ATEX Resources Inc. — Interim / Quarterly Report 2021

Feb 25, 2021

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Unaudited Condensed Interim Consolidated Financial Statements

For the Three Months Ended December 31, 2020

(Expressed in Canadian Dollars)

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying unaudited condensed interim consolidated financial statements of ATEX Resources Inc. (the ” Company ”) were prepared by management, on behalf of the Board of Directors, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. These unaudited condensed interim consolidated financial statements do not include all of the disclosures required for annual financial statements and therefore should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto for the year ended September 30, 2020. These unaudited condensed interim consolidated financial statements follow the same significant accounting policies and methods of application as those included in the Company’s most recent audited annual consolidated financial statements, as described in Note 2. Management acknowledges responsibility for the preparation and presentation of the financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company's circumstances. The Company’s significant accounting policies are summarized in Note 2 to these unaudited condensed consolidated interim financial statements. In the opinion of management, the unaudited condensed interim consolidated financial statements have been prepared within acceptable limits of materiality and are in accordance with International Accounting Standard 34, Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances.

Management has established systems of internal control over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial information is produced.

The Board of Directors is responsible for reviewing and approving the financial statements and for ensuring that management fulfils its financial reporting responsibilities. The Board of Directors meets with management as well as with the independent auditors to review the internal controls over the financial reporting process, the financial statements and the auditors' report. The Board of Directors also reviews the Company's Management’s Discussion and Analysis to ensure that the financial information reported therein is consistent with the information presented in the financial statements.

Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

February 28, 2021

(Signed) "Raymond Jannas" (Signed) "Thomas Pladsen" Raymond Jannas Thomas Pladsen Chief Executive Officer Chief Financial Officer

NOTICE OF NO AUDITOR REVIEW OF UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102, the Company discloses that the accompanying unaudited condensed interim consolidated financial statements for the three months ended December 31, 2020 were prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these unaudited condensed interim consolidated financial statements.

• 2 -

ATEX Resources Inc.

Condensed Interim Consolidated Statements of Financial Position

• (Unaudited Expressed in Canadian Dollars)

(Unaudited-Expressed in Canadian Dollars)
		September
	December 31,	30,
	2020	2020
	$	$
Assets
Current
Cash	2,878,786	320,660
Tax recoverable and other receivables	38,669	32,069
Prepaid expense	8,499	12,748
	2,925,954	365,477
Non-Current
Restricted cash	20,000	20,000
Exploration and evaluation assets (Note 3)	1,374,632	1,031,115
Total assets	4,320,586	1,416,592
Liabilities
Current
Accounts payable and accrued liabilities (Note 5)	118,906	163,609
Total Liabilities	118,906	163,609
Shareholders' Equity
Share capital (Note 5)	86,249,109	83,243,974
Contributed surplus	7,621,531	7,497,245
Accumulated deficit	(89,668,960)	(89,488,236)
Total shareholders' equity	4,201,680	1,252,983
Total liabilities and shareholders' equity	4,320,586	1,416,592
Nature of operations (Note 1)
Going concern of operations (Note 2 (d))
Subsequent events (Note 8)
Signed on behalf of the Board of Directors by:

“Robert Suttie” Director Robert Suttie	“Carl Hansen” Director Carl Hansen

The accompanying notes are an integral part of these consolidated financial statements - 3 -

ATEX Resources Inc.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the Three Months Ended December 31, 2020 - (Unaudited Expressed in Canadian Dollars)

For the Three Months Ended December 31, 2020 (Unaudited-Expressed in Canadian Dollars)
	2020	2019
	$	$
Expenses:
Consulting	26,042	41,250
Filing and transfer agent	4,734	644
Management and administration (Note 5)	72,494	76,360
Office and general	13,048	22,045
Professional fees	21,500	56,539
Travel and shareholder relations	1,780	6,399
Foreign exchange loss	41,126	15
Net loss and comprehensive loss for the period	(180,724)	(203,252)
Basic and diluted loss per share	$0.01	$0.02
Weighted number of common shares outstanding	30,575,261	13,202,595

The accompanying notes are an integral part of these consolidated financial statements - 4 -

ATEX Resources Inc.

