsidiaries

Details of the Company's subsidiaries as at December 31, 2021 are as follows:

Name of subsidiaries	Status	Country of incorporation	Interest and voting	Power held
AM Resources SAS	Active	Colombia	100 %	100 %
Asfaltitas Colombianas SAS	Active	Colombia	60 %	60 %
AM Resources Trading Corp	Inactive	Canada	100 %	100 %
Value Metals Canada Inc.	Inactive	Canada	100%	100%

4.4 Foreign currency translation

Functional and presentation currency

The consolidated financial statements are presented in Canadian dollar, which is the functional currency of the parent company, AM Resources Trading Corp and Value Metals Canada Inc. The functional currency for AM Resources SAS and Asfaltitas Colombianas SAS ("ASF") is the Colombian Pesos.

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the Company or its subsidiaries, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currency at year-end exchange rates are recognized in profit or loss.

Non-monetary items are not re-translated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

Foreign operations

In the consolidated financial statements, all assets, liabilities of the subsidiaries have been translated into Canadian dollars at the closing rate at the time of consolidation. Revenues and expenses have been translated at the average rate in effect during the reporting period. Translation differences are recognized in other comprehensive loss in equity. On disposal of a foreign operation, the related cumulative translation differences recognized in equity are reclassified to profit or loss and recognized as part of the gain or loss on disposal.

4.5 Financial Instruments

Recognition and derecognition

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognized when the contractual rights to cash flows from the financial asset expire, or when the financial asset and all risks and rewards are transferred.

A financial liability is derecognized when it is extinguished, discharged, cancelled or expired.

Classification and initial measurement of financial assets

Financial assets are initially measured at fair value adjusted for transaction costs.

Financial assets are classified at into the following categories:

Amortised cost
Fair value through profit or loss
Fair value through other comprehensive income

In the periods presented the Company does not have any financial assets categorised as fair value through profit or loss or through other comprehensive income.

The classification is determined by both:

The entity's business model for managing the financial asset
The contractual cash flow characteristics of the financial asset.

All income and expenses relating to financial assets that are recognized in profit or loss are presented within the financial costs, financial income or other financial items, except for impairment of trade receivables which is presented within other expenses.

Subsequent measurement of financial assets

Financial assets are measured at amortised cost if the assets meet the following conditions:

They are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows
The contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest in the principal amount outstanding

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Company's cash, receivables and other financial assets (except the taxes receivables and income tax installments receivable) fall into this category of financial instruments.

4.5 Financial Instruments (continued)

Impairment of financial assets

IFRS 9's impairment requirements use of forward-looking information to recognise expected credit losses – the expected credit loss (ECL) model'. Instruments within the scope of the requirements included advances and other financial assets measured at amortised cost. The Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward-looking approach, a distinction is made between:

financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk ('Stage 1') and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low ('Stage 2').

'Stage 3' would cover financial assets that have objective evidence of impairment at the reporting date.

'12-month expected credit losses' are recognised for the first category while 'lifetime expected credit losses' are recognised for the second category.

Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

Classification and measurement of financial liabilities

The Company's financial liabilities include accounts payable and accrued liabilities (except employes benefits), debenture, promissory notes and loans and long-term debt. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Company designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or finance income.

4.6 Property, equipment and intangible assets

Property and equipment are stated at historical cost, less any accumulated amortization and any accumulated impairment losses. Historical cost includes all costs directly attributable to the acquisition.

The depreciation is recognised in profit or loss based on the straight-line method over the estimated useful lives of each item of property, plant and equipment. The following are the estimated useful lives for the current and comparative year.

Machinery and equipment	10 years
Vehicules	5 years
Computers and communication equipment	3 years

4.7 Exploration and evaluation expenditures, and exploration and evaluation assets

Exploration and evaluation expenditures are costs incurred in the course of the initial search of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Costs incurred before the legal right to undertake exploration and evaluation activities are recognized in profit or loss when they are incurred.

Once the legal right to undertake exploration and evaluation activities has been obtained, all costs of acquiring mineral rights, expenses related to the exploration and evaluation of mining properties, less refundable tax credits related to these expenses, are recognized as exploration and evaluation assets.

Expenses related to exploration and evaluation include topographical, geological, geochemical and geophysical studies, exploration drilling, trenching, sampling, general expenses, financial charges, management fees and other costs related to the evaluation of the technical feasibility and commercial viability of extracting a mineral resource.

The various costs are capitalized on a property-by-property basis pending determination of the technical feasibility and commercial viability of extracting a mineral resource. These assets are recognized as intangible assets and are carried at cost less any accumulated impairment losses. No depreciation expenses are recognized for these assets during the exploration and evaluation phase.

Whenever a mining property is considered no longer viable, or is abandoned, the capitalized amounts are written down to their recoverable amounts, the difference is then immediately recognized in profit or loss.

When technical feasibility and commercial viability of extracting a mineral resource are demonstrable, exploration and evaluation assets related to the mining property are transferred to property and equipment in Mining assets under construction. Before the reclassification, exploration and evaluation assets are tested for impairment and any impairment loss is recognized in profit or loss before reclassification.

To date, neither the technical feasibility nor the commercial viability of extracting a mineral resource has been demonstrate.

4.7 Exploration and evaluation expenditures, and exploration and evaluation assets (continued)

Although the Company has taken steps to verify title to the mining properties in which it holds an interest, in accordance with industry practices for the current stage of exploration of such properties, these procedures do not guarantee the validity of the Company's titles. Property titles may be subject to unregistered prior agreements and non-compliance with regulatory requirements.

4.8 Equity

Share capital represents the amount received on the issue of shares. If shares are issued when options and warrants are exercised, the share capital account also comprises the costs previously recorded as contributed surplus and warrants. In addition, if shares were issued as consideration for the acquisition of a mineral property or some other form of non-monetary assets, they are measured at their fair value according to the quoted price on the day of the conclusion of the agreement.

Unit placements

Proceeds from unit placements are allocated between shares and warrants issued on a prorate basis. Proceeds are allocated to shares and warrants according to their relative weighted fair value. The share's fair value is determined using the quoted price on the stock exchange and the warrants fair value is estimated using the Black & Scholes pricing model.

Other elements of equity

Contributed surplus includes charges related to share options and the value of expired warrants as well as the conversion option of convertible debentures. Warrants include the value of outstanding warrants. When share options and warrants are exercised, the related compensation cost and value are transferred to share capital. Deficit includes all current and prior period retained profits or losses and share issuance costs, net of any underlying income tax benefit from these issuance costs.

