CopperCorp Resources Inc. — Annual Report 2021

Apr 29, 2022

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COPPERCORP RESOURCES INC.

CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020

Expressed in Canadian Dollars

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of CopperCorp Resources Inc.

Opinion

We have audited the accompanying consolidated financial statements of CopperCorp Resources Inc. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2021 and 2020, and the consolidated statements of loss and comprehensive loss, changes in shareholders’ equity, and cash flows for the year ended December 31, 2021 and the period from incorporation on July 21, 2020 to December 31, 2020, and notes to 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 December 31, 2021 and 2020, and its financial performance and its cash flows for the year ended December 31, 2021 and the period from incorporation on July 21, 2020 to December 31, 2020, in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit 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 audit is sufficient and appropriate to provide a basis for our opinion.

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 so.

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.

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’s report is Zachary Faure.

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Vancouver, Canada April 28, 2022

Chartered Professional Accountants

COPPERCORP RESOURCES INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian Dollars)

		December 31, 2021 December 31, 2020
ASSETS Current Cash Deferred financing costs (Note 15) GST receivable Prepaid expenses Non-current Right of use – asset (Note 7) Exploration and evaluation assets (Note 4) Equipment (Note 6) Long term deposits Total assets		$ 5,939,220 $ 6,152,979 172,678 - 92,698 4,953 94,517 -
		6,299,113 6,157,932 73,583 - 511,562 511,562 48,147 - 4,603 -
		$6,937,008$ 6,669,494
LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities (Notes 5 and 10) Lease liability – short-term portion (Note 7) Non-current Lease liability – long-term portion (Note 7) Shareholders' equity Share capital (Note 8) Reserves (Note 8) Deficit Total liabilities and shareholders’equity		$ 197,276 $ 41,498 21,449 -
		218,725 41,498 49,870 -
		268,595 41,498 9,266,029 6,698,717 2,103,451 - (4,701,067) (70,721)
		6,668,413 6,627,996
		$ 6,937,008 $ 6,669,494

Nature and continuance of operations (Note 1) Subsequent events (Note 15)

Approved and authorized by the Board on April 28, 2022.

“Stephen Swatton”

Director “Craig Roberts” Director

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

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COPPERCORP RESOURCES INC. CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Expressed in Canadian Dollars)

				From the period from
				incorporation on
		Year ended		July 21, 2020 to
		December 31,2021		December 31,2020
EXPENSES
Depreciation and amortization expense (Note 6 and 7)	$	28,650	$	-
Bank charges and interest (Note 7)		10,846		918
Director Fees (Note 10)		68,250		-
Exploration and evaluation expenditures (Note 9)		1,344,313		26,757
Foreign exchange		28,753		2,147
Management and consulting fees (Note 10)		355,125		16,109
Marketing and IR		501,265		-
Office and miscellaneous		70,949		4,344
Professional fees		89,336		19,856
Share-based compensation (Note 8 and 10)		2,103,451		-
Transfer agent and filing fees		29,408		590
Loss for theperiod	$	(4,630,346)	$	(70,721)
Basic and diluted loss per common share	$	(0.09)	$	(0.01)
Weighted average number of common shares outstanding, basic		51,090,369		14,051,002
and diluted

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

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COPPERCORP RESOURCES INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Expressed in Canadian Dollars)

	Share Capital(Note 8)	Share Capital(Note 8)
	Shares	Amount	Reserves	Deficit		Total
Balance, July 21, 2020 (incorporation)	-	$ -	$ -	$ -	$	-
Shares issued on incorporation	2	-	-	-		-
Shares issued for property acquisition	10,300,000	463,500	-	-		463,500
Shares issued for private placements	33,928,023	6,452,587	-	-		6,452,587
Share issue costs – cash	-	(217,370)	-	-		(217,370)
Loss for theperiod	-	-	-	(70,721)		(70,721)
Balance, December 31, 2020	44,228,025	$ 6,698,717	$ -	$ (70,721)	$	6,627,996
Shares issued for private placement	11,947,340	2,645,676	-	-		2,645,676
Share-based compensation	-	-	2,103,451	-		2,103,451
Share issue costs – cash	-	(78,364)	-	-		(78,364)
Loss for theyear	-	-	-	(4,630,346)	(4,630,346)
Balance, December 31, 2021	56,175,365	$ 9,266,029	$ 2,103,451	$ (4,701,067)	$	6,668,413