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity For the Three Months Ended December 31, 2020 - (Unaudited Expressed in Canadian Dollars)

	Share Capital Contributed Number of Amount Surplus Deficit Total Common Shares $ $ $ $
Balance - September 30, 2019 Net loss for the period	13,202,595 81,432,514 7,451,681 (87,617,965) 1,266,230 - - - (203,252) (203,252)
Balance - December 31, 2019 Shares issued for cash Share issue costs Stock-based compensation Net loss for the period	13,202,595 81,432,514 7,451,681 (87,821,217) 1,062,978 6,372,666 1,911,800 - - 1,911,800 - (100,340) 15,764 - (84,576) - - 29,800 - 29,800 - - - (1,667,019) (1,667,019)
Balance - September 30, 2020 Shares issued for cash Share issue costs Shares issued for mineral property Net loss for the period	19,575,261 83,243,974 7,497,245 (89,488,236) 1,252,983 16,500,000 3,300,000 - - 3,300,000 - (450,865) 124,286 - (326,579) 600,000 156,000 - - 156,000 - - - (180,724) (180,724)
Balance - December 31, 2020	36,675,261 86,249,109 7,621,531(89,668,960) 4,201,680

The accompanying notes are an integral part of these consolidated financial statements - 5 -

ATEX Resources Inc.

Condensed Interim Consolidated Statements of Cash Flows For the Three Months Ended December 31, 2020 - (Unaudited Expressed in Canadian Dollars)

ATEX Resources Inc. Condensed Interim Consolidated Statements of Cash Flows For the Three Months Ended December 31, 2020 (Unaudited-Expressed in Canadian Dollars)
	2020	2019
	$	$
Operating activities:
Net loss for the period	(180,724)	(203,252)
Items not involving cash:
Amortization of prepaid expenses	-	3,739
	(180,724)	(199,513)
Net change in non-cash working capital items:
Tax recoverable and other receivables	(6,600)	(12,465)
Prepaid expenses	4,249	(7,222)
Accounts payable and accrued liabilities	(44,703)	111,896
Cash used in operating activities	(227,778)	(107,304)
Investing activities
Mineral property expenditures	(187,517)	(130,726)
Cash used in investing activities	(187,517)	(130,726)
Financing activities
Issuance of common shares	3,300,000	-
Share issue costs	(326,579)	-
Cash used in investing activities	2,973,421	-
Change in cash	2,558,126	(238,030)
Cash- beginning	320,660	313,167
Cash- ending	2,878,786	75,137
Non-cash investing activity:
Exploration expenditures included in accountspayable	66,115	102,031

The accompanying notes are an integral part of these consolidated financial statements - 6 -

ATEX Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

1. Corporate Information

The business activity of ATEX Resources Inc. (the “Company”) is the exploration and evaluation of mineral properties in South America. The Company was incorporated under the laws of the Province of British Columbia on January 20, 1981 and its common shares are listed for trading on the TSX Venture Exchange (“TSXV”) under the symbol “ATX”.

These consolidated financial statements include the results of the Company's 100% owned subsidiaries, ATEX Chile SpA (“ATEX Chile”) and ATEX Valeriano SpA (“ATEX Valeriano”), both companies incorporated in Chile. The address of the Company’s corporate office and is Suite 1900, 25 Adelaide Street East, Toronto, Ontario.

2. Basis of Preparation

a) Statement of compliance

The Company’s unaudited condensed interim consolidated financial statements for the three months ended December 31, 2020, have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting. The significant accounting policies applied in these unaudited condensed interim consolidated financial statements are based on IFRS issued as of December 31, 2020.

These statements were authorized for issue by the Board of Directors on February 28, 2021.

b) Basis of Measurement

These financial statements have been prepared on a historical cost basis, except for financial instruments classified as available for sale which are at fair value, and have been prepared using the accrual basis of accounting.

The preparation of financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company‘s accounting policies. These critical accounting estimates are disclosed in Notes 4 of the audited annual consolidated financial statements for the year ended September 30, 2020.

c) Basis of Consolidation

These consolidated financial statements include all subsidiaries of the Company. Subsidiaries are entities over which the Company is able, directly or indirectly, to control financial and operating policies, which is the authority usually connected with holding majority voting rights. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. They are de-consolidated from the date that control by the Company ceases. All significant inter-company transactions and balances are eliminated.

