Badlands Resources — Interim / Quarterly Report 2022

Nov 24, 2021

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MINERAL MOUNTAIN RESOURCES LTD.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended September 30, 2021

(Unaudited – Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

1

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL REPORT

The accompanying unaudited interim financial report of the Company has been prepared by and is the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of this financial report.

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MINERAL MOUNTAIN RESOURCES LTD. INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited – Prepared by Management)

		September 30,	September 30,		March 31,
	Note		2021		2021
ASSETS
Current assets
Cash		$	120,657	$	456,167
Sales tax recoverable			8,675		14,016
Prepaid expenses and deposits	4		151,389		151,340
			280,721		621,523
Non-current assets
Exploration and evaluation assets	7		10,326,721		10,072,947
Restricted cash	5		24,552		24,495
Propertyand equipment	6		118,150		143,937
			10,469,423		10,241,379
Total assets		$	10,750,144	$	10,862,902
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables	8	$	467,207	$	464,616
Lease liability– currentportion	9		42,784		42,264
			509,991		506,880
Non-current liabilities
Lease liability	9		66,245		77,858
Total liabilities			576,236		584,738
Equity
Share capital			49,600,853		49,401,602
Share-based payments reserve			2,966,871		3,015,395
Deficit			(42,393,816)		(42,138,833)
Total equity			10,173,908		10,278,164
Total liabilities and equity		$	10,750,144	$	10,862,902

Commitments (Note 9)

The financial statements were authorised for issue by the board of directors on November 24, 2021 and were signed on its behalf by:

“Nelson Baker”		“Brad Baker”
	Director		Director

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

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MINERAL MOUNTAIN RESOURCES LTD.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited – Prepared by Management)

	Three Months	Three Months	Three Months	Three Months		Six Months		Six Months
		Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	Note	2021		2020		2021		2020
EXPENSES
Consulting fees	$	15,197	$	22,500	$	15,357	$	45,000
Depreciation	5	12,385		13,749		24,769		27,498
Interest expenses		3,475		1,045		7,115		2,460
Management fee	10	81,000		81,000		162,000		162,000
Media and news dissemination		4,550		25,899		9,219		66,762
Office and miscellaneous	10	25,259		23,744		48,889		45,032
Professional fees		21,162		24,528		38,787		44,540
Rent		10,745		11,535		17,832		24,375
Share-based payments	12	21,970		5,735		117,173		50,921
Transfer agent and filingfees		13,236		12,551		21,621		20,231
Loss before items below		(208,979)		(222,286)		(462,762)		(488,819)
Foreign exchange		(9,656)		19,118		(7,918)		54,350
Gain on sale of exploration and evaluation	assets	-		-		50,000		-
Comprehensive loss for the period	$	(218,635)	$	(203,168)	$	(420,680)	$	(434,469)
Basic and diluted loss per common share	11 $	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)

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

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MINERAL MOUNTAIN RESOURCES LTD.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited – Prepared by Management)

					Share-based
		Number of			payments
	Note	Shares	Share capital		reserve	Deficit	Total equity
Balance, March 31, 2021		102,208,369 $ 49,401,602		$	3,015,395	$ (42,138,833) $	10,278,164
Comprehensive loss for theperiod		-	-		-	(420,680)	(420,680)
Transactions with owners
Private placements	11	1,333,340	200,001		-	-	200,001
Share issuance costs	11	-	(750)		-	-	(750)
Share-based payments	12	-	-		117,173	-	117,173
Adjustment on expiration of stock options		-	-		(165,697)	165,697	-
		1,333,340	199,251		(48,524)	165,697	316,424
Balance, September 30, 2021		103,541,709 $ 49,600,853		$	2,966,871	$ (42,393,816) $	10,173,908
					Share-based
		Number of			payments
	Note	Shares	Share capital		reserve	Deficit	Total equity
Balance, March 31, 2020		92,959,003 $ 46,985,827		$	2,957,823	$ (41,225,764) $	8,717,886
Comprehensive loss for theperiod		-	-		-	(434,469)	(434,469)
Transactions with owners
Private placements	11	2,666,667	800,000		-	-	800,000
Share issuance costs	11	-	(54,900)		-	-	(54,900)
Exercise of stock options	11	50,000	15,450		(6,700)	-	8,750
Exercise of warrants	11	5,546,033	1,386,508		-	-	1,386,508
Share-based payments	12	-	-		50,921	-	50,921
Adjustment on expiration of stock options	12	-	-		(8,315)	8,315	-
		8,262,700	2,147,058		35,906	8,315	2,191,279
Balance, September 30, 2020		101,221,703 $ 49,132,885		$	2,993,729	$ (41,651,918) $	10,474,696

