Blue River Resources Ltd. — Interim / Quarterly Report 2021

Jun 29, 2021

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CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2021 AND 2020 (EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

BLUE RIVER RESOURCES LTD. INDEX TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

CONTENTS	1
NOTICE TO READERS	2
FINANCIAL STATEMENTS
Condensed Interim Consolidated Statements of Financial Position	3
Condensed Interim Consolidated Statements of Comprehensive Loss	4
Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency	5
Condensed Interim Consolidated Statements of Cash Flows	6
Notes to Condensed Interim Consolidated Financial Statements	7-15

1

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed interim consolidated 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 condensed interim consolidated financial statements by an entity’s auditor.

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

2

BLUE RIVER RESOURCES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian Dollars - Unaudited)

	April 30,	October 31,
	2021	2020
	$	$
ASSETS
Current assets
Cash	839	285
Receivables	1,730	199
Prepaid expenses	17	884
	2,586	1,368
Equipment, net	690	747
Exploration and evaluation assets (Note 3)	1	1
Due from related parties (Note 12)	3,000	3,000
Reclamation bond (Note 4)	10,000	10,000
Investment inequity accounted investee (Note 5)	39,557	37,432
TOTAL ASSETS	55,834	52,548
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Demand loan payable (Note 12)	20,912	19,782
Accounts payable and accrued liabilities (Note 6)	965,568	923,881
Due to related parties (Note 12)	663,527	628,027
Promissorynote(Note 7)	47,844	46,356
	**1,697,851 **	1,618,046
Shareholders' deficiency
Share capital (Note 8)	10,137,837	10,137,837
Reserves (Notes 8)	151,532	126,409
Deficit	(11,931,386)	(11,829,744)
	(1,642,017)	(1,565,498)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY	55,834	52,548

Nature of Operations and Going Concern (Note 1)

Approved and authorized on behalf of the Board:

“Griffin Jones” , Director

“Nadwynn Sing” , Director

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

3

BLUE RIVER RESOURCES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Expressed in Canadian Dollars - Unaudited)

	For the three months ended	For the three months ended	For the three months ended	For the three months ended	For	the six months ended	the six months ended	the six months ended
		April 30,				April 30,
	2021		2020		2021		2020
	$		$		$		$
OPERATING EXPENSES
Consulting fees		15,000		15,000		30,000		51,000
Depreciation (recovery)		(57)		36		58		71
Financing fees (recovery) (Note 12)		1,523		(4,438)		3,081		593
Management fees (Note 12)		15,000		15,000		30,000		30,000
Office expenses		88		3,817		146		3,946
Professional fees		5,657		4,410		8,404		8,110
Regulatoryand shareholder services		4,285		2,572		6,955		5,371
OPERATING LOSS		(41,496)		(36,397)		(78,644)		(99,091)
OTHER ITEMS
Impairment of investment		-		(6,398)		-		(11,620)
Recovery of exploration and
evaluation assets		-		-		-		1
Recovery of related party loan		-		-		-		100
Gain on equity accounted investee
(Note 5)		823		(7,889)		2,125		(7,707)
Gain on foreign exchange		-		55		-		675
		823		(14,232)		2,125		(18,551)
NET LOSS AND
COMPREHENSIVE LOSS FOR
THE PERIOD		(40,673)		(50,629)		(76,519)	(117,642)
BASIC AND DILUTED LOSS PER
SHARE:
Loss per share for the period	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
WEIGHTED AVERAGE SHARES
OUTSTANDING	191,751,470		191,751,470		191,751,470		191,751,470

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

4

BLUE RIVER RESOURCES LTD.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIENCY (Expressed in Canadian Dollars - Unaudited)

