AM Resources Corp. — Audit Report / Information 2021

May 5, 2021

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AM Resources Corp. Consolidated financial statements for the years ended December 31, 2020 and 2019 (In Canadian dollars)

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Independent Auditor's Report

To the Shareholders of AM Resources Corp.

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

T 514-878-2691

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, 2020 and 2019, 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, 2020 and 2019, 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.

rcgt.com

Member of Grant Thornton International Ltd

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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, other than the consolidated financial statements and our auditor’s report thereon, 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

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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.

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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.

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Montréal May 4, 2021

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1 CPA auditor, CA public accountancy permit no. A115879

AM Resources Corp. Consolidated statements of financial position (In Canadian dollars)

ASSETS CURRENT Cash Receivables and other financial assets (note 6) Prepaid expenses NON-CURRENT Property, plant and equipment (note 7) Exploration and evaluation assets (note 8) Total assets LIABILITIES CURRENT Accounts payable and accrued liabilities (note 9) Debentures (note 10) Promissory notes and loans (note 11) Current portion of the long-term debt (note 12) NON-CURRENT Long-term debt (note 12) Total liabilities EQUITY Share capital (note 13) Contributed surplus Other comprehensive loss Deficit Total equity attributable to owners of the parent company Non-controlling interest Total equity Total liabilities and equity	December 31, 2020 76,017 703,919 28,090 808,026 240,503 2,925,770 3,166,273 3,974,299 1,296,775 763,920 406,470 9,738 2,476,903 27,539 2,504,442 7,114,255 403,423 (144,127) (6,196,130) 1,177,421 292,436 1,469,857 3,974,299	December 31, 2019
		$ 3,295 454,070 127,331
		584,696
		346,713 2,912,455
		3,259,168
		3,843,864
		731,438 779,280 184,940 9,208
		1,704,866
		32,518
		1,737,384
		7,114,255 403,423 (67,256) (5,634,802)
		1,815,620 290,860
		2,106,480
		3,843,864

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

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AM Resources Corp.

Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2020 and 2019 (In Canadian dollars)

Sales (note 14) Cost of sales (note 15) Gross margin General and administrative expenses (note 16) Operating loss Debentures and long-term debt interest Finance fees Loss on foreign exchange Gain on debt settlement Net loss Other Comprehensive Loss Items that will be reclassified to profit and loss Foreign currency translation differences Comprehensive loss Net loss attributable to: Non-controlling interest Owners of the parent Comprehensive loss attributable to: Non-controlling interest Owners of the parent Basic and diluted loss per share Weighted average number of shares outstanding	2020 $ 458 46,554 (46,096) 306,397 352,493 (165,078) (29,963) (41,911) 29,693 (559,752) (76,871) (636,623) 1,576 (561,328) (559,752) 1,576 (638,199) (636,623) (0,009) 61,599,642	2019
		$ 1,022,593 886,185
		136,408 1,098,030
		961,622 (128,227) (49,640) (132,449) -
		(1,271,938) 15,910
		(1,256,028)
		8,860 (1,280,798) (1,271,938) 8,860 (1,264,888) (1,256,028) (0,02)
		59,662,829

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

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AM Resources Corp. Consolidated statements of changes in equity For the years ended December 31, 2020 and 2019 (In Canadian dollars)

Balance as of January 1, 2020 Net loss Other comprehensive loss Foreign currency translation differences Balance as of December 31, 2020	Number of common share outstanding 61,599,642 - - 61,599,642	Share capital $ 7,114,255 - - 7,114,255	Contributed surplus $ 403,423 - - 403,423	Other comprehensive loss $ (67,256) - (76,871) (144,127)	Deficit $ (5,634,802) (561,328) - (6,196,130)	Total attributable to the owners of the parent Company $ 1,815,620 (561,328) (76,871 1,177,421	Non controling interest $ 290,860 1,576 - 292,436	Total equity
								$ 2,106,480
								(559,752) (76,871)
								1,469,857

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

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AM Resources Corp. Consolidated statements of changes in equity For the years ended December 31, 2020 and 2019 (In Canadian dollars)

