Cymat Technologies Ltd. - Interim / Quarterly Report 2021

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OREFINDERS RESOURCES INC. Condensed Interim Consolidated Financial Statements Unaudited

For the Nine Months ended July 31, 2021 and 2020

( Expressed in Canadian Dollars unless otherwise indicated)

Management’s responsibility for financial reporting

The accompanying condensed interim consolidated financial statements of Orefinders Resources Inc. (the “Company” or “Orefinders”) were prepared by management in accordance with International Financial Reporting Standards (“IFRS”). Management acknowledges responsibility for the preparation and presentation of the condensed interim consolidated financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances. The significant accounting policies of the Company are summarized in Note 3 of the condensed interim consolidated financial statements.

Management has established processes which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the condensed interim consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the condensed interim consolidated financial statements and (ii) the condensed interim consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of July 31, 2021 and for the periods presented by the condensed interim consolidated financial statements.

The Board of Directors is responsible for reviewing and approving the condensed interim financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the condensed interim financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the condensed interim consolidated financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

Management’s assessment of internal control over financial reporting (“ICFR”)

Management is also responsible for establishing and maintaining adequate internal control over the Company’s financial reporting. The internal control system was designed to provide reasonable assurance to the Company’s management regarding the preparation and presentation of the financial statements.

(“signed”) (“signed”) (Stephen Stewart) (Jeffrey Potwarka) CEO CFO

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

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

The Company's independent auditor has not performed a review of these condensed interim financial statements in accordance with standards established by the Institute of Chartered Professional Accountants for a review of condensed interim consolidated financial statements by an entity's auditor.

OREFINDERS RESOURCES INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars) As at

		July 31,	October 31,
	Notes	2021	2020
		(unaudited)	(audited)
ASSETS
Current
Cash		$ 6,112,422	$ 6,352,599
Restricted cash	5	570,967	570,967
Marketable securities	6	1,715,353	632,470
GST-HST receivable		120,062	78,119
Due from related party	12	18,792	7,420
Due from associate	6,12	-	10,000
Prepaid expenses		34,582	24,058
Total current assets		8,572,178	7,675,633
Investments in associates	6	1,993,471	1,937,080
Property, plant and equipment	7	60,233	55,232
TOTAL ASSETS		$ 10,625,882	$ 9,667,945
LIABILITIES
Current
Accounts payable and accrued liabilities	9,12	$ 15,411	$ 470,336
Due to associate	6,12	-	1,251
Asset retirement obligation	11	570,967	570,967
Flow-through share liability	10	390,367	747,400
Total current liabilities		976,745	1,789,954
SHAREHOLDERS’ EQUITY
Share capital	13	26,356,121	23,762,063
Share-based payment reserve	13	4,571,911	4,623,219
Deficit		(21,278,895)	(20,507,291)
TOTAL EQUITY		9,649,137	7,877,991
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$ 10,625,882	$ 9,667,945

Going concern (Note 2)

Commitments and contingencies (Notes 6, 8, 10, 15, 17 and 18)

Approved on behalf of the Directors:

“Stephen Stewart” “Alex Stewart” Stephen Stewart – Director Alex Stewart– Director

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

OREFINDERS RESOURCES INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars)

	Notes	Nine months	ended July 31,	Three months ended July 31,	Three months ended July 31,
(unaudited)		2021	2020	2021	2020
EXPENSES
Consulting and management fees	12	$ 184,973	$ 172,527	$ 59,035	$ 53,925
Exploration expenses	8,12,19	1,829,339	127,552	147,529	22,232
Amortization of property, plant and equipment	7	9,498	5,747	3,166	2,367
Office, rent and general	12	12,530	29,593	1,534	6,572
Professional fees		50,698	23,227	36,207	7,596
Transfer agent, filing fees and shareholder
communications		138,555	43,182	33,009	5,116
Travel and related costs		2,318	7,027	1,412	744
Unrealized gain on marketable securities	6	(1,892,883)	-	231,196	-
Dilution gain from investment in associates	6	(372,430)	(652,631)	(329,672)	(567,857)
Equity loss from investments in associates	6	316,039	248,856	36,860	73,580
TOTAL EXPENSES (RECOVERY)		278,637	5,080	220,276	(395,725)
Income (loss) from operations for the period		(278,637)	(5,080)	(220,276)	395,725
Deferred income tax recovery
Flow-through share premium renunciation	10,15	357,033	7,547	130,074	6,055
NET INCOME (LOSS) FOR THE PERIOD		$ 78,396	$ 2,467	$ (90,202)	$ 401,780
Income (Loss) per Common Share - Basic and
Diluted		$ 0.00	$ (0.00)	$ 0.00	$ (0.00)
Weighted Average Number of Common
Shares Outstanding Basic and Diluted		230,551,126	185,571,397	230,551,126	185,571,397

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

OREFINDERS RESOURCES INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in Canadian dollars)

Expressed in Canadian dollars)
(unaudited)	Share capital Number of shares Amount Share-based Payment Reserve Deficit Total
Balance at October 31, 2019(audited) 125,650,326 $ 17,745,310 $ 3,586,133 $ (20,367,355) $ 964,088 Net loss for the period - - - 2,467 2,467 Warrants exercised 2,928,572 245,395 (173,027) - 72,368 Shares issued on hard-dollar private placement 29,800,000 1,490,000 - - 1,490,000 Value of warrants - (181,000) 181,000 - - Shares issued on flow-through private placement 8,842,856 619,000 - - 619,000 Value of warrants - (50,000) 50,000 - - Broker units issued 1,028,571 45,429 6,000 - 51,429 Broker warrants issued - - 243 - 243 Share issuance costs - (52,512) - - (52,512) Premium allocated to flow-through shares - (176,857) - - (176,857)
Balance at July 31, 2020(unaudited) 168,250,325 $ 19,684,765 $ 3,650,349 $ (20,364,888) $ 2,970,226 Loss for the period - - - (142,403) (142,403) Warrants exercised 4,453,420 410,498 (56,443) - 354,055 Stock options exercised 100,000 6,923 (1,923) - 5,000 Shares issued on hard-dollar private placement 23,000,000 2,300,000 - - 2,300,000 Value of warrants - (322,000) 322,000 - - Shares issued on flow-through private placement 25,000,000 3,200,000 - - 3,200,000 Value of warrants - (342,300) 342,300 - - Broker compensation options issued - - 114,700 - 114,700 Share issuance costs - (605,280) - - (605,280) Share-based payments - - 252,236 - 252,236 Premium allocated to flow-through shares - (570,543) - - (570,543)
Balance at October 31, 2020(audited) 220,803,745 $ 23,762,063 $ 4,623,219 $ (20,507,291) $ 7,877,991 Income for the period - - - 78,396 78,396 Stock options exercised 1,850,000 144,165 (46,665) - 97,500 Warrants exercised 105,000 9,893 (4,643) - 5,250 Dividend in-kind – spinout of American Eagle shares (note 19) - - - (850,000) (850,000) Private placement–Kirkland Lake Gold 24,400,000 2,440,000 - - 2,440,000
Balance at July 31, 2021(unaudited) 247,158,745 $ 26,356,121 $ 4,571,911 $ (21,278,895) $ 9,649,137

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

OREFINDERS RESOURCES INC .

