Bitterroot Resources Ltd. — Interim / Quarterly Report 2023

Jun 23, 2023

BITTERROOT RESOURCES LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

April 30, 2023 and 2022

(Unaudited – Prepared by Management)

(Expressed in Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

BITTERROOT RESOURCES LTD. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

Note	April 30, 2023	October 31, 2022
ASSETS Current assets Cash Accounts receivable 4 Prepaid expenses Total current assets Non-current assets Reclamation deposits Right-of-use asset 5 Exploration and evaluation assets 7 Total non-current assets TOTAL ASSETS	$ 16,700 4,815 3,214	$ 105,320 - 3,214
	24,729	108,534
	36,589 26,137 5,457,038	36,589 35,362 5,233,231
	5,519,764	5,305,182
	$ 5,544,493	$ 5,413,716
LIABILITIES Current liabilities Accounts payable and accrued liabilities Lease liability 5 Due to related party 10 Loans from related party 6 Total current liabilities Non-current liabilities Lease liability 5 Total non-current liabilities Total liabilities SHAREHOLDERS’ EQUITY Share capital 8 Equity reserves 8 Deficit Total shareholders’ equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 51,837 22,526 64,839 33,949	$ 52,461 20,961 - -
	173,151	73,422
	10,244	21,990
	10,244	21,990
	183,395	95,412
	30,437,605 4,943,178 (30,019,685)	30,236,730 4,877,578 (29,796,004)
	5,361,098	5,318,304
	$ 5,544,493	$ 5,413,716

Nature of operations (Note 1)

“ Michael S. Carr” “George W. Sanders” Michael S. Carr, Director George W. Sanders, Director

Michael S. Carr, Director

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

3

BITTERROOT RESOURCES LTD. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS For the six months ended April 30,

(Unaudited – Prepared by Management)

(Expressed in Canadian Dollars)

Three months ended April 30, Six months ended April 30, Notes 2023 2022 2023 2022	Three months ended April 30, Six months ended April 30, Notes 2023 2022 2023 2022
EXPENSES Amortization 5 $ 4,613 $ 4,613 $ 9,225 Foreign exchange 959 (14,701) 624 Interest expense 5 995 1,383 2,027 Management fees 10 30,000 30,000 60,000 Office and miscellaneous 15,573 9,723 28,367 Professional fees 10 28,591 28,860 36,751 Share-based payments 8 65,600 128,608 65,600 Shareholder information 6,383 32,262 6,878 Transfer agent and filing fees 13,564 9,456 14,209	$ 9,170 (45,146) 6,828 60,000 19,995 40,082 128,608 43,299 11,200
Loss and comprehensive loss for the period $ (166,278) $ (230,204) $ (223,681)	$ (274,036)
Basic and diluted loss per share $ (0.00) $ (0.00) $ (0.00) Weighted average number of common shares outstanding – basic and diluted 93,301,534 83,308,331 90,980,794	$ (0.00) 81,742,390

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

4

BITTERROOT RESOURCES LTD. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS For the periods ended April 30, (Unaudited – Prepared by Management)

(Expressed in Canadian Dollars)

		2023			2022
Cash flows used in operating activities
Loss for the period	$	(223,681)	$		(274,036)
Items not involving cash:
Amortization		9,225			9,170
Foreign exchange		455			-
Interest expense		2,027			6,828
Share-based payments		65,600			128,608
Changes in non-cash working capital items:
Prepaid expenses		-			(2,092)
Receivables		(4,815)			(4,132)
Accounts payable and accrued liabilities		18,369			(15,268)
Due to related party		64,839			-
		(67,981)			(150,922)
Cash flows used in investing activities
Exploration and evaluation asset expenditures		(238,300)			(778,143)
Cost recoveries for exploration and evaluation assets		-			320,089
Reclamation deposit		-			9,200
		(238,300)			(448,854)
Cash flows from financing activities
Private placements		200,000			808,500
Share issuance costs		(3,625)			(11,900)
Stock options exercised		-			15,000
Warrants exercised		-			700
Loans from related party		83,405			-
Loan repayments to related party		(50,000)			-
Lease payments		(12,119)			(11,760)
		217,661			800,540
Change in cash		(88,620)			200,764
Cash, beginning		105,320			736,386
Cash, ending	$	16,700		$	937,150

Supplemental disclosure with respect to cash flows (Note 9).

