Cariboo Rose Resources Ltd. — Interim / Quarterly Report 2021

Jan 29, 2021

CARIBOO ROSE RESOURCES LTD.

Condensed Interim Financial Statements

For the three and nine months ended November 30, 2020 and 2019 Unaudited (Expressed in Canadian dollars)

110-325 Howe Street, Vancouver, B.C. V6C 1Z7 Tel: (604) 681-7913 Fax: (604) 681-9855

NOTICE TO READER:

These condensed interim financial statements have not been reviewed by the Company's external auditors. These statements have been prepared by and are the responsibility of the Company's management.

Cariboo Rose Resources Ltd.

Condensed Interim Statements of Financial Position

(Unaudited – Expressed in Canadian dollars)

	November 30, 2020		February 29, 2020
ASSETS
CurrentCash and cash equivalents	$	1,589,707	$	379,897
Accounts receivable		17,073		20,635
Investments (Note 3)		-		1,522,650
		1,606,780		1,923,182
Investments (Note 3)		9,706		1,742
Exploration and evaluation assets (Note 4)		791,410		614,373
Project deposits (Note 4)		30,750		10,500
Equipment		17,255		4,324
Right-of-use asset (Note 5)		139,908		162,798
Receivable from Eastfield Resources Ltd. (Note 8)		12,000		12,000
	$	2,607,809	$	2,728,919
LIABILITIESCurrentAccounts payable and accrued liabilities	$	31,049	$	34,211
Lease obligations - current (Note 5)		25,425		25,425
Payable to related parties (Note 8)		17,880		29,832
Other Liability (Note 6)		-		30,155
Lease obligations – long term(Note 5)		74,354127,405		119,623145,910
		201,759		265,533
SHAREHOLDERS' EQUITY
Share capital (Note 6)		2,452,640		2,452,640
Warrant reserve (Note 6)		510,937		510,937
Options reserve (Note 6)		364,928		364,928
Accumulated other comprehensive loss		(17,528)		(786,932)
Deficit		(904,927)		(78,187)
		2,406,050		2,463,386
	$	2,607,809	$	2,728,919

Cariboo Rose Resources Ltd.

Condensed Interim Statements of Loss and Comprehensive Loss

For the Three and Nine Months Ended November 30, 2020 and 2019

(Unaudited – Expressed in Canadian dollars)

	Three Months EndingNovember 30,November 30,20202019			Nine Months EndingNovember 30,2020		November 30,2019
ExpensesDepreciation (Note 5)	$	7,630	$	-	$	22,890	$	-
Consulting		8,050		7,050		24,150		20,067
Interest and bank chargesInvestor relations		432,307		301,859		19311,442		1647,431
Office		1,851		2,822		4,939		5,716
Rent				9,232				25,742
Salaries and benefits		6,525		6,375		18,870		17,851
Transfer and filing fees		2,149		1,556		6,137		4,510
Loss before the following		28,555		28,924		88,621		81,481
Other (income)/expense
Interest income		(20)		(137)		(72)		(207)
(Gain) on sale of mineral properties		-		1133		-		(1,467,222)
(Gain) on sale on investments		-		(1,326)		-		(1,326)
Interest expense on lease obligations (Note 5)		3,510		-		10,530		-
Other Income		(3,625)		-		(33,780)		-
NET LOSS (INCOME)		28,420		28,954		65,299		(1,387,274)
OTHER COMPREHENSIVE LOSS (INCOME)
Items that will not be reclassified to net income or loss
Change in fair value of equity investments (Note 4)		(4,480)		(87,633)		(7,963)		(126,644)
COMPREHENSIVE LOSS (INCOME)	$	23,940		$ (59,039)	$	57,336		$ (1,513,918)
BASIC AND DILUTED LOSS
(INCOME) PER SHARE	$	0.000	$	0.001	$	0.001	$	(0.030)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING – basic and diluted		47,461,888		45,796,888		47,461,888		45,796,888

Cariboo Rose Resources Ltd. Condensed Interim Statements of Changes in Shareholders' Equity For the Three and Nine Months Ended November 30, 2020 and 2019 (Unaudited – Expressed in Canadian dollars)