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

(Expressed in Canadian dollars)
	Nine months	ended July 31,	Three months	ended July 31,
(unaudited)	2021	2020	2021	2020
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Income (loss) for the period	$ 78,396	$ 2,467	$ (90,202)	$ 401,780
Items not involving cash
Amortization of property, plant and equipment	9,498	5,747	3,166	2,367
Flow-through share premium renunciation	(357,033)	(7,547)	(130,074)	(6,055)
Unrealized gain on marketable securities	(1,892,883)	(652,631)	231,196	(567,857)
Dilution gain from investments in associates	(372,430)	248,856	(329,672)	73,580
Equity loss from investments in associates	316,039	-	36,860	-
Changes in non-cash working capital items:
GST-HST receivable	(41,943)	63,440	176,290	104
Prepaid expenses	(10,524)	979	4,779	1,526
Accounts payable and accrued liabilities	(454,925)	(327,277)	(169,825)	5,275
Net cash (used in) operating activities	(2,725,805)	(665,966)	(267,482)	(89,280)
INVESTING ACTIVITIES
Purchase of capital assets	(14,499)	(9,027)	-	-
Investment in associate	-	(500,000)	-	-
Investment in marketable securities	(40,000)	-	-	(9,027)
Advances to related parties	(11,372)	(3,138)	9,340	11,071
Advances from associates	10,000	7,010	-	(333)
Repayment of advances to associate	-	17,890	-	-
Net cash provided by (used in) investing activities	(55,871)	(487,265)	9,340	1,711
FINANCING ACTIVITIES
Proceeds on issue of common shares	2,440,000	2,109,000	2,440,000	-
Share issue costs	-	(840)	-	-
Proceeds on exercise of warrants	5,250	72,369	-	-
Proceeds on exercise of stock options	97,500	-	-	10,000
Advances from (to) associates	(1,251)	20,883	-	(3,500)
Net cash provided by financing activities	2,541,499	2,201,412	2,440,000	6,500
NET (DECREASE) INCREASE IN CASH	(240,177)	1,048,181	2,181,858	(81,069)
CASH, BEGINNING OF PERIOD	6,352,599	332,687	3,930,564	1,461,937
CASH, END OF PERIOD	$ 6,112,422	$1,380,868	$ 6,112,422	$1,380,868

Supplemental cash flow information (Note 17)

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

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

1. NATURE OF OPERATIONS

Orefinders Resources Inc. (“Orefinders” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on July 26, 2011 and its principal activity is the exploration, development and production of exploration and evaluation assets in Canada. On December 17, 2012, the Company completed an Initial Public Offering (“Offering”) and its shares were listed for trading on the TSX Venture Exchange (“TSX-V”).

The head and principal office of the Company is located at 55 University Avenue, Suite 1805 Toronto, Ontario M5J 2H7.

2. GOING CONCERN

The Company is in the process of exploring its mineral properties and has not yet determined whether the properties contain reserves that are economically recoverable.

The business of mining and exploration involves a high degree of risk and there can be no assurance that the Company’s exploration programs will result in profitable mining operations. The Company’s continued existence is dependent upon the discovery of economically recoverable reserves and resources, securing and maintaining title and beneficial interest in its properties, making the required payments pursuant to mineral property option agreements and/or securing additional financing; all of which are uncertain.

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

The Company has raised funds during the period ended July 31, 2021 and has utilized these funds for its exploration programs and working capital requirements. The ability of Orefinders to arrange such financing in the future will depend in part upon the prevailing capital market conditions as well as the business performance of the Company. There can be no assurance that Orefinders will be successful in its efforts to arrange additional financing on terms satisfactory to the Company. If additional financing is raised by the issuance of shares from the treasury of the Company, control of Orefinders may change and existing shareholders may have their interest diluted. If adequate financing is not available, the Company may be required to relinquish rights to certain of its interests or terminate its operations.

Management is also closely evaluating the impact of COVID-19 on the Company’s business. In order for the Company to continue as a going concern and fund its operations, the Company will require additional financing. The availability of financing will be affected by, among other things, the state of the capital markets considering the impact of COVID-19 and strategic partnership arrangements.

As at July 31, 2021, the Company had working capital of $7,595,433 (October 31, 2020 - $5,885,679) and an accumulated deficit of $21,278,895 (October 31, 2020 - $20,507,291). Orefinders has no proven history of performance, earnings or success. Management believes the Company has sufficient funds or access to sufficient funds to cover planned operations throughout the next twelve-month period. However, management plans on securing additional financing through the issue of new equity, among other things. Nevertheless, there is no assurance that these initiatives will be successful.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. Accordingly, it does not give effect to adjustments, if any that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities in other than in the normal course of business and at amounts that may differ from those shown in these consolidated financial statements. Such adjustments could be material.

The condensed interim consolidated financial statements were authorized for issue on September 29, 2021 by the directors of the Company.

Statement of compliance

The condensed interim consolidated financial statements for the nine months ended July 31, 2021 were prepared in accordance with IAS 34 International Accounting Standard – “Interim Financial Reporting” (IAS 34) as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain disclosures included in the annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) have been condensed or omitted. The significant judgments made by management in applying the Corporation’s accounting policies and the key sources of estimation uncertainty were consistent with those applied to the Corporation’s audited annual financial statements for the year ended October 31, 2020, except as disclosed under changes to significant accounting policies, and should be read in conjunction with those financial statements. Actual results may differ from estimated results due to differences between estimated or anticipated events and actual events and results.

Basis of presentation

The consolidated financial statements of the Company have been prepared on an accrual basis except for cash flow information and are based on historical costs, except for certain financial instruments which are measured at fair value, as explained in the accounting policies.

Functional and presentation currency

The functional currency of the Company is determined using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Canadian dollars which is the Company’s functional and presentation currency. The Company does not have any significant expenditures in foreign currencies.

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the consolidated statement of financial position. Exchange differences are recognized in operations in the period in which they arise.

Basis of consolidation

The consolidated financial statements include the financial statements of Orefinders Resources Inc. and its wholly owned subsidiary, McGarry-Larder Mines Inc. which was incorporated on July 8, 2018. Control is achieved when the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the period are included in the consolidated statements of loss from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-company transactions, balances, income and expenses are eliminated through the consolidation process. The accounts of the subsidiary are prepared for the same reporting period as the parent company, using consistent accounting policies.

Investment in associates

Associates are entities over which the Company has significant influence, but not control. Significant influence is generally presumed to exist where the Company has between 20 percent and 50 percent of the voting rights, but can also arise where the Company holds less than 20 percent of the voting rights, but it has power to be actively involved and influential in policy decisions affecting the entity. The Company accounts for its investment in associates using

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

the equity method. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s shares of profit or loss of the associate.

Dilution gains and losses arising from changes in interests in investments in associates where significant influence is retained are recognized in the consolidated statements of loss and comprehensive loss. At each reporting date, the Company determines whether there is any objective evidence that the investment in the associate is impaired or if previously recorded impairment should be reversed. If impairment is determined to exist, the amount of the impairment is recognized in the consolidated statement of loss. The amount of impairment is calculated as the difference between the recoverable amount of the investment in the associate and its carrying value.

Significant accounting judgements, estimates and assumptions

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods. Such estimates and assumptions affect the carrying value of assets, the determination of impairment charges of non-current assets, and affect estimates for asset retirement obligations and reclamation costs. Other significant estimates made by the Company include factors affecting valuations of share-based payments, warrants and income tax accounts. The Company regularly reviews its estimates and assumptions; however, actual results could differ from these estimates and these differences could be material.

(a) Estimation of decommissioning and restoration costs and timing of expenditure

Decommissioning, restoration and similar liabilities are estimated based on the Company’s interpretation of current regulatory requirements and constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities. The cost estimates are updated annually during the life of a project to reflect known developments, (e.g. revisions to cost estimates and to the estimated lives of operations) and are subject to review at regular intervals. See Note 8.

(b) Income, value added, withholding and other taxes

The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded. Such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.

(c) Share-based payments and warrants

Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are estimated at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviours and corporate performance. Such judgments and assumptions are inherently uncertain. Warrants are valued in a similar way. Changes in these assumptions affect the fair value estimates.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

(d) Investment in associate

Investments in associates are accounted for using the equity method, whereby the investment is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Company’s share of the net assets of the investment. The Company’s share of the results of operations of an associate is reflection in the profit and loss. An associate is an entity in which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not represent control or joint control over those decisions. The management reviews the relevant factors and made considerations in determining whether significant influence exists in associates. Significant judgment is involved in the determination of significant influence. In particular, the Company has assessed that in 2019, it exerted significant influence over QC Copper and Gold Inc. (“QC Copper”) despite owning less than 20% of the outstanding shares of QC Copper. The Company has assessed that in 2020, it exerted significant influence over Mistango River Resources Inc. (“Mistango”) despite owning less than 20% of the outstanding shares of Mistango (Note 6).

(e) Impairment of investment in associate and due from associate Impairment exists when the carrying value of the investment in associate and due from associate exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing of the asset.

(f) Contingencies – Refer to Note 18

Exploration and evaluation expenditures

Mineral property acquisition costs are expensed as incurred. Exploration expenditures are the costs incurred in the initial search for mineral deposits with economic potential. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. All exploration expenditures are expensed as incurred.

When economically viable reserves have been determined and the decision to proceed with development has been approved, the expenditures incurred subsequent to this date related to development and construction are capitalized as construction-in-process and classified as a component of property, plant and equipment .

