Copper Road Resources — Interim / Quarterly Report 2020

Nov 26, 2020

STONE GOLD INC. (FORMERLY CR CAPITAL CORP.) CONDENSED INTERIM FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED)

Notice to Reader

The accompanying unaudited condensed interim financial statements of Stone Gold Inc. ("CR Capital Corp.") (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim financial statements as at and for the three and nine months ended September 30, 2020 have not been reviewed by the Company's auditors.

Stone Gold Inc. (Formerly CR Capital Corp.) Condensed Interim Statements of Financial Position (Expressed in Canadian dollars) (Unaudited)

		As at		As at
	September 30,			December 31,
		2020		2019
ASSETS
Current assets
Cash	$	745,141	$	31,389
Amounts receivable and other assets (note 3)		30,405		10,226
Marketable securities(note 4)		-		25,000
Total assets	$	775,546	$	66,615
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Amounts payable and other liabilities (notes 5 and 13)	$	93,078	$	61,387
Flow-through share liability (note 6)		91,257		2,828
Total liabilities		184,335		64,215
Shareholders' equity
Share capital (note 7)		25,100,965		24,576,144
Reserves (notes 8 and 9)		431,464		90,748
Accumulated deficit		(24,941,218)		(24,664,492)
Total shareholders' equity		591,211		2,400
Total liabilities and shareholders' equity	$	775,546	$	66,615

The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.

Nature of operations and going concern (note 1) Commitments (note 14) Subsequent events (note 15)

• 2 -

Stone Gold Inc. (Formerly CR Capital Corp.) Condensed Interim Statements of Loss and Comprehensive Loss (Expressed in Canadian dollars) (Unaudited)

(Expressed in Canadian dollars) (Unaudited)
		Three Months Ended				Nine Months		Ended
		September 30,				September 30,
		2020		2019		2020		2019
Operating expenses
Exploration and evaluation
expenditures (note 11)	$	69,863	$	1,400	$	93,749	$	5,381
General and administrative(note 12)		100,111		22,476		196,798		106,848
Operating loss before the following items		(169,974)		(23,876)		(290,547)		(112,229)
Unrealized (loss) gain on marketable
securities (note 4)		-		(7,500)		35,000		147,500
Realized loss on marketable securities (note 4)		-		-		(32,750)		(111,000)
Premium recovery on flow-through
shares(note 6)		11,358		-		11,571		-
**Net loss and comprehensive loss for theperiod **	$	(158,616)	$	(31,376)	$	(276,726)	$	(75,729)
Basic and diluted net lossper share(note 10)	$	(0.01)	$	(0.00)	$	(0.02)	$	(0.01)
Weighted average number of common
shares outstanding (note 10)		20,549,006		10,327,335		14,430,139		10,327,335

The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.

• 3 -

Stone Gold Inc. (Formerly CR Capital Corp.) Condensed Interim Statements of Cash Flows (Expressed in Canadian dollars) (Unaudited)

		Nine Months Ended	Nine Months Ended	Nine Months Ended
		September		30,
		2020		2019
Operating activities
Net loss for the period	$	(276,726)	$	(75,729)
Adjustments for:
Share-based compensation (note 9(i))		-		19,760
Unrealized gain on marketable securities (note 4)		(35,000)		(147,500)
Realized loss on marketable securities (note 4)		32,750		111,000
Premium recovery on flow-through shares (note 6)		(11,571)		-
Shares issued for acquisition of mining property (note 7(b)(i))		14,250		-
Shares issued for professional services (note 7(b)(ii))		4,750		-
Changes in non-cash working capital items:
Amounts receivable and other assets		(20,179)		1,467
Amountspayable and other liabilities		31,691		6,025
Net cash(used in) operating activities		(260,035)		(84,977)
Investing activities
Proceeds from sale of marketable securities(note 4)		27,250		99,000
Net cashprovided by investing activities		27,250		99,000
Financing activities
Proceeds from exercise of options (note 7(b)(iii))		14,000		-
Proceeds from private placements (note 7(b)(iv)(v))		1,000,000		-
Shares issue costs		(67,463)		-
Net cashprovided by financing activities		946,537		-
Net change in cash		713,752		14,023
Cash, beginning ofperiod		31,389		7,523
Cash, end ofperiod	$	745,141	$	21,546

The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.