Other comprehensive loss

Accumulated other comprehensive loss includes all foreign currency translation adjustments.

4.9 Share-based compensation

The Company operates an equity-settled share-based payment plan for its eligible directors, employees and consultants. The Company's plan is not cash-settled.

All goods and services received in exchange for the grant of any share-based payments are measured at their fair values unless that fair value cannot be estimated reliably.

If the Company cannot estimate reliably the fair value of the goods or services received, the entity shall measure their value indirectly by reference to the fair value of the equity instruments granted. For the transactions with employees and others providing similar services, the Company measured the fair value of the services received by reference to the fair value of the equity instruments granted.

All equity-settled share-based payments (except warrants to brokers) are ultimately recognized as an expense in the profit or loss or capitalized as an exploration and evaluation asset, depending on the nature of the payment with a corresponding credit to Contributed surplus, in equity. Equity-settled share-based payments to brokers, in respect of an equity financing are recognized as issuance cost of the equity instruments with a corresponding credit to Contributed surplus, in equity.

If vesting periods or vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized in prior period if share options ultimately exercised are different to that estimated on vesting.

4.10 Impairment of Long-lived Assets

Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Some assets are tested individually for impairment and some are tested at a cash generating unit level. The recoverable amount is the higher of its fair value less costs for sale and its value in use (present value of the future cash flows expected). An impairment loss is recognized when their carrying value exceeds the recoverable amount. The amount of the impairment loss is determined as the excess of the carrying value of the asset over its recoverable amount.

4.11 Provisions

A provision is a liability for which the maturity or the amount is uncertain. A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. As at December 31, 2021 and 2020 there is no provision accounted for in the statement of financial position.

The Company's operations are governed by government environment protection legislation. Environmental consequences are difficult to identify in terms of amounts, timetable and impact. As of the reporting date, management believes that the Company's operations are in compliance with current law and regulations. Site restoration costs currently incurred are negligible. When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated, a restoration provision will be recognized in the cost of the mining property when there is constructive commitment that has resulted from past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be measured with sufficient reliability.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

4.12 Basic and Diluted Loss per Share

Basic loss per share is calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year.

Diluted loss per share is calculated by adjusting the loss attributable to common shareholders of the Company and the weighted average number of common shares outstanding, the effects of all dilutive potential ordinary shares which include options and warrants. It is assumed that the dilutive potential ordinary shares were converted into ordinary shares at the average Market price at beginning of the year or the date of issue of potential ordinary shares, if later.

To calculate diluted loss per share, an entity shall assume dilutive options and dilutive warrants were exercised. The assumed proceeds from these instruments shall be regarded as having been received from issuance of common shares at the average market price of common shares during the year.

Diluted loss per share equals basic loss per share given the anti-dilutive options and warrants.

4.13 Mining Properties Options Agreements

Options on interests in mining properties acquired by the Company are recorded at the value of the consideration paid, including other future benefit given up but excluding the commitment for future expenditures. Commitment for future expenditures does not meet the definition of a liability and thus are not accounted for immediately. Expenditures are accounted for only when incurred by the Company.

When the Company sells interest in a mining property, it uses the carrying amount of the interest before the sale of the option as the carrying amount for the portion of the property retained, and credits any cash consideration received against the carrying of this portion (any excess is recognized as a gain in profit or loss). The Company does not recognize expenses related to the exploration and evaluation performed on the property by the acquirer.

4.14 Segment Disclosures

In identifying its operating segments, management generally uses the nature of the activities of mining sites. The Company currently operates in one segment: the exploration of mining properties and the purchase and the sale of gold.

Segments are reported on the same basis as the internal information reported to the chief decision makers in allocating resources to operating segments and assessing the performance of these segments. The chief decision makers are represented by the management.

4.15 Leases

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

4.16 Revenues

Gold sales

Revenues from the sale of gold rendered during the ordinary activities are recognized at the fair value of the consideration received or receivable. Revenues from the sale of gold are recognized at the point of time when the customers obtain control of the product. Control is achieved when the gold is delivered to the refinery and approved after tests. At this moment, we have a present right to payment for the product, significant risks and rewards of ownership have transferred to the customer according to contracts terms and there is no unfulfilled obligation that could affect the customer's acceptance of the product.

4.17 Income taxes and deferred taxes

Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized directly in other comprehensive income or equity.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

However, since the Company is in exploration phase and has no taxable income, tax expense recognized in profit or loss is currently comprised only of deferred tax.

4.17 Income taxes and deferred taxes (suite)

Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income. Deferred tax liabilities are always provided for in full.

Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off current tax assets and liabilities from the same taxation authority.

Changes in deferred tax assets or liabilities are recognized as deferred income tax expense in profit or loss, except where they relate to items that are recognized directly in other comprehensive income and in equity, in which case the related deferred tax is also recognized in other comprehensive income and in equity.

4.18 Non-controlling interests

Non-controlling interests (''NCI'') represent equity interests owned by outside parties. NCI maybe initially measured either at fair value of at the NCI's proportionate share of the recognized amounts of the acquirees identifiable net assets. The choice of measurement is made on a transaction-bytransaction basis. The share of net assets attributable to non-controlling interests is presented as a component of equity. Their share of net income and comprehensive income is recognized directly in equity. Total Comprehensive income of subsidiaries is attributed to the shareholders of the Company and to the NCI even if this results in the NCI having a deficit balance. Changes in the parent company's ownership interest that do not result in a loss of control are accounted for as equity transactions.

4.19 Significant Accounting Judgments, Estimates and Assumptions

The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the application of accounting policies as well as the carrying amount of assets, liabilities, revenues and expenses. Actual results may differ from those estimates.

The estimates and underlying assumptions are reviewed regularly. Any revision to accounting estimates is recognized in the period during which the estimates is revised and in future periods affected by these revisions.

4.19.1 Key sources of estimation uncertainty

Impairment of exploration and evaluation assets

Exploration and evaluation assets shall be assessed for an impairment test when facts and circumstances suggest that their carrying amount may exceed recoverable amount. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount, the Company shall measure, present and disclose any resulting impairment loss. Indications of impairment as well as the evaluation of recoverable amount of exploration and evaluation assets require significant judgment and estimation. Management considers various factors including, but are not limited to, financial and human resources available, exploration budgets planned, importance and results of exploration work done previously, industry and economic trends and price of minerals.