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

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MINERAL MOUNTAIN RESOURCES LTD.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED SEPTEMBER 30

(Unaudited – Prepared by Management)

Note		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(420,680)	$	(434,469)
Items not affecting cash:
Depreciation		24,769		27,498
Foreign exchange		531		460
Gain on sale of exploration and evaluation assets		(50,000)		-
Interest expense		7,115		2,460
Share-based payments		117,173		50,921
Changes in non-cash working capital items:
Sales tax recoverable		5,341		2,104
Prepaid expenses and deposits		(637)		(61,489)
Trade and other payables		(9,749)		14,890
Amounts due to relatedparties		-		(57,253)
Net cash used in operatingactivities		(326,137)		(454,878)
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration and evaluation assets		(240,416)		(622,651)
Proceeds from sale of exploration and evaluation assets		50,000		-
Net cash used in investingactivities		(190,416)		(622,651)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital		200,001		2,195,258
Share issuance costs		(750)		(54,900)
Payment of lease liability		(18,208)		(27,312)
Net cashprovided by (used in)financingactivities		181,043		2,113,046
Change in cash during the period		(355,510)		1,035,517
Cash, beginning of the period		456,167		130,475
Cash, end of theperiod	$	120,657	$	1,165,992

Supplemental disclosures with respect to cash flows (Note 13)

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

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

1. NATURE OF BUSINESS

Mineral Mountain Resources Ltd. (the “Company”) was incorporated on September 1, 2006 under the laws of British Columbia, Canada and maintains its head office at Suite 401, 1195 West Broadway, Vancouver, British Columbia, Canada, V6H 3X5. Its registered office is located at Suite 2300, 550 Burrard Street, Vancouver, British Columbia, Canada, V6C 2B5. The Company is engaged in the acquisition, exploration, and development of mineral properties in North America. The Company’s common shares are listed on the TSX Venture Exchange (TSX-V) under the symbol “MMV” and on the OTCQB under the symbol “MNRLF”.

2. BASIS OF PREPARATION

These condensed interim consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by International Accounting Standards Board (“IASB”), applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34 Interim Financial Reporting . The condensed unaudited interim financial statements do not include all of the disclosures required for a complete set of annual financial statements and should be read in conjunction with the audited annual consolidated financial statements for the year ended March 31, 2021, which have been prepared in accordance with IFRS as issued by the IASB.

These condensed interim consolidated financial statements incorporate the financial statements of the Company and its wholly-owned subsidiary, Mineral Mountain Resources (SD) Inc. All inter-company transactions, balances, income and expenses are eliminated in full on consolidation.

Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at fair values. In addition these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, which is functional currency of the Company and its subsidiary.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

2. BASIS OF PREPARATION (cont’d…)

Going concern of operations

The Company is an exploration stage company. The Company has a history of losses with no operating revenue. The ability of the Company to recover the costs it has incurred to date on the exploration and evaluation assets is dependent upon the Company being able to identify a commercial ore body, to finance its exploration and development costs and to resolve any environmental, regulatory, or other constraints which may hinder the successful development of the assets. The aforementioned factors indicate the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent on its ability to obtain adequate financing on reasonable terms from lenders, shareholders and other investors and/or to commence profitable operations in the future. Although the Company has been successful in raising funds in the past, there is no assurance that it will be able to obtain adequate financing in which case the Company may be unable to meet its obligations. The directors, after reviewing the current cash position and having considered the Company’s ability to raise funds in the short term, adopt the going concern basis in preparing its consolidated financial statements.