• 4 -

Stone Gold Inc. (Formerly CR Capital Corp.) Condensed Interim Statements of Changes in Equity (Expressed in Canadian dollars) (Unaudited)

	Share			Accumulated
	capital		Reserves	deficit	Total
Balance, December 31, 2019	$ 24,576,144	$	90,748	$(24,664,492) $	2,400
Shares issued through private placements (note 7(b)(iv)(v))	1,000,000		-	-	1,000,000
Warrants (note 7(b)(iv)(v))	(354,548)		354,548	-	-
Flow-through share premium (note 6(i))	(100,000)		-	-	(100,000)
Share issue costs	(67,463)		-	-	(67,463)
Shares issued for acquisition of mining property (note 7(b)(i))	14,250		-	-	14,250
Shares issued for professional services (note 7(b)(ii))	4,750		-	-	4,750
Stock options exercised (note 7(b)(iii))	27,832		(13,832)	-	14,000
Net loss for theperiod	-		-	(276,726)	(276,726)
Balance, September 30, 2020	$ 25,100,965	$	431,464	$(24,941,218) $	591,211
Balance, December 31, 2018	$ 24,570,737	$	105,559	$(24,618,461) $	57,835
Stock options expired	-		(20,996)	20,996	-
Share-based compensation (note 9(i))			19,760	-	19,760
Net loss for theperiod	-		-	(75,729)	(75,729)
Balance, September 30, 2019	$ 24,570,737	$	104,323	$(24,673,194) $	1,866

The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.

• 5 -

Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

Stone Gold Inc. (Formerly CR Capital Corp.)

1. Nature of operations and going concern

Stone Gold Inc. (formerly CR Capital Corp.) (the "Company") was incorporated by a Certificate of Incorporation issued pursuant to the provisions of the Ontario Business Corporations Act on December 13, 2002. The Company is engaged in the acquisition, exploration and evaluation of properties for the mining of precious and base metals. The primary office of the Company is located at 82 Richmond Street East, Toronto, Ontario, M5C 1P1.

On August 26, 2020, the Company changed its corporate name from CR Capital Corp. to Stone Gold Inc. The Company's shares commenced trading on the TSX Venture Exchange ("TSXV") under the new name at the opening of trading on September 21, 2020 and under the new trading symbol "STG".

The Company has incurred a loss of $276,726 for the nine months ended September 30, 2020 (nine months ended September 30, 2019 - loss of $75,729) and as at September 30, 2020, had limited working capital and an accumulated deficit of $24,941,218 (December 31, 2019 - $24,664,492). These conditions indicate the existence of a material uncertainty that casts significant doubt as to whether the Company can continue as a going concern.

These unaudited condensed interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period.

The Company’s ability to continue to meet its obligations and carry out its activities is uncertain and dependent upon the continued financial support of its shareholders and securing additional financing. The Company is investigating other sources of financing. Regardless, based on current projections and operating plans, the Company will likely be required to raise additional funds through equity financing or other means in order to carry out its activities. There is, however, no assurance that any such initiatives will be sufficient. These unaudited condensed interim financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and classification of assets and liabilities that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations for the foreseeable future. These adjustments could be material.

The business of acquisition, exploration and evaluation for minerals involves a high degree of risk and there can be no assurance that the current exploration programs will result in profitable operations.

The Company is in the process of exploring its mineral properties and has not yet determined whether these properties contain mineral reserves that are economically recoverable. The Company’s continued existence is dependent upon the establishment of a sufficient quantity of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production or proceeds from the disposition of these assets.

Although the Company has taken steps to verify title to the properties on which it is conducting its exploration activities, these procedures do not guarantee the Company’s title. Property title may be subject to government licensing requirements or regulations, social licensing requirements, unregistered prior agreements, unregistered claims and non-compliance with regulatory and environmental requirements. The Company’s assets may also be subject to increases in taxes and royalties, renegotiation of contracts, currency exchange fluctuations and restrictions, and political uncertainty.