	Common shares Number Amount	Reserves Stock options Revaluation reserve Total Deficit **Total **
Balance at October 31, 2019 Comprehensive loss for theperiod	$ 191,751,470 10,137,837 - -	$ $ $ $ $ 151,532 1,238 152,770 (11,630,508) (1,339,901) - - - (117,642) (117,642)
Balance at April 30, 2020 Comprehensive loss for theperiod	191,751,470 10,137,837 - -	151,532 1,238 152,770 (11,748,150) (1,457,543) - (26,361) (26,361) (81,594) (81,594)
Balance at October 31, 2020 Revaluation of reserve Comprehensive loss for theperiod	191,751,470 10,137,837 - - - -	151,532 (25,123) 126,409 (11,829,744) (1,565,498) - 25,123 25,123 (25,123) - - - - (76,519) (76,519)
Balance at April 30, 2021	191,751,470 10,137,837	151,532 - 151,532 (11,931,386) (1,642,017)

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

5

BLUE RIVER RESOURCES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian Dollars - Unaudited)

	For the six months	ended
	April 30,
	2021	2020
	$	$
OPERATING ACTIVITIES
Net loss for the period	(76,519)	(117,642)
Items not affecting cash:
Depreciation	57	71
Accrued interest	3,081	2,632
Impairment of investments	-	10,948
Recovery of exploration and evaluation assets	-	(1)
Gain on equityaccounted investee	(2,125)	7,707
	(75,506)	(96,285)
Changes in non-cash working capital:
Receivables	(1,531)	360
Prepaid expenses	867	(2,600)
Accountspayable and accrued liabilities	41,224	52,931
CASH USED IN OPERATING ACTIVITIES	(34,946)	(45,594)
FINANCING ACTIVITIES
Bank indebtedness	-	(2,429)
Net funds received from relatedparties	35,500	48,166
CASH RECEIVED FROM FINANCING ACTIVITIES	35,500	45,737
NET CHANGE IN CASH	554	143
**CASH, BEGINNING OF PERIOD **	285	-
CASH, END OF PERIOD	839	143
Non-cash investing and financing activities:
Reclassification of net change in fair value of investments	25,123	-

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

6

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

Nature of operations

Blue River Resources Ltd. (the “Company”) was incorporated on September 26, 2008 under the Business Corporations Act (British Columbia) and the Company’s shares trade on the TSX Venture Exchange (“TSX-V”) under the symbol “BXR”. The Company is in the business of acquisition, exploration and development of mineral properties.

The head office and principal address of the Company are located at Suite 2607 – 1128 Alberni Street, Vancouver, B.C., V6E 4R6. The Company’s records office and registered address is Suite 700 – 401 West Georgia Street, Vancouver, B.C., V6B 5A1.

Going concern

These condensed interim consolidated 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 assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at April 30, 2021, the Company had a working capital deficit of $1,695,265 (October 31, 2020 – $1,616,678), had not advanced its properties to commercial production, and is not able to finance day to day activities through operations. The Company’s continuation as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to raise equity capital or borrowings sufficient to meet current and future obligations. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern. Management intends to finance operating costs over the next twelve months with proceeds from the exercise of options, advances from related parties and further private placements.

The condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue operations as a going concern.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with International Accounts Standards (“IAS”) 34, “Condensed Interim Financial Reporting” using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

This condensed interim consolidated financial report does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the audited annual financial statements of the Company for the years ended October 31, 2020 and 2019.

The condensed interim consolidated financial statements of the Company were approved and authorized for issue by the Board of Directors on June 29, 2021.

Basis of presentation

These condensed interim consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable and are presented in Canadian dollars unless otherwise noted.

Basis of consolidation

These condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Blue River Resources Inc., incorporated under the Laws of the State of Wyoming. All material intercompany balances and transactions have been eliminated upon consolidation.

7

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Foreign currency translation

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and its subsidiary is the Canadian dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates .

Transactions in currencies other than Canadian dollars are recorded at exchange rates prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the period end exchange rate while non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. Exchange gains and losses arising on translation are included in comprehensive loss.

Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported revenues and expenses during the period.

Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates and assumptions as the basis for determining the stated amounts include the recoverability of mineral properties, valuation of share-based compensation, determination of functional currency, and the recoverability and measurement of deferred tax assets and liabilities. Information about assumptions and estimation uncertainties that have a significant risk of resulting in material adjustments are as follows:

Valuation of share-based compensation

The Company uses the Black-Scholes Option Pricing Model for valuation of share-based compensation. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company’s earnings and equity reserves.

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to expectation of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.

Critical judgments exercised in apply accounting policies that have the most significant effects on the amounts recognized in the condensed interim consolidated financial statements are as follows:

Determination of functional currency

The Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing activities, retention of operating cash flows, and frequency of transactions with the reporting entity.

Economic recoverability and probability of future economic benefits of exploration and evaluation assets Management has determined that exploration, evaluation, and related costs incurred which were capitalized may have future economic benefits and may be economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including, geologic and other technical information, a history of conversion of mineral deposits with similar characteristics to its own properties to proven and probable mineral reserves, the quality and capacity of existing infrastructure facilities, evaluation of permitting and environmental issues and local support for the project.

8

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Use of estimates and judgments - continued

Significant influence over another entity

The Company determines whether it can exercise significant influence over another entity through an analysis of several indicators including its percentage of share ownership, representation on the board of directors or equivalent governing body of the investee, participation in the policy-making process and periodic provision of essential technical information such as their financial position and performance.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, customers, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses, including the Company’s. This outbreak could decrease spending, adversely affecting and harming our business and results of operations. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time. As at April 30, 2021, there was no significant impact to the operations of the Company but could affect the ability of the Company to raise financing.

Financial instruments

Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. The Company’s receivables, accounts payable, demand loan, promissory note and due to/from related parties are accounted for at amortized cost.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of loss and comprehensive loss in the period in which they arise. The Company’s cash is classified as FVTPL.

Debt investments at FVTOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in Other Comprehensive Income (“OCI”). On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVTOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss. The Company’s investment is classified as FVTOCI.

9

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Financial instruments - continued

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk of the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and / or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

Gains and losses on derecognition are generally recognized in profit or loss.

Accounting pronouncements not yet adopted

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s condensed interim consolidated financial statements.

NOTE 3 – EXPLORATION AND EVALUATION ASSETS

	Castle Project
	(Canada)
	$
Balance, October 31, 2019		-
Recoveryof costs		1
Balance, October 31, 2020 and April 30, 2021		1

Title to mineral properties

Title to mineral property interests involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyance history characteristic of many mineral property interests. The Company has investigated title to all of its mineral property interests and to the best of management’s knowledge, title to all of its properties are in good standing and free of material defect.

10

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 3 – EXPLORATION AND EVALUATION ASSETS – continued

CASTLE PROJECT – British Columbia, Canada

The Castle Project was comprised of four mineral claim groups located in the Similkameen area of British Columbia: RATS Claim, Claimbank Claim, South Castle Claim, and Delorme claim. Certain of the claims are subject to a net smelter return royalty (“NSR”) on any ore production from the property. The Company continues to hold an interest in one claim.

As at October 31, 2017, the Castle Project was carried at a nominal carrying value of $1 as management did not have further plans to explore the property. Recent exploration activity in the area has renewed interest in the Princeton / Nicola area; as such, management commenced exploration on the project during the year ended October 31, 2018.

During the year ended October 31, 2019, the Company temporarily abandoned the property and recorded an impairment of $7,220. During the year ended October 31, 2020, the Company recorded a recovery of $1 relating to re-staking the property.

NOTE 4 – RECLAMATION BOND

As at April 30, 2021, the Company held a reclamation bond of $10,000 (October 31, 2020 - $10,000) in connection with the Castle Project (Note 3).