These consolidated financial statements do not include adjustments that would be required if going concern is not an appropriate basis for preparation of the financial statements. These adjustments could be material.

In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is currently not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds. The Company is closely monitoring the impact of the pandemic on all aspects of its business.

Significant estimates and assumptions

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual results could differ from these estimates. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised. Significant areas requiring the use of management estimates include:

• i) The determination of the fair value of stock options and agent’s warrants using stock pricing models, require the input of highly subjective assumptions, including the expected price volatility. Changes in the subjective input assumptions could materially affect the fair value estimate.

• ii) The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards. Changes in these assumptions could materially affect the recorded amounts.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

2. BASIS OF PREPARATION (cont’d…)

Significant judgments

The preparation of these consolidated financial statements requires management to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements include:

• i) Recorded costs of exploration and evaluation assets are not intended to reflect present or future values of these assets. The assessment of indications of impairment loss and the reversal of an impairment loss and the measuring of the recoverable amount when impairment tests have been prepared involve judgment. The recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that change in future conditions could require a material change in the recognized amount.

• ii) The assessment of the Company’s ability to continue as a going concern involves judgment regarding future funding available for its exploration projects and working capital requirements and whether there are events or conditions that may give rise to significant uncertainty.

• iii) The classification of financial instruments.

• iv) The determination of whether it is likely that future taxable profits will be available to utilize against any deferred tax assets.

• v) The determination of whether a decline in the fair value of a financial asset classified as available-for-sale is prolonged and /or significant and is therefore an impairment.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out in the Company’s audited annual consolidated financial statements for the year ended March 31, 2021 were consistently applied to all the periods presented unless otherwise noted below.

New accounting standards

The Company has reviewed future new and amended IFRS pronouncements and determined that there are no standards that are not yet effective that would be expected to have a material impact on the Company’s consolidated financial statements.

4. PREPAID EXPENSES AND DEPOSITS

	September 30,	September 30,	March 31,
		2021	2021
Exploration deposits	$	25,978 $	25,704
Prepaid expenses		94,961	95,186
Rental deposit		30,450	30,450
	$	151,389$	151,340

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

5. RESTRICTED CASH

The Company has provided corporate credit cards to its Chief Executive Officer with a credit limit totalling $21,400 ($15,000 in Canadian and $5,000 in US) for the Company’s expenses. As collateral for the credit cards, the Company has a one-year term deposit of $17,250 earning average annual interest at the prime rate minus 2.27% and a one-year US term deposit of US$5,750 earning annual interest of 0.2%. As at September 30, 2021, the credit cards had an outstanding balance of $861 (March 31, 2021 - $58) in total.

6. PROPERTY AND EQUIPMENT

		Right-of-use		Computer		Office		Field
		asset		equipment		equipment		equipment		Total
Cost
Balance as at March 31 and September	$	214,457	$	7,970	$	13,299	$	20,367	$	256,093
30,2021
Accumulated depreciation
Balance as at March 31, 2021		85,783		5,977		7,780		12,616		112,156
Depreciation for theperiod		21,446		1,993		1,330		1,018		25,787
Balance as at September 30,2021		107,229		7,970		9,110		13,634		137,943
Net value as at September 30, 2021	$	107,228	$	-	$	4,189	$	6,733	$	118,150
		Right-of-use		Computer		Office		Field
		asset		equipment		equipment		equipment		Total
Cost
Balance as at March 31, 2020	$	96,702	$	7,970	$	13,299	$	20,367	$	138,338
Additions		117,755		-		-		-		117,755
Balance as at March 31,2021		214,457		7,970		13,299		20,367		256,093
Accumulated depreciation
Balance as at March 31, 2020		48,351		1,992		5,121		10,579		66,043
Depreciation for theyear		37,432		3,985		2,659		2,037		46,113
Balance as at March 31,2021		85,783		5,977		7,780		12,616		112,156
Net value as at March 31, 2021	$	128,674	$	1,993	$	5,519	$	7,751	$	143,937

During the six months ended September 30, 2021, the Company expensed $24,769 (2020 - $27,498) in depreciation to the statement of comprehensive loss and capitalized $1,018 (2020 - $1,018) to exploration and evaluation assets.