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

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COPPERCORP RESOURCES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

				From the period from
		Year-ended		incorporation on
		December 31,		July 21, 2020 to
		2021		December 31, 2020
Cash flows from operating activities:
Loss for the period	$	(4,630,346)	$	(70,721)
Items not involving cash:
Depreciation and amortization		28,650		-
Non-cash interest expense on ROUL		8,391		-
Foreign exchange		(5,608)		-
Share-based compensation		2,103,451		-
Changes in non-cash working capital:
GST receivable		(87,745)		(1,338)
Prepaid expenses		(94,517)		-
Accountspayable and accrued liabilities		101,669		26,498
Net cash used in operating activities		(2,576,055)		(45,561)
Cash flows from investing activities:
Acquisition of Georgina		-		(51,677)
Acquisition of equipment		(53,584)		-
Net cash used in investing activities		(53,584)		(51,677)
Cash flows from financing activities:
Proceeds from issuance of share capital		2,645,676		6,452,587
Share issuance costs - cash		(93,364)		(202,370)
Deferred financing costs		(103,569)		-
Deposit on lease		(4,603)		-
Repayment of leases		(28,260)		-
Net cashprovided by financing activities		2,415,880		6,250,217
Net increase (decrease) in cash		(213,759)		6,152,979
Cash,beginningof theperiod		6,152,979		-
Cash,end of theperiod	$	5,939,220	$	6,152,979
During the year ended December 31, 2021, the Company paid $ Nil in taxes (2020 - $ Nil)			and $Nil	(2020 - $Nil) in interest.
Supplemental Schedule of Non-Cash Investing and Financing Activities
Recognition of right of use asset	$	96,796	$	-
Shares issued for property acquisition	$	-	$	463,500
Shares issue costs included in accounts payable and accrued
liabilities	$	-	$	15,000
Deferred financing costs included in accounts payable and
accrued liabilities	$	69,109	$	-

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

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COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

1. NATURE AND CONTINUANCE OF OPERATIONS

CopperCorp Resources Inc. (“CopperCorp”, the “Company”) was incorporated pursuant to the provisions of the British Columbia Business Corporations Act on July 21, 2020. The Company’s head office is located at Suite 203 – 55 Water Street, Vancouver, BC, V6B 1A1 and the Company’s registered and records office is located at Suite 900 – 885 West Georgia Street, Vancouver, BC, V6C 3H1. The Company is a mineral exploration company with interests in properties in Australia.

On January 12, 2022, the Company commenced trading on the TSX Venture Exchange under the trading symbol (“CPER”). The Company completed its initial public offering (“IPO”) of 10,000,000 common shares at a price of $0.50 per share for total gross proceeds of $5,000,000 on January 12, 2022 (Note 15).

These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and settle its obligations in the normal course of business.

As at December 31, 2021, the Company had current assets of $6,299,113 to settle current liabilities of $218,725, leaving the company with a working capital of $6,080,388. Management estimates that the Company will be able to meet its obligations and to sustain operations for at least the next twelve months.

These consolidated financial statements do not reflect adjustments, which could be material to the carrying values and classification of assets and liabilities, which may be required should the Company be unable to continue as a going concern.

The business of exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of exploration properties and the Company’s continued existence are dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an advantageous basis.

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. To date, there have been no adverse effects on the Company’s business or ability to raise funds.

