Blue Star Gold Corp. — Audit Report / Information 2020

Mar 17, 2021

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Blue Star Gold Corp.

Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian Dollars)

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INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF BLUE STAR GOLD CORP.

Opinion

We have audited the consolidated financial statements of Blue Star Gold Corp. (the "Company"), which comprise:

• the consolidated statements of financial position as at November 30, 2020 and 2019;

• the consolidated statements of loss and comprehensive loss for the years then ended;

• the consolidated statements of changes in shareholders’ equity for the years then ended;

• the consolidated statements of cash flows for the years then ended; and

• the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at November 30, 2020 and 2019, and its consolidated financial performance and consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the consolidated financial statements, which indicates that the Company has a working capital deficiency of $2,083,112 as at November 30, 2020 and, as of that date, the Company has a deficit of $11,715,053. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditors' report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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Langley

Vancouver Langley Nanaimo 1700 – 475 Howe St 305 – 9440 202 St 201 – 1825 Bowen Rd Vancouver, BC V6C 2B3 Langley, BC V1M 4A6 Nanaimo, BC V9S 1H1 T: 604 687 1231 T: 604 282 3600 T: 250 755 2111 F: 604 688 4675 F: 604 357 1376 F: 250 984 0886

Smythe LLP | smythecpa.com

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Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Vancouver

Langley

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Nanaimo

1700 – 475 Howe St 305 – 9440 202 St 201 – 1825 Bowen Rd Vancouver, BC V6C 2B3 Langley, BC V1M 4A6 Nanaimo, BC V9S 1H1 T: 604 687 1231 T: 604 282 3600 T: 250 755 2111 F: 604 688 4675 F: 604 357 1376 F: 250 984 0886

Smythe LLP | smythecpa.com

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• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditors' report is Michelle Chi Wai So.

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Chartered Professional Accountants

Vancouver, British Columbia

March 16, 2021

Vancouver

Langley

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Langley Nanaimo 305 – 9440 202 St 201 – 1825 Bowen Rd Langley, BC V1M 4A6 Nanaimo, BC V9S 1H1 T: 604 282 3600 T: 250 755 2111 F: 604 357 1376 F: 250 984 0886

1700 – 475 Howe St Vancouver, BC V6C 2B3

T: 604 687 1231 F: 604 688 4675

Smythe LLP | smythecpa.com

BLUE STAR GOLD CORP. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian dollars) As at November 30,

Notes	2020 2019
ASSETS Current Cash Advances and deposits GST receivable Deferred financing charges 12 Total current assets Long-term deposits 6 Right-of-use assets 8 Equipment 7 Exploration and evaluation assets 9 Total assets	$ 128,043 $ 94,725 101,845 33,491 339,518 94,601 179,375 222,380
	748,781 445,197 2,755,076 875,000 301,436 - 369,795 713 10,607,385 4,992,290
	$14,782,473 $ 6,313,200
LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities Due to related parties 10 Lease liabilities – short term 8 Loans payable – short term 10, 11 Convertible debentures – short term 10, 12 Total current liabilities Lease liabilities – long term 8 Loans payable – long term 10, 11 Convertible debentures – long term 10, 12 Total liabilities Shareholders' equity Share capital 13 Share subscription received in advance 16 Obligation to issue shares 10, 11 Equity component of convertible debentures 12 Reserves – options 13 Reserves – warrants 13 Deficit Total shareholders’ equity Total liabilities and shareholders’ equity	$ 670,637 $ 582,511 455,162 376,185 154,869 - 1,067,366 213,524 483,859 278,630
	2,831,893 1,450,850 151,000 - 2,172,590 881,130 3,412,595 2,072,054
	8,568,078 4,404,034
	15,385,183 8,964,629 400,000 - 390,326 187,420 290,776 580,294 1,356,185 1,203,705 106,978 106,978 (11,715,053) (9,133,860)
	6,214,395 1,909,166
	$14,782,473 $ 6,313,200

Nature of operations and going concern (Notes 1 and 2) Events subsequent to the reporting period (Note 16)

	Approved and authorized by the Board of Directors on	March 16, 2021.
	__”Kenneth R. Yurichuk”_______	_”Robert Metcalfe”____
	Kenneth R. Yurichuk, Director	Robert Metcalfe, Director

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

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BLUE STAR GOLD CORP. CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Expressed in Canadian dollars) For the years ended November 30,

Notes	2020 2019
EXPENSES Accretion and interest 8, 10, 11, 12 Amortization 7 Amortization – ROU assets 8 Directors fee 10 Insurance Investor and shareholder relations Office and miscellaneous Professional fees Property investigation Regulatory and transfer agent fees Rent and administrative services Share-based compensation 10, 13 Salaries 10 Travel and entertainment Loss and comprehensive loss for the year before income tax Deferred income tax recovery 15 Loss and comprehensive loss for the year	$ 1,113,116 $ 222,419 2,184 1,709 27,403 - 100,000 - 47,118 34,501 265,291 259,770 63,385 24,980 221,339 194,930 - 2,272 25,264 25,250 54,477 65,076 162,916 517,461 749,473 331,399 29,526 32,925
	(2,861,492) (1,712,692)
	280,299 323,855
	$ (2,581,193) $ (1,388,837)
Basic and diluted loss per common share	$ (0.02) $ (0.01)
Weighted average number of common shares	147,970,628 129,600,304

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

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BLUE STAR GOLD CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Expressed in Canadian dollars)

Share Capital

	Number Amount Share subscription received in advance Obligation to issue shares Equity component of convertible debentures Reserves– options Reserves– warrants Deficit Total
Balance, November 30, 2018 Obligation to issue finders’ shares Obligation to issue bonus shares on loans Convertible debentures Share-based compensation Loss for the year Balance, November 30, 2019 Obligation to issue bonus shares on loans Finders’ shares Shares issued for loan bonus Exercise of options Exercise of warrants Convertible debentures Conversion of convertible debentures Share subscription received in advance Share issuance costs Share-based compensation Loss for the year Balance, November 30, 2020	129,600,304 $ 8,964,629 $ - $ - $ - $ 686,244 $ 106,978 $ (7,745,023) $ 2,012,828 - - - 25,200 - - - - 25,200 - - - 162,220 - - - - 162,220 - - - - 580,294 - - - 580,294 - - - - - 517,461 - - 517,461 - - - - - - - (1,388,837) (1,388,837)
	129,600,304 8,964,629 - 187,420 580,294 1,203,705 106,978 (9,133,860) 1,909,166 - - - 342,159 - - - - 342,159 1,210,000 86,950 - (25,200) - - - - 61,750 4,871,084 114,053 - (114,053) - - - - - 325,000 42,936 - - - (10,436) - - 32,500 44,000,000 3,300,000 - - - - - - 3,300,000 - - - - 290,776 - - - 290,776 60,000,000 2,877,365 - - (580,294) - - - 2,297,071 - - 400,000 - - - - - 400,000 - (750) - - - - - - (750) - - - - - 162,916 - - 162,916 - - - - - - - (2,581,193) (2,581,193)
	240,006,388 $15,385,183 $ 400,000 $ 390,326 $ 290,776 $1,356,185 $ 106,978 $ (11,715,053) $ 6,214,395

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

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BLUE STAR GOLD CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

