Core Critical Metals Corp. — Interim / Quarterly Report 2021

Aug 26, 2021

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XANDER RESOURCES INC . INTERIM CONDENSED FINANCIAL STATEMENTS Three Months Ended June 30, 2021 and 2020 (Unaudited – Prepared by Management) (EXPRESSED IN CANADIAN DOLLARS)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim condensed financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim condensed financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor Dale Matheson Carr-Hilton Labonte LLP has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim condensed financial statements by an entity’s auditor.

Interim Condensed Statements of Financial Position As at June 30, 2021 and 2020 (Expressed in Canadian dollars)

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XANDER RESOURCES INC.

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June 30, March 31, March 31,
Note 2021 2021 2020
ASSETS
Current assets
Cash $ 276,791 $ 638,176 $ 452
Prepaid expenses 50,115 66,511 5,200
Taxes receivable 45,146 23,151 2,800
Total current assets 372,052 727,838 8,452
Total assets $ 372,052 $ 727,838 $ 8,452
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 5 $ 24,742 $ 43,569 $ 60,745
Due to related parties 6 700 13,068 77,319
Total current liabilities 25,442 56,637 138,064
Non-current liabilities
-
Liability component of convertible debentures 9,601 9,491
Total non-current liabilities 9,601 9,491 138,064
Total liabilities 35,043 66,128 138,064
EQUITY
Share capital 8 3,413,234 3,167,447 1,106,112
Reserves 9 417,279 432,573 104,966
Conversion component of convertible
debentures 7 901 901 -
Deficit (3,494,405) (2,939,211) (1,340,690)
Total equity 337,009 661,710 (129,612)
Total liabilities and equity $ 372,052 $ 727,838 $ 8,452
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Nature of operations and going concern (Note 1)

Commitments and contingencies (Note 14) Subsequent Event (Note 15)

Approved and authorized for issue by the Board of Directors on August 24[th] , 2021:

“Dwayne Yaretz” “Marsha Panar” Dwayne Yaretz, Director Marsha Panar, Director

Accompanying notes are an integral part of these interim condensed financial statements

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XANDER RESOURCES INC.

Interim Condensed Statements of Comprehensive Loss Three months ended June 30, 2021 and 2020 (Expressed in Canadian dollars)

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Three Months Ended
June 30, June 30,
Note 2021 2020
Expenses:
Business development $ 11,125 $ 23,500
Consulting and Management fees 6 46,119 52,500
Exploration and evaluation expenditures 4 401,207 63,172
Office and miscellaneous 471 2,740
Professional fees 6 9,000 7,450
Property investigation 50,404 -
Share-based payments 6,8,9 22,263 89,000
Transfer agent and filing fees 13,945 19,635
Loss before other expenses (554,534) (257,997)
Other income (expenses):
Foreign exchange loss (301) -
Gain on debt settlement 8 - 3,553
Interest expenses 7 (249) (1,417)
Interest accretion 7 (110) (355)
Net and comprehensive loss $ (555,194) $ (256,216)
Net loss per share, basic and diluted $ (0.02) $ (0.02)
Weighted average number of shares outstanding 24,209,536 11,537,451
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Accompanying notes are an integral part of these interim condensed financial statements

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XANDER RESOURCES INC.

Interim Condensed Statements of Changes in Equity Three months ended June 30, 2021 and 2020 (Expressed in Canadian dollars)

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Share Capital Reserves
Equity
Share-based component of
Number of Shares to payment convertible
shares Amount be issued reserve Warrants debentures Deficit Total
(Note 8) (Note 9) (Note 7)
Balance March 31, 2020 11,342,541 $ 1,106,112 $ - $ 103,200 $ 1,766 $ - $ (1,340,690) $ (129,612)
Net and comprehensive loss - - - - - - (256,216) (256,216)
Shares issued for stock
options exercised 250,000 12,500 - - - - - 12,500
Reserve transferred for
exercise of share options - 10,000 - (10,000) - - - -
Conversion component of
convertible debentures - - - - - 6,755 - 6,755
Funds received for shares to
be issued - - 30,000 - - - - 30,000
Share issuance for debt
settlement 236,842 41,447 - - - - - 41,447
Share issued for mineral
properties 200,000 52,000 - - - - 52,000
- - - - - -
Fair value of options vested 89,000 89,000
Balance, June 30, 2020 12,029,383 $ 1,222,059 $ 30,000 $ 182,200 $ 1,766 $ 6,755 $ (1,596,906) $ (154,126)
Balance, March 31, 2021 23,443,206 $ 3,167,447 $ - $ 328,095 $ 104,478 $ 901 $ (2,939,211) $ 661,710
Net and comprehensive loss - - - - - - (555,194) (555,194)
Shares issued for exploration
and evaluation assets 867,000 160,730 - - - - - 160,730
Shares issued for stock
options exercised 350,000 47,500 - - - - - 47,500
Fair value of stock options
exercised - 37,557 - (37,557) - - - -
- - - - - -
Fair value of options vested 22,263 22,263
Balance, June 30, 2021 24,660,206 $ 3,413,234 $ - $ 312,801 $ 104,478 $ 901 $ (3,494,405) $ 337,009
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Accompanying notes are an integral part of these interim condensed financial statements

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Interim Condensed Statements of Cash Flows Three months ended June 30, 2021 and 2020 (Expressed in Canadian dollars)

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XANDER RESOURCES INC.