These consolidated financial statements include the accounts of the Company, ATEX Chile and ATEX Valeriano. All significant inter-company transactions and balances have been eliminated.

d) Going Concern of Operations

These consolidated financial statements have been prepared assuming the Company will continue on a goingconcern basis. As at December 31, 2020, the Company had not yet achieved profitable operations, has an accumulated deficit of $89,668,960, and expects to incur further losses in the development of its business. These conditions indicate the existence of material uncertainty which casts significant doubt about the Company’s ability to continue as a going concern. The continuing operations of the Company are dependent upon economic and market factors which involve uncertainties including the Company’s ability to raise adequate equity financing for continuing operations. Realization values may be substantially different from carrying values as shown and accordingly these consolidated financial statements do not give effect to adjustments, if any, which would be necessary should the Company be unable to continue as a going concern. If the going concern assumption was

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ATEX Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

not used then the adjustments required to report the Company’s assets and liabilities on a liquidation basis could be material to these consolidated financial statements.

(e) COVID-19 Estimation Uncertainty

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. The Company may incur significant delays in planned exploration activity, impacting its ability to meet obligations under current regulations or its agreements and may reduce its ability to source financing for future activities. However, it is not possible to reliably estimate the length and severity of these developments and the impact on the financial resultsand conditions of the Company in future periods at this time.

2. Summary of Significant Accounting Policies

The financial framework and accounting policies applied in the preparation of the interim financial statements are consistent with the policies disclosed in Notes 2 and 3 of the audited annual consolidated financial statements for the year ended September 30, 2020.

The Company did not adopt any new accounting policies during the nine months ended September 30, 2020.

3. Exploration and Evaluation Assets

The Company’s exploration properties are located Chile in South America, and its interest in these resource properties was maintained pursuant to agreements with the titleholders.

Chile

Apolo Concessions :

In July 2019, the Company, through its wholly-owned Chilean subsidiary, ATEX Chile, entered into an option agreement to acquire a 100% interest in the Alicia, Roma and Condor gold properties, referred to collectively as the Apolo Concessions, covering a total area of 14,900 hectares located in Region III, Chile.

The Company conducted surface examinations of the Apolo concessions and, based on the results of this work, determined that the properties were of no further interest in light of the operational difficulties resulting from the “COVID-19” coronavirus. Accordingly, the Company terminated the option agreement on the Apolo Concessions on May 31, 2020 and wrote off the related exploration and evaluation assets of $670,350 in June 30, 2020.

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ATEX Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

Valeriano Property :

In August 2019, the Company, through its wholly-owned Chilean subsidiary, ATEX Valeriano, entered into an option agreement to acquire up to a 100% interest in the 3,705-hectare Valeriano Copper/Gold Property located in Region III, Chile.

Pursuant to the option agreement, as amended January 15, 2020 and January 14, 2021, to acquire an initial 49% property interest the Company is required to:

• Pay US$4.25 million, including:

• US$200,000 upon signing (paid);

• US$300,000 on January 14, 2021 (paid);

• US$250,000 by August 30, 2022; and

• US$3.5 million by August 29, 2023 (50% of which may be paid via the issuance of common shares, at the Company’s discretion).

• Complete the following work commitments:

• Incur US$10.0 million in exploration expenditures on the property, including at least 8,000 metres of drilling by August 29, 2023.

Upon the Company acquiring the initial 49% interest, ATEX Valeriano and the optionor shall incorporate a joint stock company owned by both parties proportionate to each party’s respective property ownership interest.

After earning the initial 49% property interest, to acquire a further 51% property interest, increasing the Company’s interest to 100%, the Company is required to do the following:

• Pay US$8.0 million by August 29, 2025 (50% of which may be paid via the issuance of common shares, at the optionor’s discretion); and

• Incur a further US$5.0 million in exploration expenditures on the property by August 29, 2025.

Upon the Company earning a full 100% property interest, the optionor shall also transfer its ownership interest in the incorporated joint stock company, resulting in the Company owning 100% of this company. ATEX Valeriano shall also grant a 2.25% net smelter royalty to the optionor. See Note 8.