Share-based payments

To estimate expenses for share-based payments, it is necessary to select an appropriate valuation model and obtain the inputs necessary for the valuation model chosen. The Company estimated the volatility of its own shares or of shares of similar companies and the expected life and the exercise period of options and warrants granted. The model used by the Company is the Black-Scholes valuation model (see note 12).

Provisions and contingent liabilities

The judgment is used to determine whether a past event has created a liability that should be recorded in the financial statements or whether it should be presented as a contingent liability. Quantify these liabilities involves judgments and estimates.

These judgments and estimates are based on several factors, such as the nature of the claim or dispute, legal procedures and the potential amount to be paid, legal advice obtained, previous experience and the likelihood of the realization of a loss.

4.19.2 Significant management judgment

The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the consolidated financial statements.

Going concern

The assessment of the Company's ability to continue as a going concern and to raise sufficient funds to pay for its ongoing operating expenditures, meets its liabilities for the ensuing year and to fund planned and contractual exploration and evaluation programs, involves judgments based on historical experience and other factors including expectation of future events that are believed to be reasonable under the circumstances. See Note 2 for more information.

AM Resources Corp.

Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020

(In Canadian dollars)

5. RECEIVABLES AND OTHER FINANCIAL ASSETS

As at December 31, 2021 the receivables include the following components:

	2021	2020
	$	$
Advances to individuals, without interest cashable on demand	1,740	6,652
Taxes receivables	54,021	5,367
Income tax installments receivable	618	64,427
Advances to a company owned by the President of the Company
without interest and repayment demand	60,000	-
Advances to private companies, without interest cashable on demand	32,989	268,131
Advances to companies owned by a shareholder with a significant
influence without interest or repayment	-	326,958
Other	24,963	32,385
	174,330	703,919

6. PROPERTY, PLANT AND EQUIPMENT

Details of the Company's property, plant and equipment and their carrying amounts are as follows:

	Machinery and	Computer andcommunication
	equipment	equipment	Vehicules	Total
Gross carrying amount
At January 1, 2020	292,003	7,856	119,609	419,468
Additions / (Disposal)	-	-	(55,055)	(55,055)
Exchange difference	(16,648)	(448)	(6,819)	(23,915)
At December 31, 2020	275,355	7,408	57,735	340,498
Additions / (Disposal)	(83,442)	-	-	(83,442)
Exchange difference	(43,896)	(1,181)	(9,204)	(54,280)
At December 31, 2021	148,018	6,227	48,531	202,776
Accumulated Depreciation
At January 1, 2020	(44,888)	(2,502)	(25,365)	(72,755)
Depreciation	(27,536)	(1,482)	(18,866)	(47,884)
Disposal	-	-	16,495	16,495
Exchange difference	2,560	143	1,446	4,149
At December 31, 2020	(69,864)	(3,841)	(26,290)	(99,995)
Depreciation	(16,697)	(1,564)	(10,506)	(28,767)
Additions / (Disposal)	20,157	-	-	20,157
Exchange difference	12,337	899	4,990	18,226
At December 31, 2021	(54,067)	(4,506)	(31,806)	(90,379)
Carrying amount December 31, 2020	205,491	3,567	31,445	240,503
Carrying amount December 31, 2021	93,951	1,721	16,726	112,398

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020 (In Canadian dollars)

7. EVALUATION AND EXPLORATION ASSETS

Mining Properties	Balance as atJanuary 1, 2021	Additions	Write-off	Exchange difference	Balance as atDecember 31, 2021
	$	$	$		$
ColombiaProperty –Mina Luz (a)
Mining rights	1,170,771	-	(1,009,973)	(160,798)	-
Exploration and evaluation expenses	232,386	-	(232,386)	-	-
	1,403,157	-	(1,242,359)	(160,798)	-
ColombiaProperty –Rio Negro (b)
Mining rights	654,379	-	(520,589)	(133,791)	-
Exploration and evaluation expenses	113,189	-	(113,189)	-	-
	767,568	-	(633,778)	(133,791)	-
ColombiaProperty –Mico (c)
Mining rights	-	-	-	-	-
Exploration and evaluation expenses	31,600	-	-	(5,508)	26,092
	31,600	-	-	(5,508)	26,092
ColombiaProperty –Esperanza (d)
Mining rights	712,486	-	-	(130,370)	582,116
Exploration and evaluation expenses	35,460	90,636	-	-	126,095
	747,946	90,636	-	(130,370)	708,211
Summary
Mining rights	2,537,635	-	(1,530,562)	(424,959)	582,115
Exploration and evaluation expenses	412,635	90,636	(345,575)	(5,508)	152,187
	2,950,270	90,636	(1,876,137)	(430,467)	734,302

7. EVALUATION AND EXPLORATION ASSETS (continued)

	Balance as at January 1,			Balance as at
Mining Properties	2020	Additions	Exchange difference	December 31, 2020
	$	$		$
Colombia
Property –Mina Luz (a)
Mining rights	1,241,647	-	(70,876)	1,170,771
Exploration and evaluation expenses	165,097	67,289	-	232,386
	1,406,744	67,289	(70,876)	1,403,157
Colombia
Property –Rio Negro (b)
Mining rights	693,993	-	(39,615)	654,379
Exploration and evaluation expenses	24,500	88,689	-	113,189
	718,493	88,869	(39,615)	767,568
Colombia
Property –Mico ©
Mining rights	-	-	-	-
Exploration and evaluation expenses	31,600	-	-	31,600
	31,600	-	-	31,600
Colombia
Property –Esperanza (d)
Mining rights	755,618	-	(43,132)	712,486
Exploration and evaluation expenses	-	35,460	-	35,460
	755,618	35,460	(43,132)	747,946
Summary
Mining rights	2,691,259	-	(153,623)	2,537,635
Exploration and evaluation expenses	221,197	191,438	-	412,635
	2,912,456	191,438	(153,623)	2,950,270

7. EVALUATION AND EXPLORATION ASSETS (continued)

a) Mina Luz

The company owns 80% of the Mina Luz property covering 40 hectares. The property is situated southwest of Popayan and 150km southwest of Cali Columbia. As of December 31, 2021, the management decide to write-off the property in order to focus the activities on gold sector.

b) Rio Negro Property: Hydrocarbons

The Rio Negro property consists of a mining concession covering 97.5 hectares and situated 50 km north-southwest of Bucaramanga, Columbia. On September 25, 2017, the Company signed an agreement to acquire a 60% interest in the property for a total consideration of $ 743,453 ($ 600,000 USD), including a cash payment of $ 508,286 ($ 400,000 USD) upon signature of the agreement and $ 235,167 ($ 200,000 USD) payable at the mining rights transfer. As at December 31, 2019 the mining rights have been transferred. As of December 31, 2021, the management decide to write-off the property in order to focus the activities on gold sector.

c) Mico Property: Au

The Mico gold property consists of one mining concession covering an area of 10.4 hectares and situated in the department of Bolivar, Colombia, some 470 km to the north of Bogota, Columbia. The Company earned a 60% interest.

d) Esperanza Property: Hydrocarbons

The Esperanza property consists of a mining concession covering 298 hectares and is situated 70 km northwest of Bucaramanga, Columbia. On April 12, 2019, the Company announced the closing of an arm's length acquisition of 60% indirect interest in the La Esperanza asphalite property in consideration of the issuance of 4,700,000 common shares at $ 0,09 for a total consideration of $ 423,000.