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

5

BITTERROOT RESOURCES LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited – Prepared by Management)

(Expressed in Canadian Dollars)

	Number of		Share		Equity
	shares		capital		reserves		Deficit		Total
Balance – October 31, 2021	80,184,556	$	29,418,271	$	4,746,550	$	(28,004,183)	$	6,160,638
Private placements	8,085,000		808,500		-		-		808,500
Share issuance costs	-		(20,354)		8,454				(11,900)
Shares issued for warrants exercised	14,000		1,004		(304)		-		700
Shares issued for stock options
exercised	150,000		20,730		(5,730)		-		15,000
Share issued for property payments	100,000		9,500		-		-		9,500
Share-based payments	-		-		128,608		-		128,608
Loss for the period	-		-		-		(274,036)		(274,036)
Balance– April 30, 2022	88,533,556	$	30,237,651	$	4,877,578	$	(28,278,219)	$	6,837,010
Balance – October 31, 2022	88,583,556	$	30,236,730	$	4,877,578	$	(29,796,004)	$	5,318,304
Private placements	5,000,000		200,000		-		-		200,000
Share issuance costs	-		(3,625)		-		-		(3,625)
Share issued for property payments	100,000		4,500		-		-		4,500
Share-based payments	-		-		65,600		-		65,600
Lossforthe period	-		-		-		(223,681)		(223,681)
Balance – April 30, 2023	93,683,556	**$ **	30,437,605	**$ **	4,943,178	$	(30,019,685)	$	5,361,098

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

6

BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS

Bitterroot Resources Ltd. (the “Company”) is in the exploration stage and its principal business activity is the sourcing and exploration of resource properties.

The Company was incorporated on March 13, 1951 under the Laws of British Columbia, Canada. The Company’s head office address is Suite 206-B – 1571 Bellevue Avenue, West Vancouver, BC, V7V 1A6, Canada and its registered office address is Suite 1130 – 400 Burrard Street, Vancouver, BC, V6C 3A6, Canada. The Company is listed on the TSX Venture Exchange (“Exchange”) under the symbol “BTT”.

These condensed consolidated interim financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses since its inception and the ability of the Company to continue as a going concern depends on its ability to raise adequate financing and to develop profitable operations. The Company had a working capital deficiency of $148,422 at April 30, 2023 (October 31, 2022 – working capital of $35,112). As of April 30, 2023, the Company had accumulated deficit of $30,019,685.

Management is actively targeting sources of additional financing through alliances with financial, exploration and mining entities, and other business and financial transactions which would assure continuation of the Company’s operations and exploration programs. In addition, management closely monitors commodity prices of precious metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company if favorable or adverse market conditions occur.

As the Company is in the exploration and evaluation stage, the Company has not identified a known body of commercial grade mineral on any of its properties. The ability of the Company to realize the costs it has incurred to date on these properties is dependent upon the Company identifying a commercial mineral body, to finance its development costs and to resolve any environmental, regulatory or other constraints, which may hinder the successful development of the property. To date, the Company has not earned any revenues. The Company expects to incur further losses in the development of its business. These circumstances comprise a material uncertainty which may cast significant doubt on the Company’s ability to continue as a going concern.

The condensed consolidated interim financial statements of the Company are presented in Canadian dollars, which is the functional currency, unless otherwise indicated.

2. BASIS OF PREPARATION

Statement of compliance and basis of measurement

These unaudited condensed consolidated interim financial statements, including comparatives have been prepared using accounting policies consistent with International Accounting Standards (“IAS”) 34, Interim Financial Reporting.

The condensed consolidated interim financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss, which are stated at their fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting except for cash flow information.

The condensed consolidated interim financial statements were approved for issuance by the Board of Directors on June 22, 2023.

Use of estimates and judgments

The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

7

BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

2. BASIS OF PREPARATION (cont’d)

Use of estimates and judgments (cont’d)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

(i) Critical accounting estimates

Critical accounting estimates are estimates and assumptions made by management that may result in a material adjustment to the carrying amount of assets and liabilities within the next financial year and include, but are not limited to, the following:

Share based payments

The fair value of stock options issued are subject to the limitation of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate.