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MINERAL MOUNTAIN RESOURCES LTD.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

7. EXPLORATION AND EVALUATION ASSETS

		March 31,				March 31,			September 30,	September 30,
		2020		Additions		2021		Additions		2021
Standby Gold Project, South Dakota
Acquisition costs
Option payments	$	2,150,850	$	-	$	2,150,850	$	-	$	2,150,850
Stakingand otherpropertycosts		1,212,511		118,767		1,331,278		113,496		1,444,774
		3,363,361		118,767		3,482,128		113,496		3,595,624
Exploration costs
Assays		130,567		2,093		132,660		-		132,660
Drilling		3,388,602		-		3,388,602		30,008		3,418,610
Equipment rental		101,067		15,267		116,334		5,438		121,772
Field work		180,100		19,655		199,755		1,839		201,594
Geological consulting		1,287,506		119,237		1,406,743		43,919		1,450,662
Geophysical survey		359,604		86,750		446,354		900		447,254
Miscellaneous		361,755		184,793		546,548		20,262		566,810
State and local taxes		173,372		7,114		180,486		37,912		218,398
Travel		162,827		10,510		173,337		-		173,337
		6,145,400		445,419		6,590,819		140,278		6,731,097
	$	9,508,761	$	564,186	$	10,072,947	$	253,774	$	10,326,721

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

7. EXPLORATION AND EVALUATION ASSETS (cont’d…)

Standby Gold Project, South Dakota

The Company’s Standby Gold project is located in the Rochford Mining District of the Black Hills, South Dakota. The Standby project includes the following properties:

Rochford Claims

During the year ended March 31, 2013, the Company staked 289 unpatented mineral claims (“Rochford Claims”) situated in the Rochford Mining District of the Black Hills, South Dakota, at a cost of $191,390.

During the year ended March 31, 2017, the Company staked an additional 150 unpatented federal lode mining claims for approximately $81,400.

BHB Claims

On March 7, 2016, the Company and its wholly-owned US subsidiary entered into a purchase and sale agreement (“BHB Agreement”) with four individuals (collectively the “Owners”) to purchase a 100% interest in 19 unpatented lode mineral claims (“BHB Claims”) located in the Rochford Mining District and the historical database pertaining to the BHB Claims in consideration of 4,000,000 shares of the Company (issued during the year ended March 31, 2017 with a fair value of $1,500,000).

In addition, the Company agreed to grant the Owners a collective 2% net smelter returns royalty (“NSR”) on the BHB Claims, a collective 1% NSR on the Company’s Rochford Claims and a collective 1.5% NSR on claims falling within the area of mutual interest (“Area of Interest Claims Royalty”). The Area of Interest Claims Royalty will only be granted if the acquired property or properties are not already burdened with a royalty.

Standby Property

On September 2, 2016, the Company and its wholly-owned US subsidiary entered into an option agreement to acquire a 100% interest in the 9 patented lode mineral claims located in the Rochford Mining District. Pursuant to the option agreement, the Company made cash payments of US$500,000 to the optionor and earned a 100% interest in the Standby Property.

In addition, the Company agreed to grant the optionor a 2% NSR and the Company has the option to purchase up to one-half of the NSR (1% NSR) at the price of US$1,500,000 for 1% NSR or a proportionate amount if the Company purchases less than 1% of the NSR.

On September 23, 2016, the Company purchased a digital database relating to the Standby property in consideration of US$75,000 (paid) and 500,000 common shares of the Company (issued).

Straw Lake Property, Ontario

The Company holds a 100% interest in certain mineral claims in the Kenora Mining District in northwestern Ontario, previously known as the Straw Lake project. On June 3, 2021, the Company entered into an agreement to sell its interest in the Straw Lake claims for a total of $200,000, receivable in four equal installments over a three year period. The Company received the first instalment of $50,000 upon the signing of the agreement.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

8. TRADE AND OTHER PAYABLES

	September 30,	September 30,	March 31,
		2021	2021
Trade payables	$	461,907 $	445,616
Accrued expenses		5,300	19,000
	$	467,207$	464,616

Trade payables of the Company are principally comprised of amounts outstanding for trade purchases relating to exploration activities and accrued expenses for operating activities. The usual credit period taken for trade purchases is between 30 to 90 days.