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Three months ended
June 30, June 30,
2021 2020
Cash Provided By (Used In)
Operating Activities
Net and comprehensive loss for the period $ (555,194) $ (256,216)
Items not affecting cash:
Share-based payments 22,263 89,000
Shares Issued for mineral property 160,730 52,000
Interest expense 249 -
Gain on debt settlement - (3,553)
Interest on FT share premium 110 -
Interest accretion - 355
Changes in working capital:
Goods and services tax receivable (21,995) (527)
Prepaid expenses and deposits 16,396 1,300
Accounts payable and accrued liabilities (19,076) 10,040
Due to related parties (12,368) 15,266
Net cash used in operating activities (408,885) (92,335)
Financing Activities
Proceeds received from shares to be issued - 30,000
Proceeds from Issuance of Convertible Debentures - 75,000
Proceeds from exercise of options 47,500 12,500
Net cash provided by financing activities 47,500 117,500
Increase (decrease) in cash (361,385) 25,165
Cash, beginning of the period 638,176 452
Cash, end of the period $ 276,791 $ 25,617
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Additional cash flow information (Note 11)

Accompanying notes are an integral part of these interim condensed financial statements

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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1. NATURE OF OPERATIONS AND GOING CONCERN

Xander Resources Inc. (the “Company”) was incorporated under the Business Corporations Act of British Columbia, Canada on December 9, 2010. The head office, principal address and records office of the Company are located at Suite 400 – 1681 Chestnut Street, Vancouver, BC V6J 4M6. The Company’s shares are listed on the TSX Venture Exchange (the “Exchange”) under the symbol “XND.V”.

The Company is engaged in the exploration and development of mineral resources, currently focusing on projects in Quebec. At this time, the Company does not own any operating mines and has no operating income from mineral production. Funding for operations is raised primarily through public and private share offerings. It is not known whether the Company’s mineral properties contain reserves that are economically recoverable.

These interim condensed financial statements (the “Financial Statements”) have been prepared with the assumption that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company’s ability to meet its obligations and maintain its current operations through the ensuing twelve-month period and thereafter is contingent upon successful completion of additional financing arrangements and ultimately upon the discovery of proven reserves and generating profitable operations.

Management expects to be successful in arranging sufficient funding to meet operating commitments for the ensuing year. However, the Company's future capital requirements will depend on many factors, including the costs of exploring and developing its resource properties, operating costs, the current capital market environment and global market conditions. As at June 30, 2021, the Company has a working capital of $346,610 (2020 – $671,201) and a cumulative deficit of $3,494,405 (2020 – 2,939,211). Consequently, there is a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. For significant expenditures and resource property development, the Company will depend almost exclusively on outside capital. Such outside capital will include the issuance of additional equity shares. There can be no assurance that capital will be available, as necessary, to meet the Company’s operating commitments and further exploration and development plans. The issuance of additional equity securities by the Company may result in significant dilution to the equity interests of current shareholders. The continued operations of the Company are dependent on its ability to develop a sufficient financing plan, receive continued financial support from related parties, complete sufficient public equity financing, and ultimately generate profitable operations in the future. The Company has no assurance that it will be successful in its efforts. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the future success of the business could be adversely affected.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and has adversely affected global workforces, financial markets, and the general economy. It is not possible for the Company to determine the duration or magnitude of the adverse results of COVID-19 nor its effects on the Company’s business or operations. The Company anticipates this could have an adverse impact on its business, results of operations, financial position and cash flows in 2021.

2. BASIS OF PRESENTATION

The financial statements were authorized for issue on August 24[th] , 2021, by the directors of the Company.

Statement of compliance to International Financial Reporting Standards

The financial statements of the Company, including comparative disclosure, have been prepared in accordance with International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), and in accordance with the same accounting policies and methods of computation as compared with the most recent annual financial statements, being for the year ended March 31, 2021.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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2. BASIS OF PRESENTATION (continued)

Basis of preparation

The Company’s Financial Statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair value, as explained in Note 12, and are presented in Canadian dollars except where otherwise indicated.

The functional currency of the Company is the Canadian dollar.

Significant accounting estimates and assumptions

The preparation of the Company’s financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Areas requiring a significant degree of estimation relate to the recoverability and measurement of deferred tax asset, and provisions for restoration and environmental obligations. Actual results may differ from current estimates.

Significant accounting judgments

Information about critical judgments, apart from those involving estimates, 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 statement are discussed below:

Going Concern

The assessment of the Company’s ability to continue as a going concern involves judgment regarding future funding availability for its exploration projects and working capital requirements.

Change in accounting policy

During the year ended March 31, 2021, the Company retrospectively changed its accounting policy for mineral property and deferred exploration and evaluation expenditures. Previously, the Company capitalized acquisition costs and deferred exploration and evaluation expenditures of exploration and evaluation assets to the specific exploration and evaluation assets, net of recoveries received.

Under the new policy, exploration and evaluation expenditures incurred prior to the establishment of technical feasibility and commercial viability of extracting mineral resources and prior to a decision to proceed with mine development are charged to operations as incurred. As required by IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, the Company included the restated statement of financial position as at April 1, 2019 below. Management considers this accounting policy is more in line with the IFRS conceptual framework.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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2. BASIS OF PRESENTATION (continued)

The financial statement impact as at April 1, 2019 is as follows:

		As at April 1, 2019
		Effect of
	As	change in
	previously	accounting
	reported	policy	As restated
Property interest	$ 452,236	$ (452,236)	$	-
Total assets	489,644	(452,236)		37,408
Accumulated deficit	(901,158)	(452,236)		(1,353,394)
Total shareholders equity (deficiency)	422,334	(452,236)		(29,902)
Total liabilities and shareholders’ equity (deficiency)	$ 489,644	$ (452,236)	$	37,408

The Company re-evaluated the policy for accounting for such expenditures as a result of the current economic climate and difficult environment for capital funding in the junior mining industry. The Corporation has determined that such a voluntary change in accounting policy results in financial statements providing more reliable and more relevant information.