The option was originally granted by the optionor to SBX Asesorías e Inversiones Limitada ("SBX"). Under a transfer and assignment agreement with SBX, the Company paid US$150,000, shall issue 2 million units and shall grant a 0.25% net smelter royalty to SBX. Each unit is to consist of one common share and one common share purchase warrant exercisable at $0.40 per common share for four years. 1.0 million of the units vest and are issuable on December 31, 2020, subject to SBX not becoming an insider of the Company and a further 1.0 million units vest and are issuable upon the Company making the US$3.5 million option payment due by August 29, 2023 under the Valeriano option agreement. Under this agreement the Company issued 600,000 units to SBX on December 31, 2020. Each unit consisted of one common share and one share purchase warrant exercisable at $0.40 per common share for four years.

ATEX Chile’s generative projects are properties in Chile staked by the Company for early stage exploration for minerals.

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ATEX Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

The Company’s exploration and evaluation assets are as follows:

		Expenditures During the Year	Expenditures During the Year	Expenditures During the Year
	Sept. 30, 2019	Acquisitions	Exploration	Written Off	Sept.30, 2020
Mineral Properties:	$	$	$	$	$
ATEX Chile:
Apolo	367,276	-	303,074	(670,350)	-
ATEX Valeriano:
Valeriano	614,076	-	417,039	-	1,031,115
Total	981,352	-	720,113	(670,350)	1,031,115
		Expenditures During the Period
	Sept. 30, 2020	Acquisitions	Exploration	Written Off	Dec. 31, 2020
Mineral Properties:	$	$	$	$	$
ATEX Chile:
Generative Projects	-	-	78,271	-	78,271
ATEX Valeriano:
Valeriano	1,031,115	156,000	109,246	-	1,296,361
Total	1,031,115	156,000	187,517	-	1,374,632

4. Share Capital

a) Authorized

Authorized share capital consists of an unlimited number of common shares without par value.

b) Issued

On December 31, 2020, there were 36,675,261 common shares outstanding.

On January 31, 2020, the Company issued 3,616,333 units (each, a "Unit") at $0.30 per Unit for gross proceeds of $1,084,900 pursuant to a non-brokered private placement. Each Unit consisted of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable to purchase one common share at a price of $0.40 per common share for three years from the closing date. In connection with the financing, the Company paid a finder’s fee and other cash share issue costs of $84,576 and issued 229,810 finder’s warrants, which entitle the holder to purchase 229,810 Units at a purchase price of $0.30 per Unit until January 31, 2021. The finder’s warrants were valued at $12,759 using the Black-Scholes option pricing model.

On February 20, 2020, the Company issued 2,756,333 Units at $0.30 per Unit for gross proceeds of $826,900 pursuant to the second tranche of a non-brokered private placement. In connection with the financing, the Company paid an aggregate finder’s fee of $15,533 and issued an aggregate of 51,777 finder’s warrants, which entitle the holder to purchase an aggregate of 51,777 Units at a purchase price of $0.30 per Unit until February 20, 2021. The finder’s warrants were valued at $3,005 using the Black-Scholes option pricing model.

On November 23, 2020, the Company issued 16,500,000 Units at $0.20 per Unit for gross proceeds of $3,300,000 (the “Offering”) pursuant to a brokered private placement. The agents for the Offering were Mackie Research Capital Corporation and Canaccord Genuity Corp. (the “Agents”). Each Unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable to acquire one common share at a price of $0.30 per common share until November 23, 2022. The Agents received a cash fee equal to 6.0% of the gross proceeds from the Offering. In addition, the Company granted the Agents compensation options equal to 8.0% of the total number of Units sold under the Offering. Each compensation option entitles the Agent to purchase one Unit at an exercise

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ATEX Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

price of $0.20 until November 23, 2021. The finder’s warrants were valued at $124,286 using the Black-Scholes option pricing model.

Under the original Valeriano Project transfer and assignment agreement with SBX, the Company issued 600,000 units to SBX on December 31, 2020. Each unit consisted of one common share and one share purchase warrant exercisable at $0.40 per common share for four years. See Note 3.

c) Share Purchase Warrants

The continuity of common share purchase warrants is as follows:

	Number of Warrants	Weighted Average Exercise Price
Balance-September 30, 2019	10,000,000	$0.20
Issued pursuant to private placement–January 31, 2020	1,808,167	$0.40
Issued pursuant to private placement–February 20, 2020	1,378,166	$0.40
Balance- September 30, 2020	13,186,333
Issued pursuant to private placement–November 23, 2020	16,500,000	$0.30
Issued pursuant to private placement–December 31, 2020	600,000	$0.40
Balance- December 31, 2020	30,286,333	$0.30