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

Mining properties and process facility assets are amortized upon commencement of commercial production either on a unit-of-production basis over measured and indicated resources included in the mine plan or the life of mine.

Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its tangible and intangible non-financial assets to determine whether there is an indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the assets belong.

Recoverable amount is the higher of 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 assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of loss.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Share-based payments

The Company has adopted an employee stock option plan. 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. Share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments issued at the grant date. The corresponding amount is recorded to the share-based payment reserve. The fair value of options is determined using a Black–Scholes pricing model which incorporates market and vesting conditions. 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.

The share-based payment reserve records items recognized as share-based payments expense until such time that the stock options are exercised, at which time the corresponding amount will be transferred to share capital. If the options expire unexercised, the amount remains in share-based payment reserve.

Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. The diluted loss per share calculation assumes that any proceeds from the exercise of dilutive stock options and warrants would be used to repurchase common shares at the average market price during the period, with the incremental number of shares being included in the denominator of the diluted loss per share calculation. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. All of the Company’s outstanding stock options and warrants were anti-dilutive for the periods ended July 31, 2021 and 2020.

Financial instruments

Financial assets

Initial recognition and measurement

Non-derivative financial assets within the scope of IFRS 9 are classified and measured as "financial assets at fair value", as either FVPL or FVOCI, and "financial assets at amortized costs", as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows.

All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVPL, directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

Financial assets classified as FVPL are measured at fair value with unrealized gains and losses recognized through profit or loss. During the year ended October 31, 2019, the Company classified its shares in Mistango (up to October 22, 2019 as described in Note 6) as FVPL. Subsequent to October 22, 2019, the Company accounted for Mistango using the equity method of accounting. Effective December 23, 2019, the Company commenced classifying its investment in QC Copper as FVPL (Note 6).

Financial assets with embedded derivatives are considered in their entirety when determining their classification at FVPL or at amortized cost. Other accounts receivable held for collection of contractual cash flows are measured at amortized cost.

Subsequent measurement – Financial assets at amortized cost

After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate (“EIR”) method. Amortized cost is calculated by

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in other income in the consolidated statements of loss.

Subsequent measurement - Financial assets at FVPL

Financial assets measured at FVPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVPL are carried at fair value in the consolidated statements of financial position with changes in fair value recognized in other income or expense in the consolidated statement of loss. The Company classified its marketable securities as financial assets at FVPL.

Subsequent measurement - Financial assets at FVOCI

Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVOCI. The Company does not measure any financial assets at FVOCI.

After initial measurement, investments measured at FVOCI are subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income or loss in the consolidated statements of comprehensive loss. When the investment is sold, the cumulative gain or loss remains in accumulated other comprehensive income or loss and is not reclassified to profit or loss.

Derecognition

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.

Impairment of financial assets

The Company's only financial asset subject to are the amounts due from related party and associate, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable has been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.

Financial liabilities

Initial recognition and measurement

Financial liabilities are measured at amortized cost, unless they are required to be measured at FVPL as is the case for held for trading or derivative instruments, or the Company has opted to measure the financial liability at FVPL. The Company's financial liabilities include accounts payable and accrued liabilities and due to associate, which are each measured at amortized cost. All financial liabilities are recognized initially at fair value and in the case of long-term debt, net of directly attributable transaction costs.

Subsequent measurement - financial liabilities at amortized cost

After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in finance cost in the consolidated statements of loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in other income or expense in the consolidated statements of loss.

Financial instruments fair value hierarchy

Financial instruments recorded at fair value on the consolidated statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3: Inputs for the assets or liabilities that are not based on observable market data.

Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated amortization and accumulated impairment losses.

Amortization is provided at rates calculated to write off the cost of property, plant and equipment, less their estimated residual value, using the declining balance method over their expected useful lives, at the following annual rates.

Class	Amortization rate
Computer Equipment	30%
Automotive Equipment	30%
Furniture and Fixtures	20%
Building	10%
Machinery and Equipment	20%

Asset retirement obligations (“ARO”)

The Company records the present value of estimated costs of legal and constructive obligations required to restore operating locations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and re-vegetation of affected areas.

The obligation generally arises when the asset is installed or the ground / environment is disturbed at the production location. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related mining assets to the extent that it was incurred prior to the production of related ore.

Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognized in loss as a finance cost. Additional disturbances or changes in rehabilitation costs will be recognized as additions or charges to the corresponding assets and rehabilitation liability when they occur. For closed sites, changes to estimated costs are recognized immediately in loss.

Income tax

Income tax expense is comprised of both current and deferred income taxes. Income tax expense is recognized in the consolidated statement of loss and comprehensive loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

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

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.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Deferred income tax assets and deferred income tax 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.

Flow-through share issuances

The Company finances a portion of its exploration activities through the issue of flow-through shares issued pursuant to the Canadian Income Tax Act (“Tax Act”). Proceeds received from the issuance of flow-through shares are restricted to be used only for qualifying Canadian exploration and development expenses as defined in the Tax Act.

Pursuant to the terms of the flow-through share subscription agreements, these shares transfer the tax deductibility of qualifying expenditures to flow-through investors. On issuance, the Company allocates a portion of the subscription proceeds as a flow-through share premium, equal to the estimated premium, if any, that investors pay for the flowthrough feature, which is recognized as a flow-through share liability. As expenditures are incurred and applied against the Company’s associated flow-through commitment, the flow-through share liability is reduced proportionately, charged as a deferred income tax recovery in operations.

4. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

The adoption of the following new standard was included in the consolidated financial statements for the year beginning November 1, 2019.

IFRS 16 - In 2016, the IASB issued IFRS 16, Leases (“IFRS 16”), replacing IAS 17, Leases and related interpretations. The standard introduces a single on-balance sheet recognition and measurement model for lessees, eliminating the distinction between operating and finance leases. Lessors continue to classify leases as finance and operating leases. IFRS 16 was effective for annual periods beginning on or after January 1, 2019. The adoption of this IFRS had no material effect on the consolidated financial statements.

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after November 1, 2020. Many are not applicable or do not have a significant impact to the Company and have been excluded. Management is currently evaluating the impact of these pronouncements on the Company’s consolidated financial statements.

IAS 1 – Presentation of Financial Statements (“IAS 1”) and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”) were amended in October 2018 to refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2020.

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.

IFRS 3 – Business Combinations (“IFRS 3”) was amended in October 2018 to clarify the definition of a business. This amended definition states that a business must include inputs and a process and clarified that the process must be substantive and the inputs and process must together significantly contribute to operating outputs. In addition, it narrows the definitions of a business by focusing the definition of outputs on goods and services provided to customers and other income from ordinary activities, rather than on providing dividends or other economic benefits directly to investors or lowering costs and added a test that makes it easier to conclude that a company has acquired a group of assets, rather than a business, if the value of the assets acquired is substantially all concentrated in a single asset or group of similar

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

4. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS (cont’d)

assets. The amendments are effective for annual reporting periods beginning on or after January 1, 2020.

IAS 16 – Property, Plant and Equipment (“IAS 16”) was amended. The amendments introduce new guidance, such that the proceeds from selling items before the related property, plant and equipment is available for its intended use can no longer be deducted from the cost. Instead, such proceeds are to be recognized in profit or loss, together with the costs of producing those items. The amendments are effective for annual periods beginning on January 1, 2022.

5. RESTRICTED CASH

At July 31, 2021, restricted cash totaled $570,967 (October 31, 2020 - $570,967). This is comprised of funds placed by the Company with the Ontario government in the amount of $88,806 (October 31, 2020 - $88,806) to be applied toward reclamation of the Mirado stockpile area (Notes 8 and 11) and $482,161 (October 31, 2020 - $482,161) in funds placed by the Company with the Ontario government related to the McGarry Project (Notes 8 and 11).

6. INVESTMENT IN ASSOCIATES

At July 31, 2021, the Company held investments in associates with a total carrying value of $1,993,471 (October 31, 2020 - $1,937,080).

The continuity of the carrying values for each of QC Copper, American Eagle Gold Corp. (“American Eagle”), and Mistango are set out below:

(a) QC Copper and Gold Inc. (formerly PowerOre Inc.)

At October 31, 2019, the Company held 5,059,752 shares (or an approximate 13% interest) in QC Copper and accounted for this investment using the equity method, as three directors of the Company sat on the Board of QC Copper. As at October 31, 2020, the Company held 5,059,752 shares and its ownership was diluted to 4.7%. Accordingly, the Company was no longer considered to have significant influence. Accordingly, the investment was re-characterized as an investment at FVPL in fiscal 2020.