NOTE 5 – INVESTMENT IN EQUITY ACCOUNTED INVESTEE

In July 2018, the Company entered into an Investment Agreement (the “Agreement”) with an arms’ length party, Global Satellite Integration Ltd. (“GSIL”), a private company incorporated under the laws of British Columbia, whereby the Company would acquire 30% of the voting shares of GSIL through the purchase of 42 units of GSIL for $50,000 with each unit consisting of 1 Class A common share and 1 Class C common share of GSIL. Under the Agreement, the Company has the right, but not the obligation, to participate in any future financings of GSIL to ensure the Company maintains its 30% ownership.

As at April 30, 2021, the Company had paid GSIL $50,000 (October 31, 2020 - $50,000) for 42 (October 31, 2020 – 42) units of GSIL representing 30% of the outstanding voting shares.

During the six months ended April 30, 2021, the Company recorded a gain on the equity accounted investee of $2,125 (2020 – loss of $7,707) which represented the Company’s portion of GSIL’s gain for the period; as a result, the carrying value of the investment as at April 30, 2021 was $39,557 (October 31, 2020 - $37,432).

The following table is a reconciliation of the investment in GSIL:

	April 30,	October 31,
	2021	2020
	$	$
Balance, beginning of period	37,432	44,899
Share ofgain(loss)of equityinvestment	2,125	(7,467)
Balance, end ofperiod	39,557	37,432

11

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 5 – INVESTMENT IN EQUITY ACCOUNTED INVESTEE – continued

Summarized financial information in respect of GSIL is as follows:

	April 30,	October 31,
	2021	2020
	$	$
Current assets	16,596	455
Non-current assets	107,927	107,927
Total assets	124,523	108,382
Current liabilities	98,937	78,956
Non-current liabilities	**63,561 **	74,483
Total liabilities	162,498	153,439
For the six months ended April 30,	2021	2020
Net and comprehensive gain	7,083	607
Company’s share of net and comprehensivegain	2,125	182

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	April 30,	October 31,
	2021	2020
	$	$
Trade payables	927,420	880,733
Accrued liabilities	25,148	43,148
Otherpayables	13,000	-
	965,568	923,881

NOTE 7 – PROMISSORY NOTE

In May 2015, the Company received a promissory note for $30,000 from an arm’s length lender which matured on May 21, 2017 and bears interest at 10% per annum, payable on maturity.

As at April 30, 2021, the loan remains outstanding and is now due on demand. The Company owes the lender $47,844 (October 31, 2020 - $46,356) which includes $17,845 (October 31, 2020 - $16,356) of accrued interest.

NOTE 8 – SHARE CAPITAL

Authorized common shares

Unlimited common shares without par value.

Issued shares

The Company did not issue any shares during the six months ended April 30, 2021 and the year ended October 31, 2020.

12

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 8 – SHARE CAPITAL - continued

Stock options

The Company has an incentive stock options plan in place whereby, the maximum number of shares reserved for issue under the plan shall not exceed 10% of the issued and outstanding common shares of the Company from time to time. The maximum number of common shares reserved for issue to any individual director or officer under the plan cannot exceed 5% of the issued and outstanding number of common shares in any twelve-month period, the maximum number of common shares reserved for issue to all consultants cannot exceed 2% of the issued and outstanding number of common shares in any twelve-month period, and the maximum number of common shares reserved for issue to employees cannot exceed 2% of the issued and outstanding number of common shares in any twelve-month period. The exercise price of each option granted under the plan may not be less than the Discounted Market Price (as that term is defined in the policies of the TSXV). Options may be granted for a maximum term of ten years from the date of the grant, are non-transferable, and expire within 90 days of termination of employment or holding office as director or officer of the Company and, in the case of death, expire by the earlier of within one year thereafter or the expiry date of the option. Upon death, the options may be exercised by legal representation or designated beneficiaries of the holder of the option.

The Company did not have any stock option transactions during the six months ended April 30, 2021 and the year ended October 31, 2020.