Exploration and evaluation assets

Recorded costs of exploration and evaluation assets are not intended to reflect present or future values of these properties. 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) Critical accounting judgments

There are currently no critical accounting judgements.

Going concern

These condensed consolidated interim financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the ordinary course of operations. These condensed consolidated interim financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and thus be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in these condensed consolidated interim financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

The condensed consolidated interim financial statements include the accounts of the Company, and its wholly owned subsidiaries Trans Superior Resources, Inc. and Voyageur Lands Corporation, both of which are holding companies incorporated in Michigan, USA. All significant inter-company balances and transactions have been eliminated upon consolidation.

The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited annual consolidated financial statements as at October 31, 2022. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended October 31, 2022.

8

BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

4. RECEIVABLES

The Company’s receivables arise from goods and services tax (“GST”) receivable due from the Canadian taxation authorities.

	April	30, 2023	October 31,	2022
GST receivable	$	4,815	$	-

5. RIGHT-OF-USE ASSET AND LEASE LIABILITY

The Company entered a contractual arrangement to lease an office for 4 years starting November 1, 2019. The terms of the lease call for minimum monthly lease payments of $1,867. The Company record a right-of use asset of $72,369 based on the corresponding lease obligation as of November 1, 2019.

During the year ended October 31, 2022, the lease agreement was extended by one year. The right-of-use asset and lease obligation were increased by $18,343 to accommodate the extension of the lease period without any impact on deficit. The new terms of the lease call for minimum monthly lease payments of $1,960, starting from October 2021.

When measuring the present value of lease obligations, the Company uses a discount rate of 10%.

The change in the right-of-use asset during the period ended April 30, 2023 was as follows:

	**Right **	of Use
Balance – October 31, 2021	$	35,414
Additions		18,343
Amortization		(18,395)
Balance – October 31, 2022		35,362
Amortization		(9,225)
Balance – April30, 2023	$	26,137

The change in the lease liability during the period ended April 30, 2023 was as follows:

	Lease	Liability
Balance – October 31, 2021	$	38,935
Additions		18,343
Lease payments made		(23,581)
Interest expense		9,254
Balance – October 31, 2022		42,951
Lease payments made		(12,119)
Interest expense		1,938
		32,770
Less: current portion		(22,526)
Balance– April 30, 2023	$	10,244

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

5. RIGHT-OF-USE ASSET AND LEASE LIABILITY (cont’d)

Future lease payments are as follows for the years ending October 31:

2023	$12,198
2024	$23,104

6. LOANS PAYABLE TO RELATED PARTY

During the period ended April 30, 2023, the Company received loan proceeds of $50,000 (2022 - $nil) from a non-arm’s length party, which $50,000 was repaid during the period (2022 - $nil). This amount was non-interest bearing with no stated terms of payment.

During the period ended April 30, 2023, the Company received loan proceeds of $33,405 (US$25,000) (2022 - $nil) from a non-arm’s length party. During the period ended April 30, 2023, the Company accrued interest expense of $89 (2022 - $nil) and recorded a foreign exchange loss of $455 (2022 - $nil). This amount is interest bearing at 6% per annum with no stated terms of payment.