As at July 31, 2021, the Company held 5,059,752 shares and its ownership was diluted to 4.3%. The fair value was measured at $961,353 at July 31, 2021 (October 31, 2020 - $632,470). An unrealized gain of $328,883 (2020 - $Nil) was recognized in the consolidated statement of loss for the nine months ended July 31, 2021.

The continuity of the carrying value for the investment in QC Copper under the equity method in fiscal 2020 and 2019 is set out below:

	2020		2019
Balance – beginning of year	$	6,235	$ 30,068
Less: Loss of significant influence of QC Copper		(6,235)	-
Less: Equity loss from QC Copper		-	(158,809)
Add: Dilution gain in QC Copper		-	134,976
Balance–end of year		$-	$ 6,235

Summarized financial statements for QC Copper as at and for the year ended October 31, 2019 is as follows:

Current assets	$ 443,423
Non-current assets	-
Total assets	443,423
Total liabilities	100,228
Total net loss and comprehensive loss	(1,149,768)

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

6. INVESTMENT IN ASSOCIATES (cont’d)

Based on the quoted market price at October 31, 2019, the fair value of the Company’s interest in PowerOre was $252,988 at October 31, 2019.

(b) American Eagle Gold Corp. (formerly Pacific Precious Inc.)

On May 31, 2019, the Company completed the acquisition of 40% of the outstanding shares of American Eagle under a share exchange agreement (the “Exchange”). American Eagle was a privately-owned Canadian company which owned a 100% interest in the Kuta Ridge Gold Project located in Papua New Guinea. A director of the Company held approximately 44% of the common shares of Pacific Precious before the Exchange and approximately 26% after the Exchange. As consideration, the Company issued 10,000,000 common shares at a value of $0.05 giving a valuation of $500,000. The investment was measured at $0.05 being the price of the most recent private placement in American Eagle. In July 2020, the Kuta Ridge Gold Project was sold for consideration of a 3% NSR on the project. Furthermore, in July 2020, American Eagle entered into a twelve-month exclusive agreement that provides the option to enter a mining lease and also an option to purchase 111 unpatented mining claims on the Golden Trend Property in Eureka County, Nevada.Also, in July 2020, American Eagle entered into a share exchange agreement and issued 6,349,398 common shares in exchange for 5,000,000 common shares of the Company. The value of the shares issued and received was estimated to be $600,000 based on the quoted market price of the Company’s shares issued at the transaction date.

During the period, the Company purchased 200,000 common shares of American Eagle for a total value of $40,000 in connection with the February 5, 2021 private placement. Further to this private placement, the Company held 5,200,000 shares and its ownership was diluted to 9% (October 31, 2020 – 26%). Accordingly, the Company was no longer considered to have significant influence during the period. Accordingly, the investment was re-characterized as an investment at FVPL.

Summarized financial statements for American Eagle as at October 31, 2020 and 2019 and for the year ended October 31, 2020 and period from May 31, 2019 to October 31, 2019 are as follows:

	2020	2019
Current assets	$ 162,371	$ 267,088
Non-current assets–investment in Orefinders	650,000	-
Total assets	812,371	267,088
Total liabilities	33,743	299,389
Total net loss and comprehensive loss	(1,495,030)	(19,895)

The continuity of the carrying value for the investment in American Eagle is set out below:

	July 31, 2021		October 31, 2020
Balance – beginning of period	$	-	$ 440,300
Less: Loss of significant influence of American Eagle		-	-
Less: Equity loss from American Eagle		-	(440,300)
Balance–end of period	$	-	$-

At July 31, 2021, the fair value was estimated at $754,000 (October 31, 2020 - $1,000,000) using the quoted market value. An unrealized gain of $1,564,000 (2020 - $Nil) was recognized in the condensed interim consolidated statement of loss for the nine months ended July 31, 2021. The common shares of American Eagle began trading on May 3, 2021 on the TSX Venture Exchange under the symbol “AE”.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

6. INVESTMENT IN ASSOCIATES (cont’d)

(c) Mistango River Resources Inc.

On May 3, 2019, the Company issued 5,000,000 common shares to acquire 11,850,000 common shares of Mistango (a publicly-traded company) from Osisko Gold Royalties Ltd. (“Osisko”). The common shares of Mistango were valued at $237,000 or $0.02 per share based on the quoted market price of the Mistango shares on that day. If the Company acquires more than 50% of the shares of Mistango, it will grant Osisko a 1% NSR on the Mistango properties. In addition, if the Company sells any of the Mistango shares prior to November 3, 2020, additional compensation is payable to Osisko.

As at May 3, 2019, the Company’s common share position represented approximately 31% of the common shares of Mistango. Ordinarily, a 31% interest would indicate significant influence and the use of the equity method of accounting for the investment. However, there are factors which indicate that significant influence did not exist at that time:

(i) No representation was given to the Company on the Mistango board of directors.
(ii) Orefinders was not involved in any policy-making processes. Furthermore, in June 2019, Mistango issued 15,909,090 common shares under a private placement to a third party. This event diluted the Company’s interest to approximately 22%. The Company had no input into this private-placement decision.
(iii) There were no material transactions, interchange of managerial personnel or exchange of essential technical information between the Company and Mistango.

On October 22, 2019, the Company was successful in electing its own slate of directors to the board of Mistango replacing the old board of directors. As a result, this investment was treated as a portfolio investment through to October 22, 2019 and the Company recorded a gain from a change in fair market value through profit and loss of $Nil from the acquisition date to October 31, 2019. Effective October 22, 2019, the Company’s investment in Mistango was accounted for using the equity method. The equity pickup for the period from October 22, 2019 to October 31, 2019 was insignificant due to the close proximity to the October 31, 2019 year end date. In connection with enforcing these rights as a significant shareholder of Mistango, the Company incurred costs of $292,925 in legal and other costs. These costs have been charged back to Mistango as at October 31, 2019 and $285,469 have been included in the carrying value of the investment. As at July 31, 2021, the Company’s ownership in Mistango was 24,708,975 shares or approximately 17% (October 31, 2020 – 24,708,975 - 19%).

During fiscal 2020, the Company subscribed for 12,858,975 shares of Mistango for $655,000.

Summarized financial statements for Mistango as at and for the period ended July 31, 2021 and 2020 are as follows:

	2021	2020
Current assets	$ 7,539,023	$ 4,297,193
Non-current assets	50,296	55,379
Total assets	7,589,319	4,352,572
Total liabilities	607,969	232,087
Total net loss and comprehensive loss	$ (1,702,010)	$ (1,057,078)

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

6. INVESTMENT IN ASSOCIATES (cont’d)

The continuity of the carrying value for the investment in Mistango is set out below:

	July 31, 2021	October 31, 2020
Balance – beginning of period	$ 1,937,080	$ 458,169
Add: Investment in common shares of Mistango	-	655,000
Advanced by (repaid to) the Company during the period	-	(172,889)
Add: Gain on dilution	372,430	1,249,302
Less: Equity loss from Mistango	(316,039)	(252,502)
Balance–end of period	$ 1,993,471	$ 1,937,080

Based on the quoted market price at July 31, 2021, the fair value of the Company’s interest in Mistango was $2,223,808 (October 31, 2020 - $6,053,699).