In March 2020, the World Health Organization declared coronavirus (COVID-19) a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, economies, and financial markets globally, 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 ability to raise funds.

• 6 -

Stone Gold Inc. (Formerly CR Capital Corp.)

Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

2. Significant accounting policies

Statement of compliance

The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”). These unaudited condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by the IASB.

The policies applied in these unaudited condensed interim financial statements are based on IFRSs issued and outstanding as of November 25, 2020, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2019, except as noted below. Any subsequent changes to IFRS that are given effect in the Company’s annual financial statements for the year ending December 31, 2020 could result in restatement of these unaudited condensed interim financial statements.

New accounting standards adopted

IFRS 3, Business combinations (IFRS 3")

Amendments to IFRS 3, issued in October 2018, provide clarification on the definition of a business. The amendments permit a simplified assessment to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

The amendments are effective for transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. The adoption of the amendments had no impact on the Company's unaudited condensed interim financial statements.

IAS 1, Presentation of financial statements ("IAS 1")

Amendments to IAS 1, issued in October 2018, provide clarification on the definition of material and how it should be applied. The amendments also align the definition of material across IFRS and other publications.

The amendments are effective for annual periods beginning on or after January 1, 2020 and are required to be applied prospectively. The adoption of the amendments had no impact on the Company's unaudited condensed interim financial statements.

IAS 8, Accounting policies, changes in accounting estimates and errors ("IAS 8")

Amendments to IAS 8, issued in October 2018, provide clarification on the definition of material and how it should be applied. The amendments also align the definition of material across IFRS and other publications.

The amendments are effective for annual periods beginning on or after January 1, 2020 and are required to be applied prospectively. The adoption of the amendments had no impact on the Company's unaudited condensed interim financial statements.

• 7 -

Stone Gold Inc. (Formerly CR Capital Corp.) Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

3. Amounts receivable and other assets

		As at		As at
	September 30,			December 31,
		2020		2019
Sales tax receivable - Canada	$	24,281	$	6,158
Prepaid expenses		6,124		4,068
	$	30,405	$	10,226

4. Marketable securities

4. Marketable securities
	Number				Unrealized		Fair
September 30, 2020	of shares		Cost		loss		value
Yorbeau Resources Inc.("Yorbeau")	-	$	-	$	-	$	-
	Number				Unrealized		Fair
December 31, 2019	of shares		Cost		loss		value
Yorbeau	1,000,000	$	60,000	$	(35,000)	$	25,000

During the three and nine months ended September 30, 2020, the Company sold nil and 1,000,000 shares of Yorbeau, respectively (three and nine months ended September 30, 2019 - nil and 3,500,000 shares, respectively) for gross proceeds of $nil and $27,250, respectively (three and nine months ended September 30, 2019 - $nil and $99,000, respectively) and recorded a realized loss on marketable securities of $nil and $32,750, respectively (three and nine months ended September 30, 2019 - realized loss of $nil and $111,000, respectively) in profit or loss.

During the three and nine months ended September 30, 2020, the Company recorded an unrealized gain on marketable securities of $nil and $35,000, respectively (three and nine months ended September 30, 2019 - unrealized (loss) gain of $(7,500) and $147,500, respectively) in profit or loss.

5. Amounts payable and other liabilities

Amounts payable and other liabilities of the Company are principally comprised of amounts outstanding for purchases relating to general operating activities.

		As at		As at
	September 30,			December 31,
		2020		2019
Trade payables	$	54,552	$	55,605
Accrued liabilities		38,526		5,782
	$	93,078	$	61,387

The following is an aged analysis of the amounts payable and other liabilities:

		As at		As at
	September 30,			December 31,
		2020		2019
Less than 1 month	$	70,382	$	23,952
1 to 3 months		22,696		19,826
Greater than 3 months		-		17,609
	$	93,078	$	61,387

• 8 -

Stone Gold Inc. (Formerly CR Capital Corp.)

Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

6. Flow-through share liability

The following is a continuity schedule of the liability of the flow-through shares issuance:

Balance, December 31, 2019	$	2,828
Liability incurred on flow-through shares issued (i)		100,000
Settlement of flow-through share liabilitybyincurringexpenditures(i)(ii)		(11,571)
Balance, September 30, 2020	$	91,257

(i) The FT Units (defined below) issued in the private placements completed in July 2020 were issued at a premium to the market price in recognition of the tax benefits accruing to subscribers. The flow-through premium was calculated to be $100,000.

The flow-through premium is derecognized through income as the eligible expenditures are incurred. For the nine months ended September 30, 2020, the Company satisfied $8,743 of the commitment by incurring eligible expenditures of approximately $43,714 and as a result the flow-through premium has been reduced to $91,257.

(ii) The flow-through units issued in the private placements completed on October 9, 2019 were issued at a premium to the market price in recognition of the tax benefits accruing to subscribers. The flow-through premium is derecognized through income as the eligible expenditures are incurred. For the nine months ended September 30, 2020, the Company satisfied $2,828 of the commitment by incurring eligible expenditures of approximately $28,285 and as a result the flow-through premium has been reduced to $nil.

7. Share capital

a) Authorized share capital

The authorized share capital consisted of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

b) Common shares issued

As at September 30, 2020, the issued share capital amounted to $25,100,965. Changes in issued share capital for the periods presented are as follows:

periods presented are as follows:
	Number of
	common
	shares	Amount
Balance, December 31, 2018 and September 30, 2019	10,327,335 $ 24,570,737
Balance, December 31, 2019	11,277,335 $ 24,576,144
Shares issued for acquisition of mineral property (i)	150,000	14,250
Shares issued for professional services (ii)	50,000	4,750
Stock options exercised (iii)	280,000	27,832
Shares issued through private placements (iv)(v)	11,250,000	1,000,000
Warrants (iv)(v)	-	(354,548)
Flow-through share premium (note 6(i))	-	(100,000)
Share issue costs	-	(67,463)
Balance, September 30, 2020	23,007,335 $ 25,100,965

• 9 -

Stone Gold Inc. (Formerly CR Capital Corp.) Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

7. Share capital (continued)

b) Common shares issued (continued)

(i) Refer to note 11(i).

(ii) In connection with the option agreement (refer to note 11(i)), the Company paid a finder’s fee of 50,000 common shares valued at $4,750 to Michael Dehn, an arm’s length third party, who aided the Company in identifying and acquiring the MJ Property (as defined in note 11(i)).

(iii) On May 15, 2020, 280,000 stock options with an exercise price of $0.05 and expiry date of April 12, 2024 were exercised for gross proceeds of $14,000.

(iv) On July 20, 2020, the Company closed the first tranche ("First Tranche") of the non-brokered private placement for aggregate gross proceeds of $814,800. The First Tranche consisted of the sale of 5,810,000 units hard-dollar units ("Units") at a price of $0.08 per Unit and 3,500,000 flow-through units ("FT Units") at a price of $0.10 per FT Unit.

Each FT Unit consists of one flow-through common share of the Company and one-half of one common share purchase warrant (each whole warrant, a “FT Warrant”), with each FT Warrant entitling the holder thereof to acquire one additional common share of the Company at a price of $0.125 for a period of eighteen months following the closing of the offering. Each Unit consists of one common share of the Company and one common share purchase warrant (each a “Warrant”), with each Warrant entitling the holder thereof to acquire one additional common share of the Company at a price of $0.10 for a period of eighteen months following the closing of the offering.

The fair value of the 1,750,000 FT Warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $0.08; expected dividend yield of 0%; risk-free interest rate of 0.23%; volatility of 128% and an expected life of 1.5 years. The fair value assigned to these FT Warrants was $241,985.

The fair value of the 5,810,000 Warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $0.08; expected dividend yield of 0%; risk-free interest rate of 0.23%; volatility of 128% and an expected life of 1.5 years. The fair value assigned to these Warrant was $241,985.