10

BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022

(Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

7. EXPLORATION AND EVALUATION ASSETS

Michigan Lands, **Michigan, USA **	Coyote Sinter, **Nevada, USA **	Castle West, **Nevada, USA **	Nighthawk, Nevada, USA Total
Balance– October 31, 2021 $ 5,127,267	$ 233,708	$ 120,444	$ - $ 5,481,419
Acquisition costs - cash 25,880 Acquisition costs - shares 9,500 Claims, leases and permits 8,886 Consulting and professional 48,629 Courier and postage - Drilling 536,035 Field supplies 340 Fuel - Geochemistry 6,139 Geophysics 1,170 Ground transportation 4,032 Other 3,056 Room and board 3,936 Travel and freight 5,072	71,535 3,500 28,132 69,982 158 745,440 5,872 213 - 700 9,298 1,374 15,920 2,798	69,608 - 7,065 1,433 65 - 89 98 - - 586 - 1,463 1,080	- 167,023 - 13,000 - 44,083 - 120,044 - 223 - 1,281,475 - 6,301 - 311 - 6,139 - 1,870 - 13,916 - 4,430 - 21,319 - 8,950
Expenditures during the year 652,675	954,922	81,487	- 1,689,084
Write-off of resource properties - Recovery of costs (546,711)	(1,188,630) -	(201,931) -	- (1,390,561) - (546,711)
Balance– October 31, 2022 5,233,231	-	-	- 5,233,231
Acquisition costs - cash 276 Acquisition costs - shares 4,500 Claims, leases and permits 12,435 Consulting and professional - Drilling (2,180) Fuel - Geochemistry - Geophysics 390 Ground transportation - Room and board - Storage 20,841 Travel and freight 71	- - - - - - - - - - - -	- - - - - - - - - - - -	- 276 - 4,500 100,572 113,007 19,719 19,719 - (2,180) 239 239 10,961 10,961 65,021 65,411 1,464 1,464 2,059 2,059 - 20,841 2,019 2,090
Expenditures during the period 36,333	-	-	202,054 238,387
Recovery of costs (14,580)	-	-	- (14,580)
Balance– April 30, 2023 $ 5,254,984	$ -	$ -	$ 202,054 $ 5,457,038

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

7. EXPLORATION AND EVALUATION ASSETS (cont’d)

Title to exploration and evaluation assets involves certain inherent risks due to difficulties of determining the validity of certain claims, as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many exploration and evaluation assets. The Company has investigated title to its exploration and evaluation assets and to the best of its knowledge, title to its exploration and evaluation assets are in good standing.

Michigan Lands, Michigan, U.S.A.

During the year ended October 31, 2015, a subsidiary of Altius Minerals Corporation acquired a 50.1% interest in the Company’s Michigan Lands by funding $600,000 of exploration expenditures. Altius had the right to acquire an additional 19.9% of the properties by completing $2.5 million in exploration spending by September 29, 2021, plus the right to acquire an additional 10% of the properties by completing exploration spending of a further $5,000,000 or completing an NI 43-101 compliant pre-feasibility study on a mineral resource on the properties, before September 29, 2025. Altius failed to complete the additional expenditures required prior to September 29, 2021 and both options have expired. The Company (49.9%) and Altius (50.1%) are effectively joint venture partners, although a formal joint venture agreement has not yet been entered into. The Company also granted to Altius a 2% net smelter returns royalty (“NSR”) on the Voyageur Lands (covering approximately 250 square miles of mineral rights) and assigned to Altius its right to repurchase a 1% NSR held by a third party on the Copper Range Lands by paying $1,000,000 U.S. to the third party before December 31, 2048.

Mineral Rights Leased from the State of Michigan

During the year ended October 31, 2016, the Company (49.9%) and Altius (50.1%) acquired State of Michigan metallic minerals leases covering 3,051 acres. A cash bond of US$30,000 has been posted by a subsidiary of Altius.

LM Property

The Company’s Michigan subsidiary, Trans Superior Resources, Inc., leases 40 acres of minerals rights in Baraga County, Michigan, known as the LM Property. The lessors have granted the Company the option to reduce the current 3% NSR to a 2% NSR by paying US$1,000,000 prior to December 31, 2064. The 2022 advance royalty payment is US$170/acre (paid). The advance royalty payments increase by $10/acre/year. The LM Property is not subject to the joint venture with Altius.

During the year ended October 31, 2020, the Company, through its US subsidiary Trans Superior Resources, Inc., entered into an option/joint venture agreement whereby Below Exploration, Inc., (“Below”) a private Michigan corporation, could earn a 49% joint venture interest in the Company’s 100%-leased LM nickel-copper-platinum-palladium property in Baraga County, Michigan. During the year ended October 31, 2020, Below funded $370,061 (US$285,000) of exploration expenditures prior to the first anniversary of the agreement and earned a 49% joint venture interest. The Company is the project operator, regardless of its ownership level, and retains a right of first refusal over Below’s property interest. Following vesting of its 49% interest, Below had a 90-day option to convert its interest in the project into the Company’s shares. Below did not exercise the share conversion option and the joint venture is continuing.

