CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED AUGUST 31, 2021 AND 2020 (Expressed in Canadian Dollars)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Churchill Resources Inc. (formerly 9 Capital Corp.)

Opinion

We have audited the accompanying consolidated financial statements of Churchill Resources Inc. (formerly 9 Capital Corp.) (the "Company"), which comprise the consolidated statements of financial position as at August 31, 2021 and 2020, and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity, and cash flows for the years then ended, and notesto the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2021 and 2020, and its financial performance and its 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 Auditor's 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 1 of the consolidated financial statements, which indicates that the Company incurred a net loss of $3,915,903 during the year ended August 31, 2021 and, as of that date, the Company's total deficit was $6,089,061. As stated in Note 1, these events and conditions 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 obtained at the date of this auditor's report includes 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 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 auditor's 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.

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 s o.

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

Auditor's 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 auditor's 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 auditor's 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 auditor's 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.
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 auditor'sreport is Erez Bahar.

December 17, 2021

Vancouver, Canada Chartered Professional Accountants

	Consolidated Statements of Financial Position6
	Consolidated Statements of Loss and Comprehensive Loss7
	Consolidated Statements of Shareholders' Equity8
	Consolidated Statements of Cash Flows9
	Notes to the Consolidated Financial Statements10
1.	Nature and continuance of operations10
2.	Significant accounting policies and basis of preparation11
3.	Reverse acquisition19
4.	Prepaid expenses20
5.	Equipment21
6.	Exploration and evaluation assets22
7.	Lease obligation30
8.	Share capital30
9.	Supplemental cash flow information35
10.	Related party transactions and balances36
11.	Commitments36
12.	Segmented information37
13.	Capital management37
14.	Financial Instruments37
15.	Income taxes39

Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

	As at	August 31,	August 31,
		2021	2020
	Note(s)	$	$
ASSETS
Current assets
Cash		2,715,709	154
Amounts receivable		89,408	1,914
Prepaid expenses	4	115,269	510
		2,920,386	2,578
Non-current assets
Equipment	5	27,746	42,839
Exploration and evaluation assets	6	876,776	1,099,492
		904,522	1,142,331

TOTAL ASSETS		3,824,908	1,144,909
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities		419,748	262,427
Loan payable	10	-	47,908
Flow through shares premium liability	11	500,000	2,090
Current portion of lease obligation	7	16,076	13,812
		935,824	326,237

Long term liabilities
Lease obligation	7	13,670	29,746
		13,670	29,746

TOTAL LIABILITIES		949,494	355,983
SHAREHOLDERS' EQUITY
Share capital	8	8,507,960	2,638,711
Obligation to issue shares	6, 8	5,000	-
Warrants reserve	8	38,946	-
Stock options reserve	8	412,569	323,373
Accumulated deficit		(6,089,061)	(2,173,158)
TOTAL SHAREHOLDERS' EQUITY		2,875,414	788,926
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		3,824,908	1,144,909

Nature and continuance of operations	1
Commitments	11
Segmented information	12
Subsequent events	6, 8

These consolidated financial statements were approved for issue by the directors of the Company and signed on its behalf by:

/s/ Paul Sobie Director /s/ William Fisher Director

Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

		For the years ended
		August 31,	August 31,
		2021	2020
	Note(s)	$	$
Expenses
Depreciation	5	15,918	4,235
General and administrative costs		74,144	5,271
Exploration and evaluation	6, 10	760,608	29,837
Professional fees	10	200,404	28,176
Rent		-	9,000
Salaries and benefits	10	65,352	5,625
Share-based compensation	8	-	259,525
Shareholder information and investor relations		129,893	-
		(1,246,319)	(341,669)

Other income (expenses)
Accretion interest of lease obligation	7	(4,308)	(1,325)
Foreign exchange loss		(69)	-
Impairment of exploration and evaluation assets	6	(1,253,072)	(215,532)
Interest income		605	-
Listing expenses	3	(1,495,988)	-
Other income	11	85,840	2,910
Penalties and interest on flow‐through shares		(2,592)	-
		(2,669,584)	(213,947)

Total loss and comprehensive loss		(3,915,903)	(555,616)

Basic and diluted loss per share for the year attributable to common		(0.14)	(0.03)
shareholders

Weighted average number of common shares outstanding

- basic and diluted		27,415,241	18,862,397

Consolidated Statements of Shareholders' Equity (Expressed in Canadian Dollars)

		Share capital
	Note(s)	Number ofshares	Amount$	Sharesubscriptionreceived$	Obligation toissue shares$	Warrantsreserve$	Stockoptionsreserve$	Accumulateddeficit$	Total$
Balance as at August 31, 2020		19,164,856	2,638,711	-	-	-	323,373	(2,173,158)	788,926
Shares issued for reverse takeover	3	7,012,062	1,753,016	-	-	-	-	-	1,753,016
Shares issued for cash -flow through	8	6,674,997	1,918,750	-	-	-	-	-	1,918,750
Shares issued for cash -non-flow-through	8	5,600,000	1,400,000	-	-	-	-	-	1,400,000
Non-flow-through shares issued for finders' fees	8	133,933	33,483	-	-	-	-	-	33,483
Non-flow-through shares issuedfor debtsettlement	8	471,848	117,962	-	-	-	-	-	117,962
Shares issued for exploration and evaluation assets	6, 8	4,297,126	964,366	-	-	-	-	-	964,366
Share issue costs	8	-	(318,328)	-	-	-	-	-	(318,328)
Fair value of finders' warrants	8	-	-	-	-	38,946	-	-	38,946
Fair value of stock options issued for reversetakeover	3	-	-	-	-	-	89,196	-	89,196
Obligation to issue shares related to explorationand evaluation assets	6	-	-	-	5,000	-	-	-	5,000
Net loss for the year		-	-	-	-	-	-	(3,915,903)	(3,915,903)
Balance as at August 31, 2021		43,354,822	8,507,960	-	5,000	38,946	412,569	(6,089,061)	2,875,414

Balance as at August 31, 2019		18,144,856	2,389,155	30,000	75,000	-	63,848	(1,617,542)	940,461
Shares issued forcash -flow through	8	100,000	25,000	(20,000)	-	-	-	-	5,000
Shares issued for cash -non flow-through	8	80,000	20,000	(10,000)	-	-	-	-	10,000
Non flow-through shares issued for debtsettlement	8	40,000	10,000	-	-	-	-	-	10,000
Non-flow-through shares issued for explorationand evaluation assets	6, 8	800,000	200,000	-	(75,000)	-	-	-	125,000
Share issue costs	8	-	(5,444)	-	-	-	-	-	(5,444)
Share-based payments	8	-	-	-	-	-	259,525	-	259,525
Net loss for the year		-	-	-	-	-	-	(555,616)	(555,616)
Balance as at August 31, 2020		19,164,856	2,638,711	-	-	-	323,373	(2,173,158)	788,926

Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

		For the years ended
		August 31,2021	August 31,2020
	Note(s)	$	$
Cash flows from
OPERATING ACTIVITIES
Net loss for the year		(3,915,903)	(555,616)
Adjustments for items not affecting cash:
Accretion interest of lease obligation	7	4,308	1,325
Depreciation	5	15,918	4,235
Impairment of exploration and evaluation assets	6	1,253,072	215,532
Listing expense	3	1,495,988	-
Other income	11	(85,840)	(2,910)
Share-based payments	8	-	259,525
Net changes in non-cash working capital items
Amounts receivable		(87,494)	802
Prepaid expenses		(114,759)	(56)
Accounts payable and accrued liabilities		200,374	25,901
Cash flow used in operating activities		(1,234,336)	(51,262)