9. LEASE LIABILITY

A continuity of the Company’s lease liability is as follows:

Balance as at March 31, 2020	$	51,234
Interest accrued		5,758
Additional lease liability recognized due to modification		117,755
Leasepaymentpaid duringtheyear		(54,625)
Balance as at March 31, 2021	$	120,122
Interest accrued		7,115
Leasepaymentpaid duringtheperiod		(18,208)
Balance as at September 30, 2021	$	109,029
Current liability	$	42,784
Long-term liability	$	66,245

The Company discounted remaining lease payments using its incremental borrowing rate, which was a weightedaverage rate of 12%. The Company’s share of operating costs for the six months ended September 30, 2021 were $17,832 (2020 - $24,375) which are variable and were therefore expensed in net loss.

The Company has entered into an office lease agreement for its office premises for a term ending March 31, 2024. The undiscounted future lease payments are as follows:

2022 2023 2024	27,312 45,521 54,625 $ 127,458

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

10. RELATED PARTY TRANSACTIONS

Key management personnel include directors (executive and non-executive) and senior officers of the Company. The compensation paid or payable to key management personnel during the six month periods ended September 30 is as follows:

		2021		2020
Management fees	$	162,000	$	162,000
Professional fees		28,919		27,340
Share-basedpayments		100,434		18,291
Total	$	291,353	$	207,631

The Company entered into the following transactions relating to key management personnel and entities over which they have control or significant influence during the six month period ended September 30, 2021:

• a) Incurred management fees of $60,000 (2020 - $60,000) to a company controlled by the President of the Company.

• b) Incurred management fees of $30,000 (2020 - $30,000) to a company controlled by a director of the Company.

• c) Incurred management fees of $42,000 (2020 - $42,000) to a director of the Company.

• d) Incurred professional fees of $nil (2020 - $5,590) to a company which a director of the Company is an officer.

• e) Incurred professional fees of $22,770 (2020 - $21,750) and management of $30,000 (2020 - $30,000) to a company controlled by the Chief Financial Officer of the Company.

• f) Incurred professional fees of $5,792 (2020 - $nil) and other fees of $357 (2020 - $nil) to a company with the Secretary in common with the Company.

The Company has entered into four consulting agreements with a director and three companies controlled separately by two directors and an officer of the Company for management and corporate consulting services for a total monthly fee of $27,000 plus applicable taxes. These agreements are for a one year term and continue thereafter on a month to month basis and may be terminated with a six month notice or a termination payment equal to six months’ remuneration.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

11. SHARE CAPITAL

Authorized share capital

The Company has authorized an unlimited number of common shares with no par value.

Issued share capital

At September 30, 2021, the Company had 103,541,709 common shares outstanding (March 31, 2021 - 102,208,369).

Share issuance

During the six months ended September 30, 2020, the Company completed a non-brokered private placement of 1,333,340 units at a price of $0.15 per unit for gross proceeds of $200,001. Each unit is comprised of one common share and one share purchase warrant; each warrant entitles the holder to acquire one additional common share for a period of 12 months at an exercise price of $0.30. No value was allocated to the warrants based on the residual method. The Company also incurred filing expenses of $750 in connection with the private placement.

During the year ended March 31, 2021, the Company:

• a) Completed a non-brokered private placement of 2,916,667 units at a price of $0.30 per unit for gross proceeds of $875,000. Each unit is comprised of one common share and one share purchase warrant; each warrant entitles the holder to acquire one additional common share for a period of 12 months at an exercise price of $0.40. No value was allocated to the warrants based on the residual method. The Company paid $59,150 as finders’ fees. The Company also incurred filing and other expenses of $5,375 in connection with the private placement.

• b) Issued 375,000 common shares at $0.175 per share upon the exercise of stock options for proceeds of $65,625. Accordingly, $50,250 was transferred from share-based payments reserve to share capital.

• c) Issued 5,957,699 common shares at $0.25 per share upon the exercise of warrants for proceeds of $1,489,425.