In February 2021, the Company entered into a minerals lease and purchase option with a privately-held corporation (“MPC”) covering 80 acres of mineral rights adjacent to the LM Property. MPC leases the mineral rights exclusively to the Company for a term of forty years. Under the term of the agreement the Company is required to make the following payments and share issuances:

(i) US$15,000 (paid) and issuance of 100,000 common shares within 10 days of the TSX-V approval date, February 25, 2021 (the “Approval Date”) (issued);

(ii) US$15,000 (paid) and issuance of 100,000 (issued at a fair value of $9,500) common shares on the first anniversary of the Approval Date;

(iii) US$16,000 and issuance of 100,000 (issued at a fair value of $4,500) common shares on the second anniversary of the Approval Date;

(iv) an amount equal to the rental payment of the preceding year, plus an additional US$20 per acre of the mineral rights, on or before each anniversary of the Approval Date commencing on the third anniversary and continuing so long as the agreement is in effect.

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

7. EXPLORATION AND EVALUATION ASSETS (cont’d)

At any time while the agreement remains in effect, the Company has the exclusive right and option to purchase the mineral rights from MPC for US$1,000/acre for the first five years of the agreement, US$2,500/acre in years 6 through 10, and then escalating US$2,500/acre for each subsequent five years for the first 20 years. MPC will retain a 2% net smelter royalty (“NSR”) for products from the mineral rights generated from underground mining and a 3% NSR for products from the mineral rights generated from open-pit mining. The Company will have the option to purchase 1% of each of the NSRs from US$1,000,000 and a further option to purchase an additional 1% of the NSR from open-pit mining for an additional US$1,000,000.

Nighthawk Property, Nevada, U.S.A.

During the period ended April 30, 2023, the Company staked 162 unpatented mining claims known as the Nighthawk Property, in Esmeralda County, NV.

Coyote Sinter Property, Nevada, U.S.A.

During the year ended October 31, 2020, the Company, through its US subsidiary Trans Superior Resources, Inc., entered into a mining lease, with an option to purchase, on the 13-claim Coyote Sinter gold/silver project in Elko County, Nevada. During the year ended October 31, 2022, the project was drilled, reclaimed and abandoned. The Company wrote down exploration and evaluation costs of $1,188,630 related to the property.

Castle West Property, Nevada, U.S.A.

During the year ended October 31, 2019, the Company, through its US subsidiary Trans Superior Resources, Inc., entered into an option agreement with Ely Gold Royalties Inc. and its subsidiary Nevada Select Royalty Inc. (“Ely Gold”), to purchase a 100% interest in the Castle West gold/silver property in Esmeralda County, Nevada. During the year ended October 31, 2022, the Company conducted geologic mapping and rock sampling. The results obtained did not justify the required annual payments and the option agreements were terminated. During the year ended October 31, 2022, the Company wrote down exploration and evaluation costs of $201,931 related to the property.

8. SHARE CAPITAL AND EQUITY RESERVES

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

As at April 30, 2023, the Company had 93,683,556 shares issued and outstanding.

During the period ended April 30, 2023, the Company:

• (i) closed a private placement in two tranches for a total of 5,000,000 units at $0.04 per unit for gross proceeds of $200,000. Each unit consists of one common share and one-half share purchase warrant, exercisable at $0.08 for two years from the date of issuance. The Company paid $3,625 in cash share issuance costs in relation to the private placement.

• (ii) issued 100,000 shares for property option payments with fair value of $4,500.

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

8. SHARE CAPITAL AND EQUITY RESERVES (cont’d…)

During the year ended October 31, 2022, the Company:

• (i) closed a private placement of 8,085,000 units priced at $0.10 per unit for gross proceeds of $808,500. Each unit consists of one common share and one-half share purchase warrant, exercisable at $0.20 for two years from the date of issuance. Finder’s fees paid in conjunction with the private placement consisted of $16,321 cash and the issuance of 119,000 finders’ warrants at a fair value of $8,454;

• (ii) issued 14,000 shares for brokers’ warrants exercised for total proceeds of $700;

• (iii) issued 150,000 shares for stock options exercised for total proceeds of $15,000; and

• (iv) issued 150,000 shares for property option payments with fair value of $13,000.

