AM Resources Corp. — Interim / Quarterly Report 2021

Aug 31, 2021

Unaudited consolidated interim financial statements for the six-month periods ended June 30, 2021 and 2020 (In Canadian dollars)

Table of contents

Notice to readers	3
Unaudited consolidated statements of financial position	4
Unaudited consolidated statements of comprehensive loss	5
Unaudited consolidated statements of changes in equity	6
Unaudited consolidated statements of cash flows	8
Notes to Unaudited consolidated Financial Statements	9-24

NOTICE TO READERS OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS:

The unaudited consolidated interim financial statements of AM Resources Corp. for the six-month period ended June 30, 2021, were not reviewed by a firm of external auditors.

(s) David Grondin David Grondin, President and Chief Executive Officer

(s) Patrick Musampa

Patrick Musampa, CPA, CGA Chief Financial Officer

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

	June 30, 2021	December 31, 2020
	(Unaudited)	(Audited)
	\$	\$
ASSETS
CURRENT
Cash	451,611	76,017
Receivables and other financial assets (note 5)	837,554	703,919
Prepaid expenses	400,308	28,090
	1,689,473	808,026
NON-CURRENT
Property, plant and equipment (note 6)	131,334	240,503
Exploration and evaluation assets (note 7)	2,625,159	2,925,770
	2,756,493	3,166,273
Total assets	4,445,966	3,974,299
LIABILITIES
CURRENT
Accounts payable and accrued liabilities (note 8)	1,002,096	1,296,775
Debentures (note 9)	-	763,920
Promissory notes and loans (note 10)	-	406,470
Current portion of the long-term debt	-	9,738
	1,002,096	2,476,903
NON-CURRENT
Long-term debt	-	27,539
Total liabilities	1,002,096	2,504,442
EQUITY
Share capital (note 11)	8,969,581	7,114,255
Warrants	551,839	-
Contributed surplus	663,030	403,423
Other comprehensive loss	(606,316)	(144,127)
Deficit	(6,432,470)	(6,196,130)
Total equity attributable to owners of the parent company	3,145,664	1,177,421
Non-controlling interest	298,205	292,436
Total equity	3,443,869	1,469,857
Total liabilities and equity	4,445,966	3,974,299

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

AM Resources Corp. Consolidated Statements of Loss and Comprehensive Loss (Unaudited, in Canadian dollars)

	For the three-month period ended		For the six-month period ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
	\$	\$	\$	\$
Sales (note 12)	967,727	-	1,510,028	-
Cost of sales (note 13)	(562,571)	-	(1,098,220)	-
Gross margin	405,155	-	411,807	-
General and administrative expenses (note 14)	112,980	210,531	638,876	327,046
Operating loss	292,176	(210,531)	(227,068)	(327,046)
Debentures and long-term debt interest	-	(36,524)	(4,089)	(73,117)
Finance fees	1,156	(139)	(3,328)	(1,621)
Loss on disposal of equipment	25	-	(2,140)	-
Loss (gain) on foreign exchange	-	43,976	285	(212,233)
Net loss	293,357	(203,217)	(236,340)	(614,016)
Other Comprehensive Loss
Items that will be reclassified to profit and loss
Foreign currency translation differences	(125,412)	48,315	(462,189)	5,298
Comprehensive loss	167,945	(154,902)	(698,529)	(602,718)
Net loss attributable to:
Non-controlling interest	210	239	5,769	875
Owners of the parent	293,147	(203,456)	(242,109)	(614,891)
	293,357	(203,217)	(236,340)	(614,016)
Comprehensive loss attributable to :
Non-controlling interest	210	239	5,769	875
Owners of the parent	167,735	(155,141)	(704,298)	(608,891)
	167,945	(154,902)	(698,529)	(608,016)
Basic and diluted loss per share	0,004	(0,001)	(0,003)	(0,009)
Weighted average number of shares outstanding	73,989,124	61,599,642	73,989,124	61,599,642

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

Consolidated statements of changes in equity

For the six-month periods ended June 30, 2021 and 2020

(Unaudited, in Canadian dollars)