Basic and diluted loss per share

The calculation of basic and diluted loss per share for the six months ended September 30, 2021 was based on the loss attributable to common shareholders of $420,680 (2020 - $434,469) and a weighted average number of common shares outstanding of 102,354,089 (2020 - 97,737,306).

At September 30, 2021, 6,675,000 stock options (2020 - 6,125,000) and 6,913,940 warrants (2020 - 9,302,180) were excluded from the diluted weighted average number of common shares calculation as their effect would have been anti-dilutive.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

12. SHARE-BASED PAYMENTS

Stock options

The Company has adopted an incentive rolling stock option plan (the “Plan”) under which it is authorized to grant options to directors, officers, employees and consultants enabling them to acquire up to a maximum of 10% of the issued and outstanding common shares of the Company. The options can be granted for a maximum term of 5 years and vest as determined by the board of directors. Options granted to employees or consultants performing investor relations will vest in stages over 12 months with no more than one quarter of the options vesting in any three month period. The exercise price of options granted under the Plan shall not be less than the closing price of the Company’s shares on the trading day immediately preceding the date of grant, less the discount permitted under the TSX-V’s policies.

Stock option transactions are summarized as follows:

			Weighted
			Average
	Number		Exercise
	of Options		Price
Balance, March 31, 2020	6,200,000	$	0.26
Granted	2,275,000		0.25
Exercised	(375,000)		0.18
Cancelled/expired	(675,000)		0.32
Balance, March 31, 2021	7,425,000	$	0.25
Cancelled/expired	(750,000)		0.25
Balance, September 30, 2021	6,675,000	$	0.25
Exercisable at September 30, 2021	5,787,500	$	0.26
Weighted average fair value of optionsgranted duringtheperiod	$ nil	(2020 -$nil)

The options outstanding at September 30, 2021 have exercise prices in the range of $0.15 to $0.455 and a weighted average remaining contractual life of 2.71 years.

For the six months ended September 30, 2021, the Company recognized share based payment expense of $117,173 (2020 - $50,921) for the portion of stock options that vested during the period.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

12. SHARE-BASED PAYMENTS (Cont’d…)

Stock options (Cont’d…)

As at September 30, 2021 the following stock options were outstanding:

Number
of Options	Exercise Price	ExpiryDate
650,000	$ 0.175	October 7, 2022
1,275,000	$ 0.35	January 8, 2023
150,000	$ 0.39	January 18, 2023
300,000	$ 0.395	January 20, 2023
325,000	$ 0.25	January 21, 2024
250,000	$ 0.15	April 9, 2024
1,575,000	$ 0.175	October 7, 2024
200,000	$ 0.40	January 3, 2025
1,950,000	$0.25	January 21, 2026
6,675,000

Warrants

Warrants are issued as private placement incentives. Value was allocated to the warrants issued with private placement units based on the residual method. Agents’ warrants are measured at fair value on the date of the grant as determined using the Black-Scholes option pricing model.

Warrant transactions are summarized as follows:

			Weighted
			Average
	Number		Exercise
	of Warrants		Price
Balance, March 31, 2020	33,797,879	$	0.38
Warrants granted	2,916,667		0.40
Warrants exercised	(5,957,699)		0.25
Agents’ warrants expired	(258,412)		0.40
Warrants expired	(22,251,168)		0.41
Balance, March 31, 2021	8,247,267	$	0.40
Warrants granted	(1,333,340)		0.30
Warrants expired	(2,666,667)		0.40
Balance,September 30,2021	6,913,940	$	0.38

The warrants outstanding at September 30, 2021 have exercise prices in the range of $0.30 to $0.40 and a weighted average remaining contractual life of 0.32 year.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

12. SHARE-BASED PAYMENTS (Cont’d…)

Warrants (Cont’d…)

As at September 30, 2021, the following warrants were outstanding:

Number
of Warrants	Exercise Price	ExpiryDate
250,000	$ 0.40	October 9, 2021
5,330,600	$ 0.40	December 5, 2021
1,333,340	$0.30	September 10, 2022
6,913,940

13. SUPPLEMENTAL CASH FLOW INFORMATION

Significant non-cash investing and financing transactions during the six month period ended September 30, 2021 included:

• (a) The Company allocated depreciation of equipment of $1,018 to exploration and evaluation assets.