2. BASIS OF PRESENTATION

a) Statement of compliance

These consolidated financial statements have been prepared in accordance with International Accounting Standards 1, Presentation of Financial Statements (“IAS 1”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). These consolidated financial statements were approved by the Board of Directors on April 28, 2022.

b) Basis for measurement

These consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value. All dollar amounts presented are expressed in Canadian Dollars unless otherwise specified. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

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COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

3. SIGNIFICANT ACCOUNTING POLICIES

The functional and presentation currency of the Company and its subsidiary is the Canadian dollar.

a) Basis of consolidation

These consolidated financial statements include the financial statements of CopperCorp Resources Inc. and its wholly owned subsidiary Georgina Resources Pty Ltd. incorporated in Australia. All intercompany transactions and balances have been eliminated upon consolidation.

iminated upon consolidation.
		Proportion of
Name of subsidiary	Countryof incorporation	ownershipinterest	Principal activity
Georgina Resources Pty Ltd	Australia	100%	Mineral exploration

b) Accounting estimates and judgments

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in profit or loss in the year of the change, if the change affects that year only, or in the year of the change and future years, if the change affects both.

Information about critical estimates and judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the financial statements within the next financial year are discussed below:

Critical estimates

Share-based compensation

Share-based compensation expense is measured by reference to the fair value of the stock options at the date at which they are granted. Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures and making assumptions about them.

Critical judgments

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

Income taxes

The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development and commercialization of mineral reserves. To the extent that management’s assessment of the Company’s ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets, and future income tax provisions or recoveries could be affected.

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COPPERCORP RESOURCES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

Carrying value and recoverability of exploration and evaluation assets

The carrying amount of the Company’s exploration and evaluation assets do 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 complete the exploration and development and upon future profitable production or proceeds from the disposition of the mineral property interests 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 mineral property interests 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.

c) Foreign exchange

The Company’s reporting currency and the functional currency of all of its operations, including that of its subsidiary, is the Canadian dollar. Transactions in foreign currencies are initially recorded at the functional currency rate at the date of the transaction. At each statement of financial position date, monetary assets and liabilities are translated using the period-end foreign exchange rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when acquired. All gains and losses on translation of these foreign currency transactions are included in profit or loss.

d) Exploration and evaluation assets

Costs related to the acquisition of exploration and evaluation assets are capitalized by property until the commencement of commercial production. Exploration and evaluation costs are recognized in profit or loss. Costs incurred before and after the Company has obtained the legal rights to explore an area of interest are recognized in profit or loss until such time the technical feasibility and commercial viability of extracting a mineral resource are demonstrable, after which such costs are capitalized. Upon achieving production, costs for a producing property will be amortized on a unit of-production method based on the estimated life of the ore reserves. The recoverability of the amounts capitalized for the undeveloped exploration and evaluation assets is dependent upon the determination of economically recoverable ore reserves, confirmation of the Company's interest in the underlying mineral claims, the ability to obtain the necessary financing to complete their development, and future profitable production or proceeds from the disposition thereof.

e) Impairment of long-lived assets

At the end of each reporting period, the Company reviews the carrying amounts of its long-lived assets to determine whether there is an indication that those assets have suffered impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment charge (if any).

The recoverable amount used for this purpose is the higher of the fair value less costs to sell and value in use. 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 assignments 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 recorded amount, the recorded amount of the asset is reduced to its recoverable amount. An impairment charge is recognized immediately in the statement of loss and comprehensive loss.

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

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COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

f) Reclamation obligations

The Company recognizes statutory, contractual or other legal obligations related to the retirement of its exploration and evaluation assets and its tangible long-lived assets when such obligations are incurred, if a reasonable estimate of fair value can be made. These obligations are measured initially at the net present value of estimated future cash flows and the resulting costs are expensed to the statement of loss and comprehensive loss. In subsequent periods, the liability is adjusted for any changes in the amount or timing and for the discounting of the underlying future cash flows. For the periods presented, there were no reclamation obligations.

g) Share capital

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company's common shares, stock options and share warrants are classified as equity instruments. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

The Company uses the residual approach when allocating the fair value of the share purchase warrants issued in conjunction with the offering of units through a private placement. The Company determines the fair value of the common share and the residual value is allocated to the share purchase warrant for unit offerings that contain a common share and a share purchase warrant.

