Beauce Gold Fields Inc. — Interim / Quarterly Report 2021

Dec 17, 2020

==> picture [237 x 72] intentionally omitted <==

Beauce Gold Fields Inc.

Unaudited Financial Statements As at October 31, 2020

(In Canadian dollars)

Table of contents

Statements of Financial Position		2
Statements of Comprehensive Loss		3
Statements of Changes in Equity		4
Statements of Cash Flows		5
Notes to Financial Statements	6	- 28

As at October 31, 2020 and July 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Statements of Financial Position (unaudited)

Notes ASSETS Current Cash 6 Goods and services tax receivable Prepaid expenses Non-current Exploration and evaluation assets 7 Total assets LIABILITIES Current Trade and other payables 8 Royalties payable 7 Note payable 9 Non-current Royalties payable 7 Total liabilities EQUITY Share capital 10 Contributed surplus Retained deficit Total equity Total liabilities and equity	October 31, 2020 $ 889,410 20,748 2,044 912,202 1,854,237 2,766,439 180,117 49,364 - 229,481 174,981 404,462 3,475,555 335,116 (1,448,694) 2,361,977 2,766,439	July 31, 2020
		$ 313,267 14,821 4,895
		332,983
		1,743,362
		2,076,345
		239,357 48,411 180,000
		467,768
		168,134
		635,902
		2,329,453 325,046 (1,214,056)
		1,440,443
		2,076,345

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

These financial statements were approved and authorized for issue by the Board of Directors on December 17, 2020.

ON BEHALF OF THE BOARD

(s) Patrick Levasseur , Director (s) Bernard J. Tourillon , Director

2

Beauce Gold Fields Inc. Statements of Comprehensive Loss (unaudited) As at October 31, 2020 and 2019 (in Canadian dollars)

Notes Expenses Salaries and employee benefits expense 11.1 Professionnal fees Traveling expenses Business development Advertising fees Information to shareholders and registration fees Office expenses Bank charges Operating loss Other charges Change in fair value of royalties payable Interests on the note payable Net loss and total comprehensive loss of the period Loss per share Basic and diluted net loss per share 13	2020 $ 63,778 43,840 5,232 32,000 20,592 12,500 10,284 380 188,606 7,800 4,532 12,332 (200,938) (0.01)	2019
		$ 35,833 16,900 22,599 30,215 24,306 9,328 5,673 157
		145,011 7,945 8,167
		16,112
		(161,123)
		(0.08)

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

3

Beauce Gold Fields Inc. Statements of Changes in Equity (unaudited) As at October 31, 2020 and 2019 (in Canadian dollars)

Notes Balance as at August 1 er, 2019 Units issued by private placements 10.1 Issuance cost of units Net loss and total comprehensive loss for the period Balance as at October 31, 2019 Balance as at August 1 er, 2020 Units issued by private placements 10.1 Issuance for NSR repurchase 10.1 Issuance for the payment of accounts payable Exercise of warrants 10.1 Expiration of warrants 10.2 Issuance cost of units Net loss and total comprehensive loss for the year Balance as at October 31, 2020	Share capital $ 1,695,103 201,750 - 1,896,853 - 1,896,853 2,329,453 1,000,002 108,500 22,600 15,000 - - 3,475,555 - 3,475,555	Contributed surplus $ 319,549 - 1,101 320,650 - 320,650 325,046 - - - - (2,181) 12,251 335,116 - 335,116	Retained deficit $ (524,802) - (5,710) (530,512) (161,123) (691,635) (1,214,056) - - - - 2,181 (35,881) (1,247,756) (200,938) (1,448,694)	Total equity
				$ 1,489,850 201,750 (4,609)
				1,686,991 (161,123)
				1,525,868
				1,440,443 1,000,002 108,500 22,600 15,000 - (23,630)
				2,562,915 (200,938)
				2,361,977

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

4

Beauce Gold Fields Inc. Statements of Cash Flows (unaudited) As at October 31, 2020 and 2019 (in Canadian dollars)

Notes OPERATING ACTIVITIES Net loss Adjustments Change in fair value of royalties payable Interests on the note payable Salaries and employee benefits expense Changes in working capital items 15 Cash flows used for operating activities INVESTING ACTIVITIES Addition to exploration and evaluation assets Cash flows used for investing activities FINANCING ACTIVITIES Issuance of units by private placements Exercise of warrants Reimbursement of Note payable Issuance cost of units Cash flows from financing activities Net change in cash Cash, beginning of the period Cash, end of the period	2020 $ (200,938) 7,800 - 2,250 (41,966) (232,854) (2,375) (2,375) 1,000,002 15,000 (180,000) (23,630) 811,372 576,143 313,267 889,410	2019 $ (161,123) 7,945 8,167 - 12,130 (132,881) (21,414) (21,414) 201,750 - - (4,609) 197,141 42,846 255,489 298,335
For additional cash flows information refer to Note 14. Cash operations Interests paid related to operating activities	24,879	-

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

5

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

1. NATURE OF OPERATIONS

Beauce Gold Fields Inc. (hereinafter the "Company") specializes in the exploration of gold in mining sites located in Quebec.

2. GOING CONCERN, STATEMENT OF COMPLIANCE WITH IFRS AND COVID-19

The financial statements of the Company have been prepared in accordance with IAS 34 interim financial reporting and 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 operations.