	Nubefmr oCommonShares	ShareCailtap(No6)te	WtarranReserve(No6)te	OpiontsReserve(No6)te	AcladtecumuOhetrCoivhemprense(Lo)/Insscome	Deficit	ToltaS'haholderersEqityu
BalaFebr28,2019ncesuary,Chainfairluefinv(3)NotmtstengevaoesenRelasificaionf rlized gindispl oftcsoeaaonosa	45,796,888-	$2,402,379-	$510,937-	$336,172-	$(35,097)126,644	$(1,505,309)-	$1,709,082126,644
inv()No3tmtteesenNelofoheiodtr tssper	--	--	--	--	1,326-	()1,3261,387,274	-1,387,274
BalaNobe30,2019nce,vemrivalacf shaissPrtet,t otspemennereuecosir vluef tdeduionldduivaFatte	45,796,8881,660005,	2,402,37980,416	510,937-	336,172-	92,873-	(119,361)-	$3,223,00080,416
ingaoaxcs sorprlac(6)NotstepemenSha-bd ciontreaseompensaChainfairluefinv(3)Notmtstengevaoesen	---	(30,1)55--	---	-28,756-	--(866,242)	---	(30,1)5528,756(866,242)
Relasificaionf rlized gindispltcsoeaaonosafinv(3)NotmtteoesenNe(inc)foheiodtr tomeper	--	--	--	--	(13,63)5-	13,63527,611	-27,611
BalaFebr29,2020ncesuary,lasificaionf rlizedlodispl ofRetcsoeassonosa	47,461,888	2,452,640	510,937	364,928	(786,932)	(78,187)	2,463,386
inv(3)Notmtteesenhainfairluefinv()CNo3tmtstengevaoesenfoheiodNeLotr tssper	---	---	---	---	61,44177,963-	(61,441)7-(6299)5,	-7,963(6299)5,
30,2020BalanNobeces,vemr	4461,8887,	$2,42,6405	$10,9357	$364,928	$(128)7,5	$(904,92)7	$2,406,005

Cariboo Rose Resources Ltd.

Condensed Interim Statements of Cash Flows

For the Nine Months Ended November 30, 2020 and 2019

(Unaudited – Expressed in Canadian dollars)

	2020	2019
Cash provided by (used in)
Operating activities
Net (loss) income	$(65,299)	$1,387,274
Adjustments to reconcile net (income) loss from operating activities:
Depreciation	22,890	-
Gain on sale of mineral properties		(1,467,222)
Other Income	(33,780)	-
Transaction costs on sale of mineral properties	-	(16,615)
Interest expense on lease obligations	10,530	-
	(65,659)	(96,563)
Changes in non-cash working capital components
Accounts receivable	3,562	(419)
Accounts payable and accrued liabilities	(3,161)	(35,222)
Payable to related parties	(11,952)	261,028
	(77,210)	128,824
Investing activities
Purchase of equipment	(12,931)	-
Mineral property acquisition costs	(602)	(3,705)
Mineral property exploration expenditures	(196,435)	(187,749)
Exploration tax credits	-	20,246
Project deposits	(20,250)	-
Mineral property option proceeds	20,000	-
Proceeds from sale of investment	1,526,275	45,959
	1,316,057	(125,249)
Financing activities
Lease payments	(29,037)	-
INCREASE IN CASH AND CASH EQUIVALENTS	1,209,810	3,575
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	379,897	43,857
CASH AND CASH EQUIVALENTS, END OF PERIOD	$1,589,707	$47,432

1. NATURE AND CONTINUANCE OF OPERATIONS

Cariboo Rose Resources Ltd. (the "Company") is incorporated in the Province of British Columbia. Its principal business activities are the acquisition and exploration of gold, copper and other precious and base metal properties in Canada. The Company is in the process of actively exploring its mineral properties and has not yet determined whether these properties contain ore reserves that are economically recoverable. The Company is considered to be in the exploration stage and does not have operating cash flows.

The Company's shares are listed for trading on the TSX-Venture Exchange (the "Exchange") under the symbol CRB. Its registered office is located at 110-325 Howe Street, Vancouver, British Columbia V6C 1Z7.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. The ability of the Company to fund its potential future operations and commitments is dependent upon the ability of the Company to obtain additional financing. There is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These financial statements do not reflect the adjustments or reclassifications that would be necessary if the Company were unable to continue operations. Such adjustments and reclassifications could be material.

2. BASIS OF PREPARATION

Summary of Significant Accounting Policies

The Company prepares its interim financial statements in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of interim financial statements, as issued by the International Accounting Standards Board, including International Accounting Standard 34 – Interim Financial Reporting. These condensed interim financial statements should be read in conjunction with the Company's annual financial statements for the year ended February 29, 2020.