In connection with the First Tranche eligible finders were paid $11,760 in cash compensation for their assistance with the First Tranche.

The Units, FT Units and underlying securities are subject to a customary four months and a day hold period.

In connection with the First Tranche, Brian Howlett, President, Chief Executive Officer ("CEO") and Director of the Company, acquired 211,250 Units.

(v) On July 24, 2020, the Company closed the second and final tranche ("Second Tranche") of the non-brokered private placement for aggregate gross proceeds of $185,200. The Second Tranche consisted of the sale of 440,000 Units at a price of $0.08 per Unit and 1,500,000 FT Units at a price of $0.10 per FT Unit.

The fair value of the 750,000 FT Warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $0.08; expected dividend yield of 0%; risk-free interest rate of 0.24%; volatility of 128% and an expected life of 1.5 years. The fair value assigned to these FT Warrants was $28,271.

The fair value of the 440,000 Warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $0.08; expected dividend yield of 0%; risk-free interest rate of 0.24%; volatility of 128% and an expected life of 1.5 years. The fair value assigned to these Warrants was $18,327.

In connection with the Second Tranche eligible finders were paid $1,500 in cash compensation for their assistance with the First Tranche.

The Units, FT Units and underlying securities are subject to a customary four months and a day hold period.

• 10 -

Stone Gold Inc. (Formerly CR Capital Corp.) Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

8. Warrants

The following table reflects the continuity of warrants for the periods ended September 30, 2020 and 2019:

	Number of	Weighted average
	warrants	exerciseprice($)
Balance, December 31, 2018 and September 30, 2019	-	-
Balance, December 31, 2019	950,000	0.075
Issued(note 7(b)(iv)(v))	8,750,000	0.107
Balance, September 30, 2020	9,700,000	0.104

The following table reflects the actual warrants issued and outstanding as of September 30, 2020:

Number of
warrants	Grant date
outstanding	fair value($)	Exerciseprice($)	Expiry date
950,000	28,500	0.075	October 9, 2021
1,750,000	65,965	0.125	January 20, 2022
5,810,000	241,985	0.100	January 20, 2022
750,000	28,271	0.125	January 24, 2022
440,000	18,327	0.100	January24,2022
9,700,000	383,048	0.104

9. Stock options

The following table reflects the continuity of stock options:

	Number of	Weighted average
	stock options	exerciseprice($)
Balance, December 31, 2018	792,500	0.28
Granted (i)	400,000	0.05
Cancelled	(162,500)	0.26
Expired	(255,000)	0.50
Balance, September 30, 2019	775,000	0.10
Balance, December 31, 2019	775,000	0.10
Exercised(note 7(b)(iii))	(280,000)	0.05
Balance, September 30, 2020	495,000	0.13

(i) On April 12, 2019, the Company granted 400,000 stock options to certain directors and officers of the Company. All options are exercisable at a price of $0.05 per common share. The options vest immediately and expire in five years. The grant date fair value of $19,760 or $0.0494 per option was valued using the Black-Scholes valuation model with the following assumptions: share price of $0.05, expected dividend yield of 0%, expected volatility of 223% which is based on historical volatility of the Company's share price, risk-free rate of return of 1.64% and an expected maturity of 5 years. For the three and nine months ended September 30, 2020, $nil (three and nine months ended September 30, 2019 - $nil and $19,760, respectively) was expensed to share-based compensation.

• 11 -

Stone Gold Inc. (Formerly CR Capital Corp.) Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

9. Stock options (continued)

The following table reflects the actual stock options issued and outstanding as of September 30, 2020:

		Weighted average		Number of
		remaining	Number of	options
Expiry	Exercise	contractual	options	vested
date	price($)	life(years)	outstanding	(exercisable)
April 9, 2023	0.15	2.52	375,000	375,000
April 12,2024	0.05	3.53	120,000	120,000
		2.77	495,000	495,000

10. Net loss per common share

The calculation of basic and diluted loss per share for the three and nine months ended September 30, 2020 was based on the loss attributable to common shareholders of $158,616 and $276,726, respectively (three and nine months ended September 30, 2019 - loss of $31,376 and $75,729, respectively) and the weighted average number of common shares outstanding of 20,549,006 and 14,430,139, respectively (three and nine months ended September 30, 2019 - 10,327,335). Diluted loss per share did not include the effect of 495,000 stock options (September 30, 2019 - 775,000 stock options) and 9,700,000 warrants (September 30, 2019 - nil warrants) as they are anti-dilutive.