Given that the Company has not yet determined whether its properties contain mineral deposits that are economically recoverable, the Company has not yet generated income or cash flows from its operations. As at October 31, 2020, the Company has cumulated retained deficit of $1,448,162 ($1,214,056 as at July 31, 2020). The liquidities of the Company are not sufficient to fund its administrative and exploration and evaluation expenses of the next year. These material uncertainties cast a significant doubt on the Company's ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional financing to further explore its mineral properties and continued support of suppliers and creditors. Even if the Company has been successful in the past in doing so, there is no assurance that it will manage to obtain additional financing in the future.

The carrying amounts of assets, liabilities, revenues and expenses presented in the financial statements and the classification used in the statement of financial position have not been adjusted as would be required if the going concern assumption was not appropriate. Those adjustments could be material.

In March 2020, the World Health Organization declared the COVID-19 epidemic a pandemic. The situation is constantly evolving, and the measures put in place have numerous economic repercussions at the global, national, provincial and local levels. These measures, which include travel bans, solitary confinement or quarantine, voluntary or not, and social distancing, have caused significant disruption among businesses, globally and in Canada, due to the slowdown economic. Governments and central banks responded by implementing monetary and fiscal measures to stabilize the world economy; however, the current difficult economic climate may cause adverse changes in cash flow, the level of working capital and / or the search for future financing, which could have a direct impact on the Company future financial position. The financial impact on the Company is not know at this time.

3. GENERAL INFORMATION

The Company was incorporated under the Canada Business Corporations Act. on August 1st, 2016. The Company traded on the TSX-Venture Exchange (“TSX-V”) under the symbol:”BGF” since February 4, 2019. The address of the registered office and its principal place of business is 3000 Omer-Lavallee Street, office 306, Montreal, Quebec, Canada.

4. SUMMARY OF ACCOUNTING POLICIES

4.1 Overall considerations

The significant accounting policies that have been applied in the preparation of these financial statements are summarized below.

4.2 Functional and presentation currency

These financial statements are presented in Canadian dollars, which is also the functional currency of the Company.

6

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

4.3 Standards, modifications and interpretations of published standards which are not yet in force and which have not been early adopted by the Company

At the date of authorization of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the Company.

Management anticipates that all of the relevant pronouncements will be adopted in the Company’s accounting policies for the first period beginning after the effective date of the pronouncement and its not expected that to have a material impact on the Company’s financial statements.

4.4 Financial instruments

Recognition, initial measurement and derecognition

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. Financial assets are measured initially at fair value plus transaction costs, if any. Financial liabilities are measured initially at fair value and, if applicable, adjusted of transaction costs except if the Company has designed a financial liability at fair value through profit or loss.

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognized in the event of termination, extinction, cancellation or expiration.

The classification of financial instruments under IFRS 9 is based on the entity's business model and the characteristics of the contractual cash flows of the financial asset or liability.

Classification and initial valuation of financial assets

Financial assets are classified in the category at amortized cost.

All income and expenses relating to financial assets recognized in profit or loss are presented within other charges, if any.

Subsequent valuation of financial assets

Financial assets at amortized cost

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

• They are held according to an economic model whose objective is to hold financial assets in order to collect the contractual cash flows;

• The contractual terms of the financial assets give rise to cash flows that correspond solely to repayments of principal and interest payments on the principal outstanding.

After initial recognition, they are measured at amortized cost using the effective interest rate method. The update is omitted if its effect is not significant. Cash is included in this category of financial instruments.

7

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

4.4 Financial instruments (continued)

Impairment of financial assets

The impairment provisions in IFRS 9 use the expected credit loss model.

The recognition of credit losses must take into account information for assessing credit risk and assessing expected credit losses, including past events, current circumstances, reasonable and justifiable forecasts that affect expected recoverability of future cash flows of the financial instrument.

The estimate of expected credit losses is determined at each reporting date to reflect changes in credit risk since the initial recognition of the related financial asset.

Classification and subsequent valuation of financial liabilities

The Company's financial liabilities include trade and other payables (excluding salaries and benefits expenses), the note payable and royalties payable.

After initial recognition, financial liabilities are evaluated at amortized cost using the effective interest rate method, except for royalties payable who are designated, by the Company, at fair value through profit or loss because they included an embedded derivate. Royalties payable are subsequently evaluated at fair value with gains and losses recognized in profit or loss.

Interest expenses and change in the fair value of an instrument recognized in profit or loss are presented in other charges.

4.5 Basic and diluted loss per share

Basic loss per share is calculated by dividing the loss attributable to common equity holders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by adjusting loss attributable to common equity holders of the Company, and loss weighted average number of common shares outstanding, for the effects of all dilutive potential common shares which include share options, brokers’ warrants and warrants. Dilutive potential common shares shall be deemed to have been converted into common shares at the average market price at the beginning of the period or, if later, at the date of issue of the potential common shares.

4.6 Tax credits receivable

The Company is entitled to a refundable tax credit on qualified exploration expenditures incurred and refundable credit on duties for losses under the Mining Tax Act. The tax credits are recognized as a reduction of the exploration costs incurred based on estimates made by management. The Company records these tax credits when there is reasonable assurance with regards to collections and assessments and that the Company will comply with the conditions associated to them.

4.7 Exploration and evaluation assets and exploration and evaluation expenditures

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

8

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

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

Once the legal right to undertake exploration and evaluation activities has been obtained, all costs of acquiring mineral rights and 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 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-byproperty 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. Exploration and evaluation assets include a land recorded as non-amortizable fixed asset and carried at cost less any accumulated impairment losses.