Balance as of January 1, 2019 Mining asset acquisition (note 5) Warrant expired Options granted Net loss Other comprehensive loss Foreign currency translation differences Balance as of December 31, 2019	Number of common share outstanding 56,899,642 4,700,000 - - 4,700,000 - - 61,599,642	Share capital $ 6,691,255 423,000 - - 423,000 - - 7,114,255	Warrants $ 51,814 - (51,814) - (51,814) - - -	Contributed surplus $ 329,062 - 51,814 22,547 74.361 - - 403,423	Other comprehensive loss $ (83,166) - - - - - 15,910 (67,256)	Deficit $ (4,354,004) - - - - (1,280,798) - (5,634,802)	Total attribuatable to the owners of the parent Company $ 2,634,961 423,000 - 22,547 445,547 (1,280,798) 15,910 1,815,620	Non- controlling interest $ - 282,000 - - 282,000 - 8,860 - 290,860	Total equity
									$ 2,634,961
									705,000 - 22,547
									727,547 - (1,271,938) 15,910
									2,106,480

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

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AM Resources Corp. Consolidated statements of cash flows For the years ended December 31, 2020 and 2019 (In Canadian dollars)

OPERATING ACTIVITIES Net loss Depreciation of property, plant and equipment Share-based payment Loss on foreign exchange Gian on a debt settlement Net change in working capital items (note 20) Cash flows from operating activities INVESTING ACTIVITIES Acquisition of exploration and evaluation assets Acquisition of property plant and equipment Disposal of property, plant and equipment Advances to companies owned by a shareholder with a significant influence without interest or repayment Proceeds of advance to a private company Cash flows from investing activities FINANCING ACTIVITIES Repayment of the long-term debt Du to related parties Advance from a company owned by a shareholder with a significant influence Promissory notes Cash flow from financing activities Net change in cash Foreign currency translation differences Cash, beginning of the year Cash, end of the year	2020	2019
	$ (559,752) 46,722 - 55,109 (29,693) 250,556 (237,058) (166,938) - 37,093 (310,948) (10,000) (450,693) (2,061) 137,028 318,043 175,000 628,010 (59,741) 132,463 3,295 76,017	$ (1,271,938) 54,753 22,547 (34,230) - 283,787
		(945,081) (316,539) (63,943) 17,777 - 31,529
		(331,176) (9,624) 194,747 (26,091) 184,940
		343,972 (932,285) 149,615 785,965
		3,295

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

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

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, 2020 were approved and authorized for issue by the Board of Directors on May 4, 2021.

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, 2020, the Company has not yet determined whether its mineral properties contain mineral deposits that are economically recoverable. The Company has a deficit of $ 6,196,130 ($ 5,634,802 at December 31, 2019) and a negative working capital of $ 1,668,877 (negative working capital of $ 1,120,170 at December 31, 2019), 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. These material uncertainties cast significant doubt regarding the Company’s ability to continue as a going concern.

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 of the Company have been prepared in accordance with 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.

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, 2020 are as follows:

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

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

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 and AM Resources Trading Corp. 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 for commodity taxes and income tax installments receivable) fall into this category of financial instruments.

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

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 measured at amortised cost and trade receivables. 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.

Trade accounts receivables

The Company makes use of a simplified approach in accounting for trade accounts receivables and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. The Company assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due.

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.

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

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, 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.

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

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

Sale of Coal and Sale of transportation services

Revenues from the sale of coal and/or transportation services rendered during the ordinary activities are recognized at the fair value of the consideration received or receivable. Revenues from the sale of coal is recognized at the point of time when the customers obtain control of the product. Control is achieved when the coal is delivered to the customer, 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. The Company has revenue from transportation services related to the transportation of the coal that is sold that is recognized when services have been provided. The price of the transportation services is fixed and negotiated once a year with the client.

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.

15

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

4.0 SIGNIFICANT ACCOUNTING POLICIES (continued)

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 by transaction 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 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 13).

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 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.