For the years ended November 30,

		2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the year Items not affecting cash: Accretion and interest Amortization Amortization – ROU assets Share-based compensation Deferred income tax recovery Changes in non-cash working capital items: Advances and deposits GST receivable Accounts payable and accrued liabilities Due to related parties Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Long term deposit Purchase of equipment Exploration and evaluation expenditures Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Share subscription received in advance Share issuance costs Proceeds from exercise of options and warrants Proceeds from convertible debentures Convertible debentures issuance costs Proceeds from loans payable Repayment of loan principal and interest Repayment of lease liabilities Net cash provided by financing activities Change in cash during the year Cash, beginning of year Cash, end of year		$ (2,581,193) $ (1,388,837) 936,362 222,419 2,184 1,709 27,403 - 162,916 517,461 (280,299) (323,855) (68,354) (8,960) (244,917) (87,822) (107,623) 107,925 164,013 (57,820)
		(1,989,508) (1,017,780)
		(194,534) (875,000) (380,273) - (7,416,027) (1,919,740)
		(7,990,834) (2,794,740)
		400,000 - (750) - 3,332,500 - 4,100,000 3,000,000 (30,662) (107,892) 2,435,542 1,000,000 (200,000) - (22,970) -
		10,013,660 3,892,108
		33,318 79,588 94,725 15,137
		$ 128,043 $ 94,725
SUPPLEMENT NON-CASH DISCLOSURES Exploration and evaluation assets included in accounts payable and accrued liabilities Exploration and evaluation assets included in due to related parties Finders’ shares included in convertible debenture issue costs Convertible debenture issue costs included in accounts payable and accrued liabilities Deferred financing costs included in convertible debentures – short term Convertible debentures converted into shares Amortization in exploration and evaluation assets Interest paid Taxes paid		$ 571,827 $ 409,221 $ - $ 287,003 $ 61,750 $ 25,200 $ 32,500 $ - $ 218,788 $ 222,380 $ 2,297,071 $ - $ 9,007 $ - $ 175,483 $ - $ - $ -

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

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

1. Nature of Operations

Blue Star Gold Corp. (“Blue Star” or the “Company”) was incorporated on April 13, 2007 pursuant to the Business Corporations Act of British Columbia. The Company’s principal business activity is the acquisition and exploration of mineral property interests. The Company is in the exploration stage and substantially all the Company’s efforts are devoted to financing and developing these property interests. There has been no determination whether the Company’s interests in unproven exploration and evaluation assets contain economically recoverable mineral resources.

The Company is listed for trading on the TSX Venture Exchange (“TSX-V”) under the symbol “BAU”, and its corporate head office is located at 507 – 700 West Pender Street, Vancouver, British Columbia V6C 1G8.

2. Basis of Presentation

a) Statement of compliance

These consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

These consolidated financial statements were authorized by the Board of Directors on March 16, 2021.

b) Going concern

The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of its resource properties and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively, upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write-downs of the carrying values. Such adjustments could be material.

These consolidated financial statements have been prepared in accordance with IFRS on a going concern basis, which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Accordingly, these consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. As at November 30, 2020, the Company has an accumulated deficit of $11,715,053 (2019 - $9,133,860) and has a working capital deficiency of $2,083,112 (2019 – deficiency of $1,005,653) and has incurred significant losses. These circumstances may cast significant doubt as to the ability of the Company to meet its obligations as they come due, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The recovery of amounts capitalized for exploration and evaluation assets at November 30, 2020 and 2019 in the consolidated statement of financial position is dependent upon the ability of the Company to arrange appropriate financing to complete the development and continued exploration of the properties. The Company plans to raise funds primarily through the issuance of shares or obtain profitable operations. The outcome of these matters cannot be predicted at this time.

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in a widespread health crisis that has affected economies and financial markets around the world resulting in an economic downturn. This outbreak has caused staff shortages, reduced consumer demand, increased government regulations or interventions, all of which may negatively impact the business, financial condition or results of operations of the Company. The duration of the COVID-19 outbreak is unknown at this time and it is not possible to reliably estimate the length and severity of these developments. There may be potential difficulties in accessing the Company’s exploration and evaluation projects.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

2. Basis of Presentation (continued)

c) Consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Ulu Mining Inc. and Inukshuk Exploration Incorporated (“Inukshuk”), both incorporated under the laws of British Columbia. All significant intercompany transactions have been eliminated upon consolidation. A subsidiary is an entity that the Company controls, either directly or indirectly. Control is based on whether an investor has power over the investee, exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of returns.

d) Functional and presentation currency

The Company and its wholly owned subsidiaries’ reporting and functional currency is the Canadian dollar. Monetary assets and liabilities of the Company are translated into Canadian dollars at the exchange rate in effect on the consolidated statements of financial position date, while non-monetary assets and liabilities are translated at historical rates. Expenses are translated at the average rates over the reporting period. Gains and losses from these translations are included in profit or loss.

e) Basis of measurement

These consolidated 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 consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

f) Estimates and judgments

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and the revision affects both current and future periods.

Information about critical judgments and estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows.

Critical accounting estimates

i. Recognition of deferred taxes

The determination of income tax expense and deferred income tax involves judgment and estimates as to the future taxable earnings, expected timing of reversals of deferred tax assets and liabilities, and interpretations of laws in the countries in which the Company operates. The Company is subject to assessments by tax authorities who may interpret the tax law differently. Changes in these estimates may materially affect the final amount of deferred income taxes or the timing of tax payments.

ii. Share-based compensation

Estimating the fair value of granted stock options requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected rate of forfeitures, expected life, price volatility, interest rate and dividend yield. Changes in the input assumptions can materially affect the fair value estimate of the Company’s earnings and reserves.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

2. Basis of Presentation (continued)

• f) Estimates and judgments (continued)

Critical accounting estimates (continued)

iii. Interest rates

The Company estimates a market interest rate in determining the fair value of the liability component of its convertible debentures and loans payable and a incremental borrowing rate in determining the right-of-use asset. The determination of market interest rate is subjective and could materially affect the fair value estimate.

• iv. Recoverable amount of exploration and evaluation assets

The carrying value of exploration and evaluation assets and the likelihood of future economic recoverability of these carrying values is subject to significant management estimates. The application of the Company’s accounting policy for and determination of recoverability of capitalized assets is based on assumptions about future events or circumstances. New information may change estimates and assumptions made. If information becomes available indicating that recovery of expenditures is unlikely, the amounts capitalized are impaired and recognized as a loss in the period that the new information becomes available. A change in estimate could result in the carrying amount of capitalized assets being materially different from their presented carrying costs.

Critical accounting judgments

• i. Impairment of exploration and evaluation assets

Assets or cash-generating units are evaluated at each reporting date to determine whether there are any indications of impairment. The Company considers both internal and external sources of information when making the assessment of whether there are indications of impairment for the Company’s exploration and evaluation assets.

ii. Going concern

The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures, meet 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.

iii. Application of IFRS 16 Leases

The Company applies judgment in determining whether the contract contains an identified asset, whether the Company has the right to control the asset, and the lease term. Lease term reflect the period over which the lease payments are reasonably certain including renewal options that the Company is reasonably certain to exercise. The determination of lease terms involves significant judgment with respect to assumptions of whether lease extensions will be utilizes. Management makes assumptions about long-term industry outlook and store operating performances and growth which relate to future events and circumstances. Actual results could vary from these assumptions, and the differences could be material to the carrying value of the lease liabilities and right of use assets, for which the lease term is the basis for determining useful life.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

3. Significant Accounting Policies

a) Exploration and evaluation assets

All costs related to the acquisition, exploration and evaluation of mineral resource interests are capitalized by project. Costs incurred before the Company has obtained legal rights to explore an area are recognized in the consolidated statements of loss and comprehensive loss. The Company recognizes the payment or receipt of amounts required under option agreements as an addition or reduction, respectively, in the book value of the property under option when paid or received.