	Number of common share outstanding	Share capital \$	Warrants \$	Contributed surplus \$	Other comprehensive loss \$	Deficit \$	Total attributable to the owners of the parent Company \$	Non controling interest \$	Total equity \$
Balance as of January 1,
2021	61,599,642	7,114,255	-	403,423	(144,127)	(6,196,130)	1,177,421	292,436	1,469,857
Units issued by private
placement	32,500,000	748,161	551,839	-	-	-	1,300,000	-	1,300,000
Shares issued for debt
settlement	18,460,184	1,138,560	-	-	-	-	1,138,560	-	1,138,560
Share issuance expense	-	(31,396)	-	-	-	-	(31,396)	-	(31,396)
Share-based payments	-	-	-	259,607	-	-	259,607	-	259,607
Net loss	-	-	-	-	-	(236,340)	(236,340)	5,769	(230,571)
Other comprehensive loss
Foreign currency translation differences	-	-	-	-	(462,189)	-	(462,189)	-	(462,189)
Balance as of June 30, 2021	112,559,826	8,969,581	551,839	663,030	(606,316)	(6,432,470)	3,145,664	298,205	3,443,869

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

Consolidated statements of changes in equity

For the six-month periods ended June 30, 2021 and 2020

(Unaudited, in Canadian dollars)

Balance as of January 1, 2020 Net loss	Number of common share outstanding 61,599,642 -	Share capital \$ 7,114,255 -	Contributed surplus \$ 403,423 -	Other comprehensive loss \$ (67,256) -	Deficit \$ (5,634,802) (614,016)	Total attribuatable to the owners of the parent Company \$ 1,815,620 (614,016)	Non controlling interest \$ 290,860 875	Total equity \$ 2,106,480 (613,140)
Other comprehensive loss Foreign currency translation differences Balance as of June 30, 2020	- 61,599,642	- 7,114,255	- 403,423	(10,612) (77,868)	- (6,248,819)	(10,612) 1,190,992	- 291,736	(10,612) 1,482,728

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

AM Resources Corp. Consolidated statements of cash flows For the six-month periods ended June 30, 2021 and 2020 (Unaudited, in Canadian dollars)

	For the six-month periods ended
	June 30, 2021	June 30, 2020
	\$	\$
OPERATING ACTIVITIES
Net loss	(236,340)	(614,016)
Depreciation of property, plant and equipment	15,184	21,843
Loss (gain) on foreign exchange	(285)	212,233
Loss on disposal of equipment	2,010	-
Share-based payment	259,607	-
Net change in working capital items (note 17)	(964,248)	114,656
Cash flows from operating activities	(924,072)	(265,285)
INVESTING ACTIVITIES
Disposal of property plant and equipment	126,362	34,121
Cash flows from investing activities	126,362	34,121
FINANCING ACTIVITIES
Issuance of units under a private placement	1,300,000	-
Share issuance expenses	(31,396)	-
Long term loan payment	(37,277)	-
Short term loans	-	241,690
Cash flow from financing activities	1,231,327	241,690
Net change in cash	433,618	10,526
Foreign currency translation differences	(58,024)	(12,691)
Cash, beginning of the period	76,017	3,295
Cash, end of the period	451,611	1,130

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 period ended June 30, 2021 were approved and authorized for issue by the Board of Directors on August 30, 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 June 30, 2021, the Company has not yet determined whether its mineral properties contain mineral deposits that are economically recoverable. The Company has a deficit of \$ 6,432,470 (\$ 6,196,130 at December 31, 2020) and a working capital of \$ 687,377 (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. 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 interim financial statements have been prepared in accordance to IAS 34 Interim Financial Reporting using accounting policies consistent with the International Financial Reporting Standards (''IFRSs'') issued by the International Accounting Standards Board (''IASB'') and Interpretation of the International Financial Reporting Interpretations Committee (''IFRIC'').

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 June 30, 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 June 30, 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 %

AM Resources Corp. Notes to Consolidated Financial Statements For the six-month periods ended June 30, 2021 and 2020 (Unaudited, 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.

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.

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 June 30, 2021, 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. 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.

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.