7. PROPERTY, PLANT AND EQUIPMENT

	Furniture	Computer	Building	Automotive	Machinery and
	and Fixtures	Equipment		Equipment	Equipment	Total
Cost
Balance, October 31, 2019	$ 5,750	$ 1,298	$ 28,748	$ -	$ 22,999	$ 58,795
Additions	-	-	-	19,026	-	19,026
Balance, October 31, 2020	5,750	1,298	28,748	19,026	22,999	77,821
Additions	-	-	-	14,499	-	14,499
Balance, July 31, 2021	5,750	1,298	28,748	33,525	22,999	92,320
Accumulated amortization
Balance, October 31, 2019	$ 1,610	$ 757	$ 4,168	$ -	$ 6,440	$ 12,975
Amortization	828	162	2,458	2,854	3,312	9,614
Balance, October 31, 2020	2,438	919	6,626	2,854	9,752	22,589
Amortization	496	86	1,660	5,270	1,986	9,498
Balance, July 31, 2021	2,934	1,005	8,286	8,124	11,738	32,087
Net book value, October 31, 2020	$ 3,312	$ 379	$ 22,122	$ 16,172	$ 13,247	$ 55,232
Net book value, July 31, 2021	$ 2,816	$ 293	$ 20,462	$ 25,401	$ 11,261	$ 60,233

8. EXPLORATION EXPENSES

. EXPLORATION EXPENSES
The following are details of the Company’s	exploration and evaluation expenses	for the	period ended	July 31:
				Cumulative
	2021	2020		Since Property
				Inception
Mirado Property, Ontario	$ 1,474	$	2,181	$ 5,444,737
MZ Claims Property, Ontario	-		-	680,879
Gold Hill Property, Ontario	572		-	68,841
Knight Property, Ontario	1,465,633		45,561	3,620,408
McGarry Property, Ontario	361,660		79,810	1,095,042
	$1,829,339	$127,552		$10,909,907

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

8. EXPLORATION EXPENSES (cont’d)

Mirado Gold Project “Mirado”

The Mirado project is located in Kirkland Lake, Ontario and consists of contiguous patented claims, with surface and mining rights, owned 100% by the Company and mining claims owned 100% by the Company. They are subject to a 3% NSR payable to the vendor of which 1% can be purchased by the Company for $1,000,000. In addition, the Company previously entered into a series of transactions whereby it granted a royalty with the following rights: (a) the right to purchase a 1% NSR on the Mirado project for $2,000,000 at any time prior to 90 days after the commencement of commercial production from the Mirado Mine; (b) the right of first refusal to provide any future stream financing component to the Company on its possible future Phase Two production from expansion of the open pit provided the financing is on reasonable and competitive commercial terms consistent with industry standards; and (c) the right to receive a 2% NSR with total proceeds capped at a maximum of $1,000,000 on any future revenues from the Company’s possible Phase Two production from expansion of the open pit once a PEA has been completed.

MZ Claims (Comprising Part of the Mirado Gold Project)

The MZ Claims consist of contiguous claims and is owned 100% by the Company. The MZ claims are subject to a 2% NSR payable to the vendors of which 1% of the NSR may be purchased by the Company for $1,000,000, and the second 1% of the NSR may be purchased for $2,000,000.

Gold Hill Project “Gold Hill”

The Gold Hill project is located in Kirkland Lake, Ontario and consists of patented claims and is owned 100% by the Company. They are subject to a 1.5% NSR payable to the vendor which can be purchased by the Company for $500,000.

Knight Project “Knight”

On November 30, 2017, the Company entered into agreements for a series of three acquisitions of contiguous properties from two individual landholders. All properties are located in the Shining Tree district, in the Province of Ontario. The Tyrenite Extension and Porphyry Lake properties were acquired from two individual landholders and consist of a 100% interest in mining claims. These properties are subject to a 3% NSR with a right to buyback 2% of the NSR for $2,000,000. The Knight Project owned by Premet at acquisition consisted of mining claims and mining leases. During the year ended October 31, 2018, the Company transferred the Mann property and MacMurchy property components of Knight to QC Copper. These properties are subject to various NSR ranging from 2% to 4% with rights to buyback 1% of the NSR for amounts ranging from $500,000 to $1,000,000.

To acquire 100% of these properties, the Company issued 22,753,246 shares and 3,412,987 warrants. To acquire a 100% interest in the Tyrenite Extension and the Porphyry Lake claims, the Company issued 5,000,000 shares from its treasury.

McGarry Project “McGarry”

On August 20, 2018 (pursuant to an agreement entered into March 29, 2018), the Company closed the acquisition of the McGarry Mine project, a former producer, and the Barber-Larder project. The McGarry Mine project consists of patented mining claims and mining leases and the Barber-Larder Project consists of patented mining claims and mining leases. All assets are located in McGarry Township in the Province of Ontario. The properties are subject to a 2% NSR with a right to buyout 1% of the NSR for $1,000,000.

As consideration, the Company issued 8,000,000 common shares at a value of $0.07 giving a valuation of $560,000. The Company also incurred legal and land transfer costs in the amount of $14,972, and distributed 440,248 QC Copper shares in the amount of $13,785. Also, in connection with the acquisition, a net payment of $47,000 was incurred as a requirement by the Ontario provincial government to increase the reclamation bond on deposit, giving a total acquisition cost of $635,757. The acquisition of McGarry also included certain property, plant and equipment with $57,497 allocated to the property, plant and equipment (furniture and fixtures $5,750, machinery and equipment $22,999 and building $28,748) and the remaining $578,260 was allocated to McGarry exploration expenses.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

8. EXPLORATION EXPENSES (cont’d)

Strategic Partnership with Kirkland Lake Gold

On May 4, 2021, the Company closed its agreement for a strategic partnership with Kirkland Lake Gold Ltd. ("Kirkland Lake Gold") wherein Kirkland Lake Gold will acquire a 9.9% interest in the Company. Additionally, Orefinders has granted Kirkland Lake Gold Inc. a wholly-owned subsidiary of Kirkland Lake Gold ("KL Gold") the option to acquire up to a 75% interest in its Mirado, McGarry and Knight projects (the "Projects") in return for spending $60 million in exploration and development on the Projects.

Orefinders issued Kirkland Lake Gold 24,400,000 common shares at $0.10 per share for gross proceeds of C$2,440,000 (the "Private Placement Financing"). All securities issued under the Private Placement Financing are subject to a statutory hold period of four months and a day from closing. Kirkland Lake Gold will also have rights of first refusal concerning certain potential joint venture agreements, sale agreements or royalty agreements to be entered into between the Company and third parties, so long as KL Gold holds an interest in the Company of 5% or greater. For so long as Kirkland Lake Gold holds a minimum equity interest of 5%, it will maintain anti-dilution rights concerning certain future share issuances by the Company. It is anticipated that the Private Placement Financing will close upon receipt of regulatory approvals. Option to Earn-in and Joint Venture (the "Option Agreement").

Orefinders will grant KL Gold the option to acquire up to an undivided 50% interest in the Projects over five years. The Option Agreement is contingent on KL Gold spending a total of $10M in the ground, with a minimum commitment of C$1M before the first-year anniversary of the effective date of the Option Agreement and an additional C$1.5M before the second-year anniversary of the effective date of the Option Agreement. KL Gold, at its discretion, can complete its commitment by paying cash directly to Orefinders based on 125% of the remaining expenditures. Orefinders will continue to act as Operator for the duration of the Option Agreement.

Upon successful completion of the Option Agreement, a Joint Venture will be formed between Orefinders and KL Gold, with KL Gold having the right to acquire an additional 25% interest by incurring $50M spend within the first five years of the formation of the Joint Venture (the "Second Stage Option"). During the Second Stage Option, KL Gold will act as Operator. Subject to the required TSXV approvals, Kirkland will be granted a right to have its designated board nominee appointed to the Board of the Company for so long as KL Gold holds an interest in the Company of 5% or greater.

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities are principally comprised of amounts outstanding for trade purchases relating to exploration activities, financing activities, general and administrative expenses and professional fees. The usual credit period taken for trade purchases is between 30 to 90 days.

usual credit period taken for trade purchases is between 30 to 90 days.
Accounts payable and accrued liabilities consist of the following:
	July 31, 2021	October 31, 2020
Trade payables	$ 12,639	$ 444,180
Accruals	2,772	26,156
	$ 15,411	$ 470,336

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

10. FLOW-THROUGH SHARE LIABILITY

Flow-through common shares require the Company to incur an amount equivalent to the proceeds of the issued flowthrough common shares on Canadian qualifying exploration expenditures. The Company may be required to indemnify the holders of such shares for any tax and other costs payable by them in the event the Company has not incurred the required exploration expenditures. Under the IFRS framework, the increase to share capital when flow-through shares are issued is measured based on the current market price of the common shares. The incremental proceeds, or “premium”, are recorded as a flow-through liability. As a result of flow-through financings during the year ended October 31, 2020, the Company recorded a total of $747,400 in flow-through liabilities. During the nine months ended July 31, 2021, the Company recognized a flow-through share premium renunciation of $357,033 (2020 - $7,547). At July 31, 2021, the flow-through liability was $390,367 (October 31, 2020 - $747,400).

11. ASSET RETIREMENT OBLIGATION (“ARO”)

A provision for environmental rehabilitation was recognized for mining activities at the Company’s Mirado stockpile area in the amount of $88,806 and the amount required to be held on deposit with the Ontario provincial government for the Company’s McGarry acquisition in the amount of $482,161. The provision is estimated based on management’s estimates of projected reclamation costs and the timing of such reclamation activities.