16

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

5. SUBSIDIARY ACQUISITION

On February 4, 2019, AM Resources SAS entered into share purchase agreement with 7779534 Canada Inc., whereby the Company agreed to acquire 60% of the issued and outstanding shares of Asfaltitas Colombianas SAS. The transaction closed on May 30, 2019.

The acquisition of Asfaltitas Colombianas SAS does not constitute a business combination as Asfaltitas Colombianas SAS does not meet the definition of a business under IFRS 3.

The fair value of the consideration for the interest acquired is as follows:

The fair value of the consideration for the interest acquired is as follows:
4,700,000 shares issued and outstanding of AM Resources Corp.	$
	423,000

The fair value of the Company’s shares issued and outstanding prior to the acquisition has been determined based on the market value of the Company’s shares on May 30, 2019.

Following the closing of the transaction, the estimated fair value of the net assets acquired is: .

Trade accounts receivable Exploration and evaluation assets Trade and accounts payable Non-controlling interest	$
	5,522 758,187 (58,709) (282,000)
	423,000

6. RECEIVABLES AND OTHER FINANCIAL ASSETS

As at December 31, 2020 the receivables include the following components:

Trade accounts receivable Advances to individuals, without interest cashable on demand Taxes receivables Income tax installments receivable Advances to private companies, without interest cashable on demand Advances to companies owned by a shareholder with a significant influence without interest or repayment Other	2020 $ - 6,652 5,367 64,427 268,131 326,958 32,385 703,919	2019
		$ 4,394 7,054 90,629 83,850 258,131 - 10,012
		454,070

7. PROPERTY, PLANT AND EQUIPMENT

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

	Machinery and equipment	Computer and communication equipment	Vehicles	Total
Gross carrying amount
At January 1, 2019	304,573	8,353	98,457	411,383
Additions / Transfers	(12,570)	(497)	21,152	8,085
At December 31, 2019	292,003	7,856	119,609	419,468
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
Accumulated Depreciation
At January 1, 2019	(16,915)	(998)	(16,947)	(34,860)
Depreciation	(27,973)	(1,504)	(8,418)	(37,895)
At December 31, 2019	(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)
Carrying amount December 31, 2019	247,115	5,354	94,244	346,713
Carrying amount December 31, 2020	205,491	3,567	31,445	240,503

17

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

8. EVALUATION AND EXPLORATION ASSETS

Mining Properties Colombia Property – Mina Luz (a) Mining rights Exploration and evaluation expenses Colombia Property – Rio Negro (b) Mining rights Exploration and evaluation expenses Colombia Property – Mico (c) Mining rights Exploration and evaluation expenses Colombia Property – Esperanza (d) Mining rights Exploration and evaluation expenses Summary Mining rights Exploration and evaluation expenses Mining Properties Colombia Property – Mina Luz (a) Mining rights Exploration and evaluation expenses Colombia Property – Rio Negro (b) Mining rights Exploration and evaluation expenses Colombia Property – Mico (c) Mining rights Exploration and evaluation expenses Colombia Property – Esperanza (d) Mining rights Exploration and evaluation expenses Summary Mining rights Exploration and evaluation expenses	Balance as at January 1, 2020 $ 1,241,647 165,097 1,406,744 693,993 24,500 718,493 - 31,600 31,600 755,618 - 755,618 2,691,258 221,197 2,912,455 Balance as at January 1, 2019 $ 1,305,979 87,333 1,393,312 743,453 24,500 767,953 - - - - - - 2,049,432 111,833 2,161,265	Additions $ - 42,789 42,789 - 88,689 88,869 - - - - 35,460 35,460 - 166,938 166,938 Additions $ - 77,764 77,764 - - - - 31,600 31,600 755,618 - 755,618 755,618 109,364 864,982	Exchange difference (70,876) - (70,876) (39,615) - (39,615) - - - (43,132) - (43,132) (153,623) - (153,623) Exchange difference (64,332) - (64,332) (49,460) - (49,460) - - - - - - (113,792) - (113,792)	Balance as at December 31, 2020
				$ 1,170,771 207,886
				1,378,657
				654,378 113,189
				767,567
				- 31,600
				31,600
				712,486 35,460
				747,946
				2,537,635 388,135
				2,925,770
				Balance as at December 31, 2019
				$ 1,241,647 165,097
				1,406,744
				693,993 24,500
				718,493
				- 31,600
				31,600
				755,618 -
				755,618
				2,691,258 221,197
				2,912,455

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.