Development expenditures incurred subsequent to a determination of the feasibility of mining operations and to increase or to extend the life of existing production, are capitalized and will be amortized using the unit-ofproduction method based upon estimated proven and probable reserves. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

The amounts shown for exploration and evaluation assets represent costs incurred to date, less recoveries, and do not necessarily reflect present or future values. The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain financing to complete development of the projects, as well as future profitable production or proceeds from the disposition thereof.

At the end of each reporting period, the Company’s exploration and evaluation assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, an impairment test is conducted, where the recoverable amount of the asset is estimated to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

b) Loss per share

The Company computes the dilutive effect of options, warrants and similar instruments on loss per common share from the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. For the years presented, this calculation proved to be anti-dilutive. Basic loss per share is calculated using the weighted average number of common shares outstanding during the year.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

3. Significant Accounting Policies (continued)

c) Share-based compensation

The Company grants stock options to acquire common shares of the Company to directors, officers, employees and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes or provides services similar to those performed by an employee. The fair value of stock options is measured on the date of grant, using the Black-Scholes option pricing model, and is recognized over the vesting period. A corresponding increase in reserves is recorded when stock options vests. When stock options are exercised, share capital is increased by the sum of the consideration paid and the related portion of share-based compensation previously recorded in reserves.

Share-based compensation to non-employees is measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received.

The fair value of awards is calculated using the Black-Scholes option pricing model, which considers the following factors:

• Exercise price •

• • Expected life • • Expected volatility • Dividend yield

• Current market price of underlying shares

• Risk-free interest rate

• Forfeiture rate

d) Income taxes

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end, adjusted for amendments to tax payable with regard to previous years.

Deferred tax is recorded using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable loss; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amounts of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend. Deferred tax assets and liabilities are offset when there is a legally enforceable right to off set current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

3. Significant Accounting Policies (continued)

e) Provision for environmental rehabilitation

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of exploration and evaluation assets and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to the production assets along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The rehabilitation asset is amortized on the same basis as mining assets.

The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mining assets with a corresponding entry to the rehabilitation provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates. Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period.

f) Compound instruments

The convertible debentures and loans payable were separated into their liability and equity components on issuance of the instruments. The liability component is initially recognized at fair value, calculated at the present value of the liability based upon debt instruments with no bonus shares, conversion feature or warrants issued by comparable issuers and accounted for at amortized cost using the effective interest rate method. The effective interest rate used is the estimated rate for debt instruments with similar terms at the time of issue. The residual value is then allocated to the equity component.

g) Financial instruments

The following table shows the classification of the Company’s financial instruments:

Financial asset/liability	Classification
Cash	FVTPL
Accounts payable and accrued liabilities	Amortized cost
Due to related parties	Amortized cost
Lease liabilities	Amortized cost
Loans payable	Amortized cost
Convertible debentures	Amortized cost

i. Financial assets

The Company recognizes a financial asset when it becomes a party to the contractual provisions of the instrument. The Company classifies financial assets at initial recognition as financial assets: measured at amortized cost, measured at fair value through other comprehensive income or measured at fair value through profit or loss.

Financial assets measured at amortized cost

A financial asset that meets both of the following conditions is classified as a financial asset measured at amortized cost.

• The Company’s business model for the such financial assets, is to hold the assets in order to collect contractual cash flows.

• The contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the amount outstanding.

1 3 | P a g e

Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

3. Significant Accounting Policies (continued)

• g) Financial instruments (continued)

• i. Financial assets (continued)

Financial assets measured at amortized cost (continued)

A financial asset measured at amortized cost is initially recognized at fair value plus transaction costs directly attributable to the asset. After initial recognition, the carrying amount of the financial asset measured at amortized cost is determined using the effective interest method, net of impairment loss, if necessary.

Financial assets measured at fair value through other comprehensive income (“FVTOCI”)

A financial asset measured at fair value through other comprehensive income is recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, the asset is measured at fair value with changes in fair value included in other comprehensive income.

Financial assets measured at fair value through profit or loss (“FVTPL”)

A financial asset measured at fair value through profit or loss is recognized initially at fair value with any associated transaction costs being recognized in profit or loss when incurred. Subsequently, the financial asset is re-measured at fair value, and a gain or loss is recognized in profit or loss in the reporting period in which it arises.

The Company derecognizes a financial asset if the contractual rights to the cash flows from the asset expire, or the Company transfers substantially all the risks and rewards of ownership of the financial asset. Any interests in transferred financial assets that are created or retained by the Company are recognized as a separate asset or liability. Gains and losses on derecognition are generally recognized in the consolidated statement of loss and comprehensive loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive loss.

An ‘expected credit loss’ impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period. In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

• ii. Financial liabilities

The Company classified financial liabilities at initial recognition as financial liabilities: measured at amortized cost or measured at fair value through profit or loss.

Financial liabilities at amortized cost

Financial liabilities at amortized cost are initially recognized at fair value net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are initially measured at fair value with any associated transaction costs being recognized in profit or loss when incurred. Subsequently, the financial liability is remeasured at fair value, and a gain or loss is recognized in profit or loss in the reporting period in which it arises.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

3. Significant Accounting Policies (continued)

h) Financial instruments (continued)

• ii. Financial liabilities (continued)

The Company derecognizes a financial liability when the financial liability is discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the profit or loss.

Financial assets and liabilities are offset and the net amount is presented in the consolidated statement of financial position only when the Company has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

h) Deferred financing charges

Accretion and interest expense comprise interest expense on loans payable and convertible debentures and the accretion of the fair value discount. Deferred financing charges relate to interest payable in advance and are initially deferred and subsequently reclassified into accretion and interest expense as interest is accrued.

i) Equipment

Equipment are carried at cost less accumulated amortization and any impairment charges. The cost of an item of equipment includes the purchase price and related costs in bringing the item to the location and preparing the condition necessary for its intended use, as well the estimated costs of dismantling, removing the item and restoring the site on which the item is installed.

Amortization expense of assets used in exploration are capitalized to exploration and evaluation assets. Amortization is recorded at rates designed to amortize the cost of capital assets over their estimated useful lives.:

Computer equipment	3 years
Office equipment	2 years
Camp and field equipment	5 years

j) Adoption of new accounting policies

IFRS 16 Leases (“IFRS 16”) was adopted on December 1, 2019, using the modified retrospective approach. This approach does not require restatement of prior period financial information as it applies the standard prospectively. This standard replaced IAS 17 Leases (“IAS 17”). Under IAS 17, operating lease expenditures were expensed on a straight-line basis over the lease term whereas under IFRS 16, there is an increased focus on control of the underlying asset.