INVESTING ACTIVITIES
Acquisition of exploration and evaluation assets	6	(120,990)	(9,710)
Cash assumed on reverse takeover, less transaction costs	3	356,358	-
Purchase of equipment	5	(825)	-
Cash flow from (used in) investing activities		234,543	(9,710)

FINANCING ACTIVITIES
Lease payments	7	(18,120)	(4,500)
Loan payable	10	(47,908)	47,908
Shares issued for cash, net of share issue costs	8	3,781,376	14,556
Cash flow from financing activities		3,715,348	57,964

Increase (decrease) in cash		2,715,555	(3,008)
Cash, beginning of year		154	3,162
Cash, end of year		2,715,709	154

Supplemental cash flow information 9

1. NATUREAND CONTINUANCE OF OPERATIONS

Churchill Resources Inc. (formerly 9 Capital Corp.) ("CRI" or the "Company") was incorporated under the Business Corporations Act ofOntario on April 4, 2017, and classified as a Capital Pool Company ("CPC") as defined in the TSX Venture Exchange (the "Exchange") Policy 2.4, effective September 26, 2018.

The Company is listed on the TSX Venture Exchange (the "Exchange") under the symbol "NCPL.P".

On December 23, 2020, the Company entered into a binding agreement with Churchill Diamond Corporation ("CDC"), a Canadian exploration stage mining company which is focused on the exploration of minerals and precious gems in Canada's Nunavut Territory and provinces of Newfoundland and Labrador, and Ontario, and intends the acquisitionto constitute its Qualifying Transaction (the "Qualifying Transaction") under the policies of the Exchange, to effect a combination of the Company and CDC(the "Transaction"). The Transaction will be a reverse takeover (the "RTO") of the Company by CDC and its shareholders. The Transaction was completed on June 16, 2021 (the "Acquisition Date") (See Note 3 for details).

For accounting purposes, it has been determined that CRI was the accounting acquiree and CDC was the accounting acquirer since the shareholders of the former CDC now control CRI, based on the guidance of IFRS 10, "Consolidated Financial Statements", and IFRS 3, "Business Combinations" and IFRS 2, "Share-based Payment", to identify the accounting acquirer (Note 3). These annual consolidated financial statements are prepared as a continuation of the financial statements of CDC, reflecting the equity instruments of CRI. As a result, comparative information included herein is solely those of CDC. For simplicity, transactions undertaken by CDC are referred to as being undertaken by the Company in these annual consolidated financial statements.

On the Acquisition Date, the Company changed its name to "Churchill Resources Inc.". On June 21, 2021, the common shares of the Company began trading on the Exchange under the symbol "CRI".

The Company'sregistered office is located at Suite 505133 Richmond Street West, Toronto, Ontario, M5H 2L3 and the records office is located at 2100 Scotia Plaza, 40 King Street West, Toronto, Ontario, M5H 3C2.

At the date of these consolidated financial statements, the Company has not identified a known body of commercial grade minerals on any of its properties. The ability of the Company to realize the costs it has incurred to date on these properties is dependent upon the Company identifying a commercial mineral body, to finance its development costs and to resolve any environmental, regulatory or other constraints which may hinder the successful development of the property. To date, the Company has not earned any revenues and is considered to be in the exploration stage.

These audited consolidated financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses since its inception and the ability of the Company to continue as a going concern depends upon its ability to raise adequate financing and to develop profitable operations. As at August 31, 2021, the Company had working capital of $1,984,562(August 31, 2020 –working capital deficiency of $323,659) and an accumulated deficit of $6,089,061 (August 31, 2020 – $2,173,158) and incurred a net loss of $3,915,903 during the year end August 31, 2021 (August 31, 2020 – $555,616). These events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. These audited consolidated financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS (CONTINUED)

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

COVID-19

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or results of operations at this time.

2. SIGNIFICANT ACCOUNTING POLICIESAND BASIS OF PREPARATION

The consolidated financial statements of the Company for the year ended August 31, 2021 were approved by the Board of Directors on December 17, 2021.

Statement of compliance to International Financial Reporting Standards

These consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

The policies set out below were consistently applied to all periods presented unless otherwise noted below.

These consolidated financial statements have been prepared on a historical cost basis except for financial instruments carried at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Basis of preparation

These consolidated financial statements, including comparatives, have been prepared on the basis of IFRS standards that are published at the time of preparation and that are effective on August 31, 2021.

Basis of consolidation

These consolidated financial statements comprise the accounts of the Company and CDC, a company incorporated under the Business Corporations Act of Ontario (ownership–100%)

The Company and CDC have a reporting date of August 31.

• Subsidiaries

A subsidiary is an entity over which the Company has power to govern the operating and financial policies in order to obtain benefits from its activities. The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating inter-entity balances and transactions.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIESAND BASIS OF PRESENTATION(CONTINUED)

Basis of consolidation (continued)

• Acquisitions and disposals

The results of businesses acquired during the reporting period are brought into the consolidated financial statements from the date the control is transferred; the results of businesses sold during the reporting period are included in the consolidated financial statements for the period up to the date the control is ceased.

Gains or losses on disposal are calculated as the difference between the sale proceeds (net of expenses) and the carrying value of net assets attributable to the interest which has been sold. Where a disposal represents a separate major line of business or geographical area of operations, the net results attributable to the disposed entity are shown separately in the statement of loss and comprehensive loss.

Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to consolidated financial statements are discussed below.

The preparation of these financial statements requires management to make judgments regarding the going concern of the Company as discussed in Note 1.

Share-based payment transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIESAND BASIS OF PRESENTATION (CONTINUED)

Critical accounting judgements, estimates and assumptions(continued)

Carrying value and recoverability of exploration and evaluation assets

The carrying amount of Company's exploration and evaluation assets does not necessarily represent present or future values, and the Company's exploration and evaluation assets have been accounted for under the assumption that the carrying amount will be recoverable. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to commence and complete development and upon future profitable production or proceeds from the disposition of the mineral properties themselves. Additionally, there are numerous geological, economic, environmental and regulatory factors and uncertainties that could impact management's assessment as to the overall viability of its properties or to the ability to generate future cash flows necessary to cover or exceed the carrying value of the Company's exploration and evaluation assets.

To the extent that any of management's assumptions change, there could be a significant impact on the Company's future financial position, operating results and cash flows.

Income tax

The Company is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities for anticipated tax audit issues based on the Company's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred taxprovisions in the period in which such determination is made.

Recovery of deferred tax assets

Deferred tax assets are recognized for deductible temporary differences only if the Company considers it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Significant accounting policies

Share-based payments

The Company grants stock options to buy common shares of the Company to directors, officers, employees and consultants. The Company recognizes share-based payments expense based on the estimated fair value of the options. A fair value measurement is made for each vesting installment within each option grant and is determined using the Black-Scholes option-pricing model. The fair value of the options is recognized over the vesting period of the options granted as both share-based payments and stock option reserve. This includes a forfeiture estimate, which is revised for actual forfeitures in subsequent periods. The reserves account is subsequently reduced if the options are exercised and the amount initially recorded is then credited to share capital.