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.

18

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

8. EVALUATION AND EXPLORATION ASSETS (continued)

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 (See note 5).

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Trade accounts and accrued liabilities: Advance from a company owned by a shareholder, without interest or repayment term Employees benefits	2020 $ 931,045 349,512 16,218 1,296,775	2019
		$ 672,880 30,000 28,558
		731,438

10. DEBENTURES

On August 14, 2018 , the Company issued debentures units of $ 600,000 USD ($ 763,920 as at December 31, 2020, $ 779,280 as at December 31, 2019). 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 (note 28). The capital portion $ 600,000 usd ($ 764,311) was paid and the accumulated interest of $ 280,323 was transferred into a non interest bearing promissory note maturing on January 26, 2024.

11. 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 January 27, 2021, the Company concluded a debt settlement (note 28). The capital portion $ 70,000 was paid and the accumulated interest of $ 11,852 was transferred into non interest bearing promissory note maturing on January 26, 2024.

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 January 27, 2021, the Company concluded a debt settlement (note 28). The capital portion $ 50,000 was paid and the accumulated interest of $ 8,219 was transferred into a non interest bearing promissory note maturing on January 26, 2024.

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 %. On January 27, 2021, the Company concluded a debt settlement (note 28). The capital portion $ 50,000 USD ($ 63,580) was paid and the accumulated interest of $ 9,180 was transferred into a non interest bearing promissory note maturing on January 26, 2024.

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 January 27, 2021, the Company concluded a debt settlement (note 28). The capital portion $ 150,000 usd ($ 190,740) was paid and the accumulated interest of $ 31,790 was transferred into a non interest bearing promissory note maturing on January 26, 2024.

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). The capital and interest was paid on March 30, 2021 (note 28).

12. LONG-TERM DEBT

Loan for machinery and equipment, 7,5%, payable in monthly instalments of $1,094 including interests, maturing in September 2023 Current portion	2020 $ 37,277 (9,738) 27,539	2019
		$ 41,726 (9,208)
		32,518

The estimated instalments in long-term debt for the next year are $ 9,738 in 2021, $ 10,920 in 2022 and $ 16,619 in 2023.

19

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

13. EQUITY

13.1 Share capital

Authorized

Unlimited number of common shares without par value

Changes in the Company capital stock were as follows:

On May 30, 2019, the Company acquired a 60% interest in Asphaltite Colombia SAS (‘’ASF’’) that holds the Esperanza asphaltite mining property. The Esperanza property consists of a mineral concession that covers an area of 298 hectares in the western portion of the department of Norte de Santander in Colombia. The Company issued 4,700,000 common shares ($ 423,000).

13.2 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 6,159,964. 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:

Balance, beginning of year Granted Balance, end of year Options exercisable at the end of year		2020 Weighted average exercise price $ 0,16 - 0,16 0,16		2019
	Number 2,100,000 - 2,100,000 2,100,000		Number 1,800,000 300,000 2,100,000 2,100,000	Weighted average exercise price
				$ 0,17 0,10 0,16 0,16

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

The following table summarizes the information relating to the share purchase options granted under the plan as at December 31, 2019.