The change in accounting policy is consistent with the accounting conceptual framework for the recognition of assets, and is an accepted and most widely used accounting policy choice and practice in the mining industry and this change will enhance the comparability of our financial statements to our peers and make our financial statements more relevant to the economic decision making needs of users. The Company concluded that, although the previous accounting treatment was within acceptable accounting standards, it is preferable to expense costs as incurred, given the subjectivity in determining the recoverable amount and technical feasibility and commercial viability, the expected economic life, and the associated depreciation methodology.

This change in accounting policy has been accounted for on a retrospective basis and applied to all of the Company’s exploration activities for all properties.

No impact to the statement of financial position as the Company’s mineral properties were previously written off as at March 31, 2020, and no expenditures were incurred during the periods ended June 30 and March 31, 2021.

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and the consolidated statements of financial position classifications that would be necessary were the going concern assumption inappropriate. These adjustments could be material.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash

Cash consist of cash on hand, deposits held at banks.

Impairment of assets

The carrying amount of the Company’s assets is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

Impairment of assets (continued)

The recoverable amount of assets is the greater of an asset’s fair value less cost 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 the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount; however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

Restoration and environmental obligations

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

The Company’s estimates of restoration costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to the related asset with a corresponding entry to the restoration provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates. These changes are recorded directly to the related asset with a corresponding entry to the provision.

The increase in the restoration provision due to the passage of time is recognized as interest expense. The net present value of restoration costs arising from subsequent site damage that is incurred on an ongoing basis during production are charged to the statement of comprehensive loss in the period incurred.

The costs of restoration projects that were included in the provision are recorded against the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized in accordance with the Company’s accounting policy for exploration and evaluation assets.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Flow-through shares

On the issuance of flow-through shares, any premium received in excess of the market price of the Company’s common shares is initially recorded as a liability (“flow-through tax liability”). Provided that the Company has renounced the related expenditures, or that there is a reasonable expectation that it will do so, the flow-through tax liability is reduced on a pro-rata basis as the expenditures are incurred. If such expenditures are capitalized, a deferred tax liability is recognized. To the extent that the Company has suitable unrecognized deductible temporary differences, an offsetting recovery of deferred income taxes would be recorded.

Income (loss) per share

Basic income (loss) per share is calculated by dividing the income (loss) attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the income (loss) attributable to common shareholders equals the reported income (loss) attributable to owners of the Company. Diluted income (loss) per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted income (loss) per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. As the Company has reported losses for the years presented, the effect of stock options and warrants is anti-dilutive; therefore, basic loss per share equals diluted loss per share.

Share-based payments

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using a Black–Scholes Pricing Model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive loss or equity is recognized in other comprehensive loss or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is provided using the asset and liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes (continued)

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Financial instruments

i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.

Cash is classified as FVTPL. Accounts payable, due to related parties and convertible debentures are classified as amortized cost.

ii) Measurement

Financial assets at FVTOCI

Elected investments in equity investments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income (loss).

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transactions costs expensed in the statements of net income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of net income (loss) in the period in which they arise.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial instruments (continued)

iii) Impairment of financial assets at amortized cost

The Company recognized a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk of the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statements of net income (loss), as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

iv) Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the statements of net income (loss). However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

Financial liabilities

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the statements of net income (loss).

Foreign currency translation

The functional currency of the Company is Canadian Dollar, which is the currency of the primary economic environment in which the Company operates.

Transactions in foreign currencies are translated at rates in effect at the time of the transaction. Monetary assets and liabilities are translated at period end rates. Gains and losses are included in profit and loss.

Valuation of equity units issued in private placements

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the most reliably measurable component based on fair value and then the residual value, if any, to the less reliably measurable component.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Leases

Effective April 1, 2019, the Company adopted IFRS 16, “Leases”. This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-ofuse asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. This standard substantially carries forward the lessor accounting requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have been impacted, including the definition of a lease. The Company had no leases that qualified under IFRS 16 as at June 30, 2021 and March 31, 2021.

Accounting standards issued but not yet effective

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

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XANDER RESOURCES INC.

Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

4. EXPLORATION AND EVALUATION EXPENDITURES

As of June 30, 2021 and March 31, 2021, the Company has incurred following exploration and evaluation expenditures:

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Senneville Properties Blue Ribbon Property Bachelor North Property Total
- - - -
Balance as at March 31, 2020 $ $ $ $
Acquisition cost:
Shares issued 280,350 52,000 15,500 347,850
-
Cash payment 32,000 2,318 34,318
312,350 52,000 17,818 382,168
Exploration and evaluation expenditures:
Consulting and labour 96,213 91,478 - 187,691
Staking and permits 3,717 2,984 - 6,701
Travel 1,116 44,050 - 45,166
Equipment rentals 1,750 28,619 - 30,369
Supplies and other 296 1,866 - 2,162
-
103,092 168,997 272,089
Balance March 31, 2021 $ 415,442 $ 220,997 $ 17,818 $ 654,257
Acquisition cost:
Shares issued 72,000 - 88,730 160,730
-
72,000 88,730 160,730
Exploration and evaluation expenditures:
Consulting and labour 235,365 255 - 235,620
Staking and permits 1,876 - - 1,876
Travel 2,702 - - 2,702
Supplies and other 279 - - 279
240,222 255 - 240,477
Balance June 30, 2021 $ 727,664 $ 221,252 $ 106,548 $ 1,055,464
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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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4. EXPLORATION AND EVALUATION EXPENDITURES (Continued)

Val-d’Or Senneville West Property (Block #1)