Under IFRS 16, the Company recognizes right of use assets and lease liabilities for all leases expect where the Company has elected to use the practical expedient to not recognize right-of-use assets and lease liabilities for low-value assets or short-term leases under 1 year that are not expected to renew. As of the adoption date, the Company only had one long-term lease relating to office equipment where no right-of-use assets or lease liabilities were recognized as it was a low-value asset.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

4. Capital Management

Capital includes all the components of shareholders’ equity as well as proceeds from loans and convertible debentures. 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 acquisition and exploration of its exploration and evaluation assets and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. As the Company is in the exploration stage, its principal source of funds is from the issuance of common shares. Further information relating to liquidity risk is disclosed in note 5.

The Company manages the capital structure and adjusts 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 issue new shares, enter into joint venture property arrangements, acquire or dispose of assets, or adjust the amount of cash and cash equivalents and investments.

To facilitate the management of its capital requirements, the Company prepares budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The budgets are approved by the Board of Directors.

There were no changes in the Company’s approach to capital management during year ended November 30, 2020. The Company is not subject to externally imposed capital requirements.

5. Management of Financial Risks

Fair value measurement disclosure includes classification of financial instrument fair values in a hierarchy comprising three levels reflecting the significance of the inputs used in making the measurements, described as follows:

Level 1: Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Valuations based on directly or indirectly observable inputs in active markets for similar assets or liabilities, other than Level 1 prices such as quoted interest or currency exchange rates; and

Level 3: Valuations based on significant inputs that are not derived from observable market data, such as discounted cash flow methodologies based on internal cash flow forecasts.

The Company’s financial instruments as at November 30, 2020 are as follows:

Level 1	Level 2	Level 3
Financial assets at FVTPL Cash $ 128,043 Financial liabilities at amortized costs Accounts payable and accrued liabilities $ 670,637 Due to related parties $ 445,162 Lease liabilities $ - Loans payable $ - Convertible debentures $ -	$ - $ - $ - $ 305,869 $ 3,239,956 $ 3,896,454	$ - $ - $ - $ - $ - $-

The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments are summarized below.

1 6 | P a g e

Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

5. Management of Financial Risks (continued)

a) Fair value

The carrying value of cash, accounts payable and accrued liabilities and amounts due to related parties approximated their fair value since the interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature. The lease liabilities, loans payable and convertible debentures are classified as level 2 due as the fair value is determined based on market interest rates.

b) Interest rate risk

The Company has some exposure at November 30, 2020 and 2019 to interest rate risk through its financial instruments; however, the risk is not significant as the loans payable and convertible debentures have fixed, simple interest rates between 3% - 7.5% per annum.

c) Currency risk

As at November 30, 2020 and 2019, the majority of the Company’s cash was held in Canadian dollars, the Company’s functional and reporting currency. The majority of the Company’s accounts payable and accrued liabilities are denominated in Canadian dollars. Loans payable, convertible debentures and lease liabilities outstanding as at November 30, 2020 and 2019 are in Canadian dollars. Currency risk is not significant.

d) Credit risk

Concentration of credit risk exists with respect to the Company’s cash, as substantially all amounts are held at major financial institutions. The credit risk associated with cash is minimized by ensuring that these financial assets are placed with financial institutions with investment-grade ratings by a primary ratings agency.

e) Liquidity risk

The Company attempts to manage liquidity risk by maintaining sufficient cash balances. Liquidity requirements are managed based on expected cash flows to ensure that there is sufficient capital in order to meet short-term obligations. As at November 30, 2020, the Company had cash of $128,043 (2019 - $94,725) to settle current liabilities of $2,831,893 (2019 - $1,450,850).

The amounts listed below are the remaining contractual maturities for financial liabilities held by the Company as at November 30, 2020 and 2019.

	November	30, 2020		November	30, 2019	30, 2019
Due Date	0 to 12 months	>12 months		0 to 12 months	>12 months
Accounts payable and accrued	$ 670,637	$	-	$ 582,511	$ -
liabilities
Due to related parties	455,162		-	376,185		-
Interest – Loans payable	195,590		-	13,523		48,492
Loans payable	1,000,000	2,435,542		200,000		1,000,000
Interest – Convertible debentures	307,500		-	278,630		-
Convertible debentures	-	4,100,000		-		3,000,000
Total	$ 2,628,889	$ 6,535,542		$ 1,450,849	$	4,048,492

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

6. Long-Term Deposits

As at November 30, 2020, the Company has the following long-term deposits:

a) a deposit of $943,835 (2019 - $825,000) held with the Kitikmeot Inuit Association pursuant to its application to obtain a Land Use License to get access to the Inuit Owned Lands for the Hood River exploration camp and operations;

b) a deposit of $1,685,542 (2019 - $Nil) with Crown-Indigenous Relations and Northern Affairs Canada, in relation to the Ulu Water License issued by the Nunavut Water Board (“NWB”) for the reclamation liability of the mining license;

c) a deposit of $Nil (2019 - $50,000) held with one of the Company’s vendors to cover standby charges related to exploration activities;

d) advances of $91,715 (2019 - $nil) for exploration and evaluation expenditures; and

e) a deposit of $33,984 (2019 - $nil) for the Company’s office lease.

7. Equipment

COST Balance, November 30, 2018 and 2019 Additions Balance, November 30, 2020	Computer and office equipment Camp and field equipment Total $ 8,543 $ - $ 8,543 10,554 369,719 380,273
	19,097 369,719 388,816
Accumulated amortization Balance, November 30, 2018 Additions Balance, November 30, 2019 Additions Balance, November 30, 2020	$ 6,121 $ - $ 6,121 1,709 - 1,709
	7,830 - 7,830 2,184 9,007 11,191
	$ 10,014 $ 9,007 $ 19,021
Carrying amounts At November 30, 2019 At November 30, 2020	$ 713 $ - $ 713 $ 9,083 $ 360,712 $ 369,795

During the year ended November 30, 2020, amortization expenses of $9,007 (2019 - $Nil) were recorded into the exploration and evaluation assets.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

8. Right-of-Use (“ROU”) Assets and Lease Liabilities

On August 19, 2020, the Company entered into an office lease agreement for a 24- month lease period starting October 1, 2020. In accordance with IFRS 16, the Company recorded right-of-use assets of $328,839 and recognized lease liabilities of $328,839 on commencement of the lease. As at August 19, 2020, the Company measured the present value of its lease liabilities using a discount rate of 12% as determined from its incremental borrowing rate.

a) Right-of-use assets

A reconciliation of the Company’s right-of-use assets for the year ended November 30, 2020 is as follows:

Balance, November 30, 2019 Acquisition of office lease ROU Amortization of ROU Balance, November 30, 2020	Total
	$ - 328,839 (27,403)
	$ 301,436

b) Lease liabilities

A reconciliation of the Company’s lease liabilities for the year ended November 30, 2020 is as follows:

ease liabilities reconciliation of the Company’s lease liabilities for the year	ended November 30, 2020 is
Balance, November 30, 2019 Addition Accretion of interest Lease payments Balance, November 30, 2020 Lease liabilities – short term as at November 30, 2020 Lease liabilities – long term as at November 30, 2020	Total
	$ - 328,839 7,347 (30,317)
	$ 305,869
	$ 154,869
	$ 151,000