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of goods or services received.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Income taxes

Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in shareholders' equity, in which case it is recognized in shareholders' equity. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous periods.

Deferred tax is recorded by 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 or taxable loss; nor 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 amount of assets and liabilities, using tax rates enacted or substantively enacted atthe statement of financial position 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 set off 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.

Exploration and evaluation assets

Upon acquiring the legal right to explore a mineral property, all direct costs related to the acquisition of exploration and evaluation assets are capitalized. Exploration and evaluation expenditures incurred prior to the determination of the feasibility of mining operations and a decision to proceed with development, are charged to profit or loss as incurred.

Exploration costs are expensed as incurred as the Company is in the process of exploring its exploration and evaluation assets and has not yet determined whether these properties contain ore reserves that are economically recoverable. If and when the Company's management determines that economically extractable proven or probable mineral reserves have been established, the subsequent costs incurred to develop such property, including costs to further delineate the ore body, will be capitalized.

At each reporting date the carrying amounts of the Company's exploration and evaluation assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order 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. 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.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES AND BASISOF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Provision for environmental rehabilitation

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-lived assets, 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 related asset 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 depreciated on the same basis as the related asset.

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 the related asset 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 and loss for the year.

For the years presented the Company has no provisions for environmental rehabilitation.

Foreign exchange

The functional currency is the currency of the primary economic environment in which the entity operates. The functional currency for the Company and its subsidiary is the Canadian dollar.

Foreign currency transactions are translated into the Canadian dollar using the exchange rates prevailing at the dates of the transactions. At the end of the each reporting period, the monetary assets and liabilities of the Company that are denominated in foreign amounts are translated at the rate of exchange at the statement of financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.

Loss per share

The Company presents basic loss per share for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive.

Impairment of long-lived assets

At the end of each reporting period, the Company's assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order 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 the profit or loss for the period.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Impairment of long-lived assets (continued)

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 cashgenerating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Flow-through shares

Under Canadian income tax legislation, a company is permitted to issue flow‐through shares whereby it agrees to incur qualifying expenditures and renounce the related income tax deductions to the investors. The proceeds from issuance of these shares are allocated between the offering of shares and the sale of tax benefits. The allocation is made based on the difference between the market price of the existing shares and the amount the investor pays for the flow‐through shares. A flow-through share premium liability is recognized for this difference. The Company renounces the deductions for tax purposes related to the eligible exploration and evaluation expenditures on the date the flow‐through shares are issued under the look-back rule.

The flow-through share premium liability is reduced on a pro‐rata basis and recorded in profit or loss as other income based on the corresponding eligible expenditures that have been incurred.

Equipment

Equipment is initially recognized at cost which includes the purchase price, and directly attributable costs for bringing the asset to the present location and condition necessary for its intended use, and the estimated present value of any future costs of dismantling and removing items. All items of equipment are subsequently carried at cost less accumulated depreciation and accumulated impairment losses, if any.

Depreciation is provided for at the following rate:

Computer equipment 30%

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset as appropriate, only when it's probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the year in which they are incurred.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Financial instruments

Financial assets

Classification and measurement

The Company classifies its financial assets in the following categories: at fair value through profit or loss ("FVTPL"), at fair value through other comprehensive income ("FVTOCI") or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

The classification of debt instruments is driven by the business model for managing the financial assets and their contractual cash flow characteristics. Debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest. If the business model is not to hold the debt instrument, it is classified as FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest.

Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL, for other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument by-instrument basis) to designate them as at FVTOCI.

Financial assets at FVTPL – Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the statement of loss in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.

Financial assets at FVTOCI – Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.

Financial assets at amortized cost – Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment. They are classified as current assets or non-current assets based on their maturity date.

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Financial instruments (continued)

Derecognition of financial assets

Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized in the income statement. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income.

Financial liabilities

The Company classifies its financial liabilities into one of two categories as follows:

Fair value through profit or loss (FVTPL) – This category comprises derivatives and financial liabilities incurred principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss.

Other financial liabilities – This category consists of liabilities carried at amortized cost using the effective interest method. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

Refer to Note 14 for further disclosures.

Leases

The Company assesses whether a contract is a lease based on whether the contract conveys the right to control the use of an underlying asset for a period of time in exchange for consideration. Leases are recognized as a lease liability and a corresponding Right-of-Use ("ROU") asset at the date on which the leased asset is available for use by the Company. Liabilities and assets arising from a lease are initially measured at the present value of the remaining lease payments, discounted using the Company's estimated incremental borrowing rate when the rate implicitin the lease is not readily available. The incremental borrowing rate reflects the rate of interest that the lesseewould have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured when there is a change in the future lease payments arising from a change in an index or rate, if there is a change in the amount expected to be payable under a residual value guarantee or if there is a change in the assessment of whether the Company will exercise a purchase, extension or termination option that is within the control of the Company.

Lease payments are allocated between the lease liability and finance costs. Cash outflows for repayment of the principal portion of the lease liability are classified as cash flows from financing activities. The interest portionof the lease payments is classified as cash flows from operating activities.

The ROU asset is initially measured at an amount equal to the corresponding lease liability and is subsequently depreciated on a straight-line basis, over the shorter of the estimated useful life of the asset or the lease term.

CHURCHILL RESOURCES INC. (FORMERLY 9 CAPITAL CORP.) Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020

(Expressed in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Leases(continued)

The ROU asset may be adjusted for certain remeasurements of the lease liability and impairment losses.

Leases that have terms of less than twelve months or leases on which the underlying asset is of low value are recognized as an expense in the consolidated statement of loss on a straight-line basis over the lease term.

New Accounting Standards and Interpretations not yet mandatory or early adopted

There were no new or amended IFRS pronouncements effective September 1, 2020 that impacted these consolidated financial statements.

There were no new accounting policies adopted during the year, and no upcoming changes in IFRS standards expected to have a material impact on the Company's financial position or performance.

3. REVERSE ACQUISITION

As discussed in Note 1, on December 23, 2020, the Company entered into a binding agreement with CDC intending the acquisition to constitute its Qualifying Transaction pursuant to Policy 2.4 – Capital Pool Companies of the Exchange. The Transaction was completed on June 16, 2021.

Pursuant to the Qualifying Transaction, CRI acquired all of the issued and outstanding shares (the "CDC Shares") of CDC, with the former shareholders of CDC receiving one common share of CRI (the "CRI Shares") for each CDC Share held (the "Exchange Ratio"). The outstanding options of CDC were also exchanged for comparable securities of CRI on the basis of the Exchange Ratio. Immediately prior to the closing of the Qualifying Transaction, CRI consolidated its issued and outstanding common shares on a 1.7 for one basis.

The Transaction constitutes an RTO, as the former securityholders of CDC own approximately 81.1% of the outstanding CRI Shares on a non-diluted basis immediately after the closing of the Transaction.

The Transaction is accounted for in accordance with guidance provided IFRS 2 and IFRS 3. As CRI did not qualify as a business according to the definition in IFRS 3, this Transaction does not constitute a business combination; rather it is treated as an issuance of shares by CDC for the net assets of CRI and the CRI's listing status.