	July31,2021	October 31,2020
ARO – beginning of period	$ 570,967	$ 570,967
Accretion expense	-	-
ARO – end of period	570,967	570,967
Current portion–obligation to be funded within one year	570,967	570,967
	$-	$-

12. RELATED PARTY TRANSACTIONS

Key management personnel compensation

*Key management personnel compensation*	*Key management personnel compensation*	*Key management personnel compensation*
Key management includes directors, the president, CEO and executive chairman. The remuneration of the key
management of the Company during the nine months ended July 31, 2021 and 2020 was as follows:
	2021	2020
Management and consulting fees	$ 166,733	$ 128,100
Geological consulting fees included in exploration expenses	17,792	29,179
	$ 184,525	$ 157,279
See also Note 18(iii).

The following are the balances due from (to) associates and related parties:

	July 31, 2021 October 31, 2020
Due from Standard Ore Corporation	$ 18,792 $ 7,420 - 10,000 - (1,251)
Due from American Eagle Gold Corp.
Due (to) from Mistango River Resources Inc.
	$ 18,792 $ 16,169

Standard Ore Corporation is a private company incorporated in Ontario. The company is controlled by a director of Orefinders and provides corporate and administrative services to the Company. For the nine months ended July 31, 2021, Standard Ore charged the Company $20,500 (2020 - $10,667) in fees for CFO services included in management and consulting fees and $7,917 (2020 - $1,648) in rent expenses included in office, rent and general.

Accounts payable as at July 31, 2021 includes $Nil (October 31, 2020 - $6,707) payable to officers.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

12. RELATED PARTY TRANSACTIONS (cont’d)

All of the amounts due to and from related parties are unsecured, non-interest bearing with no fixed terms of repayment.

A director of the Company held approximately 44% of the common shares of American Eagle before the Exchange and approximately 26% after the share exchange agreement (Note 6).

13. SHARE CAPITAL

Authorized share capital

Unlimited number of voting common shares without par value.

Issued share capital

(a) On May 4, 2021, the Company closed a private placement with Kirkland Lake Gold for 24,400,000 common shares at $0.10 per share for gross proceeds of $2,440,000. There were no finders’ fees associated with this financing. (Note 8)
(b) On September 30, 2020, the Company closed a $1,800,000 brokered flow-through private placement financing at a price of $0.12 per unit, a $1,400,000 brokered charitable flow-through private placement financing at a price of $0.14 per unit, and a $2,300,000 brokered hard-dollar private placement financing at a price of $0.10 per unit for aggregate proceeds of $5,500,000.

Under the flow-through financing, 15,000,000 units were issued with each unit consisting of one flow-through common share and one-half of one common share purchase warrant, with each whole warrant exercisable until September 30, 2022 at an exercise price of $0.18 for one common share.

Under the charitable flow-through financing, 10,000,000 units were issued with each unit consisting of one flowthrough common share and one-half of one common share purchase warrant, with each whole warrant exercisable until September 30, 2022 at an exercise price of $0.18 for one common share.

Under the hard-dollar financing, 23,000,000 units were issued with each unit consisting of one common share and one-half of one common share purchase warrant, with each whole warrant exercisable until September 30, 2022 at an exercise price of $0.15 for one common share.

Using the Black-Scholes option pricing model, the flow-through warrants were valued at $181,700, the charitable flow-through warrants were valued at $121,100, and the hard-dollar warrants were valued at $322,000.

In connection with private placement, the Company issued 3,099,600 broker compensation options exercisable into one unit at a price of $0.10 per unit, for a term of two years as a finder’s fee. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable until September 30, 2022 at an exercise price of $0.15 for one common share. The broker compensation options were valued at $114,700 using the Black-Scholes option pricing model.

The following assumptions were used in the Black-Scholes option pricing model calculations: expected dividend yield rate of 0%, expected volatility of 89% based on historical volatility, risk free interest rate of 0.25%, expected life of 2 years and a share price of $0.09. Also, in connection with financing the Company incurred cash finders’ fees, legal expenses and other financing costs of $490,580.

(c) On March 27, 2020, the Company closed a flow-through portion of its non-brokered private placement for aggregate proceeds of $619,000. Upon closing of the offering, the Company issued 8,842,856 units at a price of $0.07 per unit where each unit consisted of one flow-through common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.08 for a period of 24 months from the date of issuance.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

13. SHARE CAPITAL (cont’d)

The valuation of the warrants was estimated to be $89,500 using the Black-Scholes option pricing model.

In addition, the Company paid certain arm’s length finders an aggregate of $840 in cash and 12,000 broker warrants to acquire shares at $0.07 per share until March 27, 2022The valuation of the broker warrants was estimated in the amount of $243 using the Black-Scholes option pricing model.

The following assumptions were used in the Black-Scholes option pricing model calculations: expected dividend yield rate of 0%, expected volatility of 78% based on historical volatility, risk free interest rate of 0.44%, an expected life of 2 years, and a share price of $0.06.

(d) On February 27, 2020, the Company closed a hard dollar non-brokered private placement for aggregate proceeds of $1,490,000. Upon closing, the Company issued 29,800,000 units at a price of $0.05 per unit, where each unit consisted of one common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.08 for a period of 24 months from the date of issuance.

The valuation of the warrants was estimated in the amount of $181,000 using the Black-Scholes option pricing model.

In addition, the Company paid certain arm's length finders an aggregate of 1,028,571 broker units, where each unit consists consisted of one common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.08 for a period of 24 months from the date of issuance. The valuation of the broker warrants was estimated in the amount of $6,000 using the Black-Scholes option pricing model.

The following assumptions were used in the Black-Scholes option pricing model calculations: expected dividend yield rate of 0%, expected volatility of 78% based on historical volatility, risk free interest rate of 1.25%, an expected life of 2 years, and a share price of $0.04.

(e) On July 16, 2019, the Company announced it has received a subscription for a non-brokered flow-through private placement of 1,966,667 units at a price of $0.06 per unit, to raise proceeds of $118,000. Each unit consists of one flow-through common share and one-half of one share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at $0.10 per share, until July 16, 2021. The valuation of the warrants was estimated in the amount of $12,000 using the Black-Scholes option pricing model. Additionally, the Company has received subscriptions for a non-brokered hard dollar private placement of 8,740,000 units at a price of $0.05 per unit, to raise proceeds of $437,000. Each unit consists of one common share and one-half of one share purchase warrant with each whole warrant entitling the holder to purchase one additional common share, at $0.08 per share, until July 16, 2021. The valuation of the warrants was estimated in the amount of $63,000 using the Black-Scholes option pricing model. The total aggregate private placement proceeds were $555,000.

In connection with the flow-through private placement, the Company paid a finder's fee of $8,750 and issued 196,000 broker warrants to acquire shares at $0.05 per share until July 16, 2021 valued at $7,000 using the BlackScholes option pricing model.

The following assumptions were used in the Black-Scholes option pricing model calculations: expected dividend yield rate of 0%, expected volatility of 90% based on historical volatility, risk free interest rate of 1.56% and an expected life of 2 years.

(f) On May 31, 2019, the Company issued 10,000,000 common shares to acquire 10,000,000 common shares of American Eagle. The common shares issued were valued at $500,000 based on the market price of the Company’s shares of $0.05.
(g) On May 3, 2019, the Company issued 5,000,000 common shares to acquire 11,850,000 common shares of Mistango River Resources Inc. The common shares issued were valued at $237,000 based on the market price of

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

13. SHARE CAPITAL (cont’d)

the Mistango shares of $0.02.

Stock options

The Board of Directors of the Company has adopted a stock option plan which permits the Company to grant to directors, officers and consultants of the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares and be exercisable for a period of up to five years from the date of grant. The number of common shares reserved for issuance to any individual director or officer will not exceed 5% of the issued and outstanding common shares and the number of common shares reserved for issuance to any one consultant or individual conducting investor relations activities will not exceed 2% of the issued and outstanding shares. Otherwise specified otherwise by the Board of Directors options vest on the date of grant.