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

9. Exploration and Evaluation Assets

	Ulu	Hood River
	Property	Property
	(Nunavut)	(Nunavut)	Total
November 30, 2019	$ 1,438,034	$ 1,108,053	$ 2,546,087
Acquisition	-	125,000	125,000
Exploration
Assay	-	44,405	44,405
Camp and supplies	-	24,792	24,792
Consulting	31,753	13,115	44,868
Equipment rental	-	271,078	271,078
Helicopter	-	696,603	696,603
Permits	217,543	244,290	461,833
Site personnel	-	199,011	199,011
Drilling and geological	-	546,170	546,170
Travel	950	31,493	32,443
	1,688,280	3,304,010	4,992,290
Acquisition	450,000	125,000	575,000
Exploration
Amortization	4,504	4,503	9,007
Assay	146,330	109,906	256,236
Camp and supplies	183,995	126,400	310,395
Claim maintenance	6,602	-	6,602
Community support	32,080	26,996	59,076
Consulting	160,647	70,286	230,933
Equipment rental	96,469	125,744	222,213
Fuel	133,532	133,532	267,064
Geological data and analysis	74,716	40,848	115,564
Helicopter and flight	772,602	772,602	1,545,204
Permits	299,351	67,669	367,020
Site personnel	289,506	249,413	538,919
Remediation	543,855	-	543,855
Drilling and geological	1,078,610	1,090,057	2,168,667
Travel	51,739	33,143	84,882
Cash received from Mandalay	(1,685,542)	-	(1,685,542)
November 30, 2020	$ 4,327,276	$ 6,280,109	$10,607,385

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

9. Exploration and Evaluation Assets (continued)

a) Ulu Property

The Ulu Property consists of a renewable 21-year lease with an area of approximately 947 hectares and an expiry date of November 18, 2038.

On May 30, 2014, the Company entered into an option agreement (the “Option Agreement”) with Elgin Mining Inc. and Bonito Capital Corp. (collectively, “Elgin”), to acquire an 80% undivided interest in the Ulu Property. Pursuant to the Option Agreement, the Company issued 5,000,000 shares, paid $125,000, and incurred $300,000 in property expenditures to earn a 70% interest in the Ulu Property. On September 10, 2014, Mandalay Resources Corporation (“Mandalay”) acquired Elgin. The Ulu Property is subject to a 5% net production proceeds royalty payable after 675,000 ounces of gold have been mined and recovered.

On January 8, 2018, the Company and Mandalay entered into the New Ulu Property Option Agreement. The new option agreement supersedes all prior agreements covering the Ulu Property. On July 19, 2019, the option agreement was further amended (the “Amended Option Agreement”). The TSX-V approved the Amended Option Agreement on November 26, 2019.

Pursuant to the terms of the Amended Option Agreement, the Company is required to pay the following:

• $200,000 to be paid upon the receipt of TSX-V approval for the New Ulu Property Option Agreement dated January 8, 2018; (paid)

• $200,000 to be paid on or before May 31, 2018 (paid); and

• • $450,000 (paid) in lieu of issuing 15,000,000 common shares, with such payment being made upon the closing of the transfer of the Ulu Property and associated permits.

Additionally, the Company is required to complete the following:

• Assume all environmental liabilities, past and present, of the Ulu Property, including all current and future obligations to any regulatory agency; and,

• Arrange for a third-party cash payment of $200,000 for the 5,000,000 common shares of the Company presently held by Mandalay upon the closing of the property transfer.

Under the amended agreement, Mandalay will:

• Transfer to the Company 100% interest in the Ulu Property and associated permits upon regulatory approval of the transfers;

• Assign all its rights to the remediation security, valued at approximately $1,680,000 which is held by the Nunavut Water Board*; and,

• Transfer all right, title and interest in all structures, property and equipment located on the Ulu Property.

• During the year ended November 30, 2020, the Company received $1,685,542 from Mandalay on assignment of the rights to the remediation security which is recorded as a reduction to the Ulu Property. The Company reposted the remediation security with the Nunavut government, which is recorded as a long-term deposit (Note 6).

2 1 | P a g e

Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

9. Exploration and Evaluation Assets (continued)

• b) Hood River Property

Pursuant to a letter of intent dated May 15, 2014, on February 26, 2018, the Company signed the final Transaction Agreement (the “Definitive Agreement”) and NSR Royalty Agreement to acquire 100% of the outstanding shares of Inukshuk Exploration Inc. (“Inukshuk”), with an effective date as of September 18, 2014. Inukshuk owns a 100% interest in the Hood River Property in Nunavut through a 20-year renewable mineral exploration agreement (“MEA”) dated June 1, 2013, issued by Nunavut Tunngavik Incorporated (“NTI”).

Pursuant to the terms of the Definitive Agreement, the Company acquired 100% of the outstanding shares of Inukshuk by issuing the shareholders (the “Vendors”) and their assignees 8,000,000 common shares of the Company (issued in 2014 at a fair value of $560,000) for the transaction. The TSX-V approved the transaction on September 18, 2014.

Under the terms of the Royalty Agreement in the Definitive Agreement, the Company will pay the following:

• i. Pay a 3% NSR royalty on the disposition of all minerals produced from the Hood River Property;

• ii. Make advance royalty payments totalling $500,000 in accordance with the following schedule:

• (1) $25,000 (paid) within 25 business days of TSX-V preliminary approval;

• (2) an additional $100,000 (paid) on or before February 28, 2018;

• (3) an additional $125,000 (paid) on or before February 28, 2019;

• (4) an additional $125,000 (paid) on or before February 28, 2020; and

• (5) an additional $125,000 on or before February 28, 2021 (paid on February 25, 2021).

• iii. Offer the vendor a right of conveyance if the Company abandons the Hood River Property; and

• iv. Maintain the Hood River Property in good standing during the conveyance period.

Prior to the commencement of commercial production on the Hood River Property, the Company has the option to acquire up to 2% of the NSR for up to $8,000,000 under the following terms:

• i. Purchase an initial 0.5% of the NSR for $1,000,000;

• ii. Purchase an additional 0.5% of the NSR for an additional $1,500,000;

• iii. Purchase an additional 0.5% of the NSR for an additional $2,500,000; and

• iv. Purchase an additional 0.5% of the NSR for an additional $3,000,000.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

9. Exploration and Evaluation Assets (continued)

Title to resource properties

Although the Company has taken steps to verify the title to exploration properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

Realization of assets

The investment in and expenditures on exploration properties comprise a significant portion of the Company’s assets. Realization of the Company’s investment in these assets is dependent upon the establishment of legal ownership, the attainment of successful production from the properties or from the proceeds of their disposal. Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore.

The amounts shown for acquisition costs and deferred exploration expenditures represent costs incurred to date and do not necessarily reflect present or future values. These costs will be depleted over the useful lives of the properties upon commencement of commercial production or written off if the properties are abandoned or the claims are permitted to lapse.

Environmental

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation. The Company is not aware of any existing environmental problems related to any of its current or former properties that may result in material liability to the Company. Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company’s operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the resource properties, the potential for production on the property may be diminished or negated.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

10. Related Party Transactions and Key Management Compensation

Related party transactions are in the normal course of operations and measured at the exchange amount, which is the amount of consideration established and agreed by the related parties. Amounts due to or from related parties are non-interest bearing and unsecured.

As at November 30, 2020, $455,162 (2019 - $376,185) was due to directors and officers of the Company:

		November 30,		November 30,
		2020		2019
CFO	$	9,984	$	-
Former CEO**		168,000		4,501
Former CFO*		-		5,000
Directors		237,338		-
Former Director*		-		39,840
Former CFO*		39,840		39,840
Former director of subsidiary*		-		287,004
	$	455,162	$	376,185

• These directors and officers were related parties during the year ended November 30, 2019 and have since resigned.