The Company has accounted for this Transaction as a reverse acquisition in accordance with IFRS 2, as upon the completion of the Transaction, the shareholders of CDCacquired control of CRI by virtue of senior management and the board directors of CRI being drawn predominantly from CDC, whom will have the authority and responsibility for planning, directing, and controlling the activities of CRI.

As a share-based payment transaction, the Company measures the goods or services received at the more reliable measure of the fair value of the goods and services received, or the fair value of the equity instruments granted. Management has determined that the fair value of the equity instruments granted was the more reliable measure, which resulted in a total consideration of $1,918,625.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

3. REVERSE ACQUISITION (CONTINUED)

The total consideration of $1,943,915and the transaction costs of $101,703have been allocated as follows:

	$
ASSETS
Cash	458,061
Accounts payable and accrued liabilities	(10,134)
	447,927
Listing expense	1,495,988
Purchase price	1,943,915

	$
Consideration paid
Fair value of CRI shares	1,753,016
Replacement options issued for CRI's option holders (Note 8)	89,196
Cash paid for transaction costs	101,703
	1,943,915

4. PREPAID EXPENSES

Prepaid expenses consist of amounts paid in advance for services which will be amortized over the term of the contract.

During the year ended August 31, 2021, the Company entered into an arms-length agreement with a company for geological consulting services. The Company paid $280,000 in consideration for the consulting services. These amounts were initially classified as prepaid expenses and will be expensed when the services are provided. During the year ended August 31, 2021, $174,130 was charged to the statement of loss and comprehensive loss as exploration and evaluation expenses. As of August 31, 2021, $105,870 remains in prepaid expenses as vendor deposits.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

5. EQUIPMENT

	Computer	Right-of-use	Total
	equipment	asset
	$	$	$
Cost
As at August 31, 2019	1,046	-	1,046
Additions	-	46,733	46,733
As at August 31, 2020	1,046	46,733	47,779

Depreciation
As at August 31, 2019	(705)	-	(705)
Charged for the year	(341)	(3,894)	(4,235)
As at August 31, 2020	(1,046)	(3,894)	(4,940)

Net book value
As at August 31, 2019	341	-	341
As at August 31, 2020	-	42,839	42,839

Cost
As at August 31, 2020	-	46,733	46,733
Additions	825	-	825
As at August 31, 2021	825	46,733	47,558

Depreciation
As at August 31, 2020	-	(3,894)	(3,894)
Charged for the year	(340)	(15,578)	(15,918)
As at August 31, 2021	(340)	(19,472)	(19,812)

Net book value
As at August 31, 2020	-	42,839	42,839
As at August 31, 2021	485	27,261	27,746

The Company's ROU asset relatesto an office lease and is being depreciated over its 3 years contractual term.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS

		Sandspit	White	Taylor	Florence
	Pelly Bay	Lake	River	Brook	Lake	Others	Total
	$		$	$	$	$	$
Balance as of August 31, 2019	407,144	215,532	526,218	-	-	1,420	1,150,314

Acquisition costs
- Cash	-	-	30,000	-	-	-	30,000
- Common shares	-	-	125,000	-	-	-	125,000
	-	-	155,000	-	-	-	155,000

Staking costs	-	-	9,710	-	-	-	9,710

Impairments	-	(215,532)	-	-	-	-	(215,532)

Balance as of August 31, 2020	407,144	-	690,928	-	-	1,420	1,099,492

Acquisition costs
- Cash	-	-	30,000	15,000	-	-	45,000
- Common shares	-	-	125,000	610,795(1)	233,571	-	969,366
	-	-	155,000	625,795	233,571	-	1,014,366

Staking costs	-	-	-	15,990	-	-	15,990

Impairments	(407,144)	-	(845,928)	-	-	-	(1,253,072)

Balance as of August 31, 2021	-	-	-	641,785	233,571	1,420	876,776

1For Taylor Brook, 17,544 common shares with value of $5,000 were issued subsequent to August 31, 2021. See the discussion of Taylor Brook Property below for details.

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

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Pelly Bay Property, Nunavut

The Pelly Bay Property is located in central Nunavut, Canada. The Company has a 100% interest in all claims of the Pelly Bay Property.

Adamera Minerals Corp. ("Adamera") retains a 2% Gross Over-riding Royalty ("GOR") on all diamonds mined in a specific Area of Interest, of which 1% can be purchased by the Company not later than within the first year of production, for $1,000,000. Adamera also retains a 2% GOR on all other commodities mined in the Area of Interest, under the same terms.

The Pelly Bay Property claims are currently suspended as per Nunavut Mining Regulations policies as the Company awaits the approval of the Water Permit from the Nunavut Water Board. Assessment requirements upon reactivation of the claims will total $1,707,500 in qualified work expenditures, or cash fees, to keep all claims in good standing to July 24, 2023, should the claims be activated at the Company's request following receipt of the water permit. Work or charges for each subsequent year from July 24, 2023, due annually on July 24th is $853,750 per year, assuming the entire property is retained.

As the Company has not received the approval of the Water Permit from the Nunavut Water Board, during the year ended August 31, 2021, the Company decided to impair the evaluation and exploration assets by $407,144 to a nominal amount of $1. The Impairment is based on guidance outlined in IFRS 6, Exploration for and Evaluation of Mineral Resources and IAS 36, Impairment of Assets.

Sandspit Lake Property, Northern Ontario

On August 23, 2016, the Company entered into an earn-in agreement with Rudolf Wahl and Frederick Lowndes (collectively, the "Vendors") on the Sandspit Lake property ("Sandspit Lake"). Sandspit Lake originally consisted of one isolated claim that required $5,103 work annually. The Company increased the size of the property by staking 19 new legacy claims during 2017, which have been converted in 2019 under Ontario's new Mining Lands Administration System ("MLAS"), to 280 claim cells.

On October 29, 2020, the Company returned the Sandpit Lake Property to the Vendors; as a result, the Company impaired the carrying value of the Sandspit Lake as of August 31,2020 andrecognized an impairment loss of $215,532 in the statements of loss and comprehensive loss during the year ended August 31, 2020. The Company has no further obligations with respect to this property.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

White River Property, Northern Ontario

On February 9, 2017, the Company entered into an earn-in agreement with the Vendors on the White River property ("White River"). The original property totaled 12 mining claims which the Company increased to 72 legacy claims through physical staking programsin 2017 which were converted in 2019 to 970 Mining Lands Administration System ("MLAS") claim cells. During 2019, the Company was able to further increase the size of the property by map staking 409 new MLAS claim cells under CDC's name.

Pursuant to the agreement, the Company can acquire up to a 100% interest in White River by making the following payments:

	Upon signing the agreement:	$40,000 cash (paid)
	Upon regulatory approval:	350,000 common shares (issued; fair value of $87,500)
	On or before February 9, 2018:	$30,000 cash (paid) and500,000 common shares (issued; fair value of $125,000)
	On or before February 9, 2019:	$30,000 cash (paid(1)) and500,000 common shares (issued; fair value of $125,000)
	On or before February 9, 2020:	$30,000 cash (paid(1))and500,000 common shares (issued; fair value of 125,000)
	On or before February 9, 2021:	$30,000 cash (paid) and500,000 common shares (issued; fair value of 125,000)
	On or before February 9, 2022:	$50,000 cash and 500,000 common shares

1Paid during the year ended August 31, 2021.