On May 18, 2020, the Company entered into an agreement with North American Exploration Ltd. to acquire a 100% interest in the Val-d’Or Senneville West Property (80 claims). Pursuant to the agreement, the Company will make a total cash payment of $89,600, issue 1,510,000 common shares of the Company and incur $625,000 of exploration expenditure in three years as follows:

• i. Issue 510,000 common shares (issued) of the Company and pay $9,600 cash (paid) on or before the closing date (May 18, 2020);

• ii. Pay $8,000 cash (paid) within 90 days of the closing date (August 16, 2020);

• iii. Issue 660,000 common shares of the Company and pay $24,000 cash on the date that is 18 months from the closing date (November 17, 2021);

• iv. Issue 340,000 common shares of the Company and pay $48,000 cash on the date that is 30 months from the closing date (November 17, 2022);

The Company will be considered to have acquired 100% interest in the property once all the abovementioned payments have been made subject to the grant of Net Smelter Royalty of 2% to the optionor.

Val-d’Or Senneville East Property (Block #2)

On May 18, 2020, the Company entered into an agreement with Silverwater Capital Corp. to acquire a 100% interest in the Val-d’Or Senneville East Property (62 claims). Pursuant to the agreement, the Company will make a total cash payment of $45,400, issue 1,090,000 common shares of the Company and incur $625,000 of exploration expenditure in three years as follows:

• i. Issue 450,000 common shares (issued) of the Company and pay $5,400 cash (paid) on or before the closing date (May 18, 2020);

• ii. Pay $4,000 cash (paid) within 90 days of the closing date (August 18, 2020);

• iii. Issue 410,000 common shares of the Company (issued 400,000 shares on May 18, 2021) and pay $12,000 cash on the date that is 18 months from the closing date (November 17, 2021);

• iv. Issue 230,000 common shares of the Company and pay $24,000 cash on the date that is 30 months from the closing date (November 17, 2022);

The Company will be considered to have acquired 100% interest in the property once all the abovementioned payments have been made subject to the grant of Net Smelter Royalty of 2% to the optionor.

On April 23, 2021, the Company entered into an agreement to acquire a 100% interest in 20 mineral claims located contiguous to the Senneville East Property (Block #2) in exchange for $1,340 cash (paid on May 20, 2021), 400,000 common shares (issued on May 18, 2021), and a 2% Net Smelter Royalty.

The Company is required to incur following exploration and evaluation expenditure together for Block #1 and Block #2:

• i. Incur $175,000 of exploration expenditure (incurred $124,481 as of June 30, 2021) on or before 18 months of the closing date (November 17, 2021); and

• ii. Incur $450,000 of exploration expenditure on or before 36 months of the closing date (May 17, 2023)

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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4. EXPLORATION AND EVALUATION EXPENDITURES (continued)

Val-d’Or Senneville South Property

On May 27, 2020, the Company entered into an agreement with Terrance Coyle / 9093-6725 Quebec Inc. to acquire a 100% interest in the Val-d’Or Senneville South Property (9 claims). Pursuant to the agreement, the Company will make a total cash payment of $40,000, issue 165,000 common shares of the Company and incur $75,000 of exploration expenditures in three years as follows:

• i. Issue 25,000 common shares (issued) of the Company and pay $5,000 cash (paid) on or before the closing date (May 27, 2020);

• ii. Issue 60,000 common shares of the Company and pay $15,000 cash on the date that is 18 months from the closing date (November 17, 2021);

• iii. Issue 80,000 common shares of the Company and pay $20,000 cash on the date that is 30 months from the closing date (November 17, 2022);

• iv. Incur $40,000 of exploration expenditure (incurred) on or before 18 months of the closing date (November 27, 2021); and

• v. Incur $35,000 of exploration expenditure (incurred) on or before 36 months of the closing date (May 27, 2023)

The Company will be considered to have acquired 100% interest in the property once all the abovementioned payments have been made subject to the grant of Net Smelter Royalty of 2% to the optionor.

Blue Ribbon Property

On May 15, 2020, the Company entered into an agreement with Silverwater Capital Corp. to acquire 100% interest in the Blue Ribbon Property (34 mineral claims). Pursuant to the agreement, the Company issued 200,000 common shares of the Company and paid cash of $2,652. The property is subject to a 2% Net Smelter Royalty upon commencement of commercial production and the Company will have the right to purchase 0.50% of the Net Smelter Royalty at any time for the aggregate amount of $500,000. As of June 30, 2021, the Company has met all the conditions per option agreement and the title of the property has been transferred to the Company.

Bachelor North Property

On January 8, 2021, the Company entered into an agreement with Silverwater Capital Corp. to acquire a 100% interest in the Bachelor North Property (35 mineral claims). Pursuant to the agreement, the Company will issue 1,501,000 common shares and pay $2,319 in one year as follows:

• i. Issue 100,000 common shares (issued) of the Company and pay $2,319 cash (paid on February 8, 2021) on or before the date of agreement (January 8, 2021);

• ii. Issue 467,000 common shares (issued on May 3, 2021) of the Company on or before the date that is three months after the Closing (April 8, 2021);

• iii. Issue 467,000 common shares of the Company on or before the date that is six months after the Closing (July 8, 2021); and

• iv. Issue 467,000 common shares of the Company on or before the date that is twelve months after the Closing (January 8, 2022);

The Company will be considered to have acquired 100% interest in the property once all the abovementioned payments have been made subject to the grant of Net Smelter Royalty of 2% to the optionor.