Range of Exercise price $ 0,10 to 0,16 0,17 to 0,19 0,20 to 0,23	Number of options 300,000 1,500,000 300,000	Remaining life (years)
		4,41 3,28 3,39

20

(In Canadian dollars)

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019

13. EQUITY (continued)

13.2 Share purchase options (continued)

On December 31, 2019, the weighted average fair value of the share purchase options granted of $ 0,075 ($ 22,547 was recorded in the profit or loss) was estimated using the Black-Scholes option pricing model and based on the following average assumptions:

Share price at date of grant Expected life Risk-free interest rate Expected volatility(1) Expected dividend Exercise price at date of grant	2020 - - - - - -	2019
		0,09 $ 5 years 1,46 % 125 % Nil 0,10 $

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

14. REVENUES

Coal sales Transport Other revenues 15. COST OF SALES Coal cost of sales Transport Depreciation of property, plant and equipment 16. GENERAL AND ADMINISTRATION EXPENSES Salaries and other employee benefits Rental expenses Consulting and professional fees Management fees Other operational expenses Share-based payment	2020 $ - - 458 458 2020 $ - - 46,554 46,554 2020 $ 34,987 3,350 121,519 80,076 66,465 - 306,397	2019
		$ 611,113 371,823 39,657
		1,022,593
		2019
		$ 581,753 249,620 54,812
		886,185
		2019
		$ 116,627 61,504 440,515 298,932 157,905 22,547
		1,098,030

17. FINANCIAL ASSETS AND LIABILITIES

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

FINANCIAL ASSETS Cash Receivables and other financial assets FINANCIAL LIABILITIES Accounts payable and accrued liabilities Debenture Promissory note and loans Advance from a company owned by a shareholder with a significant influence Long term debt		2020 Fair Value $ 76,017 634,125 710,142 931,045 763,920 406,470 349,510 37,277 2,488,222		2019
	Carrying amount $ 76,017 634,125 710,142 931,045 763,920 406,470 349,510 37,277 2,488,222		Carrying amount $ 3,295 356,387 359,682 672,880 779,280 184,940 30,000 41,726 1,708,826	Fair value
				$ 3,295 356,387
				359,682
				672,880 779,280 184,940 30,000 41,726
				1,708,826

21

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

17. FINANCIAL ASSETS AND LIABILITIES (continued)

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, promissory notes and loans 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.

18. 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, 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.

19. 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% (26,6 % in 2019) to earnings before income taxes as a result of the follows:

2020 $ Loss before income taxes (559,752) Expected income tax recovery (148,334) Increase (decrease) in income taxes resulting from: Temporary difference not recorded 149,217 Share-based payments - Non-deductible expenses - Tax rate difference from a foreign subsidiary (10,748) Change in differed tax rate - Other 9,865 - Composition of deferred income taxed in the consolidated statement of comprehension income: Inception and reversal of temporary differences Unrecognized deferred tax assets Change in deferred tax rate	2020 $ Loss before income taxes (559,752) Expected income tax recovery (148,334) Increase (decrease) in income taxes resulting from: Temporary difference not recorded 149,217 Share-based payments - Non-deductible expenses - Tax rate difference from a foreign subsidiary (10,748) Change in differed tax rate - Other 9,865 - Composition of deferred income taxed in the consolidated statement of comprehension income: Inception and reversal of temporary differences Unrecognized deferred tax assets Change in deferred tax rate	2019
		$ (1,271,938) (338,335) 330,007 5,998 896 (17,761) 2,160 17,035
		-
		2020 2019 (149,217) (332,167) 149,217 330,007 2,160
		- -

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:

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

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 $ 862,877.

22

(In Canadian dollars)

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019

19. INCOME TAXES (continued)

Movement of deferred income tax in 2019

As at December 31, 2019, deductible timing differences for which the Company has not recognized deferred tax asset are as follows:

Non-capital losses Share issue expenses	Federal 2,069,813 84,632 2,154,444	Quebec 2,075,548 84,632 2,160,180	Colombia
			979,906 -
			979,906

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 $ 947,289.

As at December 31, 2020, the Company has non-capital tax losses, which are available to reduce income taxes in future years and expired as follows:

Federal 2040 358,639 2039 638,320 2038 1,091,595 2032 2031 - 2030 2029 Unlimited Unlimited 2,133,554 20. ADDITIONAL INFORMATION – CASH FLOWS Accounts payable and accrued liabilities Receivables and others Prepaid expenses Inventory	Quebec 358,639 1,016,771 1,089,313 - 2,464,723 2020 $ 117,672 71,153 61,731 - 250,556		Colombia
			- - - 169,915 255,794 144,957 230,750 41,370 137,120
			724,111
			2019
			$ 198,970 160,290 (84,647) 9,174
			283,787

21. 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.