(b) Included in trade and other payables are $431,657 related to exploration and evaluation assets.

Significant non-cash investing and financing transactions during the six month period ended September 30, 2020 included:

• (a) The Company allocated depreciation of equipment of $1,018 to exploration and evaluation assets.

• (b) Included in trade and other payables are $618,978 related to exploration and evaluation assets.

14. CAPITAL MANAGEMENT

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern, pursue exploration of its mineral property interest and to maintain a flexible capital structure for the benefits of its stakeholders. In the management of capital, the Company includes components of shareholders’ equity in the definition of capital.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristic of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue common shares or dispose of assets.

Management reviews the capital structure on a regular basis to ensure that the Company’s capital management objectives are achieved. There was no change in the Company’s approach to capital management from the prior year. The Company’s capital is not subject to any external restrictions.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

15. FINANCIAL INSTRUMENTS

The Company classified its financial instruments as follows: cash and restricted cash classified as subsequently measured at amortized cost; trade and other payables as subsequently measured at amortized cost financial liabilities. The carrying amount of financial assets and liabilities carried at amortized cost is a reasonable approximation of fair value due to the relatively short period to maturity of these financial instruments.

Financial risk management

The Company’s financial risks arising from its financial instruments are credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. The Company’s exposures to these risks and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Credit risk

Credit risk is the risk of potential loss to the Company if the counter party to a financial instrument fails to meet its contractual obligations. The credit risk of the Company is associated with cash and restricted cash. The credit risk with respect to its cash and restricted cash is minimal as they are held with high-credit quality financial institutions. Management does not expect these counterparties to fail to meet their obligations.

Liquidity risk

Liquidity risk is the risk that the Company will not meet its obligations associated with its financial liabilities as they fall due. The Company performs cash flow forecasting for each fiscal year to ensure there is sufficient cash available to fund its projects and operations. As at September 30, 2021, the Company had a cash balance of $120,657 and current liabilities of $509,991. The Company’s financial liabilities include trade and other payables which have contractual maturities of 30 days or are due on demand.

At present, the Company’s operations do not generate cash flow. The Company’s primary source of funding has been the issuance of equity securities through private placements and the exercise of stock options and warrants as well as loans from related parties. Despite previous success in acquiring these financings, there is no guarantee of obtaining future financings.

Interest rate risk

Interest risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The Company is exposed to interest rate risk to the extent that the cash maintained at the financial institutions. The interest rate risks on cash and restricted cash are not considered significant due to their short-term nature and maturity.

Foreign exchange rate risk

Foreign exchange risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company funds certain operations, exploration and administrative expenses in the United States by using US dollars converted from its Canadian bank accounts. At September 30, 2021, the Company had financial assets of $13,611 and financial liabilities of $426,849 denominated in United States dollars. A 10% strengthening of the US dollar would affect net loss by approximately $41,000. The Company does not hedge its foreign exchange risk.

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MINERAL MOUNTAIN RESOURCES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED SEPTEMBER 30, 2021 (Unaudited – Prepared by Management)

16. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

As at September 30, 2021, the Company has no financial assets or financial liabilities measured at fair value. There have been no changes in these levels and no changes in classifications during the six months ended September 30, 2021.

17. SEGMENTED INFORMATION

Operating segments

The Company operates in a single reportable segment – the acquisition, exploration and development of mineral properties.

Geographic segments

The Company’s non-current assets are located in Canada the USA as follows:

At September 30, 2021:

		Canada		USA		Total
Property and equipment	$	111,417	$	6,733	$	118,150
Exploration and evaluation assets		-		10,326,721		10,326,721
	$	111,417	$	10,333,454	$	10,444,871

At March 31, 2021:

		Canada		USA		Total
Property and equipment	$	136,186	$	7,751	$	143,937
Exploration and evaluation assets		-		10,072,947		10,072,947
	$	136,186	$	10,080,698	$	10,216,884

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