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	2021	2020
	$	$
Trade accounts and accrued liabilitiesAdvance from a company owned by a shareholder with a significant	155,563	931,045
influence, without interest or repayment term	27,744	349,512
Employees benefits	5,711	16,218
	189,018	1,296,775

9. DEBENTURES

On August 14, 2018, the Company issued debentures units of $ 600,000 USD ($ 763,920 as at December 31, 2020). Each debentures units is comprised of $ 1,000 USD principal amounts of unsecured debentures of the Company due initially on August 14, 2019 and 250 warrants. Each warrant entitles the holder to purchase a share until August 14, 2019 at a price of $ 0.30 per share. The debentures bear interest at an annual rate of 15%. No value was attributed to the 150,000 issued warrants. During the year ended December 31, 2019, the term of the principal amount was extended to December 31, 2020.

On January 27, 2021, the Company concluded a debt settlement to extinguish the principal amount and accrued interest. The transaction is detailed in Note 10.

10. PROMISSORY NOTES AND LOANS

On May 17, 2019, the Company signed a promissory note with a private lender of $ 70,000. The principal amount of the promissory note is due on May 17, 2020. During the year ended December 31, 2019, the term of the principal and interest amount were extended to December 31, 2020. The promissory note bears interest at an annual rate of 10 %.

On June 4, 2019, the Company signed a promissory note with a private lender of $ 50,000. The principal amount of the promissory note is due on June 4, 2020. During the year ended December 31, 2019, the term of the principal and interest amount were extended to December 31, 2020. The promissory note bears interest at an annual rate of 10 %.

On August 16, 2019, the Company signed a promissory note with a private lender of $ 63,660 ($ 50,000 USD). The principal amount of the promissory note is due on August 16, 2020. During the year ended December 31, 2019, the term of the principal and interest amount were extended to December 31, 2020. The promissory note sees interest at an annual rate of 10 %.

10. PROMISSORY NOTES AND LOANS (continued)

On March 5, 2020, the Company signed a loan agreement with a private lender of $ 190,980 ($ 150,000 USD). The loan bear interest of $ 31,830 ($ 25,000 USD). The principal and interest are due on March 5, 2021.

On March 10, 2020, the Company signed a loan agreement with a private lender of $ 31,830 ($ 25,000 USD). The principal and interest are due on March 5, 2021. The loan bear interest of $ 6,366 ($ 5,000 USD). On March 30, 2021, the Company paid $ 37,926 for the reimbursement of the $ 31,830 ($ 25,000 USD) loan plus interest $ 6,366 ($ 5,000 USD).

On January 27, 2021, the Company concluded a debt settlement and release agreement for the capital and accrued interest of the debenture, of three of the promissory notes and the loan of $150,000 USD. On March 12, 2021, the carrying value of the debt that was extinguish was $1,510,849. The capital portion for an aggregate amount of $1,119,400 consists of the debentures ($749,580; US$600,000), the promissory notes of $70,000, $50,000 and $62,465 (US$50,000) and the loan ($187,395; US$150,000). The total accrued interest as of March 12, 2021 was $391,409 for which the company issued a new non-interest-bearing promissory note of $340,000 maturing on January 26, 2024. The net present value of the promissory note was $211,871 on the extinguishment date and is $242,305 as at December 31, 2021. As part of the debt settlement, the Company also issued 18,460,184 shares to an arm's length creditor at a price of $0.07 per share discounted by 24.75% because the shares cannot be traded for a period of four months, for a total value of $972,390. The whole transaction results in a gain on debt settlement of $326,588.

11. LONG-TERM DEBT

	2021	2020
	$	$
Loan for machinery and equipment, 7.5%, payable in monthly instalments of $1,094
including interests, maturing in September 2023	-	37,277
Current portion	-	(9,738)
	-	27,539

12. EQUITY

12.1 Share capital

Authorized

Unlimited number of common shares without par value

Changes in the Company capital stock were as follows:

On March 9, 2021, the Company closed a non-brokered private placement of 32,500,000 units at $ 0,04 per unit for gross proceeds of $ 1,300,000. Each unit is composed of one common share and one purchase warrant. Each warrant will entitle the holder to acquire one additional share of the capital at $ 0,05 per warrant for a period of 2 years from the closing date. The fair value of the 32,500,000 common shares is estimated at $ 748,161 and the fair value of the 32,500,000 warrants is $ 551,839.

On March 12, 2021, the Company completed a debt settlement in an aggregate amount of $ 972,390 by issuing 18,460,184 common shares to an arm's length creditor (Note 10).

12.2 Warrants

Outstanding warrants entitle their holders to subscribe to an equivalent number of common shares, as follows:

		2021
		Weighted
	Number of	average exercice
	warrants	price
		$
Balance, beginning of the year	-	-
Issued	32,500,000	0,05
Balance, end of the year	32,500,000	0,05

		2021
Expiration date	Number	Exercise price
		$
March 9, 2023	32,500,000	0,05
	32,500,000

There were no warrants outstanding as of December 31, 2020.

12.0 EQUITY (continued)

12.2 Warrants (suite)

The weighted average fair value of the warrants issued through the issuance of the units of $ 0.04 ($ nil in 2020) was estimated using the Black-Scholes option pricing model and based on the following average assumptions:

	2021	2020
Share price at date of grant	0,06 $	-
Expected life	2 years	-
Risk-free interest rate	0,27 %	-
Expected volatility	150 %	-
Expected dividend	Nil	-
Exercise price at date of grant	0,05 $	-

The underlying expected volatility was determined by reference to historical data of the Company's shares over the expected average life of the warrants.