The following table summarizes the options outstanding and exercisable at April 30, 2021:

	Number
Exercise price	outstanding	Expiry date
$
0.05	*2,150,000	May 9, 2021
0.05	*200,000	June 16, 2021
0.05	800,000	July 18, 2021
0.05	1,700,000	August 17,2021
	4,850,000

*these stock options expired unexercised subsequent to the quarter.

The weighted average life of stock options outstanding at April 30, 2021 is 0.16 years.

Warrants

A summary of share purchase warrant activities are as follows:

	Number of	Weighted average
	warrants	exercise price
		$
Balance, October 31, 2019	50,000,000	0.05
Forfeited	(50,000,000)	0.05
Balance, October 31, 2020 and April 30, 2021	-	-

13

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 9 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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 the Company’s receivable, accounts payable and accrued liabilities, due from and to related parties, demand loan, and promissory note approximates their carrying values. The Company’s other financial instruments, being cash and investments are measured at fair value using Level 1 inputs.

NOTE 10 – FINANCIAL RISK AND CAPITAL MANAGEMENT

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

a) Credit risk

Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. The Company’s primary exposure to credit risk is on its cash accounts. Cash accounts are held with major banks in Canada. The Company has deposited its cash with a major bank from which management believes the risk of loss is low.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s ability to continue as a going concern is dependent on management’s ability to raise the required capital through future equity or debt issuances but there can be no assurance that such financing will be available on a timely basis under terms acceptable to the Company. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to meet liabilities when they become due. As at April 30, 2021, the Company had a cash balance of $839 and was required to settle liabilities of $1,697,851. Liquidity risk is assessed as high.

c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

d) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. There is minimal interest rate risk as the Company’s interest bearing debts are not subject to floating interest rates.

e) Foreign currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company and its subsidiary’s functional currency is the Canadian dollar. As at April 30, 2021, the Company does not have any significant monetary assets or liabilities in foreign currency; the Company has determined that there is very limited currency risk at this time.

14

BLUE RIVER RESOURCES LTD. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended April 30, 2021 (Expressed in Canadian Dollars - Unaudited)

NOTE 10 – FINANCIAL RISK AND CAPITAL MANAGEMENT – continued

f) Commodity Price risk

The ability of the Company to explore and develop its exploration and evaluation assets and the future profitability of the Company are directly related to the price of copper. The Company monitors copper prices to determine the appropriate course of action to be taken.

NOTE 11 – CAPITAL DISCLOSURE AND MANAGEMENT

The Company considers its cash and share capital as capital. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of mineral properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash. There was no change in the Company’s approach to capital management during the six months ended April 30, 2021 and the year ended October 31, 2020.

NOTE 12 – RELATED PARTY TRANSACTIONS

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and Board of Director members.

Related party transactions are as follows:

• a) As at April 30, 2021, the Company owes certain officers, directors and related companies $663,527 (October 31, 2020 - $628,027) for unpaid management fees and loans advanced to the Company.

• b) As at April 30, 2021, the Company had advanced $3,000 (October 31, 2020 - $3,000) to GSIL. (Note 5)

• c) As at April 30 , 2021, the Company owes a shareholder who owns more than 10% of the Company’s outstanding shares $20,912 (October 31, 2020 - $19,782) for a demand loan payable which includes interest of $1,131 (for six months ended April 30, 2020 - $1,137) for the six months ended April 30, 2021. The demand loan bears interest at 24% per annum and has no specific date of repayment.

• d) During the six months ended April 30, 2021, the Company recovered $nil (2020 – $100) which was advanced to Company with a common director.

Amounts due from and owing by the Company are unsecured, non-interest bearing and have no specified terms of repayment unless otherwise stated. The summary of related party transactions is as follows:

	For the six months	ended
	April 30,
	2021	2020
	$	$
Financing fees	1,131	1,137
Management fees	30,000	30,000

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