During the period ended June 30, 2021, the Company decided not to proceed with the option agreement for Bachelor North Property. Therefore, the property has been impaired and no further exploration activities will be conducted on this property.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	June 30, 2021	March 31, 2021
Accounts payable	$ 8,631	$ 16,206
Accrued liabilities	16,111	27,363
	$ 24,742	$43,569

6. RELATED PARTY TRANSACTIONS

The amounts due to related parties are due to directors and officers of the Company. The balances are unsecured, non-interest bearing and have no specific terms for repayment.

Related party balances

As at June 30, 2021, $700 (March 31, 2021 - $13,068) were due to related parties as follows:

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----- Start of picture text -----

June 30, 2021 March 31, 2021
CEO $ - $ 3,968
Company controlled by the CFO - 4,725
Directors 700 4,375
$ 700 $ 13,068
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Related party transactions and key management compensation

During the three months ended June 30, 2021 and 2020, the Company incurred the following amounts through transactions with the directors and officers of the Company:

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June 30, 2021 June 30, 2020
Management fees $ 28,500 $ 22,500
Accounting fees 6,000 -
Share-based payments - 15,878
$ 34,500 $ 38,378
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Management fees consists of the following:

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----- Start of picture text -----

June 30, 2021 June 30, 2020
CEO $ 10,500 $ -
CFO 7,500 -
Secretary 10,500 10,500
Former CEO - 5,000
-
Company controlled by former CFO 7,000
$ 28,500 $ 22,500
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During the three months ended June 30, 2021, the Company paid $6,000 (2020 – $Nil) towards accounting fee to a company controlled by CFO.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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6. RELATED PARTY TRANSACTIONS (Continued)

Related party transactions and key management compensation (continued)

Share-based compensation consists of the following:

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----- Start of picture text -----

June 30, 2021 June 30, 2020
Number of Share-based Number of Share-based
options payment options payment
- $ - - $ -
Directors - - 250,000 9,340
Company controlled
by Former CFO - - 50,000 1,868
Former Directors - - 125,000 4,670
- - 425,000 15,878
----- End of picture text -----

On December 29, 2020, the Company issued 400,000 stock options to the CEO (200,000) and the Secretary (200,000) of the Company and recorded $47,586 as share-based compensation expense (Note 8).

On November 23, 2020, the Company issued 425,000 stock options to the CEO (75,000) and directors (350,000) of the Company and recorded $50,275 as share-based compensation expense (Note 7).

On September 28, 2020, the Company issued 125,000 stock options to the CEO of the Company and recorded $23,439 as share-based compensation expense (Note 7).

On May 4, 2020, the Company issued 425,000 stock options to former officers and directors (175,000) and directors (250,000) of the Company and recorded $15,878 as share-based compensation expense. Out of these, 50,000 stock options were exercised by the former CFO of the Company for aggregate proceeds of $2,500 (Note 8), and 125,000 stock options expired unexercised.

7. CONVERTIBLE DEBENTURES

On May 20, 2020, the Company closed a non-brokered private placement of 10% unsecured convertible debentures for total gross proceeds of up to $75,000 at a price of $1,000 each. The Convertible Debentures bear interest at 10% per annum, from the date of issuance, payable in arrears annually until the earlier of the Maturity date, two years from the issuance date, or any conversion thereof. Each Convertible Debenture is convertible into one common share at a price of $0.05 per share, at any time prior to the maturity date. At the time of the interest payment, such interest may be paid, at the option of the Company, in cash or by the issuance of Shares at the price of Share equal to the market price.

The Company may prepay, in cash, any or all of the Convertible Debentures at any time prior to the Maturity Date upon not less than thirty business days prior written notice for an amount equal to the principle amount of the Convertible Debentures then outstanding plus any accrued but unpaid interest.

The liability component of these debentures was calculated at $68,245, at the date of issuance, as the present value of the principal and interest, at a rate approximating the interest rate that would have been applicable to non-convertible debt at the date the note was issued. The liability component was recorded at amortized cost and is accreted to the principal amount over the term of the convertible note by charges to accretion expense using an effective interest rate of 15%.

The conversion component of these debentures was calculated at $6,755, as the residual value of the gross proceeds of the convertible debentures.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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7. CONVERTIBLE DEBENTURES (Continued)

As at June 30, 2021, the Company has issued 1,333,443 common shares for conversion of $65,000 in debentures. The fair value of the conversion component of the debentures exercised was $5,854 resulting in a transfer of $5,854 from reserves to share capital.

The carrying value of the liability component was $9,601 as at June 30, 2021 (March 31, 2021 – $9,491). The carrying value of the conversion component was amounts to $901 as at June 30, 2021 (March 31, 2021 – $6,755). During the three months ended June 30, 2021, the Company recorded accretion expense in the amount of $110 (2020 – $355) and interest expense of $249 (2020 – $842) in relation to the convertible debentures.

8. SHARE CAPITAL

Authorized:

The authorized share capital of the Company consists of unlimited common shares without par value.

Issued:

As at June 30, 2021, there were 24,660,206 issued and fully paid common shares (March 31, 2021 – 23,443,206).

Transactions during the three months ended June 30, 2021

On May 3, 2021, the Company issued 467,000 common shares at a fair value of $93,400 ($0.20 per share), pursuant to its property option agreement on the Bachelor North property (Note 4).

On May 18, 2021, the Company issued 400,000 common shares at a fair value of $60,000 ($0.15 per share), pursuant to its property option agreement on the additional claims acquired located adjacent to the Senneville East Property (Note 4).

During the three months ended June 30, 2021, pursuant to the exercise of stock option, the Company issued 350,000 common shares for aggregate proceeds of $47,500. The fair value of options exercised amounted to $37,557.

Transactions during the year ended March 31, 2021

On February 4, 2021, the Company issued 100,000 common shares at a fair value of $15,500 ($0.155 per share), pursuant to its property option agreement on the Bachelor North property (Note 3).