h) Share-based compensation

The Company applies the fair value method of accounting for all stock option awards. Under this method, share-based compensation expense attributed to the award of options to employees is measured at the fair value of the award on the date of grant and is recognized over the vesting period of the award. Share-based compensation to non-employees is valued based on the fair value of the service received, if reliably determinable, otherwise based on the fair value of the award granted. Valuation is calculated based on the date at which the Company receives the service. If and when the stock options are ultimately exercised, the applicable amounts of other equity reserves are transferred to share capital.

The fair value of instruments granted is measured using the Black-Scholes Option Pricing Model, taking into account the terms and conditions under which the instruments are granted. The fair value of the awards is adjusted by an estimate of the number of awards that are expected to vest as a result of non-market conditions. At each statement of financial position date, the Company revises its estimates of the number of options that are expected to vest based on the non-market conditions including the impact of the revision to original estimates, if any, with corresponding adjustments to equity.

i) Income taxes

Income tax expense is comprised of current and deferred taxes. Current and deferred taxes are recognized in profit or loss except to the extent that they relate to a business combination or items recognized directly in equity or profit or loss.

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is possible that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting year, the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously

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COPPERCORP RESOURCES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

j) Loss per share

The basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year. The diluted loss per share reflects the potential dilution of common share equivalents, such as outstanding share options and warrants, in the weighted average number of common shares outstanding during the year, if dilutive. The number of additional shares is calculated by assuming that outstanding share options and warrants were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting periods. Common share equivalents have been excluded from the computation of diluted loss per share for the years presented as including them would have been antidilutive.

k) Equipment

Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to profit or loss during the period in which they are incurred.

The Company’s field equipment is depreciated on a straight line basis over 2-7 years.

l) Leases

The Company assesses if a contract is or contains a lease at inception of the contract. Control is considered to exist if the contract conveys the right to control the use of an identified asset during the term of the lease. When a lease is identified, a right-of-use asset and a corresponding lease liability are recognized, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognizes the lease payments as an expense in profit or loss on a straight-line basis. Right-of-use assets are recognized at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs and decommissioning and restoration costs, less any lease incentives received. Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted by using the rate implicit in the lease or the Company’s incremental borrowing rate, if the rate implicit in the lease cannot be determined.

m) Financial instruments

Classification

Financial assets are classified at initial recognition as either: measured at amortized cost, fair value through profit or loss (“FVTPL”), or fair value through other comprehensive income ("FVTOCI"). The classification depends on the Company’s business model for managing the financial assets and the contractual cash flow characteristics. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income (“OCI”).

FVTPL – Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed to profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in profit or loss in the period in which they arise.

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.

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COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

Financial assets at amortized cost - A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date and are initially recognized at fair value and subsequently carried at amortized cost less any impairment.

Financial liabilities are measured at amortized cost unless they are required to be measured at FVTPL or the Company has opted to measure at FVTPL.

Measurement

Financial assets and liabilities at FVTPL are initially recognized at fair value and transaction costs are expensed in the consolidated statement of loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets or liabilities held at FVTPL are included in the consolidated statement loss in the period in which they arise. Where the Company has opted to designate a financial liability at FVTPL, any changes associated with the Company's credit risk will be recognized in OCI.

Financial assets and liabilities at amortized cost are initially recognized at fair value, and subsequently carried at amortized cost less any impairment.

Impairment

The Company assesses on a forward-looking basis the expected credit loss ("ECL") associated with financial assets measured at amortized cost, contract assets and debt instruments carried at FVTOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

n) New accounting standards issued but not yet in effect:

The International Accounting Standards Board continually issues new and amended standards and interpretations which may need to be adopted by the Company. The Company continually assesses the impact that the new and amended standards and interpretations may have on its financial statements or whether to early adopt any of the new requirements. No new or amended standards and interpretations have affected the financial statements for December 31, 2021.