Notes to Consolidated Financial Statements For the six-month periods ended June 30, 2021 and 2020 (Unaudited, in Canadian dollars)

5. RECEIVABLES AND OTHER FINANCIAL ASSETS

As at June 30, 2021 the receivables include the following components:

	June 30, 2021	December 31, 2020
	\$	\$
Advances to individuals, without interest cashable on demand	1,823	6,652
Taxes receivables	51,608	5,367
Income tax installments receivable	64,065	64,427
Advances to private companies, without interest cashable on demand Advances to companies owned by a shareholder with a significant	260,870	268,131
influence without interest or repayment	417,899	326,958
Other	41,290	32,385
	837,554	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 equipment	Computer and communication equipment	Vehicles	Total
Gross carrying amount
At January 1, 2020	292,003	7,856	119,609	419,468
Additions / Transfers	(16,646)	(448)	(61,874)	(78,970)
At December 31, 2020	275,355	7,408	57,735	340,498
Additions / Disposal	(87,477)	-	-	(87,477)
Exchange difference	(32,701)	(880)	(6,856)	(40,437)
At June 30, 2021	155,177	6,528	50,879	212,584
Accumulated Depreciation
At January 1, 2020	(44,888)	(2,502)	(25,365)	(72,755)
Depreciation	(24,976)	(1,339)	(75)	(27,240)
At December 31, 2020	(69,864)	(3,841)	(26,290)	(99,995)
Depreciation	12,644	(686)	(5,088)	6,870
Additions / Disposal	-	-	-	-
Exchange difference	8,297	456	3,122	11,875
At June 30, 2021	(48,923)	(4,071)	(28,256)	(81,250)
Carrying amount December 31, 2020	205,491	3,567	31,445	240,503
Carrying amount June 30, 2021	106,254	2,458	22,623	131,334

AM Resources Corp. Notes to Consolidated Financial Statements For the six-month periods ended June 30, 2021 and 2020

(Unaudited, in Canadian dollars)

7. EVALUATION AND EXPLORATION ASSETS

Mining Properties	Balance as at January 1, 2021	Additions	Exchange difference	Balance as at June 30, 2021
	\$	\$		\$
Colombia
Property – Mina Luz (a)
Mining rights	1,170,771	-	(141,652)	1,029,119
Exploration and evaluation expenses	207,886	-	-	207,886
	1,378,657	-	(141,652)	1,237,005
Colombia
Property – Rio Negro (b) Mining rights	654,378	-	(78,865)	575,514
Exploration and evaluation expenses	113,189	-	-	113,189
	767,567	-	(78,865)	688,703
Colombia
Property – Mico ©
Mining rights	-	-	-	-
Exploration and evaluation expenses	31,600	-	(3,247)	28,353
	31,600	-	(3,247)	28,353
Colombia
Property – Esperanza (d)
Mining rights	712,486	-	(76,849)	635,637
Exploration and evaluation expenses	35,460	-	-	35,460
	747,946	-	(76,849)	671,097
Summary
Mining rights	2,537,635	-	(297,365)	2,240,271
Exploration and evaluation expenses	388,135	-	(3,247)	384,888
	2,925,770	-	(300,612)	2,625,159
	Balance as at			Balance as at
Mining Properties	January 1, 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	42,789	-	207,886
	1,406,744	42,789	(70,876)	1,378,657
Colombia
Property – Rio Negro (b) Mining rights	693,993	-	(39,615)	654,378
Exploration and evaluation expenses	24,500	88,689	-	113,189
	718,493	88,869	(39,615)	767,567
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 Exploration and evaluation expenses	2,691,258 221,197	- 166,938	(153,623) -	2,537,635 388,135

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.

7. 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).

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	June 30, 2021	December 31, 2020
	\$	\$
Trade accounts and accrued liabilities: Advance from a company owned by a shareholder, without interest or	645,591	931,045
repayment term	349,512	349,512
Employees benefits	6,994	16,218
	1,002,096	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, \$ 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.

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.

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 January 27, 2021, the Company concluded a debt settlement. 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. 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.

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 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).

11. EQUITY

11.1 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 \$ 1,138,500 by issuing 18,460,184 common shares to an arm's length creditor.

11.2 Warrants

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

		June 30, 2021		December 31, 2020
		Weighted		Weighted
	Number of	average exercice	Number of	average exercice
	warrants	price	warrants	price
		\$		\$
Balance, beginning of the period	-	-	-	-
Granted	32,500,000	0,05	-	-
Balance, end of the period	32,500,000	0,05	-	-
		June 30, 2021		December 31, 2020
Expiration date	Number	Exercise price	Number	Exercise price
		\$		\$
March 9, 2023	32,500,000	0,05	-	-
	32,500,000		-

The weighted average fair value of the warrants issued through the issuance of the units of \$ 0.017 (\$ nil in 2020) was estimated using the Black-Scholes option pricing model and based on the following average assumptions:

	June 30, 2021	December 31, 2020
Share price at date of grant	0,06 \$	-
Expected life	2 années	-
Risk-free interest rate	0,27 %	-
Expected volatility	150 %	-
Expected dividend	Néant	-
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.