Whenever a mining property is considered no longer viable, or is abandoned, the capitalized amounts are written down to their recoverable amounts (see Note 4.8), 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 (see Note 4.8), and any impairment loss is recognized in profit or loss before reclassification.

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

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 and development 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.

Disposal of interest in connection with option agreement

On the disposal of interest in connection with the option agreement, the Company does not recognize expenses related to the exploration and evaluation performed on the property by the acquirer. In addition, the cash or the shares consideration received directly from the acquirer are credited against the costs previously capitalized to the property, and the surplus is recognized as a gain on the disposal of exploration and evaluation assets in profit or loss.

4.8 Impairment of exploration and evaluation assets

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at a cash-generating unit level.

Whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, an asset or cash-generating unit is reviewed for impairment.

9

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

4.8 Impairment of exploration and evaluation assets (continued)

Impairment reviews for exploration and evaluation assets are carried out on a project by project basis, with each project representing a potential single cash generating unit. An impairment review is undertaken when indicators of impairment arise, but typically when one of the following circumstances apply:

• The right to explore the areas has expired or will expire in the near future with no expectation of renewal;

• No further exploration or evaluation expenditures in the area are planned or budgeted;

• No commercially viable deposits have been discovered, and the decision has been made to discontinue exploration in the area;

• Sufficient work has been performed to indicate that the carrying amount of the expenditure carried as an asset will not be fully recovered.

Additionally, when technical feasibility and commercial viability of extracting a mineral resource are demonstrable, the exploration and evaluation assets of the related mining property are tested for impairment before these items are transferred to property and equipment.

An impairment loss is recognized in profit or loss for the amount by which the asset’s or cash-generating unit's carrying amount exceeds its recoverable amount. The recoverable amount of an asset or a cashgenerating unit is the higher of its fair value less cost to sell and its value in use.

An impairment charge is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.

4.9 Provisions and contingent liabilities

Provisions are recognized when present legal or constructive obligations as a result of a past event will probably lead to an outflow of economic resources from the Company and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Provisions are discounted when the time value of money is significant.

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 laws 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.

In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognized. Such situations are disclosed as contingent liabilities unless the outflow of resources is remote.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. No provision was recognized in the statements of financial position as at October 31, 2020 and July 31, 2020.

10

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

4.10 Income taxes

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

Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of reporting period. Deferred income taxes are calculated using the liability method.

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. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.

Deferred tax liabilities are generally recognised in full, although IAS 12 “Income Taxes” specifies limited exemptions.

Tax related to flow-through placements

According to the provisions of tax legislation relating to flow-through placements, the Company has to transfer its right to tax deductions for expenses related to exploration activities to the benefit of the investors. When the Company has fulfilled its obligation to transfer its right, which happens when the Company has incurred eligible expenditures and has renounced or has the intention to renounce to its right to tax deductions, a deferred tax liability is recognized for the taxable temporary difference that arises from difference between the carrying amount of eligible expenditures capitalized in the statement of financial position and its tax basis.

4.11 Equity

Share capital represents the amount received on the issue of shares. If shares are issued when share options, brokers’ warrants or warrants are exercised, the Share capital account also comprises the compensation costs or the value of the stock options or warrants previously recorded as Contributed surplus. In addition, if the shares are issued as consideration for the acquisition of a mineral property and other non-monetary assets, the shares were measured at 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 using the residual method. Proceeds are first allocated to the shares according to the quoted price of existing shares at the time of issuance and any residual in the proceeds is allocated to warrants.

Flow-through placements

Issuance of flow-through units represents in substance an issue of common shares, warrants and the sale of the right to tax deductions to the investors. When the flow-through units are issued, the sale of the right to tax deductions is deferred and presented as liability related to flow-through shares in the statement of financial position. The proceeds received from flow-through units are allocated between share capital, warrants and the liability related to flow-through shares using the residual method. Proceeds are first allocated to shares according to the quoted price of existing shares at the time of issuance, then to warrants according to the fair value at the date of issuance and the residual proceeds are allocated to the liability related to flow-through shares. The fair value of the warrants is determined using the Black-Scholes valuation model. The liability related to flow-through shares recorded initially on the issuance of units is reversed on renouncement of the right to tax deductions to the investors and when eligible expenses are incurred and recognized in profit or loss in reduction of deferred income tax expense.

11

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

Other elements of equity

Contributed surplus includes charges related to share options, warrants and brokers’ warrants until such options and warrants are exercised. When they are cancelled or expired, the related compensation cost is transferred in decrease of retained deficit. When options and warrants are exercised, the related compensation cost is transferred to share capital.

Retained deficit includes all current and prior period retained profits or losses, plus issuance costs, net of any underlying income tax benefit from these issuance costs and compensation related to options and warrants cancelled or expired, transferred from Contributed surplus.

4.12 Equity-settled share-based payments

The Company operates an equity-settled share-based payment plan for its eligible directors, officers, employees and consultants. The Company's plan does not feature any option for a cash settlement.

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 Company 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 rendered by reference to the fair value of the equity instruments granted.

Equity-settled share-based payments (except brokers’ warrants) are ultimately recognized as an expense in profit or loss or capitalized as exploration and evaluation assets, 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.

The expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. 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 was made to any expense recognized in prior period if share options ultimately exercised are different to that estimated on vesting.