The Company is also required to incur a minimum of $1,000,000 in exploration work on the White River by February, 2024, as amended on May 18, 2021, of which $72,000 is required to be incurred by February, 2018 (incurred). As of February 28, 2021, the Company incurred qualified exploration expenditures of $642,475 on the White River Property such that all claims are in good standing.

The Vendors will retain a 3% GOR on all diamonds mined at White River, of which 1.5% can be purchased by the Company at any time for $2,000,000. The Vendors will also retain a 2% GOR on all other commodities mined at White River, of which 1% can be purchased by the Company at any time for $1,000,000.

During the year ended August 31, 2021, the Company decided to impair the evaluation and exploration assets by $845,928 to a nominal amount of $1 due to management's decision not to conduct any significant work in the near future. The Impairment is based on guidance outlined in IFRS 6, Exploration for and Evaluation of Mineral Resources and IAS 36, Impairment of Assets.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Taylor Brook Property, Newfoundland

On October 22, 2020, the Company entered into a letter of intent (the "TB LOI") with Altius Resources Inc. ("Altius") to acquire 100% interest of the mining claims (the "TB Claims") known as the Taylor Brook Nickel -Copper-Cobalt Project.

On December 18, 2020 (the "TB Execution Date"), the Company signed an option agreement (the "1 st TB Option Agreement") with Altiusto acquire 100% interest of the TB Claims. The Company will have the exclusive rightfor a period of 24 months (the "TB Option Period") to acquire an undivided 100% interest in the Claims.

Pursuant to the 1 st TB Option Agreement, the Company will:

1. Issue 2,423,180CDC common shares, or such number which is equivalent to 9.9% of the common shares issued and outstanding of CDC at the date of issuance, to Altius upon the Execution Date (issued on the TB Execution Datewith fair value of $605,795);
1. Incur a minimum of $250,000 in exploration expenditures on the Claims within 12 months following the TB Execution Date (incurred);
1. Complete an equity financing with an amount of at least $1 million with a share price of not less than $0.25 (the "$1M Private Placement") within 12 months following the TB Execution Date (completed –Note8);
1. Issue common shares which will result in Altius' post the $1M Private Placement ownership at 19.9% based on the common shares issued and outstanding of CDC or the Company at the date of issuance, to Altius within 24 months following the TB Execution Date;
1. Commencing a transaction that will result in the Company becoming a reporting issuer in at least one province of Canada (the "Going Public Transaction") within 12 months following the TB Execution Date and complete the Going Public Transaction within 24 months following the TB Execution Date (completed –Note 3); and
1. Enter into an investor rights agreement (the "TB Investor Rights Agreement") with Altius during the TB Option Period.

The TB Investor Rights Agreement will entitle Altius to designate one nominee for the election to the board of directors of CDC or the Company and will grant the right to Altius to participate in the Future Financings undertaken by CDC or the Company on the same terms which are offered to third parties to subscribe the common shares of CDC or the Company to maintain Altius' post Future Financings ownership in CDC or the Company at 19.9% of the issued and outstanding common shares of CDC or the Company.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Taylor Brook Property, Newfoundland

On August 30, 2021(the "2nd TB Execution Date"), the Company entered into two option agreements ("2 nd TB Option Agreements") with two optionors on properties adjacent to the Taylor Book Property.

Pursuant to the 2nd TB Option Agreement with the first optionor, the Company optioned 4 contiguous claims under one mineral license. Under the term of the 2 nd TB Option Agreement with the first optionor,the Company will pay or issue:

On the 2nd TB Execution Date: $10,000cash1 2

(paid)

Within 5 days of receipt of regulatory approval: 35,000 common shares3

On or before August 30, 2022: $15,000cash4 and 45,000common shares

On or before August 30, 2023: $50,000cash5 and 100,000 common shares

2The Company selected to satisfy the $2,500 by issuing the Company's common shares. 8,772 common shares were issued on September 7, 2021.
3An approval was received subsequent to August 31, 2021,and 35,000 common shares were issued on September 7, 2021.
4The Company has an option to satisfy $5,000 by issuing the common shares of the Company with a written notice provided to the first optionor 10 days prior to the payment date. The share price will be determined based on the 5-day VWAP of the Company's common shares on the Exchange.
5The Company has an option to satisfy $20,000 by issuing the common shares of the Company with a written notice provided to the first optionor 10 days prior to the payment date. The share price will be determined based on the 5-day VWAP of the Company's common shares on the Exchange.

On execution of the 2nd TB Option Agreements, the Company granted a 2.0% Net Smelter Returns royalty ("NSR") to the first optionor, of which1.0% of the NSR may be purchased by the Company for $1 million.

1 The Company has an option to satisfy $2,500 by issuing the common shares of the Company. The share price will be determined based on the 5-day Volume Weighted Average Trading Price ("VWAP") of the Company's common shares on the Exchange.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Taylor Brook Property, Newfoundland

Pursuant to the 2nd TB Option Agreement with the second optionor, the Company optioned 15 contiguous claims under one mineral license. Under the term of the 2nd TB Option Agreement with the second optionor, the Company will:

On the 2nd TB Execution Date: $10,000cash1 2 (paid)
Within 5 days of receipt of regulatory approval: 50,000 common shares3

On or before August 30, 2022: $15,000cash4 and 100,000 common shares

On or before August 30, 2023: $50,000cash5 and 200,000 common shares

-------------------- 1 The Company has an option to satisfy $2,500 by issuing the common shares of the Company. The share price will be determined based on the 5-day Volume Weighted Average Trading Price ("VWAP") of the Company's common shares on the Exchange.
2The Company selected to satisfy the $2,500 by issuing the Company's common shares. 8,772 common shares were issued on September 7, 2021.
3An approval was received subsequent to August 31, 2021, and 50,000 common shares were issued on September 7, 2021.
4The Company has an option to satisfy $5,000 by issuing the common shares of the Company with a written notice provided to the first optionor 10 days prior to the payment date. The share price will be determined based on the 5-day VWAP of the Company's common shares on the Exchange.
5The Company has an option to satisfy $20,000 by issuing the common shares of the Company with a written notice provided to the first optionor 10 days prior to the payment date. The share price will be determined based on the 5-day VWAP of the Company's common shares on the Exchange.

On execution of the 2nd TB Option Agreements, the Company granted a 2.0% Net Smelter Returns royalty ("NSR") to the second optionor, of which 1.0% of the NSR may be purchased by the Company for $1 million.

In addition, during the year ended August 31, 2021, the Company paid staking fees of $15,990 for the Taylor Brook (South) Property located in Newfoundland, Canada. The Taylor Brook (South) Property includes 214 unpatented claims.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Florence Lake Property, Newfoundland

On June 24, 2021, the Company entered into a binding letter of intent (the "FL LOI") with Altius to acquire a 100% undivided interest in certain mining claims (the "FL Claims") comprising the Florence Lake property in central Labrador (the "Florence Lake Property").

On July 23, 2021 (the "FL Execution Date"), the Company entered into a definitive option agreement (the "FL Option Agreement") with Altius to acquire 100% undivided interest in certain mining claims comprising the Florence Lake Property. The Company will have the exclusive option for a period of 24 months (the "FL Option Period") to acquire an undivided 100% ownership interest in the Florence Lake Property.