Details of common share purchase warrants outstanding at December31, 2020 are:

Number of Warrants	Exercise Price	Expiry Date	Remaining Life (Years)
10,000,000	$0.20	April 29, 2024	3.33
1,808,167	$0.40	January 31, 2023	2.08
1,378,166	$0.40	February 20, 2023	2.14
16,500,000	$0.30	November 23, 2022	1.90
600,000	$0.40	December 31, 2024	4.00
30,286,333	$0.30

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ATEX Resources Inc.

Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

The continuity of broker warrants is as follows:

	Number of Warrants	Weighted Average Exercise Price
Balance-September 30, 2019	-	-
Issued pursuant to private placement–January 31, 2020	229,810	$0.30
Issued pursuant to private placement–February 20, 2020	51,777	$0.30
Balance- September 30, 2020	281,587
Issued pursuant to private placement–November 23, 2020	1,180,000	$0.20
Balance- December 31, 2020	1,461,587	$0.22

Details of broker warrants outstanding at December 31, 2020 are:

Number of Warrants	Exercise Price	Expiry Date	Remaining Life (Years)
229,810	$0.30	January 31, 2021	0.08
51,777	$0.30	February 20, 2021	0.14
1,180,000	$0.20	November 23, 2021	0.90
1,461,587	$0.22

The fair values of broker warrants issued on November 23, 2020 were estimated using the Black-Scholes option pricing model with the following pricing parameters with no dividend yield expected: risk-free interest rate; 0.3%, expected life: 1 year; volatility: 130%.

d) Stock Options

The Company has a stock option plan whereby the maximum number of common shares reserved for issue under the plan shall not exceed 10% of the outstanding common shares. The maximum number of common shares reserved for issue to any one person under the plan cannot exceed 5% of the outstanding number of common shares at the date of the grant and the maximum number of common shares reserved for issue to a consultant or a person engaged in investor relations activities cannot exceed 2% of the outstanding number of common shares at the date of the grant. Options vest at the date of grant, unless otherwise noted. The exercise price of each option granted under the plan may not be less than the Discounted Market Price (as that term is defined in the policies of the TSXV). Options may be granted for a maximum term of ten years from the date of the grant, are non-transferable and expire within 90 days of termination of employment or holding office as Director or officer of the Company and, in the case of death, expire within one year thereafter.

The continuity of stock options outstanding is as follows:

	Number of Options	Weighted Average Exercise Price
Balance–September, 2020	1,195,000	$0.25
Granted	290,000	$0.15
Balance- September 30, 2020 and December 31, 2020	1,485,000	$0.23

During the year ended September 30, 2020 the Company granted 290,000 stock options to Directors and officers, with each option exercisable to purchase one common share at $0.15 per common share for five years.

• 12 -

ATEX Resources Inc.

Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

Details of stock options outstanding at December 31, 2020:

Date Granted	Number of Options	Exercise Price	Expiry Date	Remaining Life (years)	Unit Fair Value
May 8, 2019	1,160,000	$0.25	May 8, 2024	3.35	$0.22
July 8, 2019	35,000	$0.30	July 8, 2024	3.52	$0.20
June 1, 2020	40,000	$0.15	June 1, 2025	4.42	$0.12
June 10, 2020	250,000	$0.15	June 10, 2025	4.44	$0.11
Balance – December 31, 2020	1,485,000	$0.23

5. Related Party Transactions

Key management personnel are persons responsible for the planning, directing and controlling activities of the entity. The Company’s key management personnel are the CEO, CFO and a Director and their compensations are included in the following:

	2020	2019
	$	$
Management fees	72,493	76,360
Total	72,493	76,360

Related party liabilities are included in trade and other payable. As at December 31, 2020, $21,849 (2019 - $69,666) was owed to related parties. These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

6. Capital Management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern and to maintain a flexible capital structure which will allow it to pursue the exploration of its mineral properties. Therefore, the Company monitors the level of risk incurred in its mineral property expenditures relative to its capital structure which is comprised of working capital and shareholders’ equity.