12.3 Share purchase options

The shareholders of the Company approved a share-based payment plan to purchase shares (the "Plan") that members of the Board may grant options to purchase shares to its directors, officers, employees and consultants to purchase common shares of the Company. Conditions and the exercise price of each stock option is determined by the board of directors.

The purchase price of common shares upon exercise of each option granted under the plan, will be the price set for this option by the Board at the time of grant of each option. The term of the options cannot exceed 5 years.

The options vest at the date of grant, except for options granted to consultants doing investors' relationship activities, for which the vesting period is twelve months.

The plan provides that the maximum number of common shares in the capital of the Company which may be reserved for issuance under the plan may not exceed 10 % of the publicly traded shares issued and outstanding on the grant date of the options (on a non-diluted basis), which represents 11,255,983 as at December 31, 2021.

The total number of shares reserved for options exercised in favor of the same person must not represent in any 12 months period, more than 5% of the issued and outstanding shares of the Company this number is calculated to the date the option is granted.

The total number of shares reserved for options exercised in favor of consultants and people that provide services of investor relations must not represent in any 12-month period, more than 2% of common shares issued and outstanding shares of the Company, this number being calculated at the date the option is granted.

All share-based payments will be settled in equity. The Company has no legal or contractive obligation to repurchase or settle the options in cash.

The Company's share options are as follows for the reporting periods presented:

		2021		2020
	Number	Weighted averageexercise price	Number	Weighted averageexercise price
		$		$
Balance, beginning of year	2,100,000	0,16	2,100,000	0,16
Granted	4,050,000	0,06	-	-
Balance, end of year	6,150,000	0,10	2,100,000	0,16
Options exercisable at the end of year	6,150,000	0,10	2,100,000	0,16

The following table summarizes the information relating to the share purchase options granted under the plan as at December 31, 2021.

Range of Exercise price	Number of options	Remaining life (years)
$
0,05 to 0,09	4,050,000	4,17
0,10 to 0,16	300,000	2,33
0,17 to 0,19	1,500,000	1,25
0,20 to 0,23	300,000	1,33
	6,150,000

On March 12, 2021, the Company granted 4,050,000 stock options to directors, officers and consultants. The options are exercisable at a price of $ 0,06 per share for a period of 5 years expiring on March 12, 2026.

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020 (In Canadian dollars)

12.3 Share purchase options (suite)

The following table summarizes the information relating to the share purchase options granted under the plan as at December 31, 2020.

Range of Exercise price	Number of options	Remaining life (years)
$
0,10 to 0,16	300,000	3,41
0,17 to 0,19	1,500,000	2,28
0,20 to 0,23	300,000	2,39
	2,100,000

For the year ended December 31, 2021, the weighted average fair value of the share purchase options granted of $ 0,07 ($ 259,607 was recorded in the profit or loss) was estimated at the grant date using the Black-Scholes option pricing model and based on the following weighted-average assumptions:

	2021	2020
Share price at date of grant	0,07 $	-
Expected life	5 years	-
Risk-free interest rate	1,03 %	-
Expected volatility (1)	150 %	-
Expected dividend	Nil	-
Exercise price at date of grant	0,06 $	-

(1) The volatility was determined as per an average of the volatility of comparable publicly traded companies and the volatility of the Company.

13. REVENUES

	2021	2020
	$	$
Gold sales	2,066,178	-
Other revenues	-	458
	2,066,178	458
14. COST OF SALES
	2021	2020
	$	$
Gold purchase	2,042,315	-
	2,042,315	-
15. GENERAL AND ADMINISTRATION EXPENSES

	2021	2020
	$	$
Salaries and other employee benefits	17,112	34,987
Rental expenses	2,400	3,350
Consulting and professional fees	311,233	121,519
Management fees	115,500	80,076
Other operational expenses	529,741	66,465
	975,986	306,397

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020

(In Canadian dollars)

16. FINANCIAL ASSETS AND LIABILITIES

The carrying amount and fair value of financial instruments presented in the statement of financial position are as follows:

		2021		2020
	Carrying amount	Fair Value	Carrying amount	Fair value
	$	$	$	$
FINANCIAL ASSETS
Cash	265,798	265,798	76,017	76,017
Receivables and other financial assets
(Excluding taxes and income tax installments
receivable)	119,691	119,691	634,125	634,125
	385,490	385,490	710,142	710,142
FINANCIAL LIABILITIES
Accounts payable and accrued liabilities	155,563	155,563	931,045	931,045
Debentures			763,920	763,920
Promissory note and loans	242,305	242,305	406,470	406,470
Advance from a company owned by a
shareholder with a significant influence	27,744	27,744	349,510	349,510
Long-term debt	-	-	37,277	37,277
	425,612	425,612	2,488,222	2,488,222

The financial assets and liabilities are measured at fair value in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based on significance of inputs used in measuring the fair value of the financial assets and liabilities.

The Company defines the fair value hierarchy under which its financial instruments are valued as follows:

Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities at the reporting date;
Level 2 includes inputs other than quoted prices in Level 1 that are observable for assets or liability, either directly or indirectly; and
Level 3 includes inputs for the asset or liability that are not based on observable market data.

The carrying value of cash, receivable and other financial assets, accounts payable and accrued liabilities and debentures are considered to be a reasonable approximation of their fair value because of the short-term maturity and contractual terms of these instruments.

The fair value of long-term debt has been determined by discounting future cash flows using rates in effect at the end of the year. The fair value approximates the carrying amount. The fair value of the promissory note and loans has been determined by discounting future cash flows using the prevailing market interest rates.

17. LOSS PER SHARE

The calculation of basic loss per share is based on the loss for the year divided by the weighted average number of shares in circulation during the year. In calculating the diluted loss per share, dilutive potential ordinary shares such as share options and warrants (note 12), have not been included as they would have the effect of decreasing the loss per share. Decreasing the loss per share would be antidilutive.

There have been no other transactions involving ordinary shares between the reporting date of the disclosure authorization of these consolidated financial statements.