Pursuantto the terms (the "FL Terms") of the FL Option Agreement will:

Issue1,373,946 common shares of the Company to Altius (issued with fair value of $233,571 on the FL Executive Date);
Incur a minimum of $1,500,000 in exploration expenditures within 12 months following the FL ExecutiveDate;
Completean equity financing with an amount of at least $4 million(the "$4M Private Placement");
Issue the lesser of 7,000,000 common shares or a number of shares which will not constitute Altius owningmore than 19.9% of the issued and outstanding common shares of the Company on a partially diluted basis(1) immediately after the issuance.
ProvideAltius with a nomination right to elect one nominee to the board of directors of the Company until such time that Altius beneficially owns less than 9.9% of the common shares of the Company; and
Provide Altius with a pre-emptive right to Altius to participate in the Future Financings undertaken by the Company on the same terms which are offered to third parties to subscribe the common shares of the Company to maintain Altius' post Future Financings ownership in the Company at 19.9% of the issued and outstanding common shares of the Company until such time that Altius beneficially owns less than 9.9% of the issued and outstanding common shares of the Company.

-------------------- 1Partially diluted basis is defined as the number of common shares of the Company and any convertible securities (the "Convertible Securities") which are convertible to the Company's common shares held by Altius divided by the number of issued and outstanding common shares of the Company and the Convertible Securities.

Upon the option being deemed to have been exercised in accordance with the FL Terms, the Company will issue the grant to Altius a 1.6% gross sales royalty on any minerals produced from the c laims comprising the Florence Lake Property.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

The Company's exploration and evaluation expenditures during the years ended August 31, 2021 and 2020 are broken down as follows:

For the year ended August 31, 2021

		White	Taylor	Florence
	Pelly Bay	River	Brook	Lake	Total
	$	$	$	$	$
Consulting	179,886	1,170	66,745	21,970	269,771
Field work	-	-	6,250	-	6,250
Helicopter	-	-	-	13,134	13,134
Licenses and permits	10,755	-	-	-	10,755
Mapping	-	-	13,514	520	14,034
Survey	-	-	299,757	131,865	431,622
Transportation	-	-	2,407	1,924	4,331
Travel	-	-	5,175	5,536	10,711
	190,641	1,170	393,848	174,949	760,608

For the year ended August 31, 2020

	Pelly Bay	WhiteRiver	TaylorBrook	FlorenceLake	Total
	$	$	$	$	$
Consulting	-	3,405	-	-	3,405
Field work	-	26,432	-	-	26,432
	-	29,837	-	-	29,837

7. LEASEOBLIGATION

As at August 31, 2021, future minimum lease payments for the Company's under finance lease are as follows:

	$
As at August 31, 2019	-
Addition	46,733
Finance costs	1,325
Payments	(4,500)
As at August 31, 2020	43,558
Finance costs	4,308
Payments	(18,120)
As at August 31, 2021	29,746
Minimum undiscounted lease payments for each fiscal year:2022	18,600
2023	14,220
Effect of discounting	32,820(3,075)
	29,745

Current	16,076
Long-term	13,670
	29,746

8. SHARE CAPITAL

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

At August 31, 2021, the Company had 43,354,822 (August 31, 2020 – 19,164,856) common shares issued and outstanding.

Escrow shares

On August 13,2018, the Company entered into an escrow agreement, whereby common shares will be held in escrow and are scheduled for release as follows:

June 16, 2021: 1,205,883 common shares (released)
December 16, 2021: 1,205,883 common shares(released subsequent to August 31, 2021)
June 16, 2022: 1,205,883 common shares
December 16, 2022: 1,205,884 common shares

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

8. SHARE CAPITAL (CONTINUED)

Issued share capital(continued)

Escrow shares (continued)

On June 16, 2021, the Company entered into an escrow agreement, whereby common shares will be held in escrow and are scheduled for release as follows:

June 16, 2021: 1,001,680 common shares (released)
December 16, 2021: 1,349,827 common shares(released subsequent to August 31, 2021)
June 16, 2022: 1,655,212 common shares
December 16, 2022: 1,655,212 common shares
June 16, 2023: 1,960,596 common shares
December 16, 2023: 1,960,597 common shares
June 16, 2024: 3,487,521 common shares

During the year ended August 31, 2021, 2,207,563common shares were released from escrow.

As of August 31, 2021, there were 15,686,615common shares held in escrow.

During the year ended August31, 2021

Prior to the RTO, CDC completed various non-brokered private placements as follows:
- Issued 4,020,000non-flow-through shares at a price of $0.25 per non-flow-through share for aggregate gross proceeds of $1,005,000.
- Issued 1,174,999 flow-through shares at a price of $0.30 per flow through share for aggregate gross proceeds of $352,500. The Company reclassified $58,750 as a flow‐through share premium liability.
- Issued 58,333common shares with fair value of $14,583as finders' fees.
- Paid $17,500 as share issue costs.
Prior to the RTO, CDC issued 471,848 common shares with a value of $117,962 to settle certain balances owed to related parties (Note 10).
Prior to the RTO, CDC issued 500,000 common shares with fair value of $125,000 for the White River Property (Note 6).
Prior to the RTO, CDC Company issued 2,423,180 common shares with fair value of $605,795 to Altius on the TB Execution Date (Note 6).
In conjunction with the RTO, CDC completed two non-brokered private placements as follows:
- Issued 1,580,000non-flow-through shares at a price of $0.25 per non-flow-through share for aggregate gross proceeds of $395,000.
- Issued 499,998 flow-through shares at a price of $0.30 per flow through share for aggregate gross proceeds of $150,000. The Company reclassified $25,000as a flow‐through share premium liability.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

8. SHARE CAPITAL (CONTINUED)

Issued share capital(continued)

Issued 75,600 common shares with fair value of $18,900 as finders' fees.
Paid $92,874as share issue costs.
As discussed in Note 3, the Company was deemed to have issued 7,012,062 common shares with fair value of $1,753,016 as part of the RTO.
On August 27, 2021, the Company completed a non-brokered private placement for an aggregate of 5,000,000 flow-through shares at a price of $0.40 per flow through share for aggregate gross proceeds of $2,000,000. The Company reclassified $500,000 as a flow‐through share premium liability. In connection with this private placement, theCompany paid $135,525 and issued 269,275finders'warrants as share issue costs.

Each finders' warrant entitles its holder to purchase one additional common share at an exercise price of $0.40 at any time prior to August 27, 2023. The Company estimated the fair value of finders' warrants using the Black‐ Scholes options pricing model, assuming a risk‐free interest rate of 0.40%, an expected life of 2 years, an expected volatility of 106% and an expected dividend yield of 0%, which totaled $38,946, and recorded these values as share issuance costs.

• The Company issued 1,373,946 common shares with fair value of $233,571 to Altius on the FL Execution Date (Note 6).