Management fees Consulting fees Share-based payments Total compensation	2020 $ 80,076 30,000 110,076 - 110,076	2019
		$ 298,932 78,000
		376,932 22,547
		399,479

Included in accounts payable and accrued liabilities as at December 31, 2020, was $ 321,682 (2019 - $ 192,157) 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 nil options (300,000 options to a director worth $ 22,547 in 2019).

22. POLICIES AND PROCESSES FOR MANAGING CAPITAL

As at December 31, 2020, 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, 2020. The Company finances its exploration activities primarily seeking additional capital either through private placements or public offerings.

23

AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

23. 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 17. 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, trade accounts receivables, advances receivable are the Company's principal financial instruments that are potentially subject to credit risk. The credit risk on advances receivable is limited since the contracting party is the private Company holding the Mina Luz property in Colombia. 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.

Trade account receivables

In assessing expected credit losses, trade receivables have been measured on a collective basis since they share common credit risk characteristics. They have been grouped according to the number of days they are past due and the geographic location of the client.

Expected credit loss rates are based on historical credit loss rates in prior years and current and prospective macroeconomic data that affect the client’s ability to pay amounts owing. Trade receivables are written off, in other words derecognized, when there is no reasonable expectation of recovery. Failure to pay within 180 days of the date of invoice and no commitment to the Company regarding an alternative payment arrangement are, among other things, considered as indicators that there is no expectation reasonable recovery. Based on the above, expected credit losses over the total life of trade receivables as at December 31, 2020 are insignificant.

Advances to individuals, private companies and companies owned by the majority shareholder

All Company advances 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, 2020, the working capital is negative of $ 1,668,877 (negative working capital of $ 1,120,170 at December 31, 2019). 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.

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

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

below:
Current Within 6 months 6 to 12 months December 31, 2020 Accounts payable and accrued liabilities 931,045 - Debenture and interests - 990,734 Promissory notes and loans including interests - 463,259 Advance from a company owned by a significant influence - 349,510 Long-term debt - 9,738 Total 931,045 1,529,638	Non-current 1 to 5 years Later than 5 years
	- - - - - - - - 27,539 -
	27,539 -

As at December 31, 2019, the Company’s financial liabilities have contractual maturities (including interest payments where applicable) as summarised below:

below:
Current Within 6 months 6 to 12 months December 31, 2019 Accounts payable and accrued liabilities 672,880 - Debenture - 934,515 Promissory note - 184,940 Advance from a private company - 30,000 Long-term debt - 9,208 Total 672,880 1,158,663	Non-current 1 to 5 years Later than 5 years
	- - - - - - - - 32,518 -
	32,518 -

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, 2020 and 2019, the Company is exposed to currency risk through fluctuations in the foreign exchange rate with respect to the following financial asset:

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

23. FINANCIAL INSTRUMENT RISKS (continued)

23. FINANCIAL INSTRUMENT RISKS (continued)
Financial instruments denominated in USD Cash Advances to private companies and company owned by a significant shareholder Promissory note and loans Debenture	2020 $ 109 595,088 (254,640) (763,920) (423,363)	2019 $ 511 258,131 (64,940) (779,280)
		(585,578)

A variation of 10% in the currency would affect the net loss and the equity of $ 42,336 ($58,575 on December 31, 2019). The Company does not use derivative financial instruments to reduce its exposure to foreign exchange risk.

Furthermore, an intercompany balance of $ 1,913,039 ($1,811,709 on December 31, 2019) between AM Resources SAS and AM Resources Corp exposes AM Resources Corp. to currency fluctuations between the Colombian pesos and the Canadian dollar. A variation of 10% in the currency would affect the net loss and the equity of $ 191,304 ($181,171 on December 31, 2019).

24. SEGMENT REPORTING

Management currently identifies one operating segment (note 4.14).