18. INCOME TAXES

The income tax expense attributable to earnings differs from the amounts computed by applying the combined federal and provincial income tax rate of 26,5% (26,5 % in 2020) to earnings before income taxes as a result of the follows:

	2021	2020
	$	$
Loss before income taxes	(3,008,562)	(559,752)
Expected income tax recovery	(797,269)	(148,334)
Increase (decrease) in income taxes resulting from:
Temporary difference not recorded	886,886	149,217
Tax rate difference from a foreign subsidiary	(95,506)	(10,748)
Other	5,889	9,865
	-	-

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020 (In Canadian dollars)

18. INCOME TAXES (continued)

Composition of deferred income taxed in the consolidated statement of comprehension income:

	2021	2020
Inception and reversal of temporary differencesUnrecognized deferred tax assets	(886,886)886,886	(149,217)149,217
Change in deferred tax rate	-	-
	-	-

Movement of deferred income tax in 2021

As at December 31, 2021, deductible timing differences for which the Company has not recognized deferred tax asset are as follows:

	FederalQuebec		Colombia
Non-capital losses	2,939,559	3,270,728	904,771
Property, plant and equipment	19,894	19,894	1,232,837
Exploration and evaluation expenses	-	-	189,322
Loans and advances	-	-	59,498
Share issue expenses	74,153	74,153	-
	3,033,606	3,364,775	2,386,428

The ability to realize the tax benefits is dependent upon a number of factors, including the future profitability of operations. Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable profits will be available to allow the asset to be recovered.

Accordingly, some deferred tax assets have not been recognized, these deferred tax assets not recognized equal an amount of $ 1,642,186.

Movement of deferred income tax in 2020

As at December 31, 2020, deductible timing differences for which the Company has not recognized deferred tax asset are as follows:

	Federal	Quebec	Colombia
Non-capital losses	2,133,554	2,464,723	724,111
Share issue expenses	77,147	77,147	-
	2,210,701	2,541,870	724,111

Accordingly, some deferred tax assets have not been recognized, these deferred tax assets not recognized equal an amount of $ 862,877.

As at December 31, 2021, the Company has non-capital tax losses, which are available to reduce income taxes in future years and expired as follows:

	Federal	Quebec	Colombia

2041	858,765	858,765	-
2040	389,154	389,154	-
2039	694,623	1,028,074	-
2038	997,017	994,735	-
2033	-	-	252,396
2032	-	-	221,360
2031	-	-	199,900
2029	-	-	194,215
Unlimited	-	-	36,900
	2,939,559	3,270,728	904,771

19. ADDITIONAL INFORMATION – CASH FLOWS

2021	2020
$	$
265,234	25,954
31,868	(31,291)
(380,191)	502,180
(83,089)	496,842

As at December 31, 2021, advance from a company owned by a shareholder with a significant influence was offset by the advance receivable from this same company for an amount of $298,097.

20. RELATED PARTY TRANSACTIONS

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed by the related parties.

The following table shows the compensation paid or payable to the Board of Directors and key management personnel. Key management personnel are the executive members of AM Resources Corp. board of directors and employees of the Company.

	2021	2020
	$	$
Management fees	115,000	80,076
Consulting fees	35,000	30,000
Total	150,000	110,076
Share-based payments	189,097	-
Total remuneration	339,097	110,076

Included in accounts payable and accrued liabilities as at December 31, 2021, was $ 10,000 (2020 - $ 321,682) due to directors and officers of the Company and/or companies they control or of which they were significant shareholders.

During the year, the Company granted 2,950,000 options to officers and directors (nil options in 2020).

21. POLICIES AND PROCESSES FOR MANAGING CAPITAL

As at December 31, 2021, the capital of the Company consists of equity, debentures, promissory notes and loans and long-term debt. The Company's capital management objective is to have sufficient capital to be able to meet its exploration and mining development plan in order to ensure the growth of its activities and to ensure to pursue its activities. It has also the objective to have sufficient cash to finance its exploration and evaluation expenses, the investing activities and the working capital requirements. There were no significant changes in the Company's approach to capital management during the year ended December 31, 2021 and 2020. The Company finances its exploration activities primarily seeking additional capital either through private placements or public offerings.

22. FINANCIAL INSTRUMENT RISKS

The company is exposed to various risks in relation to financial instruments. The Company's financial assets and liabilities are summarized in Note 16. The main types of risks the Company is exposed to are credit risk and liquidity risk.

a) Credit risk

Credit risk is the risk that a party to a financial instrument will default on one of its obligations and thereby cause the other party to incur a financial loss. Cash, advances receivable and other financial assets are the Company's principal financial instruments that are potentially subject to credit risk. The credit risk on advances receivable is limited to the amount contracted by the contracting party. However, in order to minimize this risk, the management regularly make due diligence to ensure that the contracting party is able to face her obligation. As a result, the Company does not expect the other parties to default. The book values represent the Company's maximum exposure to credit risk.

All Company advances and other financial assets measured at amortized cost are considered to have a low credit risk given that the Company regularly validates the credit quality. The impairment loss adjustment recorded is based on expected losses for 12 months. This one is not significant.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet the obligations associated with its financial liabilities. Liquidity risk management serves to maintain a sufficient amount of cash and to ensure that the Company has sufficient financing sources. The Company establishes budgets to ensure it has the necessary funds to fulfill its obligations.

When the counterparty has a choice of when an amount is paid, the liability is included on the earliest date in which the payment can be required.

As at December 31, 2021, the negative working capital is $ 7,739 (negative working capital of $ 1,668,877 at December 31, 2020). In order to continue its operation, the Company will have to find additional fund and despite the fact it has been successful in the past, there is no guarantee for the future. Actually, there remains a significant risk that the Company is unable to find cash if even the management is optimistic to find the necessary cash for the implementation of its strategic plan.

22. FINANCIAL INSTRUMENT RISKS (continued)

As at December 31, 2021, the Company's financial liabilities have contractual maturities (including interest payments where applicable) as summarised below:

	Current			Non-current
	Within 6 months	6 to 12 months	1 to 5 years	Later than 5years
December 31, 2021
Accounts payable and accrued liabilities	155,563	-	-	-
Debenture	-	-	-	-
Promissory notes and loans	-	-	242,305	-
Advance from a private company	-	27,744	-	-
Long-term debt	-	-	-	-
Total	155,563	27,744	242,305	-

As at December 31, 2020, the Company's financial liabilities have contractual maturities (including interest payments where applicable) as summarised below:

	Current		Non-current
	Within 6 months	6 to 12 months	1 to 5 years	Later than 5years
December 31, 2020
Accounts payable and accrued liabilities	931,045	-	-	-
Debenture and interests	-	990,734	-	-
Promissory notes and loans including interests	-	406,470	-	-
Advance from a company owned by a significant influence	-	349,510	-	-
Long-term debt	-	9,738	27,539	-
Total	931,045	1,756,452	27,539	-

c) Interest rate risk

The long-term debt, promissory notes and debentures bear interest at a fixed rate and the Company is, therefore, exposed to the risk of changes in fair value resulting from interest rate fluctuations.

d) Foreign currency risk

The Company is exposed to foreign currency risk arising from the degree of volatility of the exchange rate. As at December 31, 2021 and December 31, 2020, the Company is exposed to currency risk through fluctuations in the foreign exchange rate with respect to the following financial asset:

	2021	2020
	$	$
Financial instruments denominated in USD
Cash	271	109
Advances to private companies and company owned by a significant shareholder	32,989	595,088
Promissory note and loans	-	(254,640)
Debenture	-	(763,920)
	33,260	(423,363)

A variation of 10% in the currency would affect the net loss and the equity of $ 3,326 ($ 42,336 on December 31, 2020). The Company does not use derivative financial instruments to reduce its exposure to foreign exchange risk.