During the year ended August 31, 2020

CDC completed a non-brokered private placement for an aggregate of 80,000 non-flow-through shares at a price of $0.25 per non-flow-through share for aggregate gross proceeds of $20,000 of which $10,000 was received during the year ended August 31, 2019.
CDC completed a non-brokered private placement for an aggregate of 100,000 flow-through shares at a price of $0.30 per flow through share for aggregate gross proceeds of $30,000 of which $20,000 was received during the year ended August 31, 2019. The Company reclassified $5,000 as a flow‐through share premium liability.
CDC issued 300,000 common shares with fair value of $75,000 for the Sandspit Lake Property.
CDC issued 500,000 common shares with fair value of $125,000 for the White River Property.
CDC issued 40,000 non-flow-through shares at a price of $0.25 to settle the balance of $10,000 promissory note issued to the Company's Chief Executive Officer during the year ended August 31, 2019.

Subsequent to August 31, 2021

The Company issued 102,544 common shares pursuant to the 2nd TB Option Agreement(Note 6).
105,181stock options were exercised for proceeds of $17,881.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

8. SHARE CAPITAL (CONTINUED)

Warrants

The changes in warrants during the years ended August 31, 2021 and 2020, are as follows:

	August 31, 2021		August 31, 2020
	Numberoutstanding	Weightedaverage exerciseprice ($)	Numberoutstanding	Weightedaverage exerciseprice ($)
Balance, beginning of year	-	-	-	-
Issued	269,275	0.40	-	-
Balance, end of year	269,275	0.40	-	-

In connection with the non-brokered private placement completed on August 27, 2021, the Company issued 269,275 finders' warrants.

The following summarizes information about warrants outstanding at August 31, 2021:

				Weighted
				average
				remaining
		Warrants	Estimated grant	contractual life
Expiry date	Exercise price ($)	outstanding	date fair value ($)	(in years)
August 27, 2023	0.40	269,275	38,946	1.99

Stock options

The Company has a Stock Option Plan (the "Plan") applicable to directors, officers, and consultants, under which the total outstanding stock options are limited to 10% of the outstanding common shares of the Company at any one time. Under the plan, an option's maximum term is five years from the grant date. Under the stock option plan, the Board has the option of determining vesting periods.

The changes in stock options during the years ended August 31, 2021 and 2020 are as follows:

	August 31, 2021		August 31, 2020
	Numberoutstanding	Weightedaverageexerciseprice ($)	Numberoutstanding	Weightedaverageexerciseprice ($)
Balance, beginning of year	1,800,000	0.25	1,050,000	0.25
Granted	701,205	0.17	750,000	0.25
Balance, end of year	2,501,205	0.23	1,800,000	0.25

8. SHARE CAPITAL (CONTINUED)

(Expressed in Canadian Dollars)

Stock options(continued)

During the year ended August 31, 2021

In connection with the RTO, the Company issued 701,205 options to replace the outstanding options previously issued by CRI. Each option entitles theholder to purchase one common share of the Company at an exercise price of $0.17 at any time prior to June 16, 2022.

During the year ended August 31, 2020

On November28, 2019, CDC's Board of Directors approved a resolution to extend the expiry date of the options, which originally expired on March 20, 2020, to March 20, 2025.

As a result of the modification, the Company remeasured the fair value of the options and recognized $136,386 amounts as share‐based payments in the statement of loss and comprehensive loss immediately after the amendment.

On November28, 2019, CDCgranted 750,000options with an exercise price of $0.25 to certain officers, directors and consultants. The options are exercisable for a period of five years. All of the options granted vested immediately at the date of grant.

The estimated grant date fair value of the options granted during the years ended August 31, 2021 and 2020 calculated using the Black‐Scholes option pricing model with the following weighted average assumptions:

	For the year ended
	August 31, 2021	August 31, 2020
Number of options granted	701,205	750,000
Risk-free interest rate	0.37%	1.49%
Expected annual volatility	102%	80%
Expected life (in years)	1.00	5.00
Expected dividend yield	0%	0%
Grant date fair value per option ($)	0.13	0.16
Share price at grant date ($)	0.25	0.25

The following summarizes information about stock options outstanding and exercisable at August 31, 2021:

Expiry date	Exerciseprice ($)	Optionsoutstanding	Optionsexercisable	Estimatedgrant datefair value ($)	Weightedaverageremainingcontractuallife(in years)
March 20, 2025	0.25	1,800,000	1,800,000	323,374	3.56
June 16, 2022	0.17	701,205	701,205	89,196	0.79
		2,501,205	2,501,205	412,570	2.79
Weighted average exercise price ($)		0.23	0.23

8. SHARE CAPITAL (CONTINUED)

Stock options(continued)

Subsequent to August 31, 2021:

On September 1, 2021, the Company granted 250,000 options with an exercise price of $0.30 to a consultant. The options are exercisable for a period of five years. One-fourth vest three month after the grant date and will vest every three months thereafter.
On September 1, 2021, the Company granted 250,000 options with an exercise price of $0.30 to a consultant. The options are exercisable for a period of five years. One-fourth vest on date of the grant, one-fourth vest six month after the grant and one and half will be vest one year thereafter.

9. SUPPLEMENTAL CASH FLOW INFORMATION

		For the years ended
		August 31,	August 31,
		2021	2020
		$	$
Supplementary cash flow information
Fair value of shares issued for reverse takeover	3	1,753,016	-
Fair value of stock options issued for reverse takeover	3	89,196	-
Increase in accounts payable and accrued liabilities relatedto mineral property costs	6	-	30,000
Decrease in accounts payable and accrued liabilities relatedto mineral property costs	6	60,000	-
Initial recognition of right-of-use assets and lease obligation	5, 7	-	46,733
Obligation to issue shares related to exploration andevaluation assets	6	5,000	75,000
Payment of finder's fees through issue of finder's warrants	8	38,946	-
Reclassification of shares subscription received to sharecapital	8	-	30,000
Reduction to share capital for flow-through share premiumliability	8	583,750	5,000
Share issue costs included in accounts payable and accruedliabilities		124,775	-
Shares issued for debt settlement	8	117,962	10,000
Shares issued for exploration and evaluation assets	6	964,366	125,000
Cash paid during the year for interest		-	-
Cash paid during the year for income taxes		-	-

10.RELATED PARTY TRANSACTIONS AND BALANCES

For the years ended August 31, 2021 and 2020

(Expressed in Canadian Dollars)

Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. Key management includes executive officers and directors.

The transactions related to and the compensation paid to the Company's key management personnel during the year ended August 31, 2021 and 2020 are as follows:

The Company paid $131,534in wages (August 31, 2020 –$5,625) and $18,120 (August 31, 2020 –12,000) in rent to a consulting firmof which the Company's Chief Executive Officer is a partner. As at August 31, 2021, $32,861 (August 31, 2020 –$119,111) was owed to companies controlled by the Chief Executive Officer.
The Company incurred professional fees of $74,954 (August 31, 2020 –$16,939) with an accounting firm of which the Company's Chief Financial Officer is a partner, included in professional fees. As at August 31, 2021, $9,342 (August 31, 2020 –$17,500) was owed to this partnership.
During the year ended August 31, 2021, the Company repaid the non-interest-bearing promissory note with an amount of $47,908 issued to the Company's Chief Executive Officer in full.
During the year ended August 31, 2021, the Company issued 471,848 common shares with a value of $117,962 to settle certain balances owed to related parties.
During the year ended August 31, 2020, the Company recognized share-based payments of $259,525 for the options granted to the Company's officers and directors.

11.COMMITMENTS

The Company periodically issues flow-through shares with any resulting flow-through premium recorded as a flowthrough share premium liability. The liability is subsequently reduced when the required exploration expenditures are made, and accordingly, a recovery of the flow-through premium is recorded as other income.