The accounting policies applied in these condensed interim consolidated financial statements are based on IFRS effective for the year ended February 28, 2021, as issued and outstanding on January 28, 2021, the date the Board of Directors approved these financial statements.

Basis of Measurement

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments classified as fair value through profit or loss or fair value through other comprehensive income that have been measured at fair value and are presented in Canadian dollars, the Company's reporting currency and the functional currency of all of its operations.

Accounting estimates and judgments

The preparation of these consolidated financial statements required management to make estimates, judgments and assumptions that affect the reported amounts and other disclosures in these consolidated financial statements. The estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates, judgments and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both the current and future periods.

2. BASIS OF PREPARATION (continued)

Accounting estimates and judgments (continued)

Critical accounting estimates are estimates, judgments and assumptions made by management that may result in material adjustments to the carrying amount of assets and liabilities within the next financial year. Critical estimates used in the preparation of these consolidated financial statements include, among others, the recoverability of accounts receivable, determination of realizable amounts of deferred tax assets and liabilities, impairment of the carrying value of non-financial assets, estimation of provisions, measurement of the fair value of tax benefits sold and measurement of equity instruments and share-based compensation.

Critical accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments. Critical accounting judgments include the expected economic lives of and the estimated future operating results and net cash flows from equipment, the classification of financial instruments, and the recognition of deferred tax assets and liabilities.

3. INVESTMENTS

The Company has the following investments in equity instruments:

			November 30, 2020			February 29, 2020
	Numberof Shares	Cost			Fair Value	Number ofSharesCost			Fair Value
Consolidated Woodjam
Copper Corp.Western Copper and	49,772	$	19,478	$	9,706	49,772	$	19,478	$	1,742
Gold Corp	-		-		-	2,305,000		2,287,996		1,522,650
			19,478		9,706			2,307,474		1,524,392
Less: non-currentportion			(19,478)		9,706			(19,478)		(1,742)
Current portion		$	-	$	-			$ 2,287,996		$ 1,522,650

The Company has irrevocably designated these investments in equity instruments as measured at FVOCI rather than FVTPL as they are not held for trading and the FVOCI classification is considered more appropriate for these strategic investments. The fair value of these equity investments is based on quoted market prices at the reporting dates. The current portion relates to those investments which the Company is reasonably likely to sell within the next 12 months.

4. EXPLORATION AND EVALUATION ASSETS

Acquisition and exploration expenditures incurred on mineral properties for the nine months ended November 30, 2020 are as follows:

	CarruthersCarbonate
		Pass	Hosted Gold		Lightning Strike		Other*		Total
ACQUISITION COSTS
Balance, beginning of
period	$	100,742	$10,895	$	6,345	$	26,660	$	144,642
Incurred during period		-	532		70		-		602
Balance, end of period		100,742	11,427		6,415		26,660		145,244
EXPLORATION
EXPENDITURES
Expenditures for the year:
Professional fees and
field crews		10,504	15,808		76,074		25,242		127,628
Rental of vehicles and
equipment		3	418		6,719		161		7,301
Field Equipment		-			1,660		116		1,777
Transportation and fuel		-	338		2,288		198		2,823
Communications		-	42		424		-		466
Food and accommodations		-	530		14,673		1960		17,163
Freight		-	11		561		-		572
Assaying		-	-		34,203		3763		37,966
Other		-	-		-		739		739
		10,507	17,147		136,602		32,179		196,435
Balance, beginning of
period		85,379	238,815		106,241		242,984		673,419
Balance, end of period		95,886	255,962		242,843		275,163		869,854
OPTION PROCEEDS
Balance, beginning of
period		(82,274)	(20,000)		-		(101,414)		(203,688)
Disposal of mineral
property		-	-		-		(20,000)		(20,000)
Balance, end of period		(82,274)	(20,000)		-		(121,414)		(223,688)
TOTAL	$	114,354	$247,389	$	249,258	$	180,409	$	791,410

* Other includes the Pat, Cowtrail, Koster Dam and Coquigold claims.