New accounting standards issued but not yet adopted

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2022. Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been adopted and are being evaluated to determine their impact on the Company.

IAS 1 – Presentation of Financial Statements (“IAS 1”) was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2023.

IAS 37 – Provisions, Contingent Liabilities, and Contingent Assets (“IAS 37”) was amended. The amendments clarify that when assessing if a contract is onerous, the cost of fulfilling the contract includes all costs that relate directly to the contract – i.e. a full-cost approach. Such costs include both the incremental costs of the contract (i.e., costs a company would avoid if it did not have the contract) and an allocation of other direct costs incurred on activities required to fulfil the contract – e.g.

14

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

contract management and supervision, or depreciation of equipment used in fulfilling the contract. The amendments are effective for annual periods beginning on January 1, 2022.

4. ACQUISITION OF GEORGINA

On November 9, 2020, the Company closed a transaction, whereby the Company acquired a 100% interest in Georgina Resources Pty Ltd. (“Georgina”) that holds the rights to the Alpine Project and to the Skyline Project in Australia subject to a 1.5% net smelter return royalty to Georgina vendors which can be repurchased for $3,000,000. The acquisition has been accounted for as an acquisition of assets.

The aggregate purchase consideration for the acquisition consists of the Company issuing 10,300,000 common shares of the Company. The purchase price allocation is as follows:

Shares	463,500 [i]
Transaction costs	64,443
Total	527,943
Cash	12,766
Recoverable taxes	3,615
Exploration and evaluation of assets	511,562
Total transactionprice	527,943

[i] The Company issued 10,300,000 common shares on November 9, 2020 as per share purchase agreement.

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		December 31, 2021		December 31, 2020
Accounts payable	$	196,026	$	41,498
Accrued liabilities		1,250		-
Total accountspayable and accrued liabilities	$	197,276	$	41,498

6. EQUIPMENT

EQUIPMENT
		Field
		Equipment
Cost
At July 21, 2020 (incorporation) and
December 31, 2020	$		-
Addition			53,584
At December 31,2021	$		53,584
Accumulated Depreciation
At July 21, 2020 (incorporation) and	$		-
December 31, 2020
Additions			5,437
At December 31,2021	$		5,437
Net Book Value
At July 21, 2020 (incorporation) and	$		-
December 31, 2020
December 31, 2021	$		48,147

15

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

7. RIGHT-OF-USE ASSET AND LEASE LIABILITIES

a) Right-of-use asset

a) Right-of-use asset
		December 31,
		2021
Cost
Balance, July 21, 2020 and December 31, 2020	$	-
Additions		96,796
Balance, December 31, 2021	$	96,796
Accumulated Amortization
Balance, July 21, 2020 and December 31, 2020	$	-
Additions		23,213
Balance, December 31, 2021	$	23,213
Net book value	$	73,583

The right-of-use asset relates entirely to the Company’s office space in Australia. On January 1, 2021, the Company entered into a lease agreement with the following terms: duration of four years and monthly payments of $2,355 (AUD $2,500).

b) Lease liability

b) Lease liability
		December 31,
		2021
Balance, July 21, 2020 (incorporation) and December 31, 2020	$	-
Additions		96,796
Interest expense		8,391
Lease payments		(28,260)
Foreign exchange		(5,608)
Balance, December 31, 2021	$	71,319

The Company used 10% interest rate, its estimated incremental borrowing rate to calculate the present value of the lease payments as well as to calculate the monthly accretion expense.

Future minimum payments per the lease payable are as follows:

Fiscal 2022	$	28,260
Fiscal 2023		28,260
Fiscal 2024		28,260
Total future minimum lease payments		84,780
Effects of discounting		(13,461)
Total lease liability		71,319
Current lease liability		21,449
Non-Current lease liability		49,870

8. SHARE CAPITAL

a) Authorized share capital: Unlimited number of common shares, without par value.

Issued share capital: As at December 31, 2021, the Company had 56,175,365 (2020 – 44,228 025) shares issued and outstanding.