** The Company’s CEO resigned during the year ended November 30, 2020.

During the years ended November 30, 2020 and 2019, the Company entered into the following transactions with related parties:

		Year ended		Year ended
		November 30,		November 30,
		2020		2019
Salary – CEO	$	59,500	$	-
Salary – Spouse of CEO		28,320		-
Management fee – CFO		96,750		-
Directors fees		100,000		-
Salary – former CEO**		246,285		102,000
Salary – former CFO*		-		60,000
Professional fees paid to a firm owned by the former CFO*		-		14,310
Share-based compensation (Note 13)
- 1,800,000 (2019 – 6,300,000) options were granted to directors and
officers		162,916		311,962
	$	693,771	$	488,272

*The Company’s former CFO resigned during the year ended November 30, 2020.

**The Company’s CEO was terminated during the year ended November 30, 2020.

Loans and convertible debentures

During the year ended November 30, 2020:

i. On November 21, 2019, the Company entered into a loan agreement with Dr. Georg Pollert, a director of the Company. The loan principal amount of $2,435,542 was received on December 10, 2019 (Note 11). In connection with the loan, the Company issued 4,871,084 bonus shares with a fair value of $114,053 during the year ended November 30, 2020.

2 4 | P a g e

Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

10. Related Party Transactions and Key Management Compensation (continued)

Loans and convertible debentures (continued)

ii. On July 3, 2020, Dr. Georg Pollert, a director of the Company, subscribed for 3,175 units of the Company’s convertible debenture for a principal amount of $3,175,000 (Note 12).

iii. During the year ended November 2020, Dr. Georg Pollert privately sold his 2,200 units of the Company’s convertible debenture issued in August 2019. Those units were converted by the purchaser into 44,000,000 shares of the Company afterwards.

During the year ended November 30, 2019:

i. the Company entered into three loan agreements with Dr. Georg Pollert, a director of the Company, for total proceeds of $750,000 (Note 11).

ii. On August 16, 2019, Dr. Georg Pollert, a director of the Company, subscribed for 2,200 units of the Company’s convertible debenture for a principal amount of $2,200,000 (Note 12).

In connection to the loans and convertible dentures with Dr. Georg Pollert, the Company recorded an accretion and interest expense of $693,334 (2019 - $368,744).

11. Loans Payable

During the year ended November 30, 2018, the Company entered into the following loan agreement:

• On November 30, 2018, the Company entered into a loan agreement for $200,000 with a third party, which is due on November 30, 2020 and has a simple interest rate of 7% per annum. During the year ended November 30, 2020, the Company fully repaid the loan principal of $200,000 and interest of $22,147.

During the year ended November 30, 2019, the Company entered into the following loan agreements:

• On December 19, 2018, a loan agreement was entered into with a director of the Company for $250,000 (Note 10). The loan bears 7.5% simple interest per annum payable on or before the date of repayment of December 31, 2020. In consideration, the director will receive 1,000,000 bonus shares upon approval by the TSX-V.

• On March 10, 2019, a loan agreement was entered into with a director of the Company for $250,000 (Note 10). The loan bears 7.5% simple interest per annum payable on or before the date of repayment of March 31, 2021. In consideration, the director will receive 1,000,000 bonus shares upon approval by the TSX-V.

• On May 7, 2019, a loan agreement was entered into with a director of the Company for $250,000 (Note 10). The loan bears 7.5% simple interest per annum payable on or before the date of repayment of June 30, 2021. In consideration, the director will receive 1,000,000 bonus shares upon approval by the TSX-V.

• On June 19, 2019, a loan agreement was entered into with a third party for $250,000. The loan bears 7.5% simple interest per annum payable on or before the date of repayment of July 30, 2021. In consideration, the lender will receive 1,000,000 bonus shares upon approval by the TSX-V.

2 5 | P a g e

Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

11. Loans Payable (continued)

Subsequent to the year ended November 30, 2020, the Company settled the above loans entered into with a director of the Company along with accrued interest totalling $839,593 with 15,265,332 shares at a price of $0.055 per share. The Company also issued 1,000,000 bonus shares in accordance with the loan that matured on December 31, 2020, while the remaining 2,000,000 bonus shares that are settled before the maturity date were disallowed by the TSX-V.

During the year ended November 30, 2020, the Company entered into the following loan agreements:

• On November 21, 2019, the Company entered into a loan agreement with Dr. Georg Pollert. The loan principal amount is $2,435,542 (Note 10; received on December 10, 2019). The loan has a term of three years and bears interest at 3% per annum. In relation to the loan, the Company intends to issue up to 7,871,084 bonus shares to Dr. Georg Pollert which was approved by TSX-V on November 26, 2019. During the year ended November 30, 2020, the Company issued 4,871,084 bonus shares (Note 10) valued at $114,053.

In connection with the bonus shares described above, the Company recognized an obligation to issue shares of $342,159 (2019 - $162,220) and a deferred tax recovery of $126,552 (2019 - $60,000).

For accounting purposes, the loans with bonus shares were considered a hybrid financial instrument and were allocated into corresponding debt and equity components at the date of issue. The Company used the residual value method to allocate the principal amount of the loans between the liability and obligation to issue shares component. The Company valued the debt component of the loan agreements by calculating the present value of principal and interest payments, discounted at a rate of 11% (21% for loans with bonus shares issued during the year ended November 30, 2019) which represents managements best estimate of the rate that a loan without bonus shares would earn. The debt component is subsequently accreted to the face value of the loan agreements with an effective interest rate of 10% (19% for loans with bonus shares issued during the year ended November 30, 2019).

		Liability	Obligation to issue	Obligation to issue
		Component		shares
Balance at November 30, 2018	$	200,000	$	-
Proceeds received		777,780		222,220
Accretion and interest		116,874		-
Deferred income tax recovery		-		(60,000)
Balance at November 30, 2019	$	1,094,654	$	162,220
Proceeds received		1,966,831		468,711
Accretion and interest		400,618		-
Deferred income tax recovery		-		(126,552)
Bonus shares issued		-		(114,053)
Repayment of loan principal		(200,000)		-
Repayment of interest		(22,147)		-
Balance at November 30, 2020	$	3,239,956	$	390,326
		November 30,		November 30,
		2020		2019
Short-term portion of liability	$	1,067,366	$	213,524
Long-termportion of liability	$	2,172,590	$	881,130

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

12. Convertible Debentures

Convertible debenture 2019

On November 26, 2019, the TSX-V approved the closing of a non-brokered private placement of convertible debentures. Each unit is priced at $1,000 and consists of 20,000 non-secured Convertible Debentures (the “Debentures”) and 20,000 non-transferable Common Share purchase warrants (“Warrants”). Each Debenture bears an annual simple interest rate of 7.5% over its term of up to three years (the "Term") and the interest is to be calculated and paid annually in advance for each year. During the first year of the Term, the conversion price will be $0.05 per share. During the second and third years of the Term, the conversion price will be $0.10 per share. Each Warrant will entitle the holder to purchase one common share of the Company at an exercise price of $0.075 per share during the Term.