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020 (In Canadian dollars)

23. SEGMENT REPORTING

Management currently identifies one operating segment (note 4.14).

The following information provides the required information for all the Company.

				2021
	Canada	Colombia	United States	Total
	$	$	$	$
Non current assets	-	1,480,478	-	1,480,478
Revenues	-	-	2,066,178	2,066,178
				2020
	Canada	Colombia	United States	Total
	$	$	$	$
Non current assets	-	3,190,773	-	3,190,773
Revenues	-	458	-	458

24. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

January 1, 2021	Advance from acompany owned by ashareholder with asignificant influence349,512	Debenture$763,920	Promissory notes$406,470	Long-term debt$37,277	Total$1,557,179
Cash-flows:
Repayment	(23,671)	-	(31,380)	(37,277)	(92,328)
Proceed	-	-	-	-	-
Non-cash:
Compensation with advancereceivable to a company owned bya shareholder with a significantinfluence	(298,097)	-	-	-	(298,097)
Debt settlement (note 10)Promissory note with accruedinterest issued in connection with	-	(749,580)	(369,860)	-	(1,119,440)
the debt settlement (note 10)Unrealized loss (gain)	-	-	242,305	-	242,305
on exchange rate	-	(14,340)	(5,230)	-	(19,570)
December 31, 2021	27,744	-	242,305	-	270,049

	Advance from acompany owned by ashareholder with asignificant influence	Debenture	Promissory notes	Long-term debt	Total
	26,091	$	$	$	$
January 1, 2020		779,280	184,940	41,726	1,032,037
Cash-flows:
Repayment	(69,550)	-	-	(4,449)	(73,999)
Proceed	386,593	-	175,000	-	561,593
Restatement (note 27)	(8,176)	-	69,178	-	61,002
Non-cash:Unrealized loss (gain)on exchange rate	14,554	(15,360)	(22,648)	-	45,724
	349,512
December 31, 2020		763,920	406,470	37,277	1,626,357

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020 (In Canadian dollars)

25. SUBSIDIARY WITH MATERIAL NON-CONTROLLING INTERESTS

The Company includes one subsidiary with material non-controlling interests (NCI), Asfaltitas Colombianos SAS:

Name	Proportion of ownership interests and	voting rights held by the NCI		Total comprehensive lossallocated to NCI		AccumulatedNCI
	December 31,2021	December 31,2020	December 31,2021	December 31,2020	December 31,2021	December 31,2020
Asfaltitas			$	$
Colombianos SAS	40 %	40 %	(1,869)	(1,576)	269,693	271,562

No dividends were paid to the NCI during the years ended December 31, 2021 and 2020.

Summarized financial information for Asfaltitas Colombianos SAS, before intragroup eliminations, is set out below:

	2021	2020
	$	$
Non-current assets	577,894	673,438
Current assets	14,522	17,287
Total assets	592,416	690,725
Current liabilities	(4,569)	(11,820)
Total liabilites	(4,569)	(11,820)
Equity attributable to owners of the parent	318,154	407,343
Non-controlling interests	269,693	271,562
	2021	2020
	$	$
Revenue	-	-
Loss for the year attributable to owners of the parent	(2,804)	(2,364)
Loss of the year attributable to NCI	(1,869)	(1,576)
Loss for the year	(4,673)	(3,940)
Other comprehensive loss for the year	-	-
Total comprehensive loss for the year attributable
to owners of the parent	(2,804)	(2,364)
Total comprehensive loss for the year attributable to NCI	(1,869)	(1,576)
Total comprehensive loss for the year	(4,673)	(3,940)
	2021	2020
	$	$
Net cash from operating activities	3,846	847
Net cash from investing activities	-	-
Net cash used in financing activities	(3,846)	-
Net cash inflow	-	847

26. SUBSEQUENT EVENTS

On February 11, 2022, the Company signed a demand promissory note of $ 100,000 in exchange of a subscription in a private placement which was not completed included in subscription to be reimbursed in the consolidated statements of financial position as at December 31, 2021. The promissory note will bear annual rate interest of 37% and due on April 30, 2022. On April 29, 2022, the Company paid the principal and the interests of this demand promissory note for a total amount of 120,000$.

On April 6, 2022, the Company announced that is has closed a first tranche of $ 869,500 of a non-brokered private placement of up to $ 2,000,000, consisting of the issuance of 17,390,000 units at a price of $ 0,05 per unit. Each unit is comprised of one common share of the Company and one-half warrant. Each full warrant entitles the holder to acquire one common share of the Company at a price of $ 0,075 for a period of 24 months following the closing of the Offering. As at December 31, 2021, the Company received $ 165,000 related to the private placement.

In connection with this first tranche, the Company paid certain finders, which are all arms' length with the Company, finders' fees for a total of $ 18,000 in cash and issued 360,000 common shares.

26. SUBSEQUENT EVENTS (continued)

On April 29, 2022, the Company announced that is has closed a second tranche of $ 446,000 of a non-brokered private placement of up to $ 2,000,000, consisting of the issuance of 8,920,000 units at a price of $ 0,05 per unit. Each unit is comprised of one common share of the Company and one-half warrant. Each full warrant entitles the holder to acquire one common share of the Company at a price of $ 0,075 for a period of 24 months following the closing of the Offering.

In connection with this second tranche, the Company paid certain finders, which are all arms' length with the Company, finders' fees for a total of $ 1,500 in cash and issued 30,000 common shares.