4.13 Segmental reporting

The Company presents and discloses segmental information based on information that is regularly reviewed by the chief operating decision-maker, i.e. the management and the Board of Directors. The Company has determined that there was only one operating segment being the sector of exploration and evaluation of mineral resources.

5. JUDGMENTS, ESTIMATES AND ASSUMPTIONS

When preparing the financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.

5.1 Significant management judgments

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

12

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

5.1 Significant management judgments (continued)

Recognition of deferred income tax assets and measurement on income tax expense

Management continually evaluates the likelihood that its deferred tax assets could be realized. This requires management to assess whether it is probable that sufficient taxable income will exist in the future to utilize these losses within the carry-forward period. By its nature, this assessment requires significant judgment. To date, management has not recognized any deferred tax assets in excess of existing taxable temporary differences expected to reverse within the carry-forward period (see Note 4.10).

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 programs, involves significant judgment 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.

5.2 Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses are discussed below. Actual results may be substantially different.

Impairment of exploration and evaluation assets

Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment losses is a subjective process involving judgment and a number of estimates and assumptions in any cases (see Note 4.8).

When an indication of an impairment loss or a reversal of an impairment loss exists, the recoverable amount of the individual asset or the cash-generating units must be estimated.

In assessing impairment, the Company must make some estimates and assumptions regarding future circumstances, in particular, whether an economically viable extraction operation can be established, the probability that the expenses will be recovered from either future exploitation or sale when the activities have not reached a stage that permits a reasonable assessment of the existence of reserves, the Company’s capacity to obtain financial resources necessary to complete the evaluation and development and to renew permits.

Estimates and assumptions may change if new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in profit or loss in the period when the new information becomes available.

See Notes 7 for the exploration and evaluation assets impairment analysis.

During the period, the Company recognized to profit or loss a write-off of exploration and evaluation assets of nil ($ 5,000 as at July 31, 2020). No reversal of impairment losses has been recognized for the reporting periods.

The other properties have not been tested for impairment as the Company has the ability to retain properties as it has sufficient financial resources to meet its short-term obligations and expenditures are programmed over future exercises. The rights to prospect for these properties will not expire in the near future and/or work has been carried out on these properties over the year.

13

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

Royalties payable

Management uses its judgment to estimate the amount of royalties payable (see Note 7). Uncertainty in estimates is related to net expenses assumptions and the determination of a suitable discount rate.

Share-based payments

The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the volatility of historical data of the shares of similar companies in the industry, the probable life of share options, broker’s warrants and warrants granted and the time of exercise of those share options and warrants. The model used by the Company is the Black-Scholes valuation model (see Notes 10.2, 10.3 and 11.2).

6. Cash

Cash includes and amount of $10,569 ($12,944 as at July 31, 2020) which represents the balance on flowthrough financing not spent according to the restriction imposed by these financing arrangements. According to tax law, the Company has the obligation to dedicate these funds to Canadian mining properties exploration.

14

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

7. EXPLORATION AND EVALUATION ASSETS

Québec Saint-Simon-Les-Mines Property Mining rights Exploration and evaluation expenses Land Roncevaux Property-HPQ Mining rights Exploration and evaluation expenses Bradford Property Mining rights Exploration and evaluation expenses St-Bergemin Property Mining rights Exploration and evaluation expenses Summary Mining rights Exploration and evaluation expenses Land	Balance at August 1st, 2020 $ 1,334,083 207,639 181,356 1,723,078 10,000 - 10,000 9,918 - 9,918 366 - 366 1,354,367 207,639 181,356 1,743,362	Additions $ 101,500 2,375 - 103,875 - - - - - - - - - 101,500 2,375 - 103,875	Write-off $ - - - - - - - - - - - - - - - - -	Balance at October 31, 2020
				$ 1,435,583 210,014 181,356
				1,826,953
				10,000 -
				10,000
				9,918 -
				9,918
				366 -
				366
				1,455,867 210,014 181,356
				1,847,237

15

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

As at October 31, 2020 (in Canadian dollars)

7. EXPLORATION AND EVALUATION ASSETS (continued)

Québec Saint-Simon-Les-Mines Property Mining rights Exploration and evaluation expenses Land Wares Property Mining rights Exploration and evaluation expenses Roncevaux Property-HPQ Mining rights Exploration and evaluation expenses Bradford Property Mining rights Exploration and evaluation expenses St-Bergemin Property Mining rights Exploration and evaluation expenses Summary Mining rights Exploration and evaluation expenses Land	Balance at August 1st, 2019 $ 1,332,274 76,000 181,356 1,589,630 5,000 - 5,000 10,000 - 10,000 5,546 - 5,546 - - - 1,352,820 76,000 181,356 1,610,176	Additions $ 1,809 131,639 - 133,448 - - - - - - 4,372 - 4,372 366 - 366 6,547 131,639 - 138,186	Write-off $ - - - - (5,000) - (5,000) - - - - - - - - - (5,000) - - (5,000)	Balance at July 31, 2020
				$ 1,334,083 207,639 181,356
				1,723,078
				- -
				-
				10,000 -
				10,000
				9,918 -
				9,918
				366 -
				366
				1,354,367 207,639 181,356
				1,743,362

16

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

7. EXPLORATION AND EVALUATION ASSETS (continued)

Québec

Saint-Simon-Les-Mines Property

During December 2018, the Company completed the agreement concluded with a company with a significant influence, HPQ-Silicon Resources Inc. ("HPQ") for the acquisition of 152 claims located in the municipality of Saint-Simon-les-Mines in the Beauce region in Quebec, including 7 real estate lots for the price of $1,500,000. The Company paid the price by assuming the mortgage of $180,000 affecting these 7 real estate lots and the issuance of 13,200,000 common shares of its share capital for a total value of $1,320,000. The fair value of the acquired property was determined based on an independent appraisal.