On December 22, 2020, the Company closed its non-brokered private placement financing for total gross proceeds of $275,000. The Company issued 1,527,780 units at a price of $0.18 per Unit. Each Unit consists of one flow-through common share (Note 14) and one-half of non-transferable warrant, with each whole warrant entitling the holder to purchase one additional common share of the Company for a period of up to two (2) years at a price of $0.18. Pursuance to the private placement, the Company issued 111,111 broker warrants and paid $20,000 in cash as finder’s fees. The fair value of the warrants was computed to be $13,295 using black scholes model.

On October 20, 2020, the Company closed its non-brokered private placement financing for total gross proceeds of $400,000. The Company issued 2,000,000 units at a price of $0.20 per Unit. Each Unit consists of one common share and one non-transferable warrant, with each whole warrant entitling the holder to purchase one additional common share of the Company for a period of up to three (3) years at a price of $0.30.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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8. SHARE CAPITAL (Continued)

Transactions during the year ended March 31, 2021 (continued)

On September 17, 2020, the Company issued 25,000 common shares at a fair value of $6,750 ($0.27 per share), pursuant to its property option agreement on the Senneville South property (Note 3).

On August 24, 2020, the Company closed its non-brokered private placement financing for total gross proceeds of $176,400. The Company issued 784,000 units at a price of $0.225 per Unit. Each Unit consists of one common share and one non-transferable warrant, with each whole warrant entitling the holder to purchase one additional common share of the Company for a period of up to 24 months at a price of $0.25. Pursuance to the private placement, the Company issued 2,800 broker warrants and paid $3,423 in cash as finder’s fees. The fair value of the warrants was computed to be $313 using black scholes model.

On July 27, 2020, the Company closed its non-brokered private placement financing for total gross proceeds of $8,000,000. The Company issued 4,000,000 units at a price of $0.20 per Unit. Each Unit consists of one-half of common share and one non-transferable warrant, with each whole warrant entitling the holder to purchase one additional common share of the Company for a period of up to 12 months at a price of $0.26. Pursuance to the private placement, the Company issued 204,750 broker warrants and paid $41,000 in cash as finder’s fees. The fair value of the warrants was computed to be $52,550 using black scholes model.

On July 7, 2020, the Company issued 960,000 common shares at a fair value of $273,600 ($0.285 per share), pursuant to its property option agreement on the Senneville East and West properties (Note 3).

On June 16, 2020, the Company issued 200,000 common shares at a fair value of $52,000 ($0.26 per share), pursuant to its property option agreement on the Blue Ribbon Property (Note 3).

On June 11, 2020, the Company issued 236,842 common shares at a fair value of $45,000 ($0.19 per share), to the former CEO of the Company as settlement for a portion of outstanding management fees owed totaling $45,000. The Company recorded a gain of $3,552 on the settlement of this debt.

During the year ended March 31, 2021, the Company issued 1,333,443 common shares for a total conversion value of $67,831 (Note 6).

During the year ended March 31, 2021, the Company issued 475,000 common shares for total consideration received of $23,750, pursuant to the exercise of the share options. The fair value of the options exercised was $17,747 resulting in a transfer of $17,747 from reserves to share capital.

During the year ended March 31, 2021, the Company issued 458,600 common shares for total consideration received of $91,720, pursuant to the exercise of warrants. The fair value of the warrants exercised was $1,641 resulting in a transfer of $1,641 from reserves to share capital.

Share Options

The Company adopted a share option plan (the “Share Option Plan”) under which it may grant options to employees, officers, directors, or consultants for up to 10% of the issued and outstanding common shares. In connection with the foregoing, the number of common shares reserved for issuance to any one optionee in a twelve-month period is limited to 5% of the issued shares of the Company.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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8. SHARE CAPITAL (Continued)

Share Options (continued)

Under the plan, the exercise price of an option may not be less than the discounted market price. The options can be granted for a maximum term of 5 years and vest at the discretion of the board of directors. For share options granted to employees, directors, and consultants, the Company recognizes as an expense, the estimated fair value of the share options granted. The fair value of each share option granted was estimated on the date of grant using the Black-Scholes option-pricing model.

On June 1, 2021, the Company granted 100,000 stock options to a consultant of the Company. Each stock option entitles its holder to buy one common share of the Company at a price of $0.17 for a period of one year ending June 1, 2022. The options vested immediately. The resulting fair value of $6,689 was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 141%; a risk-free interest rate of 0.22%, and an expected average life of 1 year.

On April 14, 2021, the Company granted 590,000 stock options to the consultants of the Company. Each stock option entitles its holder to buy one common share of the Company at a price of $0.155 for a period of six months ending on October 14, 2021. The options vested immediately. The resulting fair value of $15,574 was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 109%; a risk-free interest rate of 0.28%, and an expected average life of 0.50 year. On May 23, 2021, pursuant to the cancellation of one of the Consulting agreements, 275,000 of the granted and outstanding options were cancelled.

Transactions during the year ended March 31, 2021

On December 29, 2020, the Company granted 600,000 stock options to officers, directors and consultants, at an exercise price of $0.15 per common share for a period of 5 years and will expire on December 29, 2025. The resulting fair value of $71,378 was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 112%; a risk-free interest rate of 0.41%, and an expected average life of 5 years. The options vested immediately.

On November 23, 2020, the Company granted 425,000 stock options to officers and directors, at an exercise price of $0.15 per common share for a period of 5 years and will expire on November 23, 2025. The resulting fair value of $50,275 was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 111%; a risk-free interest rate of 0.44%, and an expected average life of 5 years. The options vested immediately.