4. EXPLORATION AND EVALUATION ASSETS (continued)

Acquisition and exploration expenditures incurred on mineral properties for the nine months ended November 30, 2019 are as follows:

	Carruthers Pass	Canadian Creek		Other*	Total
ACQUISITION COSTS
Balance, beginning of the period	$100,742	$46,348	$	36,745	$	183,835
Incurred during the period	-	-		3,705		3,705
Impairment of mineral property	-	-		-		-
Balance, end of the period	100,742	46,348		40,450		187,540
EXPLORATION EXPENDITURES
Professional fees and field crews	3,600	15,200		105,640		124,440
Geological	-	-		114		114
Field equipment and rentals	-	-		14,114		14,114
Transportation and fuel	-	-		5,415		5,415
Fees and permits		322				322
Food and accommodation	-	-		12,020		12,020
Assaying	-	-		31,294		31,294
Other		11		19		30
	3,600	15,533		168,616		187,749
Balance, beginning of the period	76,969	1,814,414		413,783		2,305,166
Mineral exploration tax credits				(20,246)		(20,248)
Balance, end of the period	80,569	1,829,947		562,153		2,472,669
OPTION PROCEEDS
Balance, beginning of period	(82,274)	(576,132)		(121,414)		(779,820)
Sale of mineral properties	-	(1,300,163)		-		(1,300,163)
Balance, end of period	(82,274)	(1,876,295)		(121,414)		(2,079,983)
	$99,037	$-	$	481,189	$	580,226

* Other includes the Pat, Cowtrail, Koster Dam, Carbonate Hosted Gold, Skookum Cobalt, Coquigold, and Lightning Strike claims.

Skookum Cobalt Project, Fort Steele Mining Division, British Columbia

The Skookum Cobalt Project claims were dropped during the year ended February 29, 2020.

Pat Claims, Cariboo Mining Division, British Columbia (2 claims covering 1,330 hectares)

The Company owns an undivided 100% interest in the Pat claims and is seeking an option partner to continue exploration.

Carruthers Pass Project, Omineca Mining Division, British Columbia (8 claims covering 3,250 hectares)

The Company acquired a 100% interest in the 3,250-hectare Carruthers Pass property from Freeport McMoRan Explorations ("Freeport") by completing $750,000 in exploration expenditures and issuing $120,000 in shares and cash. Freeport retains a 2.5% net smelter royalty interest, which may be reduced to 1% with a cash payment by the Company of $1,500,000.

Cariboo Rose Resources Ltd. Notes to the Condensed Interim Financial Statements For the Three and Nine Months Ended November 30, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

4. EXPLORATION AND EVALUATION ASSETS (continued)

Cowtrail Property, Cariboo Mining Division, British Columbia (32 claims covering 4,400 hectares)

In 2011 Dajin Resources Corp. ("Dajin") earned a 65% interest in the Cowtrail property by completing $1,000,000 in exploration expenditures, issuing 50,000 shares and paying $110,000 in cash to the Company. In March 2018 Dajin transferred its interest in the Cowtrail property to Cariboo Rose subject to a requirement to share any third party option proceeds with Dajin on a 50%-50% basis for a period of three years. Other than this requirement Cariboo Rose now owns a 100% interest in the project.

Carbonate Hosted Gold Project, Clinton Mining Division, British Columbia (6 claims covering 3,302 hectares)

The company owns an undivided 100% interest in the Carbonate Hosted Gold claims. On November 21, 2017 the company entered into an option agreement with a ZP Mining Inc. ("ZP Mining") whereby ZP Mining could earn a 60% interest in the Carbonate Hosted Gold property by completing $1.5 million in exploration work and making $300,000 in payments over a 5.5 year term. The agreement with ZP mining was terminated on October 22, 2018 resulting in Cariboo Rose retaining a 100% interest in the project. On March 23, 2020 the company entered into an agreement with Black Shield Metals Corp. whereby Black Shield may earn a 60% interest in the Carbonate Hosted Gold Project by expending $1,500,000 in exploration and making option payments of $300,000 over a 66 month term. Upon earning a 60% interest Black Shield may increase its interest to 70% by making further payments totaling $500,000 and completing a feasibility study within a further 24 months.

Koster Dam Project, Clinton Mining Division, British Columbia (10 claims covering 4,535 hectares)

On June 30, 2017, the Company entered into an option agreement with Oakley Ventures Inc. ("Oakley Ventures"), whereby Oakley Ventures can earn a 45% interest in the Koster Dam project by completing $110,495 in exploration work within 12 months. Oakley can then increase its ownership from 45% to 50% with a payment of $50,000.