The Company monitors its capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to facilitate the management of capital and the exploration of its mineral properties, the Company prepares annual expenditure budgets which are updated as necessary and are reviewed and periodically approved by the Company’s Board of Directors. To maintain or adjust the capital structure, the Company may issue new equity if available on favourable terms, option its mineral properties for cash and/or expenditure commitments from optionees, enter into joint venture arrangements, or dispose of mineral properties.

The Company’s investment policy is to hold excess cash in interest bearing bank accounts.

The Company is not subject to externally imposed capital requirements. There has been no change in the Company’s approach to capital management during the period ended December 31, 2020.

7. Financial Instruments and Risk Management

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to market conditions and the Company’s activities. The Company has exposure to credit risk, liquidity risk and market risk as a result of its use of financial instruments.

• 13 -

ATEX Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board has implemented and monitors compliance with risk management policies as set out below.

a) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments which are subject to credit risk for the Company consist primarily of cash and long-term receivable. The Company manages credit risk by investing its cash with high creditworthy financial institutions and completing due diligence on significant counterparties that the Company has entered into contracts.

b) Liquidity Risk

Liquidity risk is the risk that the Company will incur difficulties meeting its financial obligations as they are due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking harm to the Company’s reputation.

As at December 31, 2020, the Company’s cash on hand is less than the financial liabilities comprising of accounts payable and accrued liabilities and the Company will need to raise additional funds to continue meeting its obligations in the future.

c) Market Risk

Market risk consists of currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable limits, while maximizing returns.

i) Foreign Currency Risk

Foreign currency risk is the risk that a variation in exchange rate between the Canadian and US dollar or other foreign currencies will affect the Company’s operations and financial results. As such the Company has exposure to foreign currency exchange rate fluctuations. The Company has not entered into any agreements or purchased any instruments to hedge possible foreign currency risks.

The following table reflects the Company’s foreign currency exposure from US dollars as of December 31, 2020 and 2019:

	December 31, 2020
	US$
Financial assets:
Cash	1,473,907
Financial liabilities:
Accounts payable and accrued liabilities	-

As at December 31, 2020, with other variables unchanged, a 10% change in the value of the Canadian dollar against the US dollar would result in an approximate $14,739 decrease or increase in loss and comprehensive loss.

• 14 -

Notes to the Condensed Interim Consolidated Financial Statements For the Three Months ended December 31, 2019 (Expressed in Canadian Dollars)

ATEX Resources Inc.

The following table reflects the Company’s foreign currency exposure from Chilean Pesos as of December 31, 2020:

	December 31, 2020
	Chilean Pesos
Financial assets:
Cash	315,894,346
Financial liabilities:
Accounts payable and accrued liabilities	36,933,159

As at December 31, 2020, with other variables unchanged, a 10% change in the value of the Canadian dollar against the Chilean peso would result in an approximate $49,937 decrease or increase of loss and comprehensive loss.

ii) Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest rate risk is limited to potential decreases on the interest rate offered on cash and cash equivalents held with chartered Canadian financial institutions. The Company considers this risk to be immaterial.

8. Subsequent Events

On January 4, 2021, the Company granted 1,400,000 options to Directors, officers and consultants of the Company, with each option exercisable at $0.30 per common share for five years. On January 28, 2021, the Company granted 100,000 options to a Directors of the Company, with each option exercisable at $0.35 per common share for five years.

On January 14, 2021, the Company and the optionor of the Valeriano Copper/Gold Property agreed to amend the Valeriano option agreement as follows (see Note 3):

• The US$300,000 payment originally due by the earlier of the commencement of drilling or August 29, 2021 was amended to be payable on January 14, 2021 (paid);

• The US$250,000 payment originally due by August 30, 2021 is now due by August 30, 2022;

• The US$3.5 million payment originally due by August 29, 2022 is now due by August 29, 2023;

• US$10.0 million in exploration expenditures on the property, including at least 8,000 metres of drilling, originally to be completed by August 29, 2022 are now to be completed by August 29, 2023;

• After earning an initial 49% property interest, the US$8.0 million originally payable by August 29, 2024 towards increasing the Company’s property interest to 100% is now payable by August 29, 2025; and After earning an initial 49% property interest, a further US$5.0 million in exploration expenditures to be incurred on the property originally by August 29, 2024 are now to be incurred by August 29, 2025

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