16

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

For the year ended December 31, 2021

On January 14, 2021, the Company completed a private placement unit financing of 300,714 common shares at $0.35 per unit, for gross proceeds of $105,250. Each unit comprised one common share and half common share purchase warrant with each whole warrant exercisable at $0.75 per common share until January 14, 2023. The warrants were valued using the residual value method and were allocated a value of $Nil. In connection with this financing, the Company incurred cash finders’ fees of $28,364, recorded as share issue costs.

On June 8, 2021, the Company completed a private placement unit financing of 6,610,912 common shares at $0.35 per unit and 5,035,714 shares at $0.045 per share, for gross proceeds of $2,540,426. In connection with the latter issuance, the Company recorded a share-based compensation of $1,535,893 determined by the difference between the fair value of the common shares of $0.35 and the shares issued at $0.045. Each unit comprised one common share and half common share purchase warrant each exercisable at $0.75 per common share until June 8, 2023. The warrants were valued using the residual value method and were allocated a value of $Nil. In connection with this financing, the Company incurred cash finders’ fees of $50,000, recorded as share issue costs.

In connection with the financings completed during the year ended December 31, 2021, the Company incurred a total of $78,364 in share issuance costs.

For the period from incorporation on July 21, 2020 to December 31, 2020

On October 23, 2020, the Company issued 2 incorporation shares for nominal consideration.

On October 23, 2020, the Company completed a private placement unit financing of 16,827,776 common shares at $0.045 per unit, for gross proceeds of $757,250.

On October 30, 2020, the Company completed a private placement unit financing of 950,000 common shares at $0.045 per unit, for gross proceeds of $42,750.

On November 9, 2020, the Company issued 10,300,000 common shares with a fair value of $463,500 pursuant to the share purchase agreement (Note 4).

On November 20, 2020, the Company completed a private placement unit financing of 6,345,362 common shares at $0.35 per unit, for gross proceeds of $2,220,877. Each unit comprised one common share and half common share purchase warrant each exercisable at $0.75 per common share until November 20, 2022.

On December 3, 2020, the Company completed a private placement unit financing of 9,804,885 common shares at $0.35 per unit, for gross proceeds of $3,431,710. Each unit comprised one common share and half common share purchase warrant each exercisable at $0.75 per common share until December 3, 2022.

In connection with financings completed during the period from incorporation on July 21, 2020 to December 31, 2020, the Company incurred cash finders’ fees of $217,370, recorded as share issue costs.

17

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

b) Warrants

The number and weighted average prices of warrants are as follows:

		Weighted
		Average
	Number of	Exercise
	Warrants	Price
Outstanding as at July 21, 2020 (incorporation)	-	$ -
Issued	8,075,124	$0.75
~~Outstanding as at December 31, 2020~~ Issued	~~8,075,124~~ 3,455,813	~~$ 0.75~~ $0.75
~~Outstanding as at December 31, 2021~~	~~11,530,937~~	~~$ 0.75~~

As at December 31, 2021, the outstanding and exercisable share purchase warrants were as follows:

Number of	Exercise		Weighted average
Warrants	Price	ExpiryDate	remaininglife(inyears)
3,172,681	$0.75	November 20, 2022	0.89
4,902,443	$0.75	December 3, 2022	0.92
150,357 3,305,456	$0.75 $0.75	January 14, 2023 June 8,2023	1.04 1.44
~~11,530,937~~	~~$0.75~~		~~1.06~~

c) Stock options

Pursuant to CopperCorp’s stock option plan, the Board of Directors may grant options for the purchase of up to 10% of the total number of issued and outstanding common shares of the Company. Options granted under the plan vest over time at the discretion of the Board of Directors and expire no later than five years from the date of issuance. Exercise prices on options granted under the plan cannot be lower than the market price of one share on the last trading day immediately preceding the day on which the option is granted, less the maximum applicable discount permitted by TSX Venture Exchange and the minimum exercise price per common share must be at least $0.10. Options issued are subject to vesting terms at the discretion of the Board of Directors.