During the year months ended August 31, 2021, the Company issued 6,674,997 flow-through shares (August 31, 2020 – 100,000) (Note 8). Based on Canadian tax law, the Company is required to spend the proceeds from the issuance of the flow-through shares on eligible exploration expenditures within two years from the date of issuance. If the Company is unable to meet this deadline, it will be subject to Part XII.6 taxes in accordance with the Canadian Income Tax Act.

A continuity of the flow-through share premium liability is as follows:

	August 31, 2021	August 31, 2020
	$	$
Balance, beginning of the year	2,090	-
Liability incurred on flow-through shares issuedSettlement on expenditures made recorded as	583,750	5,000
other income	(85,840)	(2,910)
Balance, end of year	500,000	2,090

12.SEGMENTED INFORMATION

The Company operates in one reportable segment, being the exploration and evaluation of exploration and evaluation assets. All of the Company's equipment and exploration and evaluation assets are located in Canada.

13.CAPITAL MANAGEMENT

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the exploration of its exploration and evaluation assets, acquire additional exploration interests and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes components of 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 attempt to issue new shares, issue debt, acquire or dispose of assets.

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.

The Company is not subject to externally imposed capital requirements.

There were no changes in the Company's approach to capital management during the years ended August 31, 2021 and 2020.

14.FINANCIAL INSTRUMENTS

Fair value

The carrying values of cash, amounts receivable, accounts payable and accrued liabilities and loan payable approximate their fair values due to the relatively short period to maturity of those financial instruments.

Financial instruments recorded at fair value on the statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are as follows:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 Inputs that are not based on observable market data.

As at August 31, 2021 and 2020, there were no financial assets or liabilities measured and recognized in the statement of financial position at fair value that would be categorized as Level 1, 2 and 3 in the fair value hierarchy above.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

14.FINANCIAL INSTRUMENTS (CONTINUED)

Financial risk management

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to financial instruments fails to meet its contractual obligations. The Company's exposure to credit risk includes cash and sales taxes receivable.

The Company's cash is held at a large Canadian financial institution in interest bearing accounts. The Company has no investments in asset-backed commercial paper.

The Company's sales taxes receivable consists of GST receivable from the government of Canada. The Company's maximum exposure to credit risk is the carrying value of its financial assets. Management believes that the credit risk related to its cash and sales taxes receivable is negligible.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. The Company manages liquidity by maintaining adequate cash balances to meet liabilities as they become due.

At August 31, 2021, the Company had cash of $2,715,709, accounts payable and accrued liabilities of $419,748. All accounts payable and accrued liabilities are current.

Market Risk

The significant market risks to which the Company is exposed are interest rate risk, foreign currency risk, and price risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's cash is held mainly in high yield saving accounts and term deposits and therefore there is currently minimal interest rate risk. Because of the short-term nature of these financial instruments, fluctuations in market rates do not have a significant impact on estimated fair values as of August 31, 2021.

The Company's loan payable is not subject to interest rate risk as it is non-interest bearing.

Foreign Currency risk

The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities held by the Company are not denominated in Canadian dollars. As at August 31, 2021,the Company is not exposed to currency risk as all transactions and balances are denominated in Canadian dollars.

Price risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on the results of operations due to commodity price movements and volatilities. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.

Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020 (Expressed in Canadian Dollars)

15.INCOME TAXES

A reconciliation of income taxes at statutory rates with the reported taxes is as follows:

	2021	2020
	$	$
Loss for the year	(3,915,903)	(555,616)

Expected income tax (recovery)	(1,038,000)	(147,000)
Change in statutory, foreign tax, foreign exchange rates and other	(58,000)	-
Permanent differences	419,000	68,000
Impact of flow through share	136,000	-
Share issue cost	(84,000)	(1,000)
Adjustment to prior years provision versus statutory tax returns andexpiry of non-capital losses	162,000	-
Change in unrecognized deductible temporary differences	463,000	80,000
Total income tax expense (recovery)	-	-

The significant components of the Company's temporary differences, unused tax credits and unused tax losses that have not been included on the statement of financial position are as follows:

	2021	Expiry Date Range	2020	Expiry Date Range
	$		$
Temporary Differences
Exploration and evaluation assets	1,630,000	No expiry date	762,000	No expiry date
Property and equipment	1,000	No expiry date	2,000	No expiry date
Share issue costs	260,000	2022 to 2025	10,000	2021
ROU assets/lease liability	2,000	No expiry date	-	N/A
Non-capital losses available for futureperiods	1,165,000	2034 to 2041	541,000	2034 to 2040

Tax attributes are subject to review, and potential adjustment, by tax authorities.

AI assistant

Churchill Resources — Audit Report / Information 2021

47605_rns_2021-12-17_502fbf1d-735d-439f-be82-6ca880b9f0cf.pdf

INDEPENDENT AUDITOR'S REPORT

Opinion

Basis for Opinion

Material Uncertainty Related to Going Concern

Other Information

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

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

1. NATUREAND CONTINUANCE OF OPERATIONS

1. NATURE AND CONTINUANCE OF OPERATIONS (CONTINUED)

COVID-19

2. SIGNIFICANT ACCOUNTING POLICIESAND BASIS OF PREPARATION

Statement of compliance to International Financial Reporting Standards

Basis of preparation

Basis of consolidation

• Subsidiaries

2. SIGNIFICANT ACCOUNTING POLICIESAND BASIS OF PRESENTATION(CONTINUED)

Basis of consolidation (continued)

• Acquisitions and disposals

Critical accounting judgements, estimates and assumptions

Share-based payment transactions

2. SIGNIFICANT ACCOUNTING POLICIESAND BASIS OF PRESENTATION (CONTINUED)

Critical accounting judgements, estimates and assumptions(continued)

Carrying value and recoverability of exploration and evaluation assets

Income tax

Recovery of deferred tax assets

Significant accounting policies

Share-based payments

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Income taxes

Exploration and evaluation assets

2. SIGNIFICANT ACCOUNTING POLICIES AND BASISOF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Provision for environmental rehabilitation

Foreign exchange

Loss per share

Impairment of long-lived assets

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Impairment of long-lived assets (continued)

Flow-through shares

Equipment

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Financial instruments

Financial assets

Classification and measurement

Impairment of financial assets at amortized cost

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Significant accounting policies(continued)

Financial instruments (continued)

Derecognition of financial assets

Financial liabilities

Leases

CHURCHILL RESOURCES INC. (FORMERLY 9 CAPITAL CORP.) Notes to the Consolidated Financial Statements For the years ended August 31, 2021 and 2020

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Leases(continued)

New Accounting Standards and Interpretations not yet mandatory or early adopted

3. REVERSE ACQUISITION

3. REVERSE ACQUISITION (CONTINUED)

4. PREPAID EXPENSES

5. EQUIPMENT

6. EXPLORATION AND EVALUATION ASSETS

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Pelly Bay Property, Nunavut

Sandspit Lake Property, Northern Ontario

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

White River Property, Northern Ontario

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Taylor Brook Property, Newfoundland

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Taylor Brook Property, Newfoundland

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Taylor Brook Property, Newfoundland

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Florence Lake Property, Newfoundland

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Churchill Resources Audit Report / Information 2021