11. Exploration and evaluation expenditures

		Three Months	Three Months	Ended		Nine Months Ended	Nine Months Ended	Nine Months Ended
		September		30,		September 30,
		2020		2019		2020		2019
Coppercorp Property
General and geology	$	39,916	$	1,400	$	42,052	$	5,381
Laboratoryanalysis		4,228		-		4,228		-
	$	44,144	$	1,400	$	46,280	$	5,381
Mount Jamie North Property (i)
Property acquisition costs	$	-	$	-	$	21,750	$	-
General and geology		11,207		-		11,207		-
Geophysics		14,512		-		14,512		-
	$	25,719	$	-	$	47,469	$	-
Total	$	69,863	$	1,400	$	93,749	$	5,381

(i) On June 3, 2020, the Company announced it entered into an option agreement with Bounty Gold Corp. (the "Vendor"), a private company, to purchase a 100% interest in the Mount Jamie North Property (the "MJ Property") located in Red Lake, Ontario. The MJ Property consists of 30 mineral claims totaling 445 hectares located in Todd Township, Red Lake Mining Division, District of Kenora, Northwestern Ontario.

Under the terms of the option agreement, the Company has the option to acquire a 100% interest in the MJ Property by making the following cash payments and share issuances:

• An initial cash payment of $7,500 (paid) and the issuance of 150,000 common shares of the Company (issued and valued at $14,250 - refer to note 7(b)(i)) by the seventh day following acceptance of the TSXV (the “Closing”);

• A cash payment of $7,500 and issuing 150,000 common shares within 180 days after the Closing; and

• A cash payment of $10,000 and issuing 200,000 common shares within one year after the Closing.

• 12 -

Stone Gold Inc. (Formerly CR Capital Corp.)

Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

11. Exploration and evaluation expenditures (continued)

(i) (continued) The Company can, at its option, accelerate the cash payments and common share issuances described above. All common share issuances by the Company will be subject to a statutory four-month and a day hold period as per Canadian securities law.

In addition, the Company will pay a 2.0% Net Smelter Return royalty (the “NSR”) to the Vendor on commencement of commercial production. The Company will have the right, at any time and upon 30 days’ notice, to purchase 1.0% of the 2.0% NSR for $1,000,000.

12. General and administrative

		Three Months Ended	Three Months Ended	Three Months Ended		Nine Months Ended	Nine Months Ended
		September 30,				September 30,
		2020		2019		2020	2019
Professional fees	$	24,004	$	19,420	$	69,308 $	60,265
Business development (note 13)		44,248		-		44,248	-
Management compensation (note 13)		7,500		-		27,500	-
Director fees (note 13)		12,000		-		21,000	-
Reporting issuer costs		5,425		225		15,735	10,029
Shareholder and investors relations		4,576		864		12,655	3,291
Office and general		2,150		1,956		6,053	13,415
Bank charges		208		11		299	88
Share-based compensation(note 9(i))		-		-		-	19,760
	$	100,111	$	22,476	$	196,798 $	106,848

13. Related party disclosures

Related parties include the Board of Directors and officers, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

Remuneration of directors and key management personnel (including CEO), Chief Financial Officer ("CFO") and directors), other than consulting fees, of the Company was as follows:

		Three Months Ended	Three Months Ended	Three Months Ended		Nine Months Ended	Nine Months Ended
		September 30,				September 30,
		2020		2019		2020	2019
Management compensation and salaries and
benefits(1)(2)	$	24,135	$	4,635	$	62,405 $	13,905
Share-based compensation	$	-	$	-	$	- $	19,760

(1) Salaries and benefits include director fees. The Board of Directors and select officers do not have employment or service contracts with the Company. Directors are entitled to director fees and stock options for their services and officers are entitled to fees and stock options for their services. During the year ended December 31, 2019, the directors of the Company have waived their director fees to conserve cash. During the three and nine months ended September 30, 2020, $21,000 was accrued for director fees. As at September 30, 2020, officers and directors (excluding the CFO) were owed $5,650 (December 31, 2019 - $2,260) and this amount was included in amounts payable and other liabilities.