11.3 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.

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.

11. EQUITY (continued)

11.3 Share purchase options

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:

		June 30, 2021		December 31, 2020
	Weighted average Number exercise price		Number	Weighted average exercise price
		\$		\$
Balance, beginning of period	2,100,000	0,16	2,100,000	0,16
Granted	4,050,000	0,06	-	-
Balance, end of period	6,150,000	0,05	2,100,000	0,16
Options exercisable at the end of period	6,150,000	0,05	2,100,000	0,16

The following table summarizes the information relating to the share purchase options granted under the plan as at June 30, 2021.

Range of Exercise price	Number of options	Remaining life (years)
\$
0,05 to 0,09	4,050,000	4,72
0,10 to 0,16	300,000	2,83
0,17 to 0,19	1,500,000	1,75
0,20 to 0,23	300,000	1,83
	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.

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

On June 30, 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 using the Black-Scholes option pricing model and based on the following average assumptions:

	June 30, 2021	March 31, 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.

12. REVENUES

		For the three-month period ended		For the six-month period ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
	\$	\$	\$	\$
Gold sales	967,654	-	1,509,744	-
Other revenues	71	-	283	-
	967,726	-	1,510,028	-

Notes to Consolidated Financial Statements For the six-month periods ended June 30, 2021 and 2020

(Unaudited, in Canadian dollars)

13. COST OF SALES

		For the three-month period ended		For the six-month period ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
	\$	\$	\$	\$
Gold purchase	562,571	-	1,098,220	-
	562,571	-	1,098,220	-

14. GENERAL AND ADMINISTRATION EXPENSES

	For the three-month period ended			For the six-month period ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
	\$	\$	\$	\$
Salaries and other employee benefits	-	5,061	-	22,614
Rental expenses	586	600	2,371	1,200
Consulting and professional fees	74,032	153,031	233,485	198,811
Management fees	9,000	20,789	25,000	40,599
Share-based payment	-	-	259,607	-
Other operational expenses	29,362	31,050	118,412	63,823
	112,981	210,530	638,876	327,046

15. FINANCIAL ASSETS AND LIABILITIES

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

		June 30, 2021		December, 2020
	Carrying amount	Fair Value	Carrying amount	Fair value
	\$	\$	\$	\$
FINANCIAL ASSETS
Cash	451,611	451,611	76,017	76,017
Receivables and other financial assets	721,882	721,882	634,125	634,125
	1,173,493	1,173,493	710,142	710,142
FINANCIAL LIABILITIES
Accounts payable and accrued liabilities	645,591	645,591	931,045	931,045
Debenture	-	-	763,920	763,920
Promissory note and loans	-	-	406,470	406,470
Advance from a company owned by a
shareholder with a significant influence	349,512	349,512	349,512	349,512
Long term debt	-	-	37,277	37,277
	995,103	995,103	2,488,224	2,488,224

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.

16. 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.

17. ADDITIONAL INFORMATION – CASH FLOWS

		For the six-month periods ended
	June 30, 2021	June 30, 2020
	\$	\$
Receivables and others	(133,635)	(240,097)
Prepaid expenses	(372,218)	(30,079)
Accounts payable and accrued liabilities	(458,395)	384,832
	(964,248)	114,656

18. 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.

		For the six-month periods ended
	June 30, 2021	June 30, 2020
	\$	\$
Management fees	49,000	39,620
Consulting fees	11,000	15,000
Total	60,000	54,620
Share-based payments	189,097	-
Total remuneration	249,097	54,620

Included in accounts payable and accrued liabilities as at June 30, 2021, was \$ 8,300 (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 period, the Company granted 2,950,000 options to officers and directors (nil options in 2020).

19. POLICIES AND PROCESSES FOR MANAGING CAPITAL

As at June 30, 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 period ended June 30, 2021. The Company finances its exploration activities primarily seeking additional capital either through private placements or public offerings.

20. 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 15. 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 June 30, 2021 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.

20. FINANCIAL INSTRUMENT RISKS (continued)

As at June 30, 2021, the working capital is \$ 687,377 (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.