The Company received total proceeds of $3,000,000 by issuing 3,000 units of convertible debentures. In November 2019, upon the approval of the TSX-V, the Company issued 60,000,000 warrants to the debenture holders. The Company paid finders' fees of $66,635, incurred legal and filing fees of $41,257, and has an obligation to issue 560,000 finders’ shares at a fair value of $25,200 (issued in February 2020).

For accounting purposes, the convertible debentures of $3,000,000 are hybrid financial instruments and were allocated into corresponding debt and equity components at the date of issue. The Company determined the conversion feature and warrant components of the convertible debenture meet the definition of equity instruments as the Company is obligated to issue a fixed number of shares for a fixed price within each year of the Term. The Company used the residual value method to allocate the principal amount of the Debentures between the liability and equity components. The Company valued the debt component of the Debentures by calculating the present value of principal and interest payments, discounted at a rate of 23% which represents managements best estimate of the rate that a non-convertible debenture with similar terms and risk would earn. The debt component is subsequently accreted to the face value of the debt portions of the convertible debentures at the effective interest rate of 22.7%. Upon issuance of the unsecured debentures, the fair value was separated into a debt component of $2,116,662 and an equity component of $883,338. On issuance, the Company recognized deferred financing charges of $278,630 related to interest for the first year payable in advance on the Debentures.

In November 2020, the principal of $3,000,000 was converted into 60,000,000 common shares of the Company at a conversion price of $0.05. The Company repaid interest of $73,909 and the remaining interest of $202,604 was recorded in account payable and accrued liabilities as of November 30, 2020. At the date of conversion, the carrying amount of liabilities $2,297,071 and equity components of the debts $580,294, totalling $2,877,365, was transferred to share capital. There is no gain or loss recorded at conversion.

Convertible debenture 2020

On July 3, 2020, the Company closed a non-brokered private placement of 4,100 units of the Company (the “Units”) at a price of $1,000 per Unit for gross proceeds of up to $4,100,000. Each Unit is comprised of 20,000 unsecured convertible debenture (the “Debentures”) and 20,000 non-transferable common share purchase warrants (“Warrants”) of the Company.

Each Debenture has a maximum term of 3 years (the “Term”) and will bear an annual simple interest rate of 7.5%. During the first year of the Term, the principal amount of each Debenture may be converted by the holder, for no additional consideration, into common shares of the Company at a conversion price of $0.05 per share and $0.10 per share during the second and third years of the Term.

Each Warrant entitles the holder to purchase one additional share at an exercise price of $0.075 per share until the expiry date of the Term.

The Company paid finder’s fee of $32,500 in cash, issued 650,000 finder’s shares at a fair value of $61,750 and incurred legal and filing fees of $30,662.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

12. Convertible Debentures (continued)

For accounting purposes, the convertible debentures of $4,100,000 are hybrid financial instruments and were allocated into corresponding debt and equity components at the date of issue. The Company determined the conversion feature and warrant components of the convertible debenture meet the definition of equity instruments as the Company is obligated to issue a fixed number of shares for a fixed price within each year of the Term. The Company used the residual value method to allocate the principal amount of the Debentures between the liability and equity components. The Company valued the debt component of the Debentures by calculating the present value of principal and interest payments, discounted at a rate of 13.25% which represents managements best estimate of the rate that a non-convertible debenture with similar terms and risk would earn. The debt component is subsequently accreted to the face value of the debt portions of the convertible debentures at the effective interest rate of 14%. Upon issuance of the unsecured debentures, the fair value was separated into a debt component of $3,641,508 and an equity component of $458,492. On issuance, the Company recognized deferred financing charges of $307,500 related to interest for the first year payable in advance on the Debentures.

	Liability component	Liability component	Equity	component
Balance, November 30, 2018	$	-	$	-
Convertible debenture at issuance		2,116,662		883,338
Transaction costs		(93,903)		(39,189)
Accretion expense		49,295		-
Interest expense		56,250		-
Interest payable recorded as deferred financing
charges		222,380		-
Deferred income tax recovery		-		(263,855)
Balance, November 30, 2019	$	2,350,684	$	580,294
Accretion and interest		445,281		-
Interest paid or accrued		(276,514)		-
Deferred financing charges		(222,380)		-
Conversion		(2,297,071)		(580,294)
Convertible debenture at issuance		3,641,508		458,492
Transaction costs		(110,943)		(13,969)
Accretion and interest		186,514		-
Interest payable recorded as deferred financing
charges		179,375		-
Deferred income tax recovery		-		(153,747)
Balance,November 30,2020	$	3,896,454	$	290,776
		November 30,		November 30,
		2020		2019
Short-term portion of liability	$	483,859	$	278,630
Long-termportion of liability	$	3,412,595	$	2,072,054

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

13. Share Capital and Reserves

a) Authorized

Unlimited number of common shares without par value.

b) Share issuances

At November 30, 2020, the Company had 240,006,388 (2019 – 129,600,304) common shares issued and outstanding.

During the year ended November 30, 2020:

i) the Company issued 1,210,000 finders’ shares valued at $86,950.

ii) the Company issued 4,871,084 bonus shares (fair valued at $114,053) to Dr. Georg Pollert in relation to a loan of $2,453,542 the Company received in December 2019 (Note 11).

iii) the Company issued 44,000,000 shares to Dr. Georg Pollert pursuant to exercise of warrants at $0.075 per share for total proceeds of $3,300,000. The fair market value of the common shares on exercise date was $0.10.

iv) the Company issued 325,000 shares pursuant to exercise of options at $0.10 per share for total proceeds of $32,500. The Company recorded $10,436, the fair value of the 325,000 options exercised, from reserves to share capital. The fair market value of the common shares on exercise date was $0.13.

v) The Company issued 60,000,000 shares pursuant to the convertible debts issued in November 2019 (Note 12) with a fair value of $2,877,365.

There was no share issuance during the year ended November 30, 2019.

c) Stock options

The Company has a stock option plan under which the aggregate number of common shares to be reserved for exercise of all options granted under the plan and any other share compensation arrangement shall not exceed 10% of the issued shares of the Company at the time of granting of options. The stock option plan provides for the granting of stock options to regular employees and persons providing investor relations or consulting services up to a limit of 5% and 2%, respectively, of the Company’s total number of issued and outstanding shares per year. Options granted to consultants providing investor relations services shall vest at a minimum over a period of twelve months with no more than one-quarter of such options vesting in any three-month period.

In August 2020, the Company granted to two directors 600,000 stock options, exercisable at $0.125 per share for a term of 4.19 years. These options vested on the date of grant. The fair value of the stock options granted was $61,833 ($0.10 per option) and is recorded in the consolidated statements of loss and comprehensive loss.

In August 2020, the Company granted 1,200,000 stock options to the CEO, exercisable at $0.125 per share for a term of 5 years. These options vest on January 1, 2021. The fair value of the stock options granted was $129,210 ($0.11 per option). As of November 30, 2020, the Company recorded share-based compensation of $101,083 in the consolidated statements of loss and comprehensive loss.

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

13. Share Capital and Reserves (continued)

c) Stock options (continued)

During the year ended November 30, 2019, the Company granted to directors, officers and consultants 10,450,000 stock options, exercisable at $0.06 per share for a term of 5 years. These options vested on the date of grant. The fair value of the stock options granted was $517,461 ($0.05 per option). On May 19, 2020, those stock options were repriced at $0.10 per share while the other terms remain the same. This modification reduces the fair value of the stock options; therefore, no revaluation is required according to IFRS 2 Share-based Payment .