Warrants

Warrant transactions are summarized as follows:

		Weighted
	Number of	Average
	Warrants	Exercise Price
Balance – October 31, 2021	14,585,100	$ 0.15
Issued	4,161,500	0.20
Exercised	(14,000)	0.05
Balance – October 31, 2022	18,732,600	0.16
Issued	2,500,000	0.08
Expired	(8,849,400)	0.12
Balance – April 30, 2023	12,383,200	$0.18

As at April 30, 2023, the following share purchase warrants were issued and outstanding:

	Number of
Expiry Date	Warrants	Exercise Price
May 4, 2023*	5,721,700	$ 0.20
March 29, 2024	4,161,500	0.20
January 27, 2025	1,750,000	0.08
February21,2025	750,000	0.08
	12,383,200	$0.18

*expired subsequent to April 30, 2023.

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

8. SHARE CAPITAL AND EQUITY RESERVES (cont’d…)

Warrants (cont’d…)

The weighted average fair value of each finders’ warrant issued during the period ended April 30, 2023 was $nil (year ended October 31, 2022 - $0.19), calculated using the Black-Scholes option-pricing model on the issue date using the following weighted average assumptions:

	Period ended	Year ended
	April 30, 2023	October 31, 2022
Volatility	-	154.83%
Risk-free interest rate	-	2.34%
Expected life	-	2years

Stock options

The Company, in accordance with the policies of the Exchange, has a stock option plan in place under which it is authorized to grant options to directors, employees, and consultants, to acquire up to 10% of the issued and outstanding common shares. Under the plan, the exercise price of each option equals the market price of the Company’s stock as calculated on the date of grant. The options can be granted for a maximum term of five years. Pursuant to the stock option plan, vesting restrictions may be applied to certain other options grants, at the discretion of the directors.

Stock option transactions and the number of stock options outstanding are summarized as follows:

		Weighted
	Number	Average
	Of Options	Exercise Price
Balance – October 31, 2021	6,170,000	$ 0.15
Expired	(670,000)	0.32
Exercised	(150,000)	0.10
Granted	1,250,000	0.10
Balance – October 31, 2022	6,600,000	0.12
Expired	(900,000)	0.08
Granted	1,800,000	0.05
Balance – April30, 2023	7,500,000	$ 0.11

As at April 30, 2023, the following stock options were outstanding and exercisable:

Number of Options	Exercise Price ($)	Expiry Date
1,100,000	0.05	May 19, 2025
2,000,000	0.16	January 4, 2026
1,350,000	0.17	June 1, 2026
1,250,000	0.10	April 21, 2027
1,800,000	0.05	March 5, 2028
7,500,000

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

8. SHARE CAPITAL AND EQUITY RESERVES (cont’d…)

Stock options (cont’d…)

The weighted average fair value of each stock option granted during the period was $0.04 (year ended October 31, 2022 - $0.10), calculated using the Black-Scholes option-pricing model on the grant date using the following weighted average assumptions:

	Period ended	Year ended
	April 30, 2023	October 31, 2022
Volatility	152.88%	160.52%
Risk-free interest rate	3.58%	2.74%
Expected life	5 years	5 years

Share based payments

Total share-based payments recognized for stock options granted during the period ended April 30, 2023 was $65,600 (year ended October 31, 2022 - $128,608).

9. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Significant non-cash transactions during the period ended April 30, 2023 included:

(a) Included in exploration and evaluation assets is $4,099 which relates to accounts payable and accrued liabilities.

• (b) Issued 100,000 shares for a property option payment, recorded at a fair value of $4,500.

Significant non-cash transactions during the period ended April 30, 2022 included:

• (a) Included in exploration and evaluation assets is $443 which relates to accounts payable and accrued liabilities.

• (b) Transferred $304 to share capital from reserves for 14,000 brokers’ warrants exercised.

• (c) Transferred $5,730 to share capital from reserves for 150,000 stock options exercised.

• (d) Issued 119,000 brokers’ warrants with a fair value of $8,454.