On April 21, 2022, AM Resources Trading Corp. a wholly owned subsidiary of the Company signed a financing agreement with Series 4 of ConsolFreight Pilot LLC for the financing of up to $ 6M usd in the procurement of gold from various sources in Colombia and potentially other countries. The agreement is effective for a period of one year, renewable for one-year period at an interest rate of 14%.

27. RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS

The Company has determined that there was an error in prior periods in respect of the application of IAS 21 - The Effects of Changes in Foreign Exchange Rates. Previously, the Company accounted for advances to its subsidiaries as not forming part of the net investment in the subsidiaries when they were part of it.

The restatement is not as a result of any change to the Company's operations or the Company's business and there is no impact on the overall cash position, the net cash flows from operating, investment or financing activities on the statement of cash flows for any of the aforementioned periods.

Impact of restatement

	December 31, 2019	Adjustment	January 1st, 2020
	$	$	$
Other Comprehensive Loss	(67,256)	(255,412)	(322,668)
Deficit	(5,634,802)	273,132	(5,361,670)
Total attribuable to the owner of the parent company	1,815,620	17,720	1,833,342
Non-controlling interest	290,860	(17,720)	273,140

As at and for the year ended December 2020

	As at and for the year ended December 31, 2020
	Previously Reported	Adjustment	Restated
	$	$	$
Impact on Consolidated Statements of Financial Position
Exploration and evaluation assets	2,925,770	24,500	2,950,270
Other Comprehensive loss	(144,127)	(316,073)	(460,200)
Deficit	(6,196,130)	361,447	(5,834,683)
Non-controlling interest	292,436	(20,874)	271,562
Impact on Consolidated Statements of loss andComprehensive income
Gain (loss) on foreign exchange	(41,911)	85,161	43,250
Net loss	(559,752)	85,161	(474,591)
Foreign currency translation differences	(76,871)	(60,661)	(137,532)
Comprehensive loss	(636,623)	24,500	(612,123)
Net loss attributable to non-controlling interest	1,576	(3,152)	(1,576)
Net loss attributable to the owners of the parent Company	(561,328)	88,313	(473,015)
Comprehensive loss attributable to non-controlling interest	1,576	(3,152)	(1,576)
Comprehensive loss attributable to the owners of the parent
Company	(638,199)	27,652	(610,547)

27. RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Impact on Consolidated Statement of Cash flows
Operating activities :
Net loss	(559,752)	85,161	(474,591)
Adjustments for non-cash items:
Gain (loss) on foreign exchange	(41,911)	85,161	43,250
Net change in working capital items:
Receivable and others	71,153	(45,199)	25,954
Accounts payable and accrued liabilities	117,672	384,508	502,180
Investing activities :
Acquisition of exploration and evaluation assets	(166,938)	(24,500)	(191,438)
Financing activities :
Du to related parties	137,028	(137,028)	-
Advance from a company owned by a shareholder with a
significant influence	318,043	(8,176)	309,867
Promissory notes	175,000	69,178	244,178

(1) The adjustments to the exchange gain (loss) on translation of foreign operations, included in other comprehensive income (loss) in the Consolidated Statement of Operations and Comprehensive Income (loss) are due to exchange losses reflected on the translation of foreign operations as the exploration and evaluation assets and property plant and equipment carrying values are now reflected in local currency and adjusted at each period end date for presentation purposes.

AI assistant

AM Resources Corp. — Annual Report 2021

46245_rns_2022-12-19_c15cd748-daf2-455b-a553-b68fb9ca4eea.pdf

AM Resources Corp.

Independent Auditor's Report

Opinion

Basis for opinion

Material uncertainty related to going concern

Information other than the consolidated financial statements and the auditor's report thereon

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor's responsibilities for the audit of the consolidated financial statements

AM Resources Corp. Consolidated statements of financial position

AM Resources Corp. Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2021 and 2020

AM Resources Corp. Consolidated statements of changes in equity For the years ended December 31, 2021 and 2020

AM Resources Corp. Consolidated statements of changes in equity For the years ended December 31, 2021 and 2020

AM Resources Corp. Consolidated statements of cash flows For the years ended December 31, 2021 and 2020 (In Canadian dollars)

1. NATURE OF OPERATIONS

2. GOING CONCERN ASSUMPTION

3. STATEMENT OF COMPLIANCE WITH IFRS

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Overall considerations and Basis of evaluation

4.2 Accounting standard issued but not yet adopted

4.3 Basis of consolidation

Subsidiaries

4.4 Foreign currency translation

Functional and presentation currency

Foreign currency transactions and balances

Foreign operations

4.5 Financial Instruments

Recognition and derecognition

Classification and initial measurement of financial assets

Subsequent measurement of financial assets

4.5 Financial Instruments (continued)

Impairment of financial assets

Classification and measurement of financial liabilities

4.6 Property, equipment and intangible assets

4.7 Exploration and evaluation expenditures, and exploration and evaluation assets

4.7 Exploration and evaluation expenditures, and exploration and evaluation assets (continued)

4.8 Equity

Unit placements

Other elements of equity

Other comprehensive loss

4.9 Share-based compensation

4.10 Impairment of Long-lived Assets

4.11 Provisions

4.12 Basic and Diluted Loss per Share

4.13 Mining Properties Options Agreements

4.14 Segment Disclosures

4.15 Leases

4.16 Revenues

Gold sales

4.17 Income taxes and deferred taxes

4.17 Income taxes and deferred taxes (suite)

4.18 Non-controlling interests

4.19 Significant Accounting Judgments, Estimates and Assumptions

4.19.1 Key sources of estimation uncertainty

Impairment of exploration and evaluation assets

Share-based payments

Provisions and contingent liabilities

4.19.2 Significant management judgment

Going concern

AM Resources Corp.

Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020

5. RECEIVABLES AND OTHER FINANCIAL ASSETS

6. PROPERTY, PLANT AND EQUIPMENT

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2021 and 2020 (In Canadian dollars)

7. EVALUATION AND EXPLORATION ASSETS

7. EVALUATION AND EXPLORATION ASSETS (continued)

7. EVALUATION AND EXPLORATION ASSETS (continued)

a) Mina Luz

b) Rio Negro Property: Hydrocarbons

c) Mico Property: Au

d) Esperanza Property: Hydrocarbons

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

9. DEBENTURES

10. PROMISSORY NOTES AND LOANS

10. PROMISSORY NOTES AND LOANS (continued)

11. LONG-TERM DEBT

12. EQUITY

12.1 Share capital

AM Resources Corp. Annual Report 2021