On September 28, 2020, the Company granted 375,000 stock options to the CEO, and consultants, at an exercise price of $0.26 per common share for a period ranging from 1 - 5 years expiring on September 28, 2021 to September 28, 2025. The resulting fair value of $70,314 was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 110%-151%; a risk-free interest rate of 0.23% - 0.35%, and an expected average life of 1 - 5 years. The options vested immediately.

On September 17, 2020, the Company granted 100,000 stock options to an investor relations consultant, at an exercise price of $0.25 per common share for a period ranging from 1 year and will expiring on September 17, 2021. The resulting fair value of $15,182 was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 149%; a risk-free interest rate of 0.24% and an expected average life of 1 year. The options vest 50,000 immediately and 50,000 after 3 months. These options have been fully vested.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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8. SHARE CAPITAL (continued)

Share Options (continued)

Transactions during the year ended March 31, 2021 (continued)

On June 19, 2020, the Company granted 150,000 incentive stock options to a consultant, at an exercise price of $0.20 per common share for a period of 1 year and will expire on June 19, 2021. The resulting fair value of $14,424 was estimated using the Black-Scholes Option Pricing Model with the following assumptions: expected dividend yield of 0%; expected volatility of 129%; a risk-free interest rate of 0.26%, and an expected life of 1 year. On September 22, 2020, these options were cancelled and the related fair value expense of $14,424 was reversed.

On June 15, 2020, the Company granted 200,000 incentive stock options to a consultant, at an exercise price of $0.285 per common share for a period of 1 year and will expire on June 15, 2021. The resulting fair value of $26,661 was estimated using the Black-Scholes Option Pricing Model with the following assumptions: expected dividend yield of 0%; expected volatility of 125%; a risk-free interest rate of 0.25%, and an expected life of 1 year. On September 22, 2020, these options were cancelled and the related fair value expense of $26,661 was reversed.

On May 4, 2020, the Company granted 1,075,000 stock options to officers, directors and consultants, at an exercise price of $0.05 per common share for a period of 5 years and will expire on May 4, 2025. The resulting fair value of $40,164 was estimated using the Black-Scholes Option Pricing Model with the following assumptions: expected dividend yield of 0%; expected volatility of 102%; a risk-free interest rate of 0.40%, and an expected life of 5 years. The options vested immediately. Out of these options, 125,000 stock options were cancelled and related fair value expense of $4,670 was reversed.

During the three months ended June 30, 2021, 350,000 of the outstanding stock options were exercised for aggregate proceeds of $47,500, 275,000 stock options were cancelled pursuant to termination of the consultant’s agreement and 125,000 of the stock options expired unexercised.

As at June 30, 2021, the Company had 2,215,000 stock options outstanding. A summary of share options outstanding is as follows:

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----- Start of picture text -----

Options Weighted Average Weighted Average
outstanding Exercise Price Years to Expiry
- - -
Balance at March 31, 2020
Options granted 2,925,000 $ 0.14 3.40
Options exercised (475,000) 0.05 4.64
Options expired (475,000) 0.20 -
Balance at March 31, 2021 1,975,000 $ 0.15 3.75
Options granted 690,000 $ 0.16 0.38
Options exercised (350,000) 0.14 4.61
Options cancelled (275,000) 0.16 -
Options expired (125,000) 0.05 -
Balance at June 30, 2021 1,915,000 $ 0.14 2.96
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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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8. SHARE CAPITAL (continued)

Share Options (continued)

Details of options outstanding as at June 30, 2021 are as follows:

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----- Start of picture text -----

Outstanding and Weighted average Weighted average
exercisable exercise price Expiry date contractual life in years
300,000 0.01 May 4, 2025 0.60
100,000 0.01 September 17, 2021 0.01
125,000 0.02 September 28, 2025 0.28
250,000 0.03 September 28, 2023 0.29
425,000 0.03 November 23, 2025 0.98
300,000 0.02 December 29, 2025 0.71
315,000 0.03 October 14, 2021 0.05
100,000 0.01 June 1, 2022 0.05
1,915,000 0.16 2.96
----- End of picture text -----

Warrants

As at June 30, 2021, the Company had 7,866,551 share warrants outstanding.

A summary of changes in outstanding warrants is as follows:

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----- Start of picture text -----

Warrants Weighted Average Weighted Average
outstanding Exercise Price Years to Expiry [(1)]
Balance at March 31, 2020 583,600 $ 0.20 0.42
Warrants issued 7,866,551 0.26 1.15
Warrants exercised (458,600) 0.21 0.04
- -
Warrants expired (125,000)
Balance at March 31, 2021 7,866,551 $ 0.26 1.15
Balance at June 30, 2021 7,866,551 $ 0.26 1.41
----- End of picture text -----

(1) On July 16, 2021, the Company extended the expiration of the 4,000,000 warrants originally issued on July 24, 2020 pursuant to a non-brokered private placement by one year to July 24, 2022 (Note 15).

Details of warrants outstanding as at June 30, 2021, are as follows:

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Weighted Weighted average
average contractual life in
Outstanding and exercisable exercise price Expiry date years
4,000,000 [(1)] $ 0.13 July 24, 2022 0.54
204,750 0.01 July 27, 2021 0.00
784,000 0.03 August 24, 2022 0.11
2,800 0.00 August 24, 2022 0.00
2,000,000 0.08 October 20, 2023 0.59
763,890 0.02 December 22, 2022 0.14
111,111 0.00 December 22, 2022 0.02
7,866,551 $ 0.26 1.41
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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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8. SHARE CAPITAL (continued)

Warrants (continued)

(1) These warrants are subject to an acceleration provision that states “in the event that the closing price of the Company’s common shares on the TSX Venture is $0.33 per common shares or greater during any fifteen (15) consecutive trading day period at any time subsequent to four months and one day after the closing date, the warrants will expire on the 30[th] day after the date on which the Company provides notice of such accelerated expiry to the holders of the warrants. On July 16, 2021, the Company extended the expiration of these 4,000,000 warrants by one year to July 24, 2022. All other terms and conditions remain the same.