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

Non current assets Revenus Non current assets Revenus			2020
	Canada $ - -	Colombia $ 3,166,273 458	Total
			$ 3,166,273 458 2019
	Canada $ - -	Colombia $ 3,259,168 1,022,593	Total
			$ 3,259,168 1,022,593

25. LEASE

The expense relating to short-term leases are of $ 9,738 as at December 31, 2020.

At December 31, 2020, the Company has committed to short-term leases and the total commitment at that date was $ 37,277.

26. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

	Advance from a company
	owned by a shareholder			Promissory	Long-term
	with a significant influence	Du to related parties	Debenture	notes	debt	Total
	$	$	$	$	$	$
January 1, 2020	26,091	192,157	779,280	184,940	41,726	1,224,193
Cash-flows:
Repayment	(68,550)	(20,000)	-	-	(4,449)	(92,999)
Proceed	386,593	157,027	-	175,000	-	718,620
Non-cash:
Unrealised loss (gain)
on exchange rate	5,376	(7,502)	(15,360)	46,530	-	29,044
December 31, 2020	349,510	321,682	763,920	406,470	37,277	1,878,859
	Advance from a company
	owned by the majority			Promissory	Long-term
	shareholder	Du to related parties	Debenture	notes	debt	Total
	$	$	$	$	$	$
January 1, 2019	-	6,524	818,520	-	51,881	876,925
Cash-flows:
Repayment	-	(9,114)	-	-	(9,624)	(18,738)
Proceed	26,091	194,747	-	184,940	-	405,778
Non-cash:
Unrealised loss (gain)
on exchange rate	-	-	(39,240)	-	(531)	(39,771)
December 31, 2019	26,091	192,157	779,280	184,940	41,726	1,224,194

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AM Resources Corp. Notes to Consolidated Financial Statements For the years ended December 31, 2020 and 2019 (In Canadian dollars)

27. SUBSIDIARY WITH MATERIAL NON-CONTROLLING INTERESTS

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

	Porportion of ownership interests and	Porportion of ownership interests and	Total	comprehensive loss		Accumulated
Name	voting rights held by the NCI			allocated to NCI		NCI
	2020	2019	2020	2019	2020	2019
			$	$
Asfaltitas
Colombianos SAS	40 %	40 %	1,576	8,860	292,436	290,860

No dividends were paid to the NCI during the year 2019 and 2020.

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

Non-current assets Current assets Total assets Non-current liabilities Current liabilities Total liabilites Equity attributable to owners of the parent Non-controlling interests Revenue Loss for the year attributable to owners of the parent Loss of the year attributable to NCI Loss for the year Other comprehensive loss for the year (all attributable to owners of the parent) Total comprehensive loss for the year attributable to owners of the parent Total comprehensive loss for the year attributable to NCI Total comprehensive loss for the year Net cash from (used in) operating activities Net cash from investing activities Net cash from financing activities Net cash inflow	2020 $ 687,490 17,287 704,777 (11,843) (11,843) 400,755 292,436 2020 $ - 2,364 1,576 3,940 - 2,364 1,576 3,940 2020 $ 847 - - 847	2019
		$ 755,618 18,954
		774,572
		- (72,412)
		(72,412)
		411,300
		290,860
		2019
		$ - 13,290 8,860
		22,150
		-
		13,290 8,860
		22,150
		2019
		$ (1,155) - 9,975
		8,821

28. CONTINGENCY

A lawsuit in the amount of approximately $ 2,900,000 has been filed against the Company as a result of a problem during the private placement of another company owned by the majority shareholder. In the opinion of management, this lawsuit is unwarranted, accordingly, no provision has been recorded in this respect.

28. SUBSEQUENT EVENTS

On January 27, 2021 , the Company concluded a debt settlement and release agreement for the payment of the capital portion of the debenture, the promissory notes (excluding the $ 25,000 USD promissory note) and the $ 150,000 USD loan in an aggregate amount of $ 1,138,631. On March 12, 2021, the Company issued 18,460,184 shares to an arm’s length creditor for a total value of $1,292,213 causing a loss of $153,582.

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.

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.

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).

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