As at June 30, 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 5 years
June 30, 2021
Accounts payable and accrued liabilities	645,591	-	-	-
Debenture	-	-	-	-
Promissory note	-	-	-	-
Advance from a private company	-	349,512	-	-
Long-term debt	-	-	-	-
Total	645,591	349,512	-	-

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 5 years
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	-	349,512	-	-
Long-term debt	-	9,738	27,539	-
Total	931,045	1,813,243	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 June 30, 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:

	June 30, 2021	December 31, 2020
	\$	\$
Financial instruments denominated in USD
Cash	187,682	109
Advances to private companies and company owned by a significant shareholder	678,769	595,088
Promissory note and loans	-	(254,640)
Debenture	-	(763,920)
	866,451	(423,363)

A variation of 10% in the currency would affect the net loss and the equity of \$ 86,645 (\$ 42,336 on December 31, 2020). The Company does not use derivative financial instruments to reduce its exposure to foreign exchange risk.

Furthermore, an intercompany balance of \$ 2,188,380 (\$ 1,913,039 on December 31, 2020) 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 \$ 218,838 (\$ 191,304 on December 31, 2020).

AM Resources Corp. Notes to Consolidated Financial Statements For the six-month periods ended June 30, 2021 and 2020 (Unaudited, in Canadian dollars)

21. SEGMENT REPORTING

Management currently identifies one operating segment (note 4.14).

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

			June 30, 2021
	Canada	Colombia	Total
	\$	\$	\$
Non current assets	-	2,756,493	2,756,493
Revenus	-	1,510,028	1,510,028
			December 31, 2020
	Canada	Colombia	Total
	\$	\$	\$
Non current assets	-	3,166,273	3,166,273
Revenus	-	458	458

22. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

	Advance from a company owned by the majority shareholder	Du to related parties	Debenture	Promissory notes	Long-term debt	Total
	\$	\$	\$	\$	\$	\$
January 1, 2021	349,512	321,682	763,920	406,470	37,277	1,878,859
Cash-flows:
Repayment	-	-	(763,920)	(406,470)	(37,277)	(1,207,667)
Proceed	-	-	-	-	-	-
Non-cash: Unrealised loss (gain) on exchange rate	-	-	-	-	-	-
June 30, 2021	349,512	321,682	-	-	-	671,194

	Advance from a company owned by a shareholder with a significant influence	Du to related parties	Debenture	Promissory notes	Long-term 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

23. 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 loss allocated to NCI		Accumulated NCI
	June 30, 2021	December 31, 2020	June 30, 2021	December 31, 2020	June 30, 2021	December 31, 2020
			\$	\$
Asfaltitas Colombianos SAS	40 %	40 %	5,769	1,576	298,205	292,436

No dividends were paid to the NCI during the six-month period ended June 30, 2021 and year ended December 31, 2020.

AM Resources Corp. Notes to Consolidated Financial Statements For the six-month periods ended June 30, 2021 and 2020 (Unaudited, in Canadian dollars)

23. SUBSIDIARY WITH MATERIAL NON-CONTROLLING INTERESTS (continued)

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

	June 30, 2021	December 31, 2020
	\$	\$
Non-current assets	605,845	687,490
Current assets	15,234	17,287
Total assets	621,079	704,777
Non-current liabilities		-
Current liabilities	(23,862)	(11,843)
Total liabilites	(23,862)	(11,843)
Equity attributable to owners of the parent	358,258	400,755
Non-controlling interests	298,205	292,436
	June 30, 2021	December 31, 2020
	\$	\$
Revenue	-	-
Loss for the period attributable to owners of the parent	8,654	2,364
Loss of the period attributable to NCI	5,769	1,576
Loss for the period	14,423	3,940
Other comprehensive loss for the period
(all attributable to owners of the parent)	-	-
Total comprehensive loss for the period attributable
to owners of the parent	8,654	2,364
Total comprehensive loss for the period attributable to NCI	5,769	1,576
Total comprehensive loss for the period	14,423	3,940
	June 30, 2021	December 31, 2020
	\$	\$
Net cash from (used in) operating activities	(955)	847
Net cash from investing activities	-	-
Net cash from financing activities	-	-
Net cash inflow	(955)	847

24. SUBSEQUENT EVENT

No subsequent event.