(2) The amounts charged are recorded at their fair value.

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Stone Gold Inc. (Formerly CR Capital Corp.)

Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

13. Related party disclosures (continued)

The Company entered into the following transactions with related parties:

			Three Months Ended	Three Months Ended	Three Months Ended		Nine Months Ended	Nine Months Ended
			September 30,				September 30,
	Notes		2020		2019		2020	2019
Marrelli Support Services Inc. ("Marrelli Support")	(i)	$	5,828	$	6,553	$	16,284 $	20,217
DSA Corporate Services Inc. ("DSA")	(ii)	$	1,797	$	235	$	3,442 $	4,550
Marrelli Press Release Services
Limited("Press Release")	(iii)	$	4,326	$	-	$	4,856 $	-

(i) During the three and nine months ended September 30, 2020, the Company paid professional fees of $5,828 and $16,284, respectively (three and nine months ended September 30, 2019 - $6,553 and $20,217, respectively) to Marrelli Support, an organization of which Carmelo Marrelli is Managing Director. Carmelo Marrelli is the CFO of the Company. These services were incurred in the normal course of operations for general accounting and financial reporting matters. Marrelli Support also provides bookkeeping services to the Company. As at September 30, 2020, Marrelli Support was owed $5,340 (December 31, 2019 - $24,745) and this amount was included in amounts payable and other liabilities.

(ii) During the three and nine months ended September 30, 2020, the Company paid professional fees of $1,797 and $3,442, respectively (three and nine months ended September 30, 2019 - $235 and $4,550, respectively) to DSA, an organization of which Carmelo Marrelli controls. Carmelo Marrelli is also the corporate secretary and sole director of DSA. These services were incurred in the normal course of operations for corporate secretarial matters. As at September 30, 2020, DSA was owed $440 (December 31, 2019 - $633) and this amount was included in amounts payable and other liabilities.

(iii) During the three and nine months ended September 30, 2020, the Company paid professional fees of $4,326 and $4,856, respectively (three and nine months ended September 30, 2019 - $nil) to Press Release, an organization of which Carmelo Marrelli controls. Carmelo Marrelli is also the corporate secretary and sole director of Press Release. These services were incurred in the normal course of operations for press release matters. As at September 30, 2020, Press Release was owed $4,615 (December 31, 2019 - $470) and this amount was included in amounts payable and other liabilities.

(iv) Refer to note 7(b)(iv).

All amounts due to related parties are unsecured, non-interest bearing and due on demand.

14. Commitments

Flow-through shares

Pursuant to the terms of a flow-through share agreement, the Company is in the process of complying with flowthrough contractual obligations to subscribers with respect to the Income Tax Act (Canada) requirements for flowthrough shares. As of September 30, 2020, the Company is committed to incurring approximately $456,000 in Canadian Exploration Expenditures (as such term is defined in the Income Tax Act (Canada)) by December 31, 2021 arising from the flow-through offerings.

The Government of Canada is considering to extend, by 12 months, the period to incur eligible flow-through share expenses,

• 14 -

Stone Gold Inc. (Formerly CR Capital Corp.)

Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2020 (Expressed in Canadian dollars) (Unaudited)

15. Subsequent events

(i) On November 2, 2020, the Company appointed John Timmons as President and CEO of the Company.

(ii) On November 2, 2020, the Company granted 950,000 stock options to certain directors, officers and consultants of the Company. All options are exercisable at a price of $0.15 per common share. The options vest immediately and expire in five years.

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