The Company has agreed to pay, to a third party, a royalty of 3.5% for the duration of gold production as well as an amount of $ 500,000 upon commencement of production.

The Company will assume the payment to a third party of a royalty of 1.5% of which, at the option of the company, 1% may be redeemed for an amount of $1,000,000. On September 30, 2020, the Company entered into an agreement to redeemed from its holder by issuing 700,000 common shares of its share capital representing a value of $ 108,500.

The Company will pay HPQ a NSR of an amount of $35,000 between the fifteeth and the twenty-fourth month after the closing date and $25,000 each subsequent year. This NSR can be redeemed at the option of the Company for $250,000. The corresponding liability, Royalties payable, was recognized at the time of the acquisition for a total amount of $176,563 calculated on the estimated cash flows under the agreement over a four year period at a rate of 18%. The corresponding counterpart was accounted against the share capital. During the fiscal year ending July 31, 2020, the Company paid an amount of $10,000 in cash.

The Company holds a 100% interest in 153 claims (153 claims as at July 31,2020).

Wares Property

During the last year, the Company has written-off this property following the abandonment of mining claims.

Roncevaux Property-HPQ

During the month of December 2018, according to the agreement entered with HPQ, the latter granted the Company the right to search and extract from its Roncevaux property base metals and other minerals other than quartz, in consideration of a 5% royalty (NSR) and the Company's issuance of 100,000 common shares for a value of $10,000. This NSR can be repurchased in part by the company by paying HPQ $100,000 for every 0.1%, up to 4%.

Bradford Property

The Company holds a 100% interest in 112 claims acquired by staking (112 claims as at July 31, 2020).

St-Bergemin Property

The Company holds a 100% interest in 8 claims acquired by staking (8 claims as at July 31,2020).

17

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

8. TRADE AND OTHER PAYABLES

Trade accounts Management fees payable Salaries payable Remuneration of directors payable Other	October 31, 2020 $ 30,163 29,167 93,623 25,500 1,724 180,177	July 31 2020
		$ 70,838 29,167 93,623 23,250 22,479 239,357

9. NOTE PAYABLE

During December 2018, the Company signed an estate mortgage of $180,000, secured by the land with a net carrying amount of $181,356, bearing interest at compound rate of 18 % annually until July 31, 2020. On September 4, 2020, the Company reimbursed the principal and interests.

10. EQUITY

10.1 Share capital

The share capital of the Company consists of an unlimited number of common shares without par value. All shares are participating and are equally eligible to receive dividends and the repayment of capital and represent one vote each at the shareholders’ meeting of the Company.

Shares issued at the beginning Private placements (a) (b) (c) (d) (e) Flow-through private placement (c) Issuance for the payment of accounts payable (g) Exercise of warrants Acquisition of mining rights (f) Total shares issued and fully paid Shares to be issued (h) Total shares at the end	October 31, 2020 Number of shares 25,474,166 8,333,350 - 77,931 100,000 700,000 34,685,447 86,923 34,772,370	July 31, 2020
		Number of shares 18,716,666 6,637,500 120,000 - - -
		25,474,166
		25,474,166

18

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

10.1 Share capital (continued)

• (a) On September 9, 2019, the Company completed a private financing for a total amount of $173,250. The Company issued 1,732,500 units consisting of one common share and one warrant. Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.15 per share during a period of 24 months following the closing of the financing. No amount related to warrants was recorded.

Furthermore, the Company issued 16,000 warrants to brokers (for a value of $1,101). Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.15 per share for a period of 24 months from the date of closing of the financing.

• (b) On October 8, 2019, the Company completed a private financing for a total amount of $28,500. The Company issued 285,000 units consisting of one common share and one warrant. Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.15 per share during a period of 24 months following the closing of the financing. No amount related to warrants was recorded.

• (c) On December 31, 2019, the Company completed a private financing for a total amount of $30,000. The Company issued 30 units and each unit consisting of 4,000 common shares, 4,000 flow-through shares and 4,000 warrants. Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.18 per share during a period of 24 months following the closing of the financing. An amount of $2,400 related to the warrants was recorded as an increase of contributed surplus and no amount related to flow-through liability was recognized.

• (d) On June 23, 2020, the Company completed a private financing for a total amount of $405,000. The Company issued 4,500,000 units consisting of one common share and one warrant. Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.15 per share during a period of 36 months following the closing of the financing. No amount related to warrants was recorded.

In addition, the Company paid an amount of $5,506 as commission fees. The Company issued to the agent 61,184 warrants (for a value of $4,457). Each warrant entitles the holder to subscribe to one common share of the Company at a price of $0.15 per share for a period of 36 months from the date of closing of the financing.

• (e) On August 21, 2020, the Company completed a private financing for a total amount of $1,000,002. The Company issued 8,333,350 units consisting of one common share and one warrant. Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.18 per share during a period of 36 months following the closing of the financing. No amount related to warrants was recorded.

In addition, the Company paid an amount of $12,800 in commission fees. The Company issued to the agent 106,664 warrants (for a value of $12,251). Each warrant entitles the holder to subscribe to one common share of the Company at a price of $0.18 per share for a period of 36 months from the date of closing of the placement.