A summary of the changes in the Company’s share-based payment reserve is set out below:

	July 31, 2021 Number of options Weighted average exercise price Weighted average life (years) 13,171,000 $ 0.10 2.69 - - - (1,850,000) (0.05) (0.40) (450,000) (0.12) (3.06) (375,000) (0.055) - 10,496,000 $ 0.10 2.32 10,496,000 $ 0.10 2.32	October 31, 2020
		Number of options Weighted average exercise price
Options outstanding, beginning of period Options granted Options exercised Options cancelled Options expired		11,471,000 $ 0.09 2,450,000 0.13 (100,000) 0.05 (650,000) (0.10)
Options outstanding, end of period		13,171,000 $ 0.10
Options exercisable, end of period		13,171,000 $ 0.10

On October 21, 2020, the Company granted 50,000 stock options with an exercise price of $0.165 and a term of two years. These options vested immediately. The total fair value of $6,500 was estimated using the Black-Scholes option pricing model assuming an expected life of 5 years, a risk-free interest rate of 0.36% and an expected volatility of 117%. The granting of these options resulted in a share-based payment expense of $6,500 being recorded during the year ended October 31, 2020.

On August 14, 2020, the Company granted 2,400,000 stock options with an exercise price of $0.13 and a term of five years. These options vested immediately. The total fair value of $245,736 was estimated using the Black-Scholes option pricing model assuming an expected life of 5 years, a risk-free interest rate of 0.42% and an expected volatility of 120%. The granting of these options resulted in a share-based payment expense of $245,736 being recorded during the year ended October 31, 2020.

On July 9, 2019, the Company granted 3,475,000 stock options with an exercise price of $0.07 and a term of five years. These options vested immediately. The total fair value of $221,000 was estimated using the Black-Scholes option pricing model assuming an expected life of 5 years, a risk-free interest rate of 1.56% and an expected volatility of 143%. The granting of these options resulted in a share-based payment expense of $221,000 being recorded during the year ended October 31, 2019.

The estimated volatility used in the Black-Scholes option pricing model is based on the historical volatility of the Company’s shares. There were no options granted during the nine months ended July 31, 2021. The weighted average fair value of all grants in the year ended October 31, 2020 was $0.10 per share.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

13. SHARE CAPITAL (cont’d)

Stock options

The following incentive stock options were outstanding and exercisable at July 31, 2021:

Number of options	Number of options	Exercise
outstanding	exercisable	Price	Expiry Date
721,000	721,000	$ 0.07	October 24, 2021
400,000	400,000	$0.07	July 13, 2022
3,850,000	3,850,000	$0.13	January 5, 2023
100,000	100,000	$0.10	June 5, 2023
3,225,000	3,225,000	$0.07	July 9, 2024
2,150,000	2,150,000	$0.13	August 14, 2025
50,000	50,000	$0.165	October 21, 2025
10,496,000	10,496,000	$ 0.10

Warrants

A summary of the changes in the Company’s warrants is set out below:

	July 31, 2021 October 31, 2020
	Number of warrants Weighted average exercise price Weighted average life (years) Number of warrants Weighted average exercise price
Warrants outstanding, beginning of period 44,843,637 $ 0.13 1.58 11,055,883 $ 0.07 Warrants issued - - - 43,847,714 0.13 Warrants exercised (105,000) (0.05) - (7,381,982) (0.06) Warrants expired (4,974,333) (0.08) - (2,677,978) (0.12)
Warrants outstanding, end of period 39,764,304 $ 0.13 0.94 44,843,637 $ 0.13

As at July 31, 2021 the following warrants were outstanding.

Number of warrants	Exercise
outstanding	Price	Expiry Date
10,928,590	$0.08	February 27, 2022
514,286	$0.08	February 27, 2022
4,321,428	$0.08	March 27, 2022
11,500,000	$0.15	September 30, 2022
7,500,000	$0.18	September 30, 2022
5,000,000	$0.18	September 30, 2022
39,764,304	$ 0.13

Broker compensation options

In connection with the September 30, 2020 financing, the Company issued 3,099,600 broker compensation options. Each broker compensation option is exercisable into one unit at an exercise price of $0.10 per unit for a term of two years. These options vested immediately. The total fair value of $114,700 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 0.25% and an expected volatility of 89%.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

13. SHARE CAPITAL (cont’d)

As at July 31, 2021 the following broker compensation options were outstanding.

Number of broker
compensation options	Exercise
outstanding	Price	Expiry Date
3,099,600	$0.10(1)	September 30, 2022

(1) Exercisable into one unit, comprised of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable until September 30, 2022 at an exercise price of $0.15 for one common share.

Share-based payment reserve

A summary of the changes in the Company’s share-based payment reserve is set out below:

Balance – Beginning of period Value of warrants issued on private placements Value of broker warrants issued Warrants exercised Stock options exercised Broker compensation options issued Share-based payments Balance – End of period	July 31, 2021 October 31, 2020
	$ 4,623,219 $ 3,586,133 - 895,300 - 6,243 (4,643) (229,470) (46,665) (1,923) - 114,700 - 252,236
	$4,571,911 $4,623,219

14. CAPITAL MANAGEMENT

The Company’s capital structure is adjusted based on managements and the Board of Directors’ decision to fund expenditures with the issuance of debt or equity such that it may complete the acquisition, exploration and development of properties for the mining of minerals that are economically recoverable. The Board of Directors does not establish quantitative return on capital criteria, but rather relies on the expertise of management and other professionals to sustain future development of the business. The capital of the Company consists of share capital, share-based payment reserve and deficit.

The Company’s mineral properties are in the exploration stage and, as a result, the Company does not currently generate cash flow from operations. The Company intends to raise such funds as and when required to complete its exploration projects. There is no assurance that the Company will be able to raise additional funds on reasonable terms.

The only sources of future funds presently available to the Company are through the exercise of outstanding stock options and warrants and the sale of equity capital of the Company, the issuance of loans and/or debentures or the sale of an interest in any of its mineral properties in whole or in part. The ability of the Company to arrange such financing in the future will depend in part upon the prevailing capital market conditions as well as the business performance of the Company. There can be no assurance that the Company will be successful in its efforts to arrange additional financing, if needed, on terms satisfactory to the Company.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the nine months ended July 31, 2021 and 2020. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX Venture Exchange (“TSXV”) which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months. As at July 31, 2021, the Company is compliant with the policies of the TSXV.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

15. INCOME TAXES

Flow-through common shares require the Company to spend an amount equivalent to the proceeds of the issued flowthrough common shares on Canadian qualifying exploration expenditures. The Company may be required to indemnify the holders of such shares for any tax and other costs payable by them in the event the Company has not made the required exploration expenditures in the period permitted. See Note 18(ii).

16. FINANCIAL RISK MANAGEMENT

The Company is exposed in varying degrees to a variety of financial instrument related risks. The type of risk exposure and the way in which such exposure is managed is provided as follows:

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’s exposure to credit risk is on its cash held in bank accounts, restricted cash and marketable securities. Cash is held with major banks in Canada. Restricted cash is on deposit with an Ontario government agency. Certain marketable securities are held in a brokerage account. Management assesses credit risk of cash as remote.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company strives to ensure that there are sufficient funds to meet its short-term business requirements, considering its anticipated cash flows from operations and its holdings of cash.

Market risk

Market risk incorporates a range of risks. Movements in risk factors, such as interest rate risk, currency risk, market price risk, and commodity price risk, affect the fair value of financial assets and liabilities.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s interest rate risk is minimal as there are no outstanding loans or interest-bearing debt. The Company’s current policy is to deposit excess cash in non-interest-bearing accounts at its Canadian banking institutions.

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s functional currency is the Canadian dollar as the majority of its transactions and operations are in Canada. Management believes the foreign exchange risk derived from currency conversions is negligible and therefore does not hedge its foreign exchange risk.

Market price risk

The prices of metals and minerals fluctuate widely and are affected by many factors outside of the Company’s control. The prices of metals and minerals and future expectation of such prices have a significant impact on the market sentiment for investment in mining and mineral exploration companies. This in turn may impact the Company’s ability to raise equity financing for its long-term working capital requirements.

The Company was also exposed to market risk relating to its investment in marketable securities and unfavourable market conditions could result in dispositions of marketable securities at less than favourable prices. The Company’s marketable securities were comprised of investments in publicly traded corporations .

Commodity price risk

The value of the Company's exploration and evaluation assets are related to the price of gold and other mineral

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

16. FINANCIAL RISK MANAGEMENT (cont’d)

commodities, and the outlook for this mineral. Adverse changes in the price of gold can also significantly impair the economic viability of the Company’s projects, along with the ability to obtain future financing.