The fair value of the stock options granted was determined using the Black-Scholes option price modelling with the following assumptions:

	Year ended	Year ended
Weighted average assumptions	November 30, 2020	November 30, 2019
Risk free interest rate	0.38%	1.58%
Volatility	131.99%	147.44%
Expected life of options	4.73 years	5 years
Dividend rate	0%	0%

Expected stock price volatility was derived from the historical closing price of the Company’s stock for a length of time equal to the expected life of the options. Companies are required to utilize an estimated forfeiture rate when calculating the expense for the reporting period. Based on the best estimate, management applied the estimated forfeiture rate of 0.00% in determining the expense recorded in the accompanying consolidated statements of loss and comprehensive loss.

Stock option transactions are summarized as follows:

	Number ofOptions	Weighted Average ExercisePrice
Balance, November 30, 2018 Expired/cancelled Granted Balance, November 30, 2019 Granted Exercised Expired/cancelled Balance, Outstanding, November 30, 2020	3,300,000 (825,000) 10,450,000 12,925,000 1,800,000 (325,000) (3,400,000) 11,000,000	$ 0.10 0.10 0.06 $ 0.07 0.125 0.10 0.10 $ 0.10
Exercisable, at November 30, 2020	9,800,000	$ 0.10

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

13. Share Capital and Reserves (continued)

c) Stock options (continued)

At November 30, 2020, the Company has the following outstanding stock options with a weighted average life of 3.97 years enabling holders to acquire common shares as follows:

Number	Exercise
ofOptions	Price	ExpiryDate
1,200,000	$ 0.125	August 7, 2025
600,000	$ 0.125	October 17, 2024
9,200,000	$ 0.10	October 17,2024

d) Warrants

During the year ended November 30, 2019, the Company issued 60,000,000 warrants with an exercise price of $0.075 in three years, pursuant to the private placement of convertible debentures closed on November 26, 2019 (Note 12).

During the year ended November 30, 2020, the Company issued 82,000,000 warrants with an exercise price of $0.075 in three years, pursuant to the private placement of convertible debentures closed on July 3, 2020 (Note 12).

Share purchase warrant transactions are summarized as follows:

	Number ofWarrants Weighted Average ExercisePrice
Balance, November 30, 2018 Granted Expired/cancelled Balance, November 30, 2019 Granted Exercised Balance, November 30, 2020	15,350,000 $ 0.10 60,000,000 0.075 (15,350,000) 0.10
	60,000,000 $ 0.075 82,000,000 0.075 (44,000,000) 0.075
	98,000,000 $ 0.075
Exercisable, at November30,2020	98,000,000 $ 0.075

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

13. Share Capital and Reserves (continued)

d) Warrants (continued)

As at November 30, 2020, the following share purchase warrants were outstanding:

Number	Exercise
ofWarrants	Price	ExpiryDate
16,000,000	$ 0.075	November 26, 2022
82,000,000	$ 0.075	July3,2023

14. Segmented Information

The Company has one reportable operating segment, being the acquisition and exploration of mineral properties. At November 30, 2020 and 2019, the Company’s exploration and evaluation assets are located in Canada. All expenses and cash receipts pertaining to exploration and evaluation activities are capitalized.

15. Income Taxes

As at November 30, 2020, the Company had accumulated non-capital losses for tax purposes in Canada of approximately $8,596,000. The losses expire as follows:

2027	$		11,000
2028			21,000
2029			133,000
2030			294,000
2031			368,000
2032			383,000
2033			280,000
2034			407,000
2035			1,008,000
2036			690,000
2037			611,000
2038			758,000
2039			1,257,000
2040			2,375,000
		$	8,596,000

Income tax expense (recovery) differs from the amount that would be computed by applying the Canadian statutory income tax rate of 27.00% (2019 – 27.00%) to income before income taxes. A reconciliation of income taxes at statutory rates with reported taxes is as follows:

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

15. Income Taxes (continued)

			2020	2019
Net loss for the year	$		(2,581,193) $	(1,388,837)
Statutory income tax rate			27%	27%
Income tax benefit computed at statutory tax rate	$		(696,922) $	(374,986)
Items not deductible for income tax purposes			12,056	140,500
Over (under) provided in prior years			(46,455)	179,501
Unused tax losses and tax offsets not recognized			451,022	(268,870)
Deferred income tax recovery		$	(280,299) $	(323,855)

Deferred tax assets and liabilities

The Company recognizes tax benefits on losses or other deductible amounts where it is probable the Company will generate sufficient taxable income to utilize its deferred tax assets. The tax effected items that give rise to significant portions of the deferred income tax liabilities at November 30, 2020 and 2019 are presented below:

		2020		2019
Deferred tax liabilities:
Exploration and evaluation assets	$	(111,801)	$	(44,301)
Loans payable		(106,044)		(45,187)
Convertible debt		(161,287)		(227,241)
Deferred financing charges		(48,431)		(60,043)
Deferred tax assets
Non-capital losses carry-forwards		427,563		376,772
Deferred income tax expense	$	-	$	-

Significant unrecognized tax benefits and unused tax losses for which no deferred tax asset is recognized as of November 30 are as follows:

		2020		2019
Non-capital losses carried forward	$	7,012,046	$	4,548,177
Equipment		20,628		9,437
Investment tax credits		79,102		79,102
Share issue costs		201,932		44,622
Unrecognized deductible temporary differences	$	7,313,708	$	4,681,338

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Blue Star Gold Corp. Notes to the Consolidated Financial Statements For the years ended November 30, 2020 and 2019 (Expressed in Canadian dollars)

16. Events Subsequent to the Reporting Period

Private placement

In December 2020, the Company completed a private placement by issuing 22,010,000 units (the “Units”) at a price of $0.08 per Unit for gross proceeds of $1,760,800. Each Unit will consist of one common share and one transferable common share purchase warrant with each warrant exercisable into shares of the Company at a price of $0.11 per share till December 16, 2021. In relation to the private placement, the Company paid or accrued $38,328 cash finders’ fees and issued 479,100 of share purchase warrants with each warrant exercisable into shares of the Company at a price of $0.08 per share till December 16, 2022.

As of November 30, 2020, the Company received $400,000 of share subscription in advance.

Stock options

On December 17, 2020, the Company granted to directors, officers and consultants 10,600,000 stock options, exercisable at $0.11 per share for a term of 3 years. These options vested on the date of grant.

Debt settlement

On January 25, 2021 the Company issued 15,265,332 shares to settle loans and interest totalling $839,593 at a price of $0.055 per share (Note 11). The Company also issued 1,000,000 bonus shares in accordance with the loan that matured on December 29, 2019, while the remaining 2,000,000 bonus shares that are settled before the maturity date were disallowed by the TSX-V.

Share issuance

On February 17, 2021, the Company issued 14,000,000 shares as per exercise of warrants at $0.075 per share for total proceeds of $1,050,000. The Company also issued 1,217,771 loan bonus shares.

Acquisition of Roma property

On February 17, 2021, the Company entered into a Property Purchase Agreement to acquire 100% interest in 9 mineral claims ("Roma") located in Nunavut. The Company issued 750,000 shares on February 22, 2021 and reimbursed all expenses in connection with staking the claims.

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