• (f) On September 30, 2020, the Company entered into an agreement to buy back the 1.5% royalty on the Saint-Simon-Les-Mines property. The 1.5% royalty is redeemed from its holder by issuing 700,000 common shares of its share capital representing a value of $ 108,500.

• (g) On September 30, 2020, the Company has settled a trade account payable of $11,300 by the issuance of 77,931 common shares. No profit or loss was recorded on this transaction.

19

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

10.1 Share capital (continued)

• (h) On October 31, 2020, the Company has settled a trade account payable of $11,300 by the issuance of 86,923 common shares. No profit or loss was recorded on this transaction. The common shares are to be issued on October 31, 2020.

10.2 Warrants

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

Balance, beginning Granted Exercised Expired Balance, end	October 31, 2020 Number of warrants Weighted average exercise price $ 13,217,060 0.19 8,333,350 0.18 (100,000) 0.15 (144,140) 0.415 21,306,270 0.18	July 31,2020	July 31,2020
	Number of warrants 13,217,060 8,333,350 (100,000) (144,140) 21,306,270	Number of warrants 7,163,423 6,637,500 (583,863) 13,217,060	Weighted average exercise price
			$ 0.25 0.15 0.53
			0.19

The Company recognized an amount of $2,400 as an increase in contributed surplus and a decrease in share capital in connection with the issuance of 120,000 warrants issued relating to the placement concluded on December 31, 2019 (see note 10.1 (c)).

The fair value of $ 0.07 of the warrants granted during the December 2019 placement was estimated, at the grant date, using the Black-Scholes valuation model, based on the following weighted average assumptions:

Average share price at date of grant Expected Dividends yield Expected volatility Risk-free interest rate Expected life Average exercise price at date of grant	2020 $0.13 0 % 115% 1.38 % 2 years $0.18	2019
		$0.10 0 % 98% 1.92 % 1.67 years $0.36

The underlying expected volatility was determined by reference to historical data on the shares of similar companies in the industry over the expected average life of the warrants.

20

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

10.2 Warrants (continued)

Outlined below are the outstanding warrants which could be exercised for an equivalent number of common shares:

Expiration date October, 2020 November, 2020 December, 2020 (i) December, 2020 August, 2021 September, 2021 October, 2021 December, 2021 June 2023 August 2023	October 31, 2020 Number Exercise price $ - 0.415 600,630 0.31 833,333 0.18 3,400,000 0.15 1,501,457 0.35 1,732,500 0.15 285,000 0.15 120,000 0.18 4,500,000 0.15 8,333,350 0.18 21,306,270 0.18	July 31,2020	July 31,2020
	Number - 600,630 833,333 3,400,000 1,501,457 1,732,500 285,000 120,000 4,500,000 8,333,350 21,306,270	Number 144,140 600,630 833,333 3,500,000 1,501,457 1,732,500 285,000 120,000 4,500,000 - 13,217,060	Exercise price
			$ 0.415 0.31 0.18 0.15 0.35 0.15 0.15 0.18 0.15 - 0.19

(i) See Note 19.

10.3 Brokers’ warrants

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

Balance, beginning Granted Balance, end	October 31, 2020 Number Weighted average exercise price $ 165,184 0.15 106,664 0.18 271,848 0.16	July 31, 2020	July 31, 2020
	Number 165,184 106,664 271,848	Number 88,000 77,184 165,184	Weighted average exercise price
			$ 0.15 0.15
			0.15

The Company recorded an amount of $12,251 ($5,558 as at July 31, 2020) as issuance cost when the brokers’ warrants were issued and was recorded as an increase to contributed surplus and a decrease to retained deficit.

21

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

10.3 Brokers’ warrants (continued)

The weighted average fair value $0.115 ($0.072 as at July 31, 2020) of the brokers’ warrants granted was estimated on the grant date using the Black-Scholes option pricing model, based on the following weighted average assumptions:

Average share price at date of grant Expected Dividends yield Expected volatility Risk-free interest rate Expected life Average exercise price at date of grant	2021 $0.18 0 % 105 % 0.23 % 3.0 years $0.18	2020
		$0.12 0 % 113 % 0.50 % 2.2 years $0.15

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

Outlined below are the outstanding brokers’ warrants which could be exercised for an equivalent number of common shares:

Expiration date December 2020 September 2021 June 2023 August 2023	October 31, 2020 Number Exercise price $ 88,000 0.15 16,000 0.15 61,184 0.15 106,664 0.18 271,848 0.16	July 31, 2020	July 31, 2020
	Number 88,000 16,000 61,184 106,664 271,848	Number 88,000 16,000 61,184 - 165,184	Exercise price
			$ 0.15 0.15 0.15 - 0.15

22

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

11 EMPLOYEE REMUNERATION

11.1 Salaries and employee benefits expense

Salaries and employee benefits expense are analysed as follows:

Salaries and employee benefits expense are analysed as follows:
Salaries and benefits Management fees Remuneration of directors	As at October 31,
	2020 $ 49,028 12,500 2,250 49,028	2019
		$ 27,500 8,333 -
		27,500

11.2 Share-based payments

On September 1, 2020, the Company adopted a new share-based payment plan under which the Board of Directors may award to directors, officers, employees and consultants, share options entitling its holder to purchase common shares of the Company. The maximum number of shares issuable under the plan is 3,380,000 common shares (1,900,000 as at July 31, 2020).