.Coquigold Project, Nicola Mining Division, British Columbia, (12 claims covering 1,497 hectares)

The company has staked three claim blocks, subsequently consolidated into two blocks, adjacent to the Coquihalla Highway in response to the recent success being achieved at the Shovelnose gold project owned and operated by Westhaven Ventures Inc. The claims have attributes identified by the BC Geological survey which suggest they are targets for epithermal precious metal mineralization.

Lightning Strike Project, Clinton Mining Division, British Columbia (14 claims covering 3,735 hectares)

The Company has staked 14 claims covering 3,735 hectares, 60 km northeast of the community of 100 mile house, BC.

Project Deposits

$10,500 in term deposits, bearing interest at rates ranging from 0.60% to 1.25% and maturing between July 14, 2020 and February 20, 2021, are provided as reclamation bonds for the above mineral properties. The term deposits will continue to be renewed to comply with the requirements of the BC Ministry of Energy, Mines and Petroleum Resources (the "Ministry"). As these reclamation bonds are required to be in place while the Company has ownership of these mineral properties, they are recorded as non-current assets.

5. RIGHT-OF-USE ASSET AND LEASE OBLIGATIONS

The Company leases office space under a lease agreement which expires on June 30, 2025. The Company's right-ofuse asset and estimated future lease payments over the remaining term of the lease are:

		Accumulated
Right-of-use Asset	Cost	Depreciation	Carrying Amount
Balance, February 28, 2019	$-	$-	$-
Additions	192,042	29,244	162,798
Balance February 29, 2020	$192,042	$29,244	$162,798
Additions	-	22,890	15,260
Balance November 30, 2020	$192,042	$52,134	$139,908
Lease Obligations
2020	$4,831
2021 to 2025	159,878
Subsequent to 2025	13,688
Total future payments	178,397
Less: interest	(25,567)
Lease obligations	152,830
Less: current portion	(25,425)
Lease obligations – long term	$127,405

6. SHARE CAPITAL

Authorized

Unlimited common shares without par value Unlimited preferred shares without par value

Private Placement

On December 30, 2019, the Company completed a private placement consisting of 1,665,000 flow-through common shares at a price of $0.05 per share for total consideration $83,250. The estimated fair value of the tax deductions sold to investors in connection with the issue of flow-through shares was $30,155 was recorded as a liability at February 29, 2020 and subsequently recognized as other income as the related expenditures have been incurred and their tax deductibility transferred to the investors.

Share Purchase Options

A summary of changes in common share purchase options for the nine months ended August 31, 2020 and 2019 is:

		Nine months endedNovember 30, 2020	Nine months endedNovember 30, 2019
	Number ofShares	WeightedAverageExercise Price		Number ofShares	WeightedAverageExercise Price
Balance, beginning of the period	3,875,000	$	0.09	3,750,000	$	0.10
Cancelled	-		-	(575,000)		0.10
Options exercisable, end of the period	3,875,000	$	0.09	3,175,000	$	0.10

6. SHARE CAPITAL (continued)

Share Purchase Options (continued)

The following common share purchase options are outstanding at November 30, 2020:

	Options Outstanding		Options Exercisable
Expiry Date	Number ofshares	WeightedAverageExercise price	WeightedAverageRemaining	Number ofshares	WeightedAverageExercise price
		($)	Life (Years)		($)
December 13, 2021	1,675,000	0.10	1.03	1,675,000	0.10
September 26, 2023	300,000	0.05	2.82	300,000	0.05
December 19, 2024	750,000	0.05	4.06	750,000	0.05
August 29, 2026	550,000	0.11	5.75	550,000	0.11
January 17, 2027	100,000	0.20	6.13	100,000	0.20
October 5, 2027	500,000	0.11	6.86	500,000	0.11
	3,875,000	0.09	3.31	3,875,000	0.09

Share Purchase Warrants

There were no common share purchase warrants outstanding at November 30, 2020

7. SEGMENTED DISCLOSURES

The Company operates in one industry segment, the acquisition and exploration of mineral properties, within Canada. Mineral properties and other capital assets are located in Canada.

8. RELATED PARTY DISCLOSURES

Related party transactions are recorded at the exchange amount as agreed to by the parties.