Based on management’s knowledge and experience of the financial markets, the Company believes that movements at ± 10% are “reasonably possible” over a one-year period:

(i) The Company does not hold significant balances in foreign currencies to give rise to significant exposure to foreign exchange risk.

(ii) Price risk is remote since the Company is a non-producing entity.

(iii) The Company’s marketable securities are subject to fair value fluctuations. As at July 31, 2021, if the fair value of the marketable securities fluctuated by 10% all other factors held constant, net loss would have changed by approximately $318,516 (2020 - $Nil).

The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. The carrying value of the Company’s financial instruments approximates fair value due to their short-term or demand nature.

Classification of financial instruments

Financial assets included in the consolidated statement of financial position are as follows:

	July 31, 2021	October 31, 2020
Loans and receivables:
Cash	$ 6,112,422	$ 6,352,599
Restricted cash	570,967	570,967
Due from associates	-	10,000
Due from related party	18,792	7,420
FVPL:
Marketable securities	1,715,353	632,470
	$ 8,417,534	$ 7,573,456

Financial liabilities included in the consolidated statement of financial position are as follows:

	July 31, 2021	October 31, 2020
Other financial liabilities:
Accounts payable and accrued liabilities	$ 15,411	$ 470,336
Due to associate	-	1,251
	$ 15,411	$ 471,587

The Company held marketable securities during 2021 and 2020 that were carried at fair value. They were classified at Level 1 in the fair value hierarchy.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

17. SUPPLEMENTAL CASH FLOW INFORMATION

During the nine months ended July 31, 2021 and 2020, the Company incurred the following non-cash transactions that are not reflected in the statement of cash flows:

July 31, 2021 July 31, 2020 Brokers units and warrants issued $ - $ 51,672 Dividend in-kind – spinout of American Eagle shares $ 850,000 $ -

18. COMMITMENTS AND CONTINGENCIES

(i) The Company’s exploration activities are subject to various federal and provincial laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.
(ii) Pursuant to the terms of the flow-through share agreement entered into on July 16, 2019, the Company was committed to incurring Canadian Exploration Expenditures of $118,000 by December 31, 2020. Pursuant to the terms of the flow-through agreements entered into on March 27, 2020 and September 30, 2020, the Company is committed to incurring Canadian Exploration Expenditures of $3,819,000 by December 31, 2021. Through October 31, 2020, the Company had incurred the $118,000 in eligible exploration expenditures which left a $Nil expenditure commitment to be made by December 31, 2020. In addition, the Company incurred $318,299 in eligible exploration expenditures through October 31, 2020 and $1,829,342 in eligible exploration expenditures through July 31, 2021 which left $1,671,359 to be made by December 31, 2022. The Company has indemnified the subscribers of current and previous flow-through share offerings against any tax-related amounts that become payable by the shareholder as a result of the Company not meeting its expenditure commitment.

On December 20, 2020, draft legislation was released that includes a 12-month deferral for timelines and penalties associated with any flow-through funds raised in 2019 and 2020. Provided this legislation passes, any funds raised in 2019/2020 will receive an additional 12-month extension to incur expenses. The intent to pass this legislation was reaffirmed in the proposed Budget 2021 and it has been included in Bill C-30. The Company is taking the position that the Canadian provinces will also provide a similar 12-month extension.

(iii) The Company is party to certain management contracts. These contracts contain minimum commitments of approximately $10,000 due within one year.
(iv) In February 2019, the Company entered into an agreement for the lease of office space. Minimum rental payments over the term of the agreement are approximately:

2021 $ 9,250 2022 9,000 $ 18,250

(v) The COVID-19 pandemic is causing a widespread health crisis that has affected economies and financial markets around the world resulting in an economic downturn. In response to the outbreak, governmental authorities in Canada and internationally have introduced various recommendations and measures to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, quarantines, self-isolations, sheltersin-place and social distancing. The COVID-19 outbreak and the response of governmental authorities to try to limit it are having a significant impact on the private sector and individuals, including unprecedented business, employment and economic disruptions. The continued spread of COVID-19 nationally and globally could have an adverse impact on the Company’s business, operations and financial results, as well as a deterioration of general economic conditions including a possible national or global recession. Due to the speed with which the COVID-19 situation is developing and the uncertainty of its magnitude, outcome and duration, it is not possible to estimate its impact on the Company’s business, operations or financial results, including the Company’s ability to secure financing; however, the impact could be material.

OREFINDERS RESOURCES INC. Notes to the Condensed Interim Consolidated Financial Statements - Unaudited For the nine months ended July 31, 2021 and 2020 (Expressed in Canadian dollars)

19. PLAN OF ARRANGEMENT

On April 26, 2021, the Company completed a "spin‐out" of American Eagle whereby, pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) involving the Company, its shareholders, and American Eagle. The arrangement was approved by the Supreme Court of British Columbia on April 8, 2021, whereby each existing shareholder of the Company exchanged their shares of the Company for: (a) one new common share of the Company for each one existing share of the Company held; and (b) such shareholder's pro rata portion of 5,000,000 common shares of American Eagle held by the Company (being approximately one common share of American Eagle for every 44.50 shares of the Company held on the effective date of the Arrangement). After completion of the arrangement, the Company continues to hold 5,200,000 common shares of American Eagle, representing approximately 9% of the issued and outstanding shares of American Eagle. As a result of the distribution of the American Eagle shares, the Company recorded a dividend in-kind of $850,000 during the period ended July 31, 2021. The fair value of the dividend was estimated using the February 5, 2021 private placement financing share price of $0.17 calculated under Black Scholes.

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Cymat Technologies Ltd. — Interim / Quarterly Report 2021

45886_rns_2021-09-29_ba28affe-bbb9-4b83-89a4-380c75ec583d.pdf

OREFINDERS RESOURCES INC. Condensed Interim Consolidated Financial Statements Unaudited

For the Nine Months ended July 31, 2021 and 2020

Management’s responsibility for financial reporting

Management’s assessment of internal control over financial reporting (“ICFR”)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OREFINDERS RESOURCES INC.

OREFINDERS RESOURCES INC.

OREFINDERS RESOURCES INC.

OREFINDERS RESOURCES INC .

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

1. NATURE OF OPERATIONS

2. GOING CONCERN

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION

Statement of compliance

Basis of presentation

Functional and presentation currency

Basis of consolidation

Investment in associates

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Significant accounting judgements, estimates and assumptions

(a) Estimation of decommissioning and restoration costs and timing of expenditure

(b) Income, value added, withholding and other taxes

(c) Share-based payments and warrants

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Exploration and evaluation expenditures

Impairment of non-financial assets

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Share-based payments

Loss per share

Financial instruments

Financial assets

Subsequent measurement – Financial assets at amortized cost

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Subsequent measurement - Financial assets at FVPL

Subsequent measurement - Financial assets at FVOCI

Derecognition

Impairment of financial assets

Financial liabilities

Initial recognition and measurement

Subsequent measurement - financial liabilities at amortized cost

Derecognition

Financial instruments fair value hierarchy

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Property, plant and equipment

Asset retirement obligations (“ARO”)

Income tax

3. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (cont’d)

Flow-through share issuances

4. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

4. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS (cont’d)

5. RESTRICTED CASH

6. INVESTMENT IN ASSOCIATES

(a) QC Copper and Gold Inc. (formerly PowerOre Inc.)

6. INVESTMENT IN ASSOCIATES (cont’d)

(b) American Eagle Gold Corp. (formerly Pacific Precious Inc.)

6. INVESTMENT IN ASSOCIATES (cont’d)

(c) Mistango River Resources Inc.

6. INVESTMENT IN ASSOCIATES (cont’d)

7. PROPERTY, PLANT AND EQUIPMENT

8. EXPLORATION EXPENSES

8. EXPLORATION EXPENSES (cont’d)

Mirado Gold Project “Mirado”

MZ Claims (Comprising Part of the Mirado Gold Project)

Gold Hill Project “Gold Hill”

Knight Project “Knight”

McGarry Project “McGarry”

8. EXPLORATION EXPENSES (cont’d)

Strategic Partnership with Kirkland Lake Gold

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

10. FLOW-THROUGH SHARE LIABILITY

11. ASSET RETIREMENT OBLIGATION (“ARO”)

12. RELATED PARTY TRANSACTIONS

Key management personnel compensation

12. RELATED PARTY TRANSACTIONS (cont’d)

13. SHARE CAPITAL

Authorized share capital

Issued share capital

Cymat Technologies Ltd. Interim / Quarterly Report 2021