The exercise price of each share option is determined by the Board of Directors and cannot be less than the discount market price of common shares as defined by TSX Venture Exchange policies and the term cannot exceed ten years.

The maximum number of common shares that can be issued to a beneficiary, during any 12-month period is limited to 5% of issued and outstanding shares.

The maximum numbers of shares that can be issued to a consultant during any 12-month period is limited to 2% of issued and outstanding shares. Moreover, the share options granted to consultants performing investor relations activities shall be exercised by stages over a 12-month period after the grant, at a rate of 25% per quarter.

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

The Company’s share options are as follows for the reporting period presented:

Outstanding, beginning Granted Outstanding at end of reporting period Exercisable	October 31,2020 Number of options Weighted average exercise price $ 1,850,000 0.16 50,000 0.17 1,900,000 0.16 1,850,000 0.16	July 31, 2020 Number of options Weighted average exercise price $ 1,850,000 0.16 - - 1,850,000 0.16 1,850,000 0.16	July 31, 2020 Number of options Weighted average exercise price $ 1,850,000 0.16 - - 1,850,000 0.16 1,850,000 0.16
	Number of options 1,850,000 50,000 1,900,000 1,850,000		Weighted average exercise price
			$ 0.16 -
			0.16
			0.16

23

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

11.2 Share-based payments (continued)

The table below summarizes the information related to outstanding share options as at October 31, 2020:

Outstanding options	Outstanding options
Number 1,850,000 50,000 1,900,000	Exercice price $ 0.16 0.17 0.16	Remaining contractual life
		years 3.30 1.80 3.26

The table below summarizes the information related to outstanding share options as at July 31, 2020:

Outstanding options	Outstanding options
Number 1,850,000 1,850,000	Exercice price $ 0.16 0.16	Remaining contractual life
		years 3.56 3.56

The weighted fair value of the granted options of $ 0.10 was determined using the Black-Scholes option pricing model based on the following weighted average assumptions:

Share price at date of grant Expected Dividend yield Expected volatility Risk-free interest rate Expected life Exercise price at date of grant	2021
	$0.18 0% 105% 0.23% 2 years $0.17

The underlying expected volatility was determined by reference to historical data of the Company’s shares over the expected average life of the options. No special features inherent to the options granted were incorporated into measurement of fair value.

24

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited) As at October 31, 2020 (in Canadian dollars)

11.2 Share-based payments (continued)

The Company granted 50,000 options to a consultant at a value of $ 5,007. No amount was recorded in net income and credited to contributed surplus and no options acquired during this period.

12. FAIR VALUE MEASUREMENT

12.1 Financial instruments measured at fair value

The fair value hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date;

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

• Level 3: Inputs for the assets or liabilities that are not based on observable market data.

As at Octobre 31, 2020, the fair value of current royalties’ payable is considered to be a reasonable approximation of the carrying value and the non-current royalties’ payable is $174 981 ($168,134 as at July 31, 2020). Royalties payable are classified in the level 3 of the fair value hierarchy.

The fair value of royalties’ payable were estimated using a discounting method. The initial fair value of $176,563 and the fair value as at October 31, 2020, were estimated based on the probability of reimbursment under a four-year period at a rate of 18% which is the rate for similar instruments. The outgoing cash flows before discounting are $310,000 and reflect the assumption of the management for the reimbursment of royalties. During the period, an amount of $7,800 ($31,443 as at July 31, 2020) was accounted in profit or loss as change in fair value of royalties payable.

As at October 31, 2020 and July 31,2020, a variation of 1% of the discount rate would have increase or decrease the fair value of approximatively $3,000 ($3,000 as at July 31, 2020).

13. LOSS PER SHARE

The calculation of basic loss per share is based on the loss for the period divided by the weighted average number of shares in circulation during the period. In calculating the diluted loss per share, dilutive potential common shares such as warrants, brokers’ warrants and 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. Details of share options and warrants issued that could potentially dilute earnings per share in the future are given in Notes 10.2, 10.3 and 11.2.

Both the basic and diluted loss per share have been calculated using the loss as the numerator, i.e. no adjustment to the loss were necessary in 2021 and 2020. Net loss Weighted average number of outstanding shares Basic and diluted loss per share	October	31,
	2020 $(200,938) 32,218,554 $(0.01)	2019
		$(161,123) 21,389,104 $(0.08)

25

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

As at October 31, 2020 (in Canadian dollars)

14. ADDITIONAL INFORMATION – CASH FLOWS

The changes in working capital items are detailed as follows:

14. ADDITIONAL INFORMATION – CASH FLOWS The changes in working capital items are detailed as follows:
Goods and services tax receivable Prepaid expenses Trade and other payables Royalties payable Non-cash financial position transactions are detailed as follows: Trade and other payables included in exploration and evaluation assets Issuance of shares for payment of an account payable Issuance of equity instruments for issuance cost of units Issuance of shares included in exploration and evaluation assets	As at October 31,
	2020 $ (5,927) 2,851 (38,890) - (41,966) 2020 $ - 22,600 12,551 101,500	2019
		$ (11,565) 297 33,398 (10,000) 12,130 2019
		$ 4,363 - - -

15. RELATED PARTY TRANSACTIONS

The Company’s related parties include key management, companies held by a director or an officer and a company with significant influence.

Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantee was given or received. Oustanding balances are usually settled in cash.