In the normal course of business, the Company will enter into transactions with a related company, Eastfield Resources Ltd. ("Eastfield"), for the use of equipment, services and rental of office space. The Company is related to Eastfield through common key management personnel. During the nine months ended November 30, 2020, amounts payable for rent, salaries, telephone, office, consulting, convention and travel costs to Eastfield amounted to $85,220 (nine months ended November 30, 2019 - $74,694). At November 30, 2020, payable to related parties included $9,374 (February 29, 2020 – $11,474) payable to Eastfield.

During the nine months ended November 30, 2020, geological services totaling $202,848 (nine months ended November 30, 2019 - $185,996) were provided to the Company by Mincord Exploration Consultants Ltd. ("Mincord"), a geological service company owned by two directors of the Company. Mincord's relationship with the Company is non-exclusive and without retainer, and Mincord is used on a project by project basis. Services provided include the hiring of field and professional personnel, rental of vehicular, camp and technical equipment, and transportation and mobilization costs. The amounts for geological and exploration services also include payments for services on properties managed by the Company on behalf of joint venturers. At November 30, 2020, payable to related parties included $8,506 (February 29, 2020 - $18,357) payable to Mincord.

During the year ended February 29, 2012, the Company transferred reclamation bonds totaling $12,000, which had been released by the Ministry of Energy, Mines and Petroleum Resources, to Eastfield. This amount remains a receivable from Eastfield at November 30, 2020.

9. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The Company's financial instruments are exposed to certain risks, which include credit, liquidity, and market risk. The risks related to financial instruments are managed by the senior management of the Company under policies and directions approved by the Board of Directors.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Accounts payable and accrued liabilities and payable to related parties are due within the current operating period. The Company's lease obligations are due as set out in Note 5. The Company manages liquidity risk through the management of its capital structure (Note 10) and financial leverage.

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company's cash is held at large Canadian financial institutions. The Company's receivables consist mostly of Goods and Services Tax due from the federal government of Canada and mineral exploration project deposits and tax credit receivable from the Government of British Columbia. As such, the Company considers this risk to be minimal and has not recognized an expected credit loss allowance in these financial instruments. As at November 30, 2020 and 2019, none of the Company's financial instruments subject to credit risk were past due or impaired.

The Company has determined that the expected credit losses on its accounts receivable and project deposits are not significant and accordingly has not recognized an allowance for expected credit losses as at November 30, 2020 and 2019.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's market risk is comprised of two types of risk: interest rate risk, and equity price risk.

(i) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company is exposed to interest rate risk when holding fixed rate short term deposits of varying maturities. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash equivalents investments is limited because these investments are generally highly liquid securities with short-term maturities. As at November 30, 2020 and 2019, the Company considers its exposure to interest rate risk to be minimal.

(ii) Equity Price Risk

Equity risk is the uncertainty associated with the valuation of assets arising from changes in equity markets. The Company is exposed to this risk through its investment in equity instruments. All of the Company's listed equity investments (Note 3) are common shares of companies listed on the Toronto Stock Exchange and the Toronto Stock Exchange's Venture Exchange and are monitored by management with decisions on sale taken at the board level.

10. MANAGEMENT OF CAPITAL

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the exploration and development of its mineral property interests, and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. The Company considers its capital for this purpose to be its shareholders' equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may issue new shares or debt, acquire or dispose of assets or adjust the amount of cash and investments.

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

In order to maximize ongoing development efforts, the Company does not pay out dividends.

The Company's investment policy is to invest its surplus cash in highly liquid short-term interest-bearing investments with maturities 90 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.

The Company currently has sufficient capital resources to meet its administrative overhead expenses through its current operating period and it is confident it can raise additional funds to undertake all of its planned business activities. Actual funding requirements may vary from those planned due to a number of factors. Management believes it will be able to raise capital as required in the long term, but recognizes that there will be risks involved that may be beyond their control.

11. DILUTED INCOME OR LOSS PER SHARE

For the nine months ended November 30, 2020, the Company's diluted loss per share is equal to its basic loss per share. Outstanding share purchase options and warrants could potentially dilute basic loss per share in the future but were not included in the calculation of diluted loss per share because they are antidilutive for the nine months ended November 30, 2020.

12. COVID – 19 PANDEMIC

On March 11, 2020, the World Health Organization declared the COVID-19 coronavirus outbreak a pandemic. The spread of COVID-19 has created significant volatility in the Canadian and world markets and has the potential to have a significant and far-reaching effect on the Canadian and world economies, interest rates, and other financial measures. The Company will continue to monitor the ongoing developments regarding the COVID-19 pandemic and the potential impact on the Company's financial statements.