9. RESERVES

Share-based payment reserve

The share-based payment reserve records items recognized as share-based payments expense until such time that the share options are exercised, at which time the corresponding amount will be transferred to share capital. If the options expire or are forfeited, the corresponding amount previously recorded remains in share-based payment reserve. The balance in the share-based payment reserve as on June 30, 2021 was $312,801 (March 31, 2021 - $328,095)

Warrants reserve

The warrant reserve records items recognized as warrants until such time that the warrants are exercised, at which time the corresponding amount will be transferred to share capital. If the warrants expire unexercised, the amount previously recorded remains in warrant reserves. The balance in the warrant reserve as on June 30, 2021 was $104,478 (March 31, 2021 - $104,478).

10. CAPITAL DISCLOSURE

The Company considers its capital structure to include cash and shareholders’ equity. The Company’s objectives when managing capital are to (i) maintain financial flexibility in order to preserve its ability to meet financial obligations and continue as a going concern; (ii) maintain a capital structure that allows the Company to finance its operations using internally-generated cash flow and debt capacity; and (iii) optimize the use of its capital to provide an appropriate investment return to its shareholders commensurate with risk.

The Company’s financial strategy is formulated and adapted according to market conditions in order to maintain a flexible capital structure that is consistent with its objectives and the risk characteristics of its underlying assets. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of its underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets, or adjust the amount of cash and cash equivalents and receivables.

The Company is not subject to externally imposed capital requirements. There were no changes in the Company's approach to capital management during the year.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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11. ADDITIONAL CASH FLOW INFORMATION

During the three months ended June 30, 2021 and 2020, the Company incurred non-cash financing activities as follows:

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----- Start of picture text -----

June 30, 2021 June 30, 2020
Non-cash financing activities:
Fair value of options vested $ 22,263 $ 89,000
Fair value of options exercised 37,557 10,000
Shares issued for debt settlement - 41,447
Fair value adjustment for convertible debentures - 6,755
Non-cash investing activities:
Shares issued for exploration and evaluation assets $ 160,730 $ 52,000
----- End of picture text -----

12. FINANCIAL INSTRUMENTS AND RISKS

Fair Values

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, and the liability component on convertible debentures. These financial instruments are classified as financial assets at FVTPL and financial liabilities at amortized cost. The fair values of these financial instruments approximate their carrying values at June 30, 2021, due to their short-term nature.

The following table presents the Company’s financial instruments, measured at fair value on the statements of financial position as at June 30, 2021 and June 30, 2020 and categorized into levels of the fair value hierarchy:

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Fair Value Measurements Using
Quoted Prices in Significant
Active Markets Other Significant
For Identical Observable Unobservable
Instruments Inputs Inputs
(Level 1) (Level 2) (Level 3) Total
$ $ $ $
June 30, 2021
Assets:
Cash 276,791 – – 276,791
Liabilities:
– –
Accounts payable 8,631 8,631
March 31, 2021
Assets:
Cash 638,176 – – 638,176
Liabilities:
Accounts payable 16,206 – – 16,206
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*The fair value of the Company’s financial assets and liabilities approximates the carrying amount.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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12. FINANCIAL INSTRUMENTS AND RISKS (Continued)

Fair Values (continued)

Risks

The Company's financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, market risk, liquidity risk and currency risk.

a) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk by holding cash. This risk is minimized by holding cash in large Canadian financial institutions. This risk is assessed as low.

b) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to any interest rate risk.

c) Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by management of its working capital to ensure its expenditures will not exceed available resources. This risk is assessed as high.

d) Foreign exchange risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company does not have foreign currency denominated financial instruments and is not exposed to foreign exchange risk.

e) Price risk

Price risk is the risk that the risk of a decline in the value of the Company’s financial instruments. Although price risk can be mitigated by hedging, the Company currently doesn’t apply any hedging techniques as the Company doesn’t have securities that are subject to price fluctuation.

13. COMMITMENTS AND CONTINGENCIES

Flow-through shares tax liabilities

The Company entered into Flow-through Share Subscription Agreements in the calendar three months ended December 31, 2020 whereby it was committed to incur on or before December 31, 2021 a total of $275,000 of qualifying Canadian Exploration Expenses (“CEE”) as described in the Income Tax Act of Canada. As at June 30, 2021, the Company needs to incur $26,283 of CEE.

14. SEGMENTED INFORMATION

The Company currently operates in a single reportable operating segment, the acquisition, exploration and development of mineral properties. All of the Company’s assets and expenditures are located in Canada.

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XANDER RESOURCES INC. Notes to the Unaudited Interim Condensed Financial Statements (Expressed in Canadian Dollars) For the periods ended June 30, 2021 and 2020

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15. SUBSEQUENT EVENT

On July 6, 2021, the Company staked additional 39 claims contiguous to its Senneville West property.

On July 12, 2021, the Company granted 300,000 stock options to a consultant of the Company. Each stock option entitles its holder to buy one common share of the Company at a price of $0.12 for a period of two years ending July 12, 2023. The options vest immediately.

On July 16, 2021, the Company extended the expiration of the 4,000,000 warrants originally issued on July 24, 2020 pursuant to a non-brokered private placement by one year to July 24, 2022. All other terms and conditions of the Warrants, including the exercise price, remain the same.

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