15.1 Transactions with key management personnel

Key management personnel of the Company are members of the Board of Directors and officers. Key management personnel remuneration includes the following expenses:

Salaries and benefits Management fees (1) Remuneration of directors	As at Octobre 31,	As at Octobre 31,
	2020 $ 49,028 12,500 2,250 63,778	2019
		$ 27,500 8,333 -
		35,833

• (1) Paid to a company owned by a director

Trade and other payables include an amount of $141,862 ($ 144,433 as at July 31, 2020 ) due to officers as well as $ 25,500 ( $23,250 as at July 31, 2020) due to directors.

26

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

16. CAPITAL MANAGEMENT POLICIES AND PROCEDURES

The Company’s capital management objectives are to ensure the Company’s ability to continue as a going concern, to increase the value of the assets of the business, and to provide an adequate return to owners of the Company.

These objectives will be achieved by identifying the right exploration projects, adding value to these projects and ultimately taking them through to production or sale and cash flows, either with partners or by the Company’s own means.

The Company monitors capital on the basis of the carrying amount of equity.

The Company is not exposed to any externally imposed capital requirements except when the Company issues a flow-through placement for which an amount should be used for exploration work, details of which are given in Notes 10.1 and 19.

The Company finances its exploration and evaluation activities mainly by seeking additional capital either through private placements or public placements. When funding conditions are not optimal, the Company can sign option agreements or other agreements to be able to continue its exploration and evaluation activities or can slow down its activities until conditions funding improves.

17. FINANCIAL INSTRUMENT RISKS

The Company is exposed to various risks in relation to financial instruments. The main types of risks are credit risk and liquidity risk.

The Company risk management is coordinated in close cooperation with the Board of Directors. The objectives focuses on actively securing the Company short-term to medium-term cash flows by minimizing the exposure to financial markets.

The Company does not actively engage in the trading of financial assets for speculative purposes.

The most significant financial risks to which the Company is exposed are described below.

17.1 Credit risk

Credit risk is the risk than another party to a financial instrument fails to its obligations and, therefore, leads the Company to incur a financial loss.

The Company’s maximum exposure to credit risk is limited to the carrying amount of cash for an amount of $889,410 as at October 31, 2020 ($313,267 as at July 31, 2020).

The credit risk for cash is considered negligible, since the counterparty is a reputable bank with high quality external credit ratings.

17.2 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations with financial liabilities that are settled by cash or another financial asset.

Liquidity risk management serves to maintain a sufficient amount of cash and to ensure that the Company has financing sources such as private and public investments for a sufficient amount.

Over the period, the Company has financed its exploration programs, its working capital requirements through private placements.

The Company expects to respect its obligations with its cash flows related to placements.

27

As at October 31, 2020 (in Canadian dollars)

Beauce Gold Fields Inc. Notes to Financial Statements (unaudited)

17.2 Liquidity risk (continued)

Trade and other payables for an amount of $60,930 ($101,604 as at July 31, 2020), royalties payable of $50,000 ($50,000 as at July 31, 2020) and no note payable ($180,000 plus interests of $20,879 as at July 31, 2020) have contractual maturities of less than twelve months. Royalties payable of $250,000 ($250,000 as at July 31, 2020) have maturities between one and five years.

The Company considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash.

18. CONTINGENCIES AND COMMITMENTS

The Company is partially financed through the issuance of flow-through units and, according to tax rules regarding this type of financing, the Company is engaged in realizing mining exploration work.

These tax rules also set deadlines for carrying out the exploration work, which must be performed no later than the first of the following dates:

• Two years following the flow-through financings;

• One year after the Company has renounced the tax deductions relating to the exploration work.

However, there is no guarantee that the Company’s exploration expenses will qualify as Canadian exploration expenses, even if the Company is committed to taking all the necessary measures in this regard.

Refusal of certain expenses by the tax authorities would have a negative tax impact for investors.

The Company entered into agreements with subscribers whereby the Company has to incur $17,880 of Canadian Exploration Expenses before December 31, 2020. As at October 31, 2020, $7,311 was spent.

On August 1, 2020, the Company signed an agreement with AGORACOM, where by the Company will issue shares for the services rendered by AGORACOM, in exchange for the online advertising, marketing and branding services. The number of shares to be issued at the end of each period will be determined by reference to the fair value of the services rendered. The agreement starting August 1, 2020 is for 12 months and the services total an aggregate amount of $ 50,000 and must be paid for by the Company upon receipt of the invoice.

On August 20, 2020, the Company entered into a service relationship agreement with investors with the company MI3 Communications Financières Inc. Under the agreement, the Company will pay monthly fees of $5,000 for a period of 12 months and will issue 50,000 share options to purchase shares at a price of $0.17 per share over a period of 24 months following the grant at a rate of 25% per quarter.

19. SUBSEQUENT EVENT

On November 24, 2020, the Company extended 833,333 warrants expiring in December 2020 through December 2022.

On December 10, 2020, the Company completed a private financing for a total amount of $500,000. The Company issued 3,125,000 units consists of one flow-through share and one-half warrant. Each full warrant entitles the holder thereof to subscribe for an equivalent number of common shares of the Company at a price of $0.21 per share for a period of 24 months following the closing of the financing.

Furthermore, the Company issued 153,125 warrants to brokers. Each warrant entitles the holder thereof to subscribe to one common share of the Company at a price of $0.21 per share for a period of 24 months from the date of the closing of the financing.

28