• (e) Issued 100,000 shares for a property option payment, recorded at a fair value of $9,500.

10. RELATED PARTY TRANSACTIONS

Key management personnel are the persons responsible for the planning, directing and controlling the activities of the Company and include both executive and non-executive directors, and entities controlled by such persons. The Company considers all Directors and Officers of the Company to be key management personnel.

The following is a summary of related party transactions and balances during the period ended April 30, 2023, not disclosed elsewhere in the condensed consolidated interim financial statements:

• (a) Management fees of $60,000 (2022 - $60,000) and professional fees of $875 (2022 - $1,325) were incurred from a company controlled by a director of the Company. As at April 30, 2023, $64,839 was owing to this company for management fees, professional fees and reimbursable expenses. This amount is non-interest bearing with no stated terms of payment.

• (b) Share based compensation include stock options granted to directors and officers recorded at a fair value of $51,020 (2022 - $92,598).

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

11. SEGMENTED INFORMATION

Industry information

The Company operates in one reportable operating segment, being the acquisition, exploration and development of exploration and evaluation assets.

Geographic information

The Company operated in both Canada and the United States. The Company’s reclamation deposits and exploration and evaluation assets are located in Canada and the United States.

12. FINANCIAL INSTRUMENTS AND CAPITAL MANAGEMENT

Capital management

The Company manages its capital to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide adequate returns to shareholders and benefits to other stakeholders, and to have sufficient funds on hand for business opportunities as they arise.

The Company considers the items included in share capital as capital. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through short-term prospectuses and private placements or return capital to shareholders. As at April 30, 2023, the Company is not subject to externally imposed capital requirements.

The Company is exposed to various financial instrument risks and assesses the impact and likelihood of this exposure. These risks include liquidity risk, credit risk, currency risk, interest rate risk and price risk. Where material, these risks are reviewed and monitored by the Board of Directors.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is considered to be in the exploration stage. Thus, it is dependent on obtaining regular financings in order to continue its exploration programs. Despite previous success in acquiring these financings, there is no guarantee of obtaining future financings. The Company’s cash consists of cash deposited in business accounts and redeemable guaranteed investment certificates held by high credit quality financial institutions. The Company is not invested in any asset backed commercial paper.

Credit risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its cash, receivables and reclamation deposits. The Company limits exposure to credit risk by maintaining its cash and reclamation deposits with high-credit quality financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. The receivables balance consists mainly of GST recoverable. There is ongoing review to evaluate the credit worthiness of these counterparties. The Company’s maximum exposure to credit risk at the reporting date is the carrying value of cash, receivables and reclamation deposits.

Currency risk

The Company’s operations are in Canada and the United States. The international nature of the Company’s operations results in foreign exchange risk as transactions are denominated in a foreign currency. The operating results and the financial position of the Company are reported in Canadian dollars. The fluctuations of the operating currencies in relation to the Canadian dollar will, consequently, have an impact upon the reported results of the Company and may also affect the value of the Company’s assets and liabilities. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time. A strengthening (weakening) of the Canadian dollar against the US dollar of 10% would not have a significant effect on net loss.

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BITTERROOT RESOURCES LTD. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months ended April 30, 2023 and 2022 (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

12. FINANCIAL INSTRUMENTS AND CAPITAL MANAGEMENT (cont’d…)

Interest rate risk

The Company’s exposure to interest rate risk arises from the interest rate impact on its cash. The Company’s practice has been to invest cash at floating rates of interest in order to maintain liquidity, while achieving a satisfactory return for shareholders. There is minimal risk that the Company would recognize any loss as a result of a decrease in the fair value of any guaranteed bank investment certificates included in cash as they are generally held with large financial institutions. The Company does not have any variable interest-bearing debt.

Price risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors the commodity prices of precious metals and the stock market to determine the appropriate course of action to be taken by the Company.

Fair value

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

The fair value of cash and reclamation deposits are measured based on level 1 inputs of the fair value hierarchy. The estimated fair value of accounts payable and accrued liabilities is equal to its carrying values due to the short-term nature of the instrument. The fair value of lease liability is initially recorded at fair value and subsequently carried at amortized cost using rates comparable to market interest rates.

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