As at December 31, 2020, the Company had no outstanding stock options. During the year ended December 31, 2021, the Company granted a total of 5,400,000 incentive stock options to directors, officers, and consultants of the Company. Each option is exercisable to purchase one common share of the Company for five years at a price of $0.35 per common share and vest as follows:

(a) one-third (1/3rd) of the Securities to vest on the date that is four months after the Company lists on the TSX Venture Exchange;

(b) one-third (1/3rd) of the Securities to vest on the date that is eight months after the Company lists on the TSX Venture Exchange; and

(c) one-third (1/3rd) of the Securities to vest on the date that is 12 months after the Company lists on the TSX Venture Exchange.

Number of	Number of	Exercise		Weighted average
options	options	Price	Expiry Date	remaining life (in years)
outstanding	exercisable
5,400,000	-	$0.35	July27,2026	4.57
~~5,400,000~~	~~-~~	~~$0.35~~		~~4.57~~

18

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

The fair value of stock options issued was estimated at the grant date based on the Black-Scholes valuation model with the following weighted average assumptions:

following weighted average assumptions:
	~~2021~~	~~2020~~
Risk-free interest rate	1.26%	Nil
Expected dividend yield	Nil	Nil
Share price	$0.35	Nil
Expected stock price volatility	100%	Nil
Average expected option life	5 years	Nil
Fair value of options granted	$0.26	Nil

During they year ended December 31, 2021, the Company recognized $567,558 (2020 – $Nil) in share-based compensation expense for the fair value of stock options granted and vested.

9. EXPLORATION AND EVALUATION EXPENDITURES

During the year ended December 31, 2021, the Company incurred the following exploration and evaluation expenditures:

		AMC
		(formerly		Skyline		Others		Total
		Alpine)
Drilling	$	572,426	$	-	$	-	$	572,426
Field and general operations		71,576		7,037		38,757		117,370
Field contractors and consultants		407,791		56,059		37,327		501,177
Field equipment		438		1,246		-		1,684
Geo consulting		1,484		6,359		-		7,843
Geochemistry		29,329		321		-		29,650
Geophysics		48,720		-		-		48,720
Metallurgy		37,779		-		-		37,779
Travel and accommodation		26,858		806		-		27,664
December 31, 2021	$	1,196,401	$	71,828	$	76,084	$	1,344,313

From the period of incorporation on July 21, 2020 to December 31, 2020, the Company incurred the following exploration and evaluation expenditures:

		AMC
		(formerly		Skyline			Others			Total
		Alpine)
Field and general operations	$	26,070	$		-	$		-	$	26,070
Metallurgy		600			-			-		600
Travel and accommodation		87			-			-		87
December 31, 2020	$	26,757	$		-	$		-	$	26,757

10. RELATED PARTY TRANSACTIONS

Key management personnel

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers and/or companies controlled by those individuals.

19

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

During the year ended December 31, 2021, the Company incurred $239,537 (2020 - $Nil) in management, consulting and director fees. From this amount, $171,287 (2020 - $Nil) was included in management and consulting fees, and $68,250 (2020 - $Nil) in director fees in the consolidated statement of loss and comprehensive loss.

As at December 31, 2021, the Company owed $2,576 (2020 - $11,250) to related parties. The amount is included in accounts payable and accrued liabilities.

On June 8, 2021, the Company completed a private placement whereby it issued 5,035,714 common shares at $0.045 per share to the Company’s CEO and a director. As such it resulted in share-based compensation of $1,535,893 determined by the difference between the fair value of common shares of $0.35 and the shares issued at $0.045.

During the year ended December 31, 2021, the Company granted 3,650,000 options to officers and directors of the Company resulting in a share-based compensation of $383,627.

Other related party transactions

During the year ended December 31, 2021, CopperCorp incurred a total of $79,500 (2020 - $Nil) in consulting fees from a company owned by a close family member of the CFO.

11. FINANCIAL INSTRUMENTS

Fair value

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

Cash is carried at fair value using a Level 1 fair value measurement. The recorded values of GST receivable, and accounts payable and accrued liabilities approximate their carrying values due to their short-term to maturities which is the amount presented on the statement of financial position.

Financial risk factors

The Company’s risk exposures and the impact on the Company’s financial statements are summarized below:

Credit risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and GST receivable due from the Government of Canada and Australia. The Company limits its exposure to credit loss by placing its cash with major financial institutions. The Company believes its credit risk with respect to GST receivable is minimal.

Liquidity risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2021, the Company had a working capital balance of $6,080,388.

Interest rate risk

The Company is exposed to interest rate risk to the extent that the cash maintained at the financial institution is subject to floating rates of interest. The interest rate risk on cash is not considered significant.

20

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

COPPERCORP RESOURCES INC.

For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

Foreign currency risk

The Company is exposed to foreign currency risk on fluctuations related to cash, and accounts payable and accrued liabilities, denominated in Australian dollars. A 10% fluctuation between the Canadian dollar against the Australian dollar would impact profit or loss by approximately $32,614.

Price risk

The Company has limited exposure to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market.

12. CAPITAL MANAGEMENT

Capital is comprised of the Company’s shareholders’ equity. As at December 31, 2021, the Company’s shareholders’ equity was $6,668,413. The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital. The Company currently is not subject to externally imposed capital requirements. There were no changes to the Company’s capital management during the year.

13. SEGMENT INFORMATION

The Company operates in one reportable segment, being the acquisition, exploration and evaluation of mineral resources. All of the Company’s equipment and exploration and evaluation assets are located in Australia as follows:

		December	31,2021		December 31,2020
Equipment
Australia	$		48,147	$	-
			48,147		-
Exploration and evaluation assets
Australia			511,562		511,562
	$		511,562	$	511,562
	$		559,709	$	511,562

21

COPPERCORP RESOURCES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2021 and for the period from incorporation on July 21, 2020 to December 31, 2020 Expressed in Canadian Dollars

14. INCOME TAXES

INCOME TAXES
		Year Ended	Year Ended
	December 31,		December 31,
		2021	2020
Loss before income taxes	$	(4,630,346)	$ (70,721)
StatutoryCanadian federal andprovincial tax rates		27%	27%
Expected tax (recovery)	$	(1,250,000)	$ (19,000)
Change in statutory, foreign tax, foreign exchange rates and other		(46,000)	-
Permanent differences		568,000	-
Share issue cost		(21,000)	(59,000)
Change in unrecognized deductible temporarydifferences		749,000	78,000
Deferred income tax recovery	$	-	$-

The tax effects on the temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows:

		2021	2020
Non-capital losses	$	768,000	$ 25,000
Share issuance costs		59,000	53,000
		(827,000)	78,000
Unrecognized deferred tax assets		827,000	(78,000)
Net deferred tax liability	$	-	$-

The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have been included on the statement of financial position are as follows:

		Expiry Date		Expiry Date
	2021	**Range **	2020	**Range **
Temporary differences
Share issuance costs	$ 217,000	2042 to 2045	$ 198,000	2041 to 2045
Non-capital losses	$ 2,676,000		$ 89,000
Canada	$ 1,172,000	2040 to 2041	$ 50,000	2041
Australia	$1,504,000	Indefinite	$53,000	Indefinite

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

15. SUBSEQUENT EVENTS

Subsequent to the year ended December 31, 2021, the following events took place:

• the Company completed its IPO, resulting in the issuance of 10,000,000 common shares in the capital of the Company at a price of $0.50 per common share for gross proceeds of $5,000,000. In connection with the IPO, the Company incurred $328,280 in share issuance costs of which $172,678 is presented as deferred financing costs at December 31, 2021. The Company also issued 50,000 common shares of the Company as a corporate finance fee.

• the Company granted a total of 50,000 incentive stock options to an employee of the Company. Each option is exercisable to purchase one common share of the Company for five years at